A German Retailing Icon Essay Example | Topics and Well Written Essays - 1000 words

A German Retailing Icon - Essay Example These strategies are strongly in line with the company’s goal to provide offerings at lower cost but with high quality standard. The reason why customers should buy the products of Aldi is due to the firm’s success in instilling products into the market at a lower cost but with high quality standard. This is just a way of saying that at a lower cost, Aldi does not compromise the quality of its products. This can be the company’s competitive edge and it adds value to its value particularly for those customers who are after of good quality at a reasonable price. Aldi’s lines of offerings are viewed cheaper but of high quality and this perception has significantly created specific value to particular customers. 2. How are different components of Aldi’s retail strategy aligned with one another? Answer As mentioned in the case, Aldi tries to apply limited assortment for its merchandise and it particularly adheres to principle that the increase of item actually increases expenditure (Aldi: A German Retailing Icon 3). Product pricing for Aldi’s offerings is said to be 20 to 30 percent below those of regular supermarkets (3-4). Its basic design for store and open display adhere to one of its core principles, simplicity at a minimal cost (2). The communication of its products is said to apply minimal ads through its flyers and website (3-4). Its location is particularly located off land which is its own so as to ensure minimizing cost (4). Its service is through fast check out through cash and there is inclusion of entertaining returns at high speed (5). The case of Aldi simply shows that in maintaining overall cost leadership as its competitive strategy, there is a need to actually control the costs that have to be incurred in the operation. It is clear that in order for Aldi t o come up with lower cost but not to sacrifice quality of service and product offering, there is a need to consider minimizing costs that are not actually creating significant impact on product quality. This is how in particular the different components of Aldi’s strategy are aligned with each other. 3. Explain the key internal and external reasons why the company has been so successful over the past decades. Answer Aldi’s success over the past decades is due to its successful entry in the market. Part of this successful entry is its proper aligning of the different components in its retail strategy. As an effect, Aldi is creating competitive strategy which is remarkably in line with overall cost leadership. This in particular has created value not just to the company but to the customers who are after of cheaper products but with high quality. Thus, this enables the company to come up with products that are highly differentiated when it comes to price and quality. The extent of this is the achievement of specific market focus which is a market segment that over time, Aldi is willing to serve with its line of offerings. Over the course of time, this develops customer loyalty as one of Aldi’s external factors for success. This customer loyalty is a sustainable competitive advantage of the company and through this; the company has remarkably gained high buying power which means that it can further demand for low price. In return, this added to the capacity of the company to maintain its competitive edge when it comes to overall cost leadership. As it can be observed, the combined effects of both external and internal factors for Aldi’