Aldi in the UK: Cost Leadership through Operational Excellence




Case Details Case Introduction 1 Case Introduction 2 Case Excerpts

Abstract

Germany-based, Albrecht Discount, abbreviated as Aldi, evolved over the years from a small grocery store into one of the leading hard discount stores. Karl and Theo, two brothers of the Albrecht family, were responsible for this huge transformation. They took charge of the grocery shop, which was earlier run by their mother to meet family requirements, in 1945. Albrecht Discount was incorporated in the year 1948.

At that time, about 13 stores were in operation. Gradually, the store’s figures rose. In the same year, the first supermarket under the name ‘Aldi’ was started. Later, owing to a disagreement between the brothers, reportedly over the issue of selling cigarettes, Aldi was split into Aldi Nord and Aldi Süd. Though they operated in different geographic areas they maintained a common corporate identity. In 1967, Aldi entered Austria, its first overseas venture. It gradually expanded into countries like Belgium, Denmark, France, Luxembourg, The Netherlands, Portugal, Spain, Australia, the UK, Slovenia, Switzerland, and the US.

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Issues

The case is structured to achieve the following teaching objectives:

  • Illustrate various retailing concepts and various retail formats.
  • Highlight the important factors influencing retail operations.
  • Discuss the importance of understanding shoppers’ behavior.
  • Discuss the role of operational effectiveness in obtaining cost leadership.

Contents
Introduction
Background Note
Strategies In The UK
Unique Business Model Of Aldi
The Road Ahead
Exhibit

Keywords

ALDI, Business environment, Corporate strategy, Retailing, Hard discounters, Operations, Competitive advantage, Cost leadership, Standardization, Localization, Discount supermarkets, Discount retailing

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