Impact of Globalization on Aldi - Grocery Stores

Topics: Wal-Mart, Aldi, Globalization Pages: 8 (3117 words) Published: November 1, 2009
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History of ALDI, its core business and philosophy
Established in 1913 in Germany, ALDI operates what are known in the grocery business as "limited-assortment" stores or "hard discounters." ALDI has taken this retail concept, which features low overhead and scanty selection, to its leanest, meanest extreme. Unlike the vast majority of supermarket chains, ALDI store carries about 1,400 regularly-stocked items, including fresh meat, and, in certain locations, beer and wine, of which nearly all are ALDI, select brands. Though the original ALDI concept has been modified somewhat to accommodate the ever-changing tastes and preferences, the core concept and philosophy remains: “Incredible Value Every Day.” By limiting consumer choice, ALDI saves money in several ways. ALDI stores are correspondingly small--usually 8,000 to 15,000 square feet--compared to the 50,000 to 125,000 square feet typically utilized by competitors with larger catalogs of items. ALDI is currently under the direction of Theo Albrecht Jr. with their global Headquarters located in Essen, Germany, ALDI reported sales in 2007 were about $47 Bi. Drivers of globalization in the retail industry

While we can talk about which are the drivers of globalization that has most impacted the retail industry, I think it is appropriate to state that the retail business as much as many other business in the world, have been exposed to the globalization effect mainly driven by the creation of the Internet, significant improvement and growth of the logistics routes and companies bringing the logistics cost down and new demand coming from emerging markets like China. To discuss specifically about the drivers that have impacted the retail industry, I think E-commerce has contributed to the retail brokerage industry becoming more global and more contestable. By examining the different stages of the value chain, we can analyze the differential impact of the information and communication technology (ICT) revolution on each segment of the industry. To date, the primary drivers of globalization have been manifested at the 'wholesale' stage of the industry. In contrast, important features of the broker-customer interface have perpetuated a multi-location competitive structure at the retail stage of the industry. Nevertheless, actual and potential competition has been significantly increased by the spread of e-commerce at all stages of the industry. E-commerce innovations encourage both standardization and variety within an increasingly competitive industry. Last but not least, the trade agreements signed within the last 20 years have also helped to foster globalization. Free trade agreements signed in the NAFTA regions helped bring goods at a significant lower cost than what it would cost without this agreement. Same applies to the home land of ALDI (Europe) where goods and resources can flow throughout the countries that are part of the European community without any need of passports or tariffs. Impact of Globalization in ALDI

Since the inception of ALDI in 1913, ALDI has grown to be a multinational retail company. Through standardization of their business practices and taking advantage of the globalization drivers, ALDI has been successful in realizing the benefits of globalization in their business. ALDI currently makes business in 18 different countries and even though ALDI does not sell over the internet, they market all their promotions through the WWW. As some of the articles read, despite of the economical recession the...
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