ALDI

Situation Analysis report (1,300-1,400 words): 

A brief introduction on the brand

ALDI supermarkets original began in German in 1913 with ALDI Stores Supermarkets Pty Ltd being
the Australian version of these stores. ALDI is spread across Europe, China, America and Australia
with over 10,000 stores in its name. The first store in the Australian market was opened in NSW in
2001, and over 500 stores have opened up across Australia since then. ALDI offers a significantly
smaller range of products (~1500) compared with its biggest Australian competitors Coles and
Woolworths (~20,000 – 30,000), however the products it does supply are mostly exclusive products
offered at cheaper prices than its competitors (“IBISWorld Australia - Industry, Company and
Business Research Reports and Information,” n.d.; Müller-Lankenau, Wehmeyer, & Klein, 2006)

Financially ALDI has achieved a steady rate of growth from 2014-2019 (peaking at 17.9% in 2015)
which is significantly greater than the industry as a whole. This consistent growth has reportedly
been due to the increase in stores that have opened during this period as well as increasing sales.
(“IBISWorld Australia - Industry, Company and Business Research Reports and Information,” n.d.)

followed by a structured report in which you conduct a situation analysis (SWOT analysis), which
reflects the information you obtain from your research on the brand, and summarizes key points
from an IMC perspective.

Strengths
Price/Savings
Aldi positions itself as a discount supermarket chain where lower prices than the mainstream giants
like Coles and Woolworths are the standard. This aspect is there most prominently advertised
feature.
Product mix
Aldi offers a significantly different variety of products and brands than the traditional major
supermarkets in Australia. Aldi markets (through their Wednesday and Saturday brochure) a wide
variety of products that can sometimes include meat smokers, snowboards, TVs, clothes etc. These
are all products that are unique in the supermarket landscape in Australia and usually only found at
other department stores.
International reach
Through its network of 10,000 stores, Aldi has access to an extensive international distribution
network. This reach of international brands and products which they can offer at reduced prices is
another core of Aldi’s marketing plan.
 
Customer satisfaction/Trusted Brand
(“Aldi now Australia’s most trusted brand - retailbiz,” n.d.)
Weaknesses
Low margins
Discount retailers like Aldi operate with lower profit margins than other supermarkets which
requires large volumes of stock to be sold to create the same profits as larger stores. 
Employee and customer satisfaction
Whilst Aldi offers a competitive wage to its staff, to save on costs there are frequently not enough
staff rostered on to each shift which causes tension for both staff and customers due to extend
waiting times to be served during peak periods. Checkout staff are also required to stock shelves and
perform other duties, unlike the bigger supermarkets where these roles are split.

Product offering compared to competitor

Aldi’s diverse and often different product and brand mix can hinder their sales when compared to
their competitors as consumers get accustomed to certain products and brands that Aldi cannot or
doesn’t offer. Aldi tried to influence consumers perception of this in a recent advertising campaign.
Reference
 
Opportunities
New market share with cheaper goods
In the current economic climate where growth is slowing, cheaper product alternatives can become
very appealing to a greater section of the market than the current target market for Aldi.
Offer what Coles and Woolworths can’t
Through their weekly brochures and catalogue’s Aldi can continue to offer and market a large
number of products that aren’t supplied by the other supermarket chains. 
Threats
Established competitors
Aldi is attempting to grow further in a market that has has heavily established competitors in both
the “discount store” market as well as traditional supermarket chains. Both Coles and Woolworths
Both these companies have a foothold in the Australian market with over 1800 stores across the
country between the two. Not only do these stores have greater reach, their marketing power is also
far more significant and they have a longer history of operating in the Australian market.
 
Can’t offer the same number of products
Aldi simply cannot offer the same number and variety of products that the bigger retail chains can
do the physical limitation of the size of their stores.

This is summarised weakness and threats. You need to do the duncan’s swot analysis on this

Weaknesses
 
Perceived product offering compared to competitor
Aldi’s diverse and often different product and brand mix can hinder their sales when compared to
their competitors as consumers get accustomed to certain products and brands that Aldi cannot or
doesn’t offer. Aldi tried to influence consumers perception of this in a recent advertising campaign
called “Give it another go” (“BMF - Give it Another Go,” n.d.).
 
Threats
Established competitors
Aldi is attempting to grow further in a market that has heavily established competitors in the
traditional supermarket section of the market. Australia has one of the world’s most highly
concentrated grocery markets (Mortimer & Parker, 2013). Both Coles and Woolworths have a
foothold in the Australian market with over 7000 stores across the country between the two entities
(Knox, 2015), which consumes up to 77% of all grocery and liquor sales within Australia (O’Kane,
Richardson, D’Almeida, & Wei, 2019).  Not only do these stores have greater reach, their marketing
power due to the amount of market share and revenue they generate in the Australian market is
also far more significant.
New entrants into market
Whilst the Australian market is highly concentrated, the barrier to entry is quite low (Mortimer &
Parker, 2013), meaning Aldi will now have to contend with two new players in the discount retailer
market. Costco and Kaufland (part of the Schwartz Group), the worlds 2 and 4 biggest retailers
nd th

(“STORES Global Powers of Retailing 2017 [G14 - G15],” 2017), are attempting to cement their own
foothold locally with their immense marketing power a definite threat to Aldi.
 

BMF - Give it Another Go. (n.d.). Retrieved September 1, 2019, from http://www.bmf.com.au/our-
work/aldi-give-it-another-go/
IBISWorld Australia - Industry, Company and Business Research Reports and Information. (n.d.).
Retrieved August 27, 2019, from
http://clients1.ibisworld.com.au.ezproxy.lib.monash.edu.au/reports/au/industry/majorcom
panies.aspx?entid=1834#MP12688
Knox, M. (2015). Supermarket Monsters: The Price of Coles and Woolworths’ Dominance -
Malcolm Knox - Google Books. Schwartz Publishing Pty Ltd. Retrieved from
https://books.google.com.au/books?hl=en&lr=&id=GNW-
CQAAQBAJ&oi=fnd&pg=PT5&dq=Aldi+AND+Coles&ots=DazgJwFDrO&sig=Y1X5MsjCh-
kT4czUeLRyZEyOWBw#v=onepage&q=Aldi AND Coles&f=false
Mortimer, G., & Parker, C. (2013). FactCheck: is our grocery market one of the most concentrated
in the world? 6.05am AEST. Retrieved from https://eprints.qut.edu.au/92651/1/92651.pdf
Müller-Lankenau, C., Wehmeyer, K., & Klein, S. (2006). Strategic channel alignment: an analysis of
the configuration of physical and virtual marketing channels. Information Systems and E-
Business Management, 4(2), 187–216. https://doi.org/10.1007/s10257-005-0031-4
O’Kane, G. M., Richardson, A., D’Almeida, M., & Wei, H. (2019). The cost, availability, cultivars, and
quality of fruit and vegetables at farmers’ markets and three other retail streams in
Canberra, ACT, Australia. Journal of Hunger & Environmental Nutrition, 14(5), 643–661.
https://doi.org/10.1080/19320248.2018.1465003
STORES Global Powers of Retailing 2017 [G14 - G15]. (2017). Retrieved September 1, 2019, from
http://www.nxtbook.com/naylor/NRFK/NRFE0017/index.php#/14