Aldi is a Germany based Supermarket chain. This supermarket chain is comprised of two groups, Aldi SUD and Aldi Nord. However, these both groups are independent in its operations and operate in their specific markets. Aldi has successfully transformed itself from one of the small business to one of a leading valuable and successful retail business chain.
The company is currently operating in 18 countries and employing more than 100,000 people. It offers high quality products with variety, in reasonable prices and presents in simplest possible way. Aldi builds everything with the possibility of considerable savings which always passes to the customers as discounted prices (Aldi, 2020).
The VRIO analysis is the marketing analytical tool used for evaluating the resources of the company and competitive advantage. It is an acronym of Value Rareness, Imitability and Organization. Here is the detailed VRIO analysis of Aldi.
Value
The first component of the VRIO analysis is the value, which helps in identifying how valuable company’s resources are. Aldi is an international retailer which is operating highly competitive in the market. The financial resources of Aldi can enable the company to pursue its expansion strategies aggressively for attaining the competitive advantage. Aldi has good and talented human and technological resources for establishing the advanced technological hypermarkets in new and different locations.
The company hire talented and skilled employees who are tech savvy and help in training the new employees. This helps the company in standardising the entire company’s operation. The company’s resources are helpful and valuable in gaining the competitive advantage (Jeffrey, 2020).
Rarity
This component deals with determining the rarity of the resources and capabilities of the company. Rarer will be the resources, more chances of the company will be to achieve competitive advantage in the industry. Aldi is one of the technological savvy company, who has adopted some of the technological resources.
Aldi has implemented the energy management system in 2011 in the company operations which is exclusive. However, such exclusivity does not need to be assumed blindly as other retailers also adopted this. Therefore, the company should focus on existing technological resources efficiently. They should also adopt new and creative marketing strategies.
Imitability
Third component of the VRIO analysis is Imitability, which means company tries hard to adopt the resources which are difficult to imitate. This would help the company in achieving competitive advantage and edge over others. It is necessary for Aldi to implement such advanced processes in the outlets and stores which are difficult for the rivals to imitate.
This could help the company with expansion strategy. Its distribution networks are highly efficient and diverse. This is not something difficult to imitate but require huge capitalization and time for maintaining and retaining the efficiency.
Organization
This is the last component of VRIO analysis. This helps the company in identifying how well organized and managed the resources of the company are. Aldi company really take care of this component. The company’s operational managers are responsible for the organization, and this is adopted at national or regional level of company.
Aldi allows the continuous process of suggestion and recommendation from the operational level for ensuring the company can be streamlined. This also helps in operating the individual stores effectively. Aldi also make sure to provide good working environment to motivate employees (Stuart, 2017).
Conclusion
Aldi limited is one of the famous international retailers, which works hard in achieving the competitive advantage in this competitive industry. The company is successful in making its resources and operations valuable, rare, difficult to imitate and well organized. The company is also looking forward for the new expansion strategy in locations where it is not operating currently.
| V | R | I | O | ||
| Supply Chain | ✓ | ✓ | ✓ | ✓ | Competitive advantage |
| Bargaining power | ✓ | ✓ | ✓ | Competitive Parity | |
| Inventory management | ✓ | ✓ | ✓ | ✓ | Sustainable advantage |
| Brand Name | ✓ | ✓ | ✓ | ✓ | Sustainable competitive advantage |
| Efficiency | ✓ | ✓ | ✓ | ✓ | Sustainable advantage |
| Product quality | ✓ | ✓ | ✓ | Competitive Parity | |
| Product range | ✓ | ✓ | Competitive parity | ||
| Talented HR | ✓ | ✓ | ✓ | Competitive parity |
References
- Aldi, 2020. About Aldi. [Online], Available at: https://www.aldi.co.uk/c/everyday-collections, [Accessed on: 22nd March, 2020].
Jeffrey, 2020. VRIO framework analysis. [Online], Available at: https://www.coursehero.com/file/p2tdud3/52-VRIO-framework-analysis-A - VRIO-framework-examines-the-strengths-that-can-be/, [Accessed on: 22nd March, 2020].
Stuart, G. 2017. Strategy Report on Aldi Stores UK Ltd. [Online], Available at: - https://www.academia.edu/32363503/Strategy_Report_On_Aldi_Stores_UK_Ltd, [Accessed on: 22nd March, 2020].
- UK Essays. 2018. Marketing Analysis of Aldi. [Online]. Available at: https://www.ukessays.com/essays/marketing/an-analysis-of-aldi-marketing-essay.php?vref=1, [Accessed on: 22nd March, 2020].