The Aldi Discount Supermarket

The Aldi Discount Supermarket

Introduction

Aldi is an organization that owns a chain of discount supermarkets with over 10,000 stores in 20 different countries around the world. The organization was founded in 1946 by two German families, and from then it grew into a big organization that earns an approximated turnover of over €50 billion combined (Brandes & Brandes 2019). These chains of stores were founded and based in German by two brothers Theo and Karl Albrecht, after they took over their mother’s store in Essen. Over the years, the Aldi organization has faced both challenges and success in its line of operations, putting in place strategies, techniques that enable them to meet the social, environmental, and economic obstacles to enhance its services and obtain more profits. This paper focuses on giving a clear overview of the problems the institution is facing and how they have managed to mitigate them.

History of the Aldi organization

The Aldi organization started from a humble background as a simple store in Essen Germany in 1913, which was owned by the mother of Theo and Karl Albrecht. In 1946 the two brothers took over the management of their mother’s store, and that is where the Aldi Corporation or organization was established (Brandes & Brandes 2019). After the two brothers took over, the organization grew into great heights over the year, moving from their headquarters in Essen Germany into the international market where they ventured into other countries and states and established their chain of stores there. The name Aldi is an abbreviation of the name Albrecht Diskont made formed by combining the first two letters of the first and last name.

In 1960 the Aldi organization split into two different companies. In 1962 the two companies renamed themselves from Aldi to Aldi Sud, which was based and had its headquarters in Mulheim, Germany, and the other renamed its self to Aldi Nord, whose headquarters remained in Essen Germany (Brandes & Brandes 2019). The organization became legally separated from 1966, which gave them formal business names which are Aldi Einkauf GmbH and The Compagnie, Ohg. The legal names are the names the stores use when negotiating with contractor companies to avoid confusion. But since it was a family business initially, the brothers decided to still hold the Aldi name for the stores and the sake of their customers.

Aldi Nord has about 2,500 stores in eastern, western, and southern Germany, which are its major regions. On the other hand, the Aldi Sud major regions are southern and western Germany, where it has a total of 32 companies with about 1,600 stores (Brandes & Brandes 2019). In the international market, Aldi Nord operates in Portugal, Denmark, Poland, France, the United States, and Spain. While on the other end the Aldi Sud has its stores and operations in Hungary, China, Slovenia, Great Britain, Austria, Ireland, and the united states. The two organizations have invested heavenly in the USA as, by 2017, they had a total of 1600 stores spread in different states in America.

Sustainability Embedment of the Organization

As an organization, Aldi has more embedment on environmental sustainability, aiming at improving the ecological state in the countries they operate in and in the world. The Aldi organization has put measures and programs in place to ensure that they achieve their environmental goal, which will also result in more benefits for the organization (O’Higgins & Zsolnai, 2018). For instance, the organization has put in place a program that aims at reducing the carbon emitted in the environment by its stores and operations. The fight to reduce the carbon footprint the organization has invested heavily in a more sophisticated transport system with vehicles that emit little or no carbon to the environment.

Also, Aldi is a heavy recycler and plans to stop the use of plastic bags and materials in their stores entirely by 2025. The strategy put in place for the organization to achieve this sustainability goal they have set a target of reducing all the plastic waste generated from plastic packages by making their packaging recyclable, reusable, and compostable. Including instructions on how to recycle on their bags will also enable their customers to contribute to the goal of Aldi (O’Higgins & Zsolnai, 2018). The primary purpose of the organization is to reduce the number of plastics dumped into the oceans and land, which poses a threat to the animals and causes land degradation.

The organization also plans on using energy-saving devices and equipment in their sores to enable their reduction of energy consumption. Also, Aldi recycles and refurbishes all their damaged machines and sells or donates them to third world countries. This action ensures that they do not dispose of the hazardous material in the tools, they repair them and resale them, providing the organization with more money and, at the same time, saving the environment. With these measures of recycling in place, Aldi can reduce the percentage of harmful waste it disposes of, and using energy-efficient devices and gadgets helps save the organization a great deal of money in the operations resulting in the sustainability of the organization.

Techniques and Strategies Employed By Aldi

The rapid growth and success of Aldi can be termed as a result of the excellent relationship the organization has built with its stakeholders. Aldi’s vision and mission are based on delivering the best quality of products to the community to improve people’s lives. The organization looks at its self as part of the community, and that is why it creates good relations with people around it (O’Higgins & Zsolnai, 2018). The stakeholders of Aldi are the customers, the employees, the suppliers, and the community at large.  The organization’s shareholders the HOFER KG Austria, which runs the international front having the countries the organization invests in as their shareholders and the ALDI GmbH & Co. KGs which controls Germany. The shareholders are not involved in the day to day running of the organization.

The Aldi organization has put in place or adapted strategies that enable its success in the market world, even with the fierce competition it faces from other organizations in the same field of work. These strategies and techniques have enabled the organization to have sustainability and continue to serve its clients with the best quality products. In an article on the Guardian, written in 2107, predicted that Aldi would grow to a higher level more than its competitors. It was predicted that Aldi would gain or grow by 19.8% in 12 weeks, while its main competitors will increase by 1.6% in the same period. The following are techniques and strategies that are employed by Aldi to ensure its success.

First, the organization has put more emphasis on human resources, which is an essential part of the organization. Aldi has developed a good relationship with their workers seeing them as part of the organization and not just workers but stakeholders in the organization. The employees of Aldi are involved in decision making in the organization and delegations in the organization. Treating the employees as part of the company has motivated them, enhancing their performance, which increases positive results in the organization. The employees of Aldi are usually happy with their work, which results in them working hard and honestly improving the organization’s returns and increasing customer satisfaction.

Secondly, the organization keeps on improving its resources and systems. The continuous improvement in the organization has enabled Aldi to achieve its success in the market and stay on top of the competition (Brandes & Brandes 2019). With periodic upgrades of their hardware and software have enabled it to keep up with the changing technology in the world, which enhances the sufficiency and speed of their services, which increases customer satisfaction. Also, Aldi ensures that they train their employees on how to conduct themselves and serve the clients to enhance customer service and workers skills. The improvements in their sectors help manage the changes in the business world and stay flexible in adopting the changes.

Thirdly, the organization uses a management strategy that is based on Total quality and time-based management. This type of control ensures that all the workers have skills to operate in various departments in the organization, which enhances employee flexibility and prevents the breakdown of processes due to the availability of substitutes in case someone is absent (Tench et al. 2014). The employees are also trained in time management, which increases efficiency in the operations. Aldi also focuses more on improving the quality of its services and products, which ensures that the customers get the right quality products at a discounted price, which enhances customer loyalty.

Lastly, the organization uses methods that help it deal with declining resources, which is also a strategy for its success. Aldi purchases its products in bulk or vast quantities, which enable it to get discounted prices from the supplier, which allows it to slash its prices for their buyers (Tench et al. 2014). The bulk buying also enables them to have enough stock in case of declining resources. They also train their employees to handle all the departments in the store in case someone is absent; anyone can handle that role. They also use a method that allows them to reduce the cost of operations, for example locating their stores in the outcasts of urban areas where it is not expensive and using sufficient energy gadgets, which saves on the amount of energy consumed reducing the bills paid on power.

How Aldi Deals With Increasing Expectation and Radical Transparency

In 2018 Aldi was ranked as the top transparent organization on their employee’s pay, and they were awarded the hero award for pay transparency. The employees of Aldi said that the organization always keeps their pay transparent hence increasing loyalty and honesty in the organization. The organization also uses the unselling approach where they deliver what they promised and nothing less or more (Stratten, 2014). This way, they can deal with the increased expectations of their customers and enhance transparency between the organization and its customers. It also maintains transparency with its suppliers or manufacturers, which help create a sustainable chain of supply.

Aldi’s

chain of supply keeps the business running, and it is efficient for the business. The organization has a chain of supply that starts with the supplier or the manufacturer of the products and items they sell in their stores. Then after a deal is made and the organization purchases the products in bulk, they are taken to the organization’s distribution centers where they are stored. From the distribution center, they are now taken to the respective stores where they are sold to the customers (Kleemann, 2013). The marketing team also comes in handy in creating awareness of the store and reminding its customers about the best offers the stores have. With such a strategy or chain of supply, value is sustained. Also, there is transparency and satisfaction for all the parties involved leading to the success of the business.

References

Brandes, D., & Brandes, N. (2019). Bare essentials: The ALDI story.

Tench, R.,  Jones, B., & Sun, W. (2014). Communicating corporate social responsibility: Perspectives and practice.

Kleemann, F. C. (2013). Supply chain strategy analysis for Aldi. Place of publication not identified: Grin Verlag Ohg.

Laufer, P. (2015). Organic: A journalist’s quest to discover the truth behind food labeling.

O’Higgins, E., & Zsolnai, L. (2018). Progressive business models: Creating sustainable and pro-social enterprise.

Stratten, S. (2014). Unselling: The new customer experience.