Notre Dame University Louaize Faculty of Business Administration and Economics Department of Management and Marketing Operations Management

t BAD 429 Section A ALDIs Case Spring 2012 Presented By: Romina Rahme To: Dr. Atef Harb

1- ALDI has gained and sustained its competitive advantage over other grocery stores and supermarkets by following a low-cost strategy which attracts middle to low income population and allow them to benefit from good quality products but at a cheaper price than the other groceries. To be able to achieve such low-cost strategy, ALDI has followed many steps: Buying large quantities so that to benefit from economies of scale. Renting small stores which means lower rental prices Selective products are sold instead of too many products of low-usage. Limitation of brands to the stores name. Locating the stores in inexpensive streets. Pallets are used to display products instead of shelves. Employees have the flexibility to perform many tasks, instead of hiring employees for each and every task; this means lower salaries expenses. The bags are also sold instead of providing them for free. Profit Margins are lower than the others.

2- ALDIs low-cost strategy indeed does not imply that it is offering low-quality products; in contrast it is offering the same quality as the others but at cheaper price, because if it is doing so it could not be able to develop its business across its national boundaries. Quality is important to guarantee the consumers safety and rights, and to preserve the good reputation of the company in order to be able to keep in business.