RETAILING ASSIGNMENT

Retailing Assignment

Executive Summary

ALDI is a global chain of discount retail outlets and is short for Albrecht Discount. It's a German based company. Internationally AIDL operates overall of 8500 stores around the world. Many of the ALDI practices are much common in the outlets around Germany, but largely unique in other countries according to their specific needs. Also the LIDL Superstore has been an integral part of English culture in the years to come. Brand reputation is loaded in consumer sentiment more mature, and evokes the image of excitement and fun to the younger market.

This report compares the strategy of these two retailers competing in the same market sector and segment and evaluates the retailers' retail strategy and implementation in the light of its competitive environment.

ALDI has to face competition from all those that offer similar low cost items. The competition is tough due to the fact that there are various competitors, and the supermarket industry is a very saturated industry, with several competitors working with their separate unique competencies. Where as LIDL's main focus is on low cost retail outlet. Cost leadership requires low costs relative to competitor's costs. The focus strategy of LIDL is based on the firm's ability to serve a narrow target market more effectively and efficiently than competitors who compete more broadly (Porter. 1980).

Table of Contents

Introduction4

Discussion4

Competitor Analysis6

Company Analysis6

ALDI retail strategy in the light of its competitive environment7

Customer Analysis7

Personal Position in the Enterprise8

Control8

Opportunity Specification9

Channel Analysis10

Distribution10

Communication Strategies11

Contingency plans11

Philosophy of this company12

Goals of ALDI 13

Company Objective14

ALDI Future Profitability14

Competitive Advantage16

Customer's Perceptions about ALDI16

LIDL retail strategy in the light of its competitive environment18

Focus19

Expansion19

The Tactics19

Overall Cost Leadership19

Feasibility of Tactics19

Focus Strategy20

Value System20

Distribution Channel20

Competitive Advantage21

Competitive Positioning21

Approach to Strategy Development at LIDL 21

Competition 21

Bargaining Power of Buyers22

Threat of Substitute Product22

Global Retail Market Dynamics22

Conclusion23

References25

Retailing Assignment

Introduction

This report compares the strategy of two retailers with a UK presence competing in the same market sector and segment (based on both desk research and store visits) which evaluates the retailers' retail strategy and implementation in the light of its competitive environment. The retailers chosen are ALDI (Albrecht Discount) and LIDL. Both companies are based in Germany and have their presence in the United Kingdom.

Discussion

The approach to competitive strategy that has dominated strategic management theory and practice over the last two decades was developed by Michael Porter at the beginning of the 1980s. According to Porter (1980), competitive strategy is concerned with a firm's position in an industry, relative to various competitive forces. These include established competitors, buyers/customers, suppliers, the threat of substitute products, and the threat of entry to the industry by new competitors. The goal of every company should be to position itself in its industry in such a way as to minimize the bargaining power of these five forces over the company.

ALDI is a global chain of discount retail outlets and is short for Albrecht Discount. It's a German based company. Internationally AIDL operates overall of 8500 stores around the world. Many of the ALDI practices are much common in the ...