The Dark Horse Discounter Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

The Dark Horse Discounter Case Study Solution

Introduction/Overview

The case illustrates an importance of identifying one of the popular grocery chains in the world. Under the particular scenario, Aldi was a least known brand at the time of successful implementation of the operations because of less concern for competing with other brands to sustain the prices and growth of the firm. At the time of market growth, Aldi was also successful in making the right decisions to increase the profits at a slow pace as compared to Walmart and other market giants because its primary focus was to take a conservative approach to increase the market share and not considering any risk factor.

On the other side, it also opened its stores all around the world with a focus on to the discounted pricing strategies that would differentiate with the other competitors. After 1970, it was determined that the compounded annual growth rate was decreased more than the expected one. The reason for such reduction in the annual growth was the fact that customers were focusing on to look after the concept of self-service and more concerned with the food safety.

It means that they were managing the security of the products themselves instead of allowing the companies and stores to save the stock until they would be able to receive. This particular scenario had made the store chains to reduce the inventory stock by selling directly to the customers with only focused on packaging the products instead of safety for the considerable period. It had also made to decrease the prices of the products and discounted the prices with the bulk of purchases and other terms.

Moreover, Aldi has also expanded its operations in US and UK markets with a successful implementation of the discounted stores and increased the store volumes every year. Thus, under the current status of the firm, Aldi is looking for the aggressive operational expansion criteria to become one of the biggest grocery chains in the world. The criteria involved to effectively manage the operations and maintain the stock keeping unit less than or equal to 1000. It would make the firm to reduce the cost of operations and increase the profit margin gradually.

The target set for the store expansions is 650 by 2018 which would show the relative power of the firm over the other competitors operating within a particular industry. Therefore, it indicates that the store chain would prefer to accept the concept of a conservative approach to growth instead of driving itself towards the aggressive growth strategy because if it could do it, then the competition would raise and damage the effective pricing strategy. So, it seems that a more concern on the growth of stores would lead to increase the market share of Aldi and allow to take a competitive position within a selected industry. The main advantage of taking action would be to conclude the less pricing strategy and consider a successful operational efficiency of the new initiative to be taken for firm’s long-term vision over time.

Industry analysis

As far as Aldi was one of the successful grocery chains that performed differentiated strategies and maintain its high position in a particular market. So, such successful initiations would be measured with the industry analysis that could able to judge the cause of the operations and the environment in which it operates. Michael Porter’s five forces would consider being a relevant analysis to assess the internal as well as the external performance of the firm.

The Dark Horse Discounter Harvard Case Solution & Analysis

Michael Porter’s Five Forces

Bargaining power of Buyer-Moderate

Under the given scenario, it has been identified that the power of buyer is somehow moderate in the case because there are only a few players within a particular market. Therefore, most of the buyers would not consider switching to another grocery chain because they prefer low prices of the goods and services.

Bargaining power of Supplier-Low

In a similar context related to the buyer’s concern, the bargaining power of the suppliers seems small because most of the suppliers would prefer to switch towards another grocery chain. The suppliers under the particular scenario need loyalty of the stores regarding purchasing the bulk of amount with the concept of an “Arm’s Length Transaction” where the buyer and seller would be satisfied. Thus, it shows that the power is low and not allow the related suppliers to focus on another brand or grocery chain.................

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