How Does Aldi ‘Kick’ Wal-Mart Out of German Market?

Topics: Wal-Mart, Supermarket, Aldi Pages: 3 (956 words) Published: October 11, 2011
Problem 6
Group: Srianankavanich, Wiwatthani, Yinyin, Liao, Sijun Huang.

How does ALDI ‘kick’ Wal-Mart out of German market?

Wal-Mart grocery supermarket, the company by the American retail legend Mr. Sam Walton, was established in 1962 in Arkansas. After more than forty year’s development, Wal-Mart has become the largest grocery retailer. At present, the Wal-Mart in 15 countries worldwide has opened more than 8000 stores, owned 53 brands, and employed more than 2.1 million staffs. On average, more than 200 million customers step in Wal-Mart per week.

ALDI, named from the first two letters of Albrecht and Discount, stands for the discount grocery store managed by Albrecht family. Over the years, ALDI has gradually expanded its business to Denmark, France, Netherlands, Belgium, Luxembourg, UK, Ireland, Austria, and United States. So far, ALDI’s rapid expansion embodies in both domestic and foreign markets. Its domestic chain has reached over 3600 grocery stores, around 16 states; there are more than 1000 stores oversea and nearly 600 branches were started in the eastern of United States. By now, ALDI’s annual revenue reaches $34 billion, being the largest food chain enterprise in German.

Nowadays, it is extremely competitive for companies survive in the close to full capacity grocery retail industry. Thus, we choose to compare Wal-Mart and ALDI’s operation strategies in order to justify both of their operational advantages and clarify why ALDI can stand still in German market.

Wal-Mart’s competitive priorities:
* Location: Wal-Mart choose to open stores in rural/small town locations that are not being served by competitors, which allows Wal-Mart to establish itself as the sole discount retailer in the areas. * Pricing strategy: Wal-Mart allows local store set the price to meet local demand, to maximize sales volume and inventory turnover and to minimize expenses. 

Wal-Mart’s operation strategies:
* Wal-Mart has multiple...
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