Advantages Of Walmart

In case you didn’t know what a dark horse was exactly (like me), the Merriam-Webster dictionary was generous enough to explain. A dark horse is a candidate or competitor about whom little is known but who unexpectedly wins or succeeds. This article on Aldi is well deserving of its title. I have been shopping at Aldi since I was a child, and I think my dad is one of the statistics that buys 90% of his groceries from there. However, I did not realize how exquisite this company is until reading the article. And to be honest, the moment after reading the article I called my dad to fill him in on Aldi’s fascinating story.

Should Wal-Mart be worried about Aldi? Should Aldi be worried about Walmart? Wal-Mart began its journey with the purpose of

As it has been engrained in our head since day one of this course, competitive advantage is a condition or circumstance that puts a company in a favorable position. I foresee Wal-Mart always having a stronger market presence, buying power, and breadth of inventory compared to Aldi. Aldi does not advertise to save on costs. It is appreciated by suppliers for the reliability of having fixed profits but is does not have quite the negotiation power of Wal-Mart. And Aldi does not have warehouses and outlets like Wal-Mart due to its JIT inventory process. When analyzing the common size costs structure estimates of the two businesses. Aldi has a lower percentage in everything but purchase prices and rental. The higher purchase prices could be due to dedication of quality products provided by Aldi. Due to Aldi’s rigorous quality control, I am also curious whether they allocate this control testing cost to purchase price. Otherwise, I would suspect that their inbound logistics would be higher than that of Wal-Mart. Either that or the costs of warehouses and the intricate process of receiving and storing goods for Wal-Mart cancels out the extra care for quality of Aldi. When comparing the two against Porter’s Five Forces, I would argue that Wal-Mart has a stronger competitive advantage in the United States. However, the circumstance differs when comparing the two within other geographic segments—one example: Germany.

Two words: price and quality. Aldi focuses on efficiency while abiding by its core values of simplicity, consistency, and responsibility. With a devotion to frugality, Aldi adheres to a culture of simplicity, focus, and a desire to serve customers. What I admire most about Aldi’s strategy is its dedication to it. Aldi never compromises its operating model or veers from its values in order to make a profit. Aldi gives off a real “take me or leave me” façade, and it works for them. To balance low price with high quality Aldi’s utilizes its lean approaches. Some examples of the way Aldi reduces costs and minimizing wastes while maintaining a maximum quality are:

• It costs a quarter to take a cart to avoid cart theft.

• Hours of operation are limited to lower overhead costs.

• Employees are multi-skilled so fewer employees can be scheduled per shift.

• Barcodes and customer self-bagging help the speed of checkout.

• Ready to shelve boxes make it so customers can help themselves when a box runs out, and Aldi saves money on displays.

• Aldi usually has an unlisted number to open up employee service for in-house customers.

• Checkout usually only accepts cash or debit cards.

• Coupons are rare even though they still hold weekly discounts.

Aldi requires more customer participation than other grocery stores but this aligns with their business strategy and is understood and expected by consumers who enter an