Value Chain Analysis of Aldi

Aldi is a retail chain discount supermarket German multinational company. Theo Albrecht and Karl founded the retail chain brand in 1946. Today, we’ll discuss the value chain analysis of Aldi supply chain analysis; primary and supporting activities in the process of value chain analysis Example Company. They are inbound and outbound logistics, operations, marketing, and customer service; infrastructure, HRM, technology, and procurement as an application of the value chain analysis process.

Products and services of Aldi

• Consumer goods
• Groceries
• Food items
• Household appliances
• Fresh fruits and vegetables

Financial figures of Aldi

• Annual revenue of Aldi Sud – 27 billion Euros (2022)
• Annual revenue of Aldi Nord – 76 billion Euros (2022)
• Employees of Aldi Sud – 201,361 
• Employees of Aldi Nord – 72,811 
• Network – 12,596 stores

Substitutes and competitors of Aldi

• Publix
• Costco
• Kroger
• Morrisons
• Walmart
• Target
• Lidl
• Tesco
• Dollar Tree

The Value chain analysis of Aldi supply chain analysis would analyze the primary and supporting activities in the process of value chain analysis. They’re inbound and outbound logistics, operations, marketing, and services; infrastructure, HRM, technology, and procurement. Here’s supply chain analysis of Aldi value chain analysis company example as follows;

Value Chain Analysis of Aldi 

Let’s discuss the primary and supporting activities involved in the process of value chain analysis of Aldi supply chain analysis. It is an application of value chain analysis based on Porter’s model; some of the key elements and components of value chain analysis are as follows;

Primary Activities of Aldi

Some of the five main primary activities in the value chain analysis of Aldi supply chain analysis are as follows;

Inbound Logistics of Aldi

I-Goods Relationship with Suppliers

Aldi invests a significant amount of capital resources in building a long-term relationship with suppliers and vendors. It helps the company to source top-quality products, raw supplies, and materials at the best market competitive price. However, supplier relationship plays a key role in performing smooth operations and functions of the company. The company makes sure that fair labor practices, committing to human rights, and performing in the best working environment.

II-Responsible Sourcing

Aldi ensures that its suppliers are sourcing raw materials, products, and goods sustainably to have a limited impact on the environment. In fact, the company has shown a strong commitment to responsible sourcing and implementation of human rights. The retail chain brand has set strict guidelines and standards for its suppliers and business partners to amplify their working environment responsibly.

Outbound Logistics of Aldi

I-Distribution Network

Aldi has established a network of more than 12,596 stores in various countries across Europe and worldwide. The outbound logistical distribution network of the company comprises; manufacturers, distributors, wholesalers, retailers, and consumers. However, it focuses on ensuring the finished products and goods are on the shelves of the company’s retail chain stores.

II-Selective Distribution Channel Method

Aldi follows the selective distribution channel method for the sale of complex products and goods that need assistance. The company employs various transportation and distribution channels; shipping, pipelines, trucking, or air freight, and every channel has its own pros and cons. Out of all, trucking is the most suitable method due to cost effectiveness, easy scheduling, and wide availability.

III-Distribution Objectives

Some of the main logistics, distribution, and transportation objectives of Aldi are as follows;

• Improving and managing the flow of goods and resources
• Coordination, designing, and planning
• Improving the efficiency in the flow of information
• Collaborating with distribution partners
• Efficiency in internal transportation and warehousing factions

Operations of Aldi

I-Warehousing

Warehousing is the most significant function that Aldi performs in its daily routine operations. It focuses on receiving the finished goods; ensuring their safety in the storage facility, and delivering the relevant products and goods to the required retail stores. Efficient warehousing processes and operations would help the company reduce costs and improve the company’s profitability.

Marketing & Sales of Aldi

I-Push Marketing Strategy

Aldi follows the push marketing strategy by working closely with its suppliers. The manufacturers and producers offer incentives to the retail brand Aldi and its distribution for selling their products to the customers at their retail stores.

II-Marketing

Aldi employs various traditional and digital media channels like TV, radio, newspaper, and social media for the promotion of its products, goods, and brands. In fact, the company has recently partnered up and sponsored the food programming strands of the British TV Channel 4. Multiple media channels help the company to amplify its market reach, sales, and revenue stream.

Services of Aldi

I-Self-Servicing Offers

Aldi has invested a significant amount of capital resources on self-service offers; home delivery service, order online and in-store pickups, and mobile applications. The objective of all such self-servicing options is to offer a better customer experience and improve profitability.

II-Dedicated Customer Support Staff

Aldi has set up a very loyal and dedicated customer support staff that focuses on supporting customers and resolving their problems both online and offline. As a result, it has allowed the company to increase its customer satisfaction level.

Supporting Activities of Aldi

Some of the main supporting activities in the value chain analysis of Aldi supply chain analysis are as follows;

Infrastructure of Aldi

Aldi has developed a strong infrastructure in the form of supply chain, logistics, distribution, retail, and marketing and branding. It helps the company to gain significant control over its operations and achieve a competitive edge. Integration of the physical retail infrastructure with the IT infrastructure would lead the company towards growth, progress, and success of its operations.

HRM of Aldi

Both Aldi Sud and Aldi Nord have employed over 274,000 employees collectively to manage their global retail chain operations. The company pays a lot of attention to the professional growth and personal well-being of its employees; some of the main employee benefits Aldi offers are as follows;

• Early access to wages
• Safe working environment
• Competitive salaries and wages
• Paid holidays and generous vacations
• Flexible shift schedule
• Industry-leading wages

The human resources department of Aldi strongly believes in women’s emancipation, workforce diversity, and creating a safer workplace environment.

Technological Development of Aldi

Aldi invested a significant amount of capital resources in technological development and improving its retail chain brand relevant to the industry standards. It could be in the form of developing an online platform, building mobile applications, home delivery services, strategic partnerships with tech companies, self-servicing kiosks, online payments, and others.

Procurement of Aldi

Aldi is highly cautious about responsible sourcing from its suppliers and business partners. In fact, the company sets specific standards and rules when it comes to procuring goods and products from its suppliers and vendors. It helps the company to make sure that it is purchasing the right and environmentally sustainable products and goods.

Conclusion: Supply Chain Analysis of Aldi Value Chain Analysis Example Company | Application of Value Chain Analysis Process 

After an in-depth study of the value chain analysis of Aldi supply chain analysis; we have realized that Aldi is the world’s leading German retail chain brand. If you are learning about the Aldi value chain analysis example company; then you should keep in mind the abovementioned primary and supporting activities. They’re inbound and outbound logistics; operations, marketing and sales, and services; infrastructure, procurement, HRM, and technological development as an application of the value chain analysis process.