This is no substitute for reading the case, but here is a link to a video clip on Aldi if you are interested:

This case is set in 2013, when Aldi was the world’s 8th largest retailer, and was making plans to accelerate its US expansion. Aldi is a German based hard-discounter that sells a limited assortment of private-label groceries and household items in its bare-bones stores. Despite its presence in 32 states with 1200 stores, Aldi was still relatively unknown in the United States at that time, even though it was a sufficiently strong powerhouse in Europe is that it was often cited as one of the reasons for Walmart’s withdrawal from Germany. Given the ambitious plans for growth that Aldi had for the US, they seem to think that they can compete with Walmart in their home market, but I wonder if you agree.

The case directly contrasts Aldi with Walmart, two retailers with a common core strategy and value proposition but with radically different business models. Since many of you have may have shopped at both of the retailers’ stores, think of what you like and dislike about each. To address the question of how the competition between the two companies will play out, you will need to assess Aldi’s competitive advantage or disadvantage relative to the Walmart strategy. What might be Walmart’s potential reactions to a new entrant in what is already a tremendously competitive industry?

• Think about the ideas and concepts we have learned since the beginning of our course, but especially think about the ideas and concepts from the chapter on Change and Innovation as Aldi adjusts itself to the wider US market and the chapter on Planning and execution of plans in terms of their ambitious goals. Most of all, think about what you have learned from studying Strategy, including Porter’s dual models of Low Cost and Differentiation and Broad and Narrow Focus as well as the three strategy types: Growth, Stability and Renewal.
• Please also remember as you address the Case Study Questions (BELOW) that I have read the case and so try to limit the amount of detail that you include unless you are selecting particular facts that support your analysis.
  • VIEW ATTACHED CASE STUDY
  • VIEW ATTACHED RUBRIC & GRADING GUIDELINES
  • VIEW ATTACHED COURSE CONCEPTS

CASE STUDY QUESTIONS:

1. Very briefly explain Aldi’s founding and early history. How would you describe the corporate culture? Business Model? Core Competencies Competitive Advantages?
2. Aldi has been pursuing a growth strategy through international expansion in Europe and the United States since the early 1960’s. Briefly describe some of their successes and challenges.
3. Describe the key elements of Aldi’s operating practices. Why can Aldi promise that “When you buy a can of peas at Aldi, you’re paying almost entirely for the can of peas.” (Van Den Steen, Lane; 4)
4. Identify Aldi’s major competitors in the United States. If you were hired to perform a SWOT Analysis, how would you describe Aldi’s Strengths and Weaknesses and Opportunities and Threats in comparison with their US competitors?
5. Aldi and Walmart have a common core value proposition but very different business models. Should Aldi be worried about Walmart? Why or Why not? Should Walmart be worried about Aldi? Why or Why not?
6. At the end of 2013, Aldi announced plans to open 650 new stores in the United States within five years. Having been in the US for so long, why were they suddenly pursuing such explosive growth? Evaluate their potential for success with this ambitious strategy?
7. In preparing your Case Analysis, apply a minimum of TEN relevant course concepts throughout your paper. Please feel free to include any current information about Aldi’s performance, but be sure to cite the sources