The UK food retailing industry is characterized by price wars, heavy discounting and increased merger and acquisition activity as seen in the recent merger of Tesco and wholesaler Bookers Group as well as the much anticipated merger of Sainsburys and Asda (Sainsdas). While a Brexit-led lull in consumer spending has played a part in creating this state of affairs for UK supermarkets especially the Big Four, it is Aldi and to a lesser extent Lidl, who have played a massive part in shaking up the UK food retailing industry. They are the only two food retailers in the UK who have been recording double digit growth rates since 2010, during a time when sales and market shares of the Big Four were in freefall. Since 2010, Aldi has increased its market share from 1.6% to 6.8% in 2018, taking it from the 11th largest grocer to now 5th and predicted to overtake Wm Morrisons. Using Pestle, Swot, BCG Matrix and Porters Five Forces analysis, this report examines the macro environment and industry structure of the UK food retailing industry to understand the forces and trends driving competition and how Aldi has been responding. While some trends such as UK consumers continuing to trade down favour it, others such as digitisation innovations and internal weaknesses including its limited product assortment, may hamper future growth in the UK and other key markets such as the US and Australia.
HARVARD
Magezi, K. Prudence (2018) "Aldi Pestle and Swot analysis 2018" 123 Writing [Online] at https://www.123writing.com/sample/pestle-and-swot-analysis-of-aldi-2017-2018
Aldi Business Strategy Case Study
Key Learning Outcomes
- Understand the broad macro-environment of Aldi and the UK food retailing industry in terms of political, economic, social, technological, environmental and legal factors (PESTEL/PEST/STEEPLE).
- Use our swot analysis example to gain an overall understanding of Aldi's strengths and weaknesses and strategic options arising from the opportunities and threats that have been identified from the Pestle analysis example.
- Analyse the various strategic business units in Aldi's portfolio and assess which ones are the stars and cash cows generating the most value, or the question marks, and dogs that may need further investment or divesting.
- To apply strategy business models and frameworks such as Pestle/Pest/Steeple, Swot, BCG etc to real company cases.
Analyse the internal and external environment of Aldi and the UK supermarket industry using Pestel, Swot, Porters five forces & BCG
- For Aldi Porters five forces, see Aldi Porters Five Forces Analysis 2018
- For Sainsburys Pestle and Swot analysis, see Sainsburys Pestle & Swot Analysis .
- For Tesco Pestle and Swot analysis, see Tesco Pestle & Swot Analysis
1.0 INTRODUCTION
Aldi is a German international discount store opened in the UK in 1990 and in Ireland 9 years later. Aldi has experienced rapid growth in the UK becoming the fifth largest grocer over taking co-op (Butler 2017).The company owns more than 726 stores only in the UK with market shares of approximately 6.9% ahead of co-op which has 6% as of 2017( Davay 2017; BBC 2017).
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