Cost-leadership strategy

I have enclosed the student’s post below. Please respond whether you agree or disagree based on the five levels of business strategies
Here are the five levels of business strategy
1. Leadership strategy
2. Strategy of Differentiation
3. Cost-leadership strategy
4. Focus differentiation


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Please respond to the following:

Assess your satisfaction with Aldi and make recommendations about how the company could modify its business-level strategy to both increase your overall level of satisfaction and to attract new customers. Provide specific examples to support your response.
Analyze the five business-level strategies discussed in Chapter 4 to determine which strategy most likely applies to Aldi. Determine how a shopper’s experience might change if it switched to one of the other four strategies (your choice). Explain your rationale.

I think Aldi is very much in the role of market disruptor. They have single-handedly entered into multiple foreign markets, putting all their competitors in a position where they have no option but to respond by adopting the way Aldi does business. It is a genius move because it makes all these other retail companies have to shift product and lower them, as well as affecting their suppliers. From a customer standpoint, they are doing right by them as well, because they can buy a lot of the same products for far cheaper than other retail chains. They are obviously doing a great job, but I think they need to adapt to the new times and that is increasing their online retail presence as well. Their current online retail experience is lacking, to say the least, and as well as they are doing as a brick and mortar store, that is not where the future lies in retail from what is happening today. Currently, they aren’t direct competitors to Amazon, however for them to be a real huge player in the scene they have to keep up with the likes of Amazon and Walmart.

When analyzing the fire business-level strategies, it is clear where Aldi would fall under and that would be cost leadership because they are most definitely the ones to undercut their competition and offer more or less the same products at a lower cost. They aren’t narrowing on any particular segment per se but are focusing broadly across all the products they sell. If they decided to do focused cost leadership maybe they would focus on offering the lowest price on sports goods, or clothing goods for example. However, they are going across the board to all the different items that a retailer like them would sell, so they have no actual focus. They are also not going to fall into differentiation because they are not offering the customer anything unique, whether it’s in their products or the customer experience. They are just trying to be as lean as they can from a business and operations standpoint so they can sell products cheaper than their competition aka undercut their competition, which is their number one business objective.

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