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Aldi is the inventor of the hard discount model, copied by Lidl and Mercadona (amongst others) The case explains the history and operating model of Aldi, starting from its origins in 1913 to its challenges in 2023 with presence in Europe, USA, Australia and China. The case allows a detaled analysis of how the business model of hard discount works, how Aldi has been able to gr from a 35 sqm store to a ?100 billion retail giant - and how the company developed over the past decade. This case replaces the P-1071-E Aldi: A German Retailing Icon from the same author.
Students will first analyze in depth the elements that made the hard discount a very successful model over the past 70 years. They will then have to identify the challenges the company faces in 2023 and how to best overcome them. The challenges are representative for the challenges faced by leading companies in grocery retail. In the first part of the case discussion students will be able to explore how many elements of operations (e.g., purchasing, cross-docking, store operations, supply chain management) have been the backbone of success for Aldi. In the second part of the class students will explore how the changes over the past decade have presented Aldi with the challenge of preserving its core (i.e., extreme efficiency in operations and supply chain) while adapting to a new world of retail where digital plays a key role.