How will this transaction affect aldi as it seeks to expand its presence in the united states?

Published by

Nov 7, 2022

s

Struggling with a similar assignment? Don’t know where to start? Don’t have time to work on this? Get a high-quality paper written for you from scratch – PLAGIARISM FREE, guaranteed to get you a good grade. To get started, please click on the Submit Your Instructions at the bottom of the page.

The Ripple Effect of Supermarket Wars: Aldi Is Changing the Markets in Many Countries
Aldi started as a small, family-owned grocery store located in Essen, Germany, in 1913. Two sons, Karl and Theo, took over the store from their mother in 1946; soon after doing so, they began expanding the business. They emphasized low costs from the very beginning, allowing them to offer their products to customers at low prices relative to competitors. Over time, Aldi expanded to other European countries, and it entered the United States market in 1976. Currently, there are roughly 11,000 Aldi stores located in 20 countries; 1,750 of these units are in 35 states in the United States. In the United States alone, the firm serves 40 million customers on a monthly basis.
Aldi holds its costs down in a variety of ways. It largely sells its own brand-label products in “no frill” stores. The company limits the number of external brands it sells (usually one or two per product), and it has low packaging, transportation, and employee costs. To sell products in its stores, Aldi positions them in ways that are similar to the approach warehouse stores use, for example, placing products on pallets and in cut-away cardboard boxes. In Germany, Aldi advertises very little, but it does advertise in the United States. It produces its own ads in-house (no external agency) and advertises mostly through newspaper inserts and a few television commercials.
Aldi and another discount store, Lidl, have hurt the largest four supermarkets in the U.K. market—Tesco, Walmart’s Asda, J Sainsbury, and Wm. Morrison Supermarkets. Aldi and Lidl have captured market share from these retailers, especially Tesco and Morrison, and held approximately 8.6 percent of the U.K. market in 2016. Aldi plans call for it to reach about 17 percent share of the market by 2021. Tesco has controlled about 30 percent of the discount supermarket market, but it has been declining. Morrison’s recent poor performance has precipitated turnover in most of the firm’s top executives. In addition, the new CEO, David Potts, has been making major changes—largely cutting costs in order to compete on prices. Because of reduced costs, Morrison cut its prices on 130 staple items such as milk and eggs. Likewise, Tesco reduced prices of 380 of its brand
products by about 25 percent. Yet, because of gains in its market share, Aldi plans to invest about $900 million to open 550 new stores in Britain by 2022.
Aldi is having similar effects on the Australian market. It has gained market share from the two largest supermarkets in Australia—Coles and Woolworths. In response, Woolworths indicated that it plans to reduce its prices to avoid a perception among customers as the “expensive option.” This action does not seem to concern Aldi in that the firm intends to spend $700 million to add 120–130 stores by 2020 to its current number of 300 stores in Australia.
Aldi appears to be harming some competitors in the United States as well. For example, a rival discount food retailer, Bottom Dollar owned by Delhaize from Belgium, closed all of its stores (located in New Jersey, Pennsylvania, and Ohio) and sold the locations and leases to Aldi. Aldi does have stiffer competition in the United States from Walmart, Sam’s (Walmart’s warehouse stores), and Costco, among other discount food retailers. Yet, Aldi is not only surviving, but also flourishing and growing in the U.S. market as well. In early 2018, Aldi announced that it would spend $1.6 billion to remodel and expand 1,300 U.S. stores by 2020. Desiring to have 2,500 stores in the United States by 2022, the firm announced in 2018 that it would spend up to $3 billion to open new stores to reach this target. If reached, a total number of 2,500 stores would result in Aldi being the third largest supermarket chain in the United States.
In addition to affecting grocery store competitive rivalry across country boundaries, Aldi’s actions (and those of others as well) have an effect on wholesalers and other suppliers. For example, wholesale prices have been declining, and some of the major supermarket chains, such as Tesco and Morrison, have been reducing the number of brands on their shelves. Interestingly, manufacturers of popular products, such as Mr. Kipling cakes and Bistro gravy, stand to gain shelf space and increase sales because of stores’ decisions to take some rivals’ products off their shelves. Of course, the suppliers whose products lose their positions on stores’ shelves will likely suffer.
The bottom line is that Aldi is having a major effect on rivals in multiple countries and on many other companies that supply products to the industry. As a result, the grocery industry’s competitive dynamics are different today than they were before.
Sources: 2018, Aldi unveils $1.6 billion nationwide store remodel plan to enhance customer shopping experience, Aldi Homepage, www.aldi.com, February 8; 2017, Motley Fool staff, Setting the stage for grocery industry competition in 2018, Motley Fool Homepage, www.fool.com, December 24; 2014, Aldi targets doubling of UK stores with 600 million pound investment, New York Times, www.nytimes.com, November 10; T. Hua, 2015, Tesco’s overhaul points to a price war, Wall Street Journal, www.wsj.com, January 5; L. Northrup, 2015, Bottom dollar food to close stores, sell chain to Aldi, Consumerist, www.consumerist.com, January 5; 2015, Mr. Kipling Maker Premier Foods sees positives in supermarket wars, New York Times, www.nytimes.com, January 23; 2015, Morrisons cuts prices on 130 grocery staples like milk, eggs, New York Times, www.nytimes.com, February 15; 2015, British shop price decline steepens in February—BRC, New York Times, www.nytimes.com, March 3; K. Ross, 2015, Supermarket wars: Aldi takes on market share as Woolworths drops prices, Smart Company, www.smartcompany.com.au, March 9; A. Felsted, 2015, Morrison chiefs take express checkout from struggling supermarket, Financial Times, www.ft.com, March 24; 2015, Aldi Foods, www.grocery.com, accessed March 25.
Assignment Instructions
Read the short end-of-chapter case and answer questions in the following areas.
Case Discussion Questions
Using materials in the case and items to which you gain access through a search, describe how Aldi is creating competitive rivalry in the retail grocers’ industry.
As explained in this chapter’s Opening Case, Amazon purchased Whole Foods. How will this transaction affect Aldi as it seeks to expand its presence in the United States? What competitive actions might Aldi take in response to Amazon’s purchase of Whole Foods?
Using concepts and actions explained in this chapter, decide if Aldi is more likely to respond to any strategic actions Amazon might initiate through Whole Foods or if Amazon through Whole Foods is more likely to respond to any strategic actions Aldi takes. Be prepared to justify your decision.
In a competitive rivalry sense, explain the actions (strategic and/or tactical) you believe Walmart and Costco will take to respond to Aldi’s intentions to have 2,500 U.S. stores by 2020 (and if this truly came to light now that we are in 2022, and how many stores actual exist).
Note: Two recent articles to support content from textbook to make it more applicable to current times and how it pertains to recent pandemic events. https://querysprout.com/aldi-competitive-advantages/ (Links to an external site.) and https://www.producebluebook.com/2022/04/05/study-shows-aldi-led-grocery-growth-since-start-of-pandemic/# (Links to an external site.)
Parameters of this assignment: minimum of two pages in APA style format.
Submit to Canvas in the designated column.

n

Need Writing Help? Our writing specialists are here 24/7, every day of the year, ready to support you! Instantly chat with an online tutor below or click here to submit your paper instructions to the writing team.

More than just an assignment.

GET THE GRADES YOU DESERVE | A OR A- GUARANTEED
NO MORE SLEEPLESS NIGHTS DOING RESEARCH
NO MORE LATE POINTS DEDUCTIONS 
GET A QUALITY PAPER SENT TO YOUR EMAIL
GET GOOD GRADES ON YOUR ASSIGNMENTS
Explore Now →

Who is this homework service for?

* If you are having a really hard class and want to get through it, then this is for you.

* If you have a medical emergency or someone close to you has a medical emergency and you don’t think you’ll be able to turn your assignment on time, this is definitely a service you could use.

* You can use us if you are having a tough Professor who won’t give you the grades you deserve.

* If you have a tight work schedule and you are getting points deducted for not submitting assignments on time.

* English might not be your first language and you feel like you are being left behind in class because of it.

* If you have a large project coming up and don’t think you have enough time to get it done well, definitely reach out to us.

TALK TO SUPPORT
{

Super stoked you are checking us out! We would like to help you with your assignment. We just need a few things from you:

* The full assignment instructions as they appear on your school account.

* If a Rubric is present, make sure to attach it.

* Any relevant weekly readings or learning resources.

* Include any special announcements or emails you might have gotten from your Professor regarding your assignment.

* Any templates or additional files required to complete the assignment.

If your assignment is somewhat complex and you need to explain it, please don’t hesitate to reach out to me via live chat. 

 

FAQ

Frequently asked questions

How soon can I get my paper done?

It depends with your deadline. If you need your paper completed in 3 hours, we will deliver it in that time. All you need to do is indicate your deadline in our custom order page here. Alternatively, if you are sending us your instructions via email, please be sure to indicate your deadline.

Will it be completely original? I don't want to be caught in a case of Academic Integrity Violation.

We are as paranoid as you are. Maybe even more! And we understand that the greatest sin you can commit in your academic journey is plagiarizing your academic work. To that end, we have made sure that we check and double-check our papers using high quality plagiarism detection tools such as SafeAssign and Turnitin before submitting the paper to you.

Who is my writer? Is he/she a native English Speaker?

All our writers are native English Speakers. That is not to say that ESL writers are not good, we just prefer hiring native writers because we want the very best people working on your paper. This might mean paying a little bit more for your paper as opposed to when you pay a foreign company whose writers are non-native English Speakers.

What if I need revisions? Will your charge additional for this?

Of course not! If you do happen to require a revision on your paper, our team will handle it for you free of charge. Matter of fact, we won’t rest till you are happy with your paper. So, ask for as many revisions as you need, it’s completely FREE!

Will you give me my money back if I don't like my paper?

We have very few instances where we delivered a paper that a client didn’t fall in love with. But if it so happens that you don’t like your paper for any reason whatsoever, we’ll refund your money back no questions asked.

I have more assignments after this, can you help me with those too?

Of course! And what’s even better is that we can reserve a writer permanently to work on your entire class. This comes in handy for projects which build up on each other and where you need just one writer, one writing style.

I got my order information wrong, can I change that?

Yes you can. Just reach out to our support team via email (support@essaynook.com) or live chat here and they’ll help you change the instructions.

Can I place an order via email instead of going through the order page?

Yes you can. Email Anna at anna@essaynook.com, she’s in charge of our sales team. Alternatively, you can talk to our Live Chat team here and request to speak to Anna.

Trusted by Thousands of Students

Delivering quality assignments since 2007

%d bloggers like this: