Principles of Operations Management
1. How does ALDI’s strategy lead to a competitive advantage? How does the company achieve this strategy?
By putting such a huge focus on the quality of his products and even offering a no questions money back guarantee, ALDI’s leads the way to a competitive advantage. Not only does the quality of the products allow ALDI’s to pursue a differentiation strategy, but modern quality methods like total quality management (TQM) and just-in-time (JIT) also promote low-cost and response strategies.
By only keeping max 2 brands per product and only 700 products in ALDI’s stores the makes sure that stock moves fast and the possibility for old stock is very slim. ALDI also has a standard design for the entire group of stores, although where other countries and cultures are ALDI’s adopts it to the country which in turn shows respect for other cultures.
This strategy is achieved by means of good quality at low price.
Low cost strategy is achieved by using variety of methods: 1. Buy large quantities of good quality products helps to give the customer a better price for good quality. 2. Taking advantage of quantity discount and economies of scale 3. Stores are small and are standardized. 4. Stocks limited amount of different items 5. Only one or 2 of brand per item 6. Chooses inexpensive locations to minimize overheads 7. Products displayed on pallets, not shelves. 8. Employees are multi skilled. They can perform more than one task en therefore safe cost on labour which in turn keeps overheads low. 9. Customers give deposit for carts and get refund when they bring it back. This prevents ALDI’s from buying new carts every now and then, keeping overheads low.
2. Does ALDI’s low-cost strategy imply that the company offers low quality? Why is quality important regardless of competitive advantage?
Although the products are sold at very low prices, the quality is never neglected. ALDI’s buys bulk and always make sure the quality of the
By putting such a huge focus on the quality of his products and even offering a no questions money back guarantee, ALDI’s leads the way to a competitive advantage. Not only does the quality of the products allow ALDI’s to pursue a differentiation strategy, but modern quality methods like total quality management (TQM) and just-in-time (JIT) also promote low-cost and response strategies.
By only keeping max 2 brands per product and only 700 products in ALDI’s stores the makes sure that stock moves fast and the possibility for old stock is very slim. ALDI also has a standard design for the entire group of stores, although where other countries and cultures are ALDI’s adopts it to the country which in turn shows respect for other cultures.
This strategy is achieved by means of good quality at low price.
Low cost strategy is achieved by using variety of methods: 1. Buy large quantities of good quality products helps to give the customer a better price for good quality. 2. Taking advantage of quantity discount and economies of scale 3. Stores are small and are standardized. 4. Stocks limited amount of different items 5. Only one or 2 of brand per item 6. Chooses inexpensive locations to minimize overheads 7. Products displayed on pallets, not shelves. 8. Employees are multi skilled. They can perform more than one task en therefore safe cost on labour which in turn keeps overheads low. 9. Customers give deposit for carts and get refund when they bring it back. This prevents ALDI’s from buying new carts every now and then, keeping overheads low.
2. Does ALDI’s low-cost strategy imply that the company offers low quality? Why is quality important regardless of competitive advantage?
Although the products are sold at very low prices, the quality is never neglected. ALDI’s buys bulk and always make sure the quality of the