An important element of Aldi’s strategy is a severely limited range of “preselected” products, overwhelmingly private brands. The company’s smaller range (some 1,500 store-keeping units as opposed to 20,000 to 30,000 in a large Coles or Woolworths outlet) has several advantages – in terms of store footprints, warehousing infrastructure and supplier discounts, to name a few.
Strategy has limits
In embracing the “Aldi way”, the company has made hard strategic choices. But it’s turning away shoppers who value things other than what’s on offer at Aldi – larger choice, established brands, more service, plusher stores, in-store bakeries and delis or expanded fresh food sections. As a result, Aldi’s growth in Australia is going to reach its limits.
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Angela McCabe is a Lecturer in the Department of Management, Sport and Tourism at La Trobe University. Angela McCabe’s research focuses on the mechanism of knowledge transfer and knowledge co-production in cross-sector collaboration. Her work has contributed to understanding the way in which behavioural and institutional dynamics affect teamwork and the production and dissemination of knowledge within university-industry-government networks.