Strategic Marketing for Aldi

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5.1.4 Technology Factor

United States is one of the country that has the most advanced technology and research and development teams in the world. It has allowed the retail industry to use the technology such as internet to connect and provide information to the customers. Other than that, retailing industry is able to use technology to go green and be part of company that reduce carbon emission to the environment. E-commerce allows ALDI’s customers to have information on products that the company offers and check on their latest information. Also, they provide mobile application on smartphones so their customers can access to them with ease and this can be an opportunity to ALDI (ALDI, 2015). Apart from that, ALDI has also adopted technology such as LED lights in their United States’ stores to minimize expenses and meanwhile responsible to carbon emission to the environment.

5.1.5 Environmental Factor

Environmental factor has always been a critical factor for a big company to deal with as it could affect the image of the company if their issues against environment are not well dealt. It creates problems not only to a certain society but affects the whole mankind if it is ignored. Large company such as Walmart, utilizes the solar energy and reduce plastic bag usage by 38% today compare to 2008 (Walmart, 2015). They emphasize on being part of responsible for saving the environment as it could help on building image for them and meanwhile save the environment. ALDI has been partnered up with Duke Energy in order to share out their energy-saving ideas and meet the company’s energy goals throughout the ALDI grocery chain. New LED lights have been replaced for the ALDI’s freezer door lights as it can use up energy more efficiently and reduce energy consumption compares to normal lights (Bonnett, 2014). Other than that, ALDI has their refrigerated cases added with anti-sweat heater controls and nighttime display covers installed for open coolers. Helping reducing carbon emission that every ALDI store could be potentially release to the atmosphere at their best can result in becoming an opportunity to the company.

5.1.6 Legal Factor

The most and latest significant legal issues that could possibly create by retail industry is the privacy of consumer and security of data in terms of personally identifiable data collected in transactions (Herzeca and Hogan, 2013). Retailers today are facing high level of risk in data security due to ease of access to the data. Findings show that in year of 2014, 20 percent of consumers have clarified that they will not visit retailer that experienced data leakage issue. On the other hand, 36 percent of consumers are more favor to visit retailers that measure the risk of leaking personal data. Hence, having high transparency on how retailers deal with securing consumers’ personal information will be forthcoming (Paul, 2015). ALDI are committed to protect customer’s information to ensure they are not disclosed to the public for misusage. ALDI is being careful on how they deal with their customers’ information in order to prevent facing legal issues from the society (ALDI Corporate, 2015). A transparent working culture will be beneficial in avoiding legal issues too if ALDI keeps their customers’ information enclosed, this could be an opportunity for the company as it values customers’ information the way it values them.

5.2 Micro-Environmental Analysis

Micro-environmental analysis analyzes the company based using the Porter’s 5 forces model which consists of threat from new entrants, threat from substitutes, buyer bargaining power, suppliers bargaining power and competitive rivalry.

5.2.1 Threats from New Entrants

In order to compete with giants of the food retailing industry in the United States, huge capital investments are required and not to mention establishing a high reputation brand name (Mintel, 2009). Several large food retailers such as Walmart, Tesco, ALDI and such in the United States are already accounted for most of the food shopping industry. (Ivory Research, 2015). Therefore, it threat from the new entrants is considered small for the existing companies.

5.2.2 Threat from Substitutes

ALDI faces threats from local farmers selling their own home-grown vegetables, dairy products as they can be sold at first hand prices, which cost lesser price compare to ALDI’s products. Convenience stores are the major substitutes for the food retailing industry. ALDI manages to offer high quality products at their lowest price allows them to minimize threats from smaller stores that substitute their products (Financial Times, 2009). Moreover, convenience stores do not provide genuine high quality products as ALDI does (Carreno et al., 2011). Apart from that, ALDI’s branches manage to isolate their substitutes by providing the most convenient location and wider product range, which the substitutes do not have advantage to compete with. Hence, the threats from the substitutes for ALDI is small to no threat.

5.2.3 Suppliers Bargaining Power

ALDI have their own exclusive brands and they are tested to beat the international brand’s quality. This requires the company’s suppliers to consistently supply them high quality organic ingredients and raw materials to produce their favored quality products. However, the suppliers will have low bargaining power against ALDI because of ALDI has the ability to look for other high quality materials and ingredients suppliers instead of sticking to one. In order to maintain or having competitive bargaining power against ALDI’s suppliers, they are required to expand ALDI’s market share in the United States to let the suppliers create a relationship bond among ALDI and the suppliers. Therefore, ALDI US has low threat against their bargaining power of suppliers.

5.2.4 Competitive Rivalry

In competition rivalry, ALDI faces high threats as their competitors such as Costco and Walmart who have their reputation built as a low cost wholesaler. They are able to provide customers products with low prices. The only difference among the competitors and ALDI is ALDI offers unique groceries which the competitors rarely acquire. However, the intensity of competition and continuation of global recession cause customers to become more price sensitive, discerning and reducing in brand loyalty. Comparing to quality of products offered by the stores, customers today are more likely prepared to travel from stores to stores