Introduction of ALDI

• That four letter word dangerous competitor defined as ALDI.

• ALDI has perfected its low cost operating model and dramatically altered the German retail landscape. Its format of a small grocery store, limited variety and a Private Label PLs only policy became known as hard discount.

• By 2005, ALDI had spread from Australia to the United States with more than 6,000 stores and sales in excess of 34 billion Euros.

Introduction of LiDL

Lidl, its biggest competitor and imitator, had nipped the ALDI concept and increasingly added manufacturer brands over the years. In recent years, Lidl had grown faster than ALDI.

Introduction

• ALDI IS A CHAIN OF LOW BUDGET RETAIL STORE WITH SALE OF 473.5 BILLION IN 2008.

• Aldi invented the hard discount store which is very harmful for brands.

• They destroy a quarter or half trillion dollar brand sale annually.

• The brands have misconception about the discount store like They offer inferior quality productsThey are only for middle classTheir success is a recessionary phenomenon

Problem identification

• Hard discount store like Aldi and idle offer product on low prices to attract household consumer as compare to brand which is not acceptable by brand because they want a handsome profit margin on their product.

Derivation of Alternatives

• Their are different solution available for brands to reduce the level of competition

• Brand offer their discount store• Reduce the price gap between their product

and hard discounter product.• Sell unfamiliar size of product at hard discount

store.• Present the brand in an attractive outer cases

Analysis of Alternate

• If brand offer discount store then the profit margin become less butt the gap between sale is reduce between private label and brands

• Reduce the price gap is another option mean’s reduce the price of product which is equal or little high as compare to private labels. it will also effect on the profit margin of brand

• Sell unfamiliar size of product at hard discount stores.beacuse they also realize that their current strategy give limited market share.

Analysis of Alternate

• If they offer both private and branded product then more customer visit their store.

Choosing the best alternate

• Sale unfamiliar size of product like nestle offer 2 litter of mineral water cane for hard discount store.

• It will surely increace sale of branded product and also reduce the fear of sales cabablization.

conclusion

Implementation of alternate

• Brands must make unfimilar size of product and offer to hard discount store.