diversity in retailing by shanna bank, lucie pospísilová, jana nováková, julia maurer
TRANSCRIPT
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Diversity in European
Retailing
08.12.2014
By Jana Nováková, Shanna Bank, Lucie Pospíšilová, Julia Maurer
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Case introduction
Food retailing industry
Snapshot ALDI
ALDI in Romania
ALDI in the UK
Internationalization strategy CountryLife
Snapshot
Business model
Recommended internationalization strategy
Adaption vs. standardization zones
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Agenda
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Case introduction
ALDI in Romania
ALDI in theUK
Interna-tionalization
Strategy
Customized models for each community
Create unique shopping experience
Differentiation from competitors necessary
Staff, technology, services, advertising etc.
Positioning
i.e. ALDI target customers who want to save money
BUT also offers private labels
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Food Retailing Industry
0
20
40
60
80
100
120
Retail revenue 2012 (US$bn)
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Case introduction
ALDI in Romania
ALDI in theUK
Interna-tionalization
Strategy
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Snapshot ALDI
9,600 stores in 18 countries (2013)
Albrecht Discount ALDI
World‘s largest operator in discount channel
Revenue €75 billion worldwide (2013)
Limited assortment, focused on most needed and most
often used products
In-store costs kept at minimum
„We buy the best for less, so you can
too...“
https://www.youtube.com/watch?v=8
sf8NiJPWzY
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ALDI in Romania
Was it a good idea of ALDI to enter
Romania?
Market entry learnings transferred from
the UK to Romania
Recommendations for local adaptions to
taste and shopping habits
Evalutaion of ALDI‘s approach to enter
the Romanian market
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Case introduction
ALDI in Romania
ALDI in theUK
Interna-tionalization
Strategy
Yes... Wave of Eastern European store openings: Slovenia (2005),
Hungary (2007), Poland (2008)
No competition of local discounters
Lidl&Plus started its aggressive expansion towards CEE
Sales growth decreased from 2000-2004 for Aldi
Romania in EU since 2007
Financial crisis started in 2008, good possibility for „hard-discounters“
In CEE: Romania is the largest country , #2 in terms of populationsize, Bucharest is biggest city
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Was it a good idea of ALDI to enter
Romania?
07.2007: First market entry by 100% subsidiary in Bucharest
controlled by Austrian based subsidiary Hofer
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Case introduction
ALDI in Romania
ALDI in theUK
Interna-tionalization
Strategy
...and No
Low GDP per capita and shrinking population
High property prices
ALDI as a „laggard“ and less aggressive
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Was it a good idea of ALDI to enter
Romania?
07.2007: First market entry by 100% subsidiary in Bucharest
controlled by Austrian based subsidiary Hofer
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Case introduction
ALDI in Romania
ALDI in theUK
Interna-tionalization
Strategy
2005
Plus
Tengelmann Group
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Was it a good idea of ALDI to enter
Romania?
ALDI is a “laggard” and less aggressive
1995 2011
1995
Mega Image
Delhaize Group
1996
Metro
Metro AG
1999
Billa
REWE Group
2000
Profi
Delhaize Group2001
Penny Markt XXL /
Selgros
REWE Group
2001
Carrefour
Carrefour Group
2005
Kaufland
Schwarz Gruppe
2005
Penny Markt
REWE Group
2006
Real
Metro AG
2006
Auchan
Mulliez Group
2011
Lidl
Schwarz Gruppe
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Case introduction
ALDI in Romania
ALDI in theUK
Interna-tionalization
Strategy
Repositioning plan (2005):
Investment £1.5 billion
50 new stores annually over next 4/5 years
Product range expanded 700 1050 products
Advertisement:
TV add “Spend a Little, Live a Lot”
Incredible quality and unbeatable value
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Market entry learnings transferred
from the UK to Romania
Result:
> 3% of British grocery market
7th out of 96 retailers in the UK’s
biggest survey of high street shops
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Case introduction
ALDI in Romania
ALDI in theUK
Interna-tionalization
Strategy
Store size/type: Proximity stores with smaller area
Low prices, very price sensitive
Assortment:
Local suppliers preferred
Private labels appreciated
Local adaption
“Natural”, home made-like products
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Romania: Local tastes and
shopping habits
Mămăligă Compot Plăcintă
Local wine
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ALDI in the UK
ALDI‘s shift from glocal to multinational
strategy: The right decision?
How ALDI was repositioned in the UK
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Case introduction
ALDI in Romania
ALDI in theUK
Interna-tionalization
Strategy
Internationalization approach
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Glocal Orientation
Domestic Market Orientation Multinational Orientation
Be
ne
fits
from
Inte
gra
tion
Local Responsiveness
Global Orientation
Standardization
Adaptation
Homogenous markets
EtnocentricUnified
Economies of scale
Diverse formats
Heterogenous markets
Moderate adaptation
Think global, act local
Positioning
Pricing
Logistics
Layout
Logistics
Pricing
PricingNew brands
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Case introduction
ALDI in Romania
ALDI in theUK
Interna-tionalization
Strategy
From Glocal to Multinational
Aldi’s Business Model
Low rent
Stacked on pallets, in boxes
Layout suits logistics
Limited assortment
Low-cost media
Newsletter „Aldi informs“
Aldi in the UK
City center, eco-friendly
Fresh, Grab-and-go food
Easy layout, lower shelves
Premium private brands
Professional publicity agency
Online press center
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Case introduction
ALDI in Romania
ALDI in theUK
Interna-tionalization
Strategy
Internationalization strategy change
Loss of unifiedcompany image
Mode different products, different
store image, different target
customer
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Occuring problems:
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Case introduction
ALDI in Romania
ALDI in theUK
Interna-tionalization
Strategy
Internationalization strategy change
More complicatedsupply chain
More products(700 1050) and more different types (healthy, cosmetics, ready-to-eat)
Higher costsSeveral marketing
campaigns in the UK and redesign of stores
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Occuring problems:
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Discussion time
ALDI‘s shift from glocal to multinational
strategy: What do you think? The right
decision?
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Internationalization
strategy
Snapshot CountryLife
Business Model
Recommended Internationalization
Strategy
Adaption vs. standardization zones
How the Czech food retailer
CountryLife should venture abroad
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Case introduction
ALDI in Romania
ALDI in theUK
Interna-tionalization
Strategy
Founded 1991 in Prague, first bio groceries store in CZE by Otakar Jiranek
Eco-center, Eco-farm, Bio-bakery
No. 1 importer of bio-products – more than 2000 in portfolio
Groceries
Fruits and vegetables
Pastry
Cosmetics
Detergents
4 stores in Prague
More than 150 employees
Introducing bio-groceries to schools
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Snapshot CountryLife
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Case introduction
ALDI in Romania
ALDI in theUK
Interna-tionalization
Strategy
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Business Model
To inspire people with balanced and socially responsible lifestyle.
NEWSTART concept
Covering the whole food chain
Ecological responsibility
Mission
Target group
Core business
Differentiation from thecompetition
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Case introduction
ALDI in Romania
ALDI in theUK
Interna-tionalization
Strategy
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Recommended internationalization
strategy
Vienna
Health consciousness(9. healthiest
country)
Geographicalproximity
Income
Culturalsimilarity
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Case introduction
ALDI in Romania
ALDI in theUK
Interna-tionalization
Strategy
Internationalization approach
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Glocal Orientation
Domestic Market Orientation Multinational Orientation
Be
ne
fits
from
Inte
gra
tion
Local Responsiveness
Global Orientation
Pricing: higher
Moderate adaptation: language, assortment
Think global, act local
Layout: similar style
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Case introduction
ALDI in Romania
ALDI in theUK
Interna-tionalization
Strategy
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Standardization vs. adaption zones
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http://www.foodanddrinkeurope.com/Retail/Falling-domestic-sales-force-Aldi-into-Eastern-Europe?utm_source=copyright&utm_medium=OnSite&utm_campaign=copyright
http://www.fruitnet.com/eurofruit/article/9656/lidl-branches-out-in-eastern-europe
http://en.wikipedia.org/wiki/List_of_supermarket_chains_in_Romania
http://fructidor.com/newsdetail.aspx?idn=13412
http://www.techbusiness.me/files/aldivslidl.pdf
http://hbr.org/2009/12/dont-be-undersold/ar/1
http://www.wall-street.ro/articol/Companii/31941/Meciul-dintre-discounterii-Aldi-si-Lidl-se-muta-in-arena-romaneasca.html
http://mpra.ub.uni-muenchen.de/40361/1/25-The_economic_crisis_an_opportunity_for_retailers_in_Romania.pdf
http://www.countrylife.cz/
http://www.forbes.com/2008/04/07/health-world-countries-forbeslife-cx_avd_0408health_slide_16.html
http://www.eufic.org/article/en/expid/Fruit-vegetable-consumption-Europe/
http://www.oecdbetterlifeindex.org/countries/hungary/
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References