Introduction
Aldi is a German-based discount supermarket chain that operates in several countries across the globe. Theo and Karl founded the organization after the Second World War (Gebel & Askinasi, 2019). Before they took over, their mother was running the grocery and transformed it into a supermarket offering goods at low prices. However, in 1960, the organization was split into two distinct halves, namely, Aldi Sud and Aldi Nord, after a disagreement on selling cigarettes. The supermarket has more than 10,000 stores in 20 countries worldwide (Gebel & Askinasi, 2019). Apart from Germany, the organization operates in the US, Australia, the UK, and many more. Aldi uses its discounting business model to achieve a competitive advantage over its competitors in the market.
The Approach to Evaluation
My approach to business evaluation is the income approach due to its effectiveness when measuring business value. It is among the main methodology used when it comes to business evaluation. The income approach is important business determines the value of a business based on its ability to generate revenue benefits to the owners (Almabekova et al., 2018). Without looking at the revenue generated, it would be difficult to describe the impact of the business, the direction of its activity results, and the actions that must be done to improve the outcome. Largely, the effectiveness of an organization has been evaluated based on financial data provided in financial reports. To better unravel causal relationships between management decisions and final activity results, an organization’s financial indicators have received a lot of attention.
The income approach as an evaluation technique relates to McClelland’s theory of achievement motivation. The success of a business organization usually depends on its ability to make a profit (Almabekova et al., 2018). This indicates that a company’s primary goal is to maximize profit for its shareholders while remaining socially responsible. This view is supported by McClelland’s theory, which states that entrepreneurs are defined by a desire to achieve, develop, and expand, also known as achievement orientation (Güss et al., 2017). Based on this theory, people have three motivations for doing things: the desire for achievement, the need for connection, and the need for power. Thus, entrepreneurship is driven by a desire to succeed and a desire to have power.
The Entrepreneurial Personality of the Main Characters
Karl Albrecht
Karl is among the two founding brothers of the Aldi retail business. He is one of the world’s most successful entrepreneurs and a core owner of Aldi. Karl and his brother developed a global food store from a small store managed by the mother (Gebel & Askinasi, 2019). As a successful entrepreneur, Karl tends to be self-sufficient and concerned with the challenge of new things. For example, he refused to embrace the selling of cigarettes in the stores, citing that it would attract shoplifters (Gebel & Askinasi, 2019). Karl is also considered an introvert with low anxiety due to the attribute of being cautious and highly critical of flawed thinking. As a result, Karl’s personality includes being cautious and self-sufficient.
Additionally, Karl is a motivated self-starter and assertive due to his trait of doing what has to be done without being told. Starters usually take the initiative in their affairs and lead themselves (Walker, 2021). For example, when Theo wanted to introduce cigarettes as one of the products in the stores, Karl refused to give in despite the conviction that it would increase the organization’s profitability. Based on the nine Belbin team’s roles, Karl fits the role of a plant (Ampuero & Abreu, 2021). When he disagreed with the brother over the sale of cigarettes, he solved the problem unconventionally. For example, he agreed to split the stores and area of operation to avoid unnecessary rivalry. Therefore, as an inspired self-starter, Karl solved the problem from his conviction.
Karl is also a hard-working person due to his ability to continue driving growth even after separating from his brother. According to Lee (2019), a hard worker puts effort into doing and completing tasks. He continued with the culture of providing customers with low-priced and quality products. Karl ensured that the employees remained focused on achieving organizational goals. Based on the nine Belbin team’s roles, Karl is a shaper. He ensured that the team did not lose direction (D. Brandes, 2019; N. Brandes, (2019). As a sharper, some of Karl’s strengths include thriving under pressure. He did not yield to the pressure in the industry of adopting technology and increasing the prices of goods. Karl ensured that the team focused on activities that would preserve their culture of providing low-cost products to customers.
Theo Albrecht
Theo Albrecht is one of the founding brothers behind the Aldi supermarket empire. He is among the successful entrepreneurs and owners of the best-performing retailers. Together with his brother, Theo built a global grocery titan from their mother’s shop in 1913 (D. Brandes, 2019; N. Brandes, (2019). As a successful entrepreneur, Theo is a hard-working and strongly disciplined person who enjoys performing his tasks. He is also committed, focused, and determined to achieve the anticipated goal. Theo is considered an implementer because effectiveness is his yardstick. They are usually well-organized and appear to have endless energy. For example, the grocery chain now operates in more than 10,000 locations across the globe (Gebel & Askinasi, 2019). As a result, Theo’s hard-working attribute was integral to the business’s success.
The Company’s Approach to Innovation Management
The first approach the organization uses to manage its innovation is the use of organizational culture. It unifies employees and promotes organized work structures to assist people in working together and generating appropriate ideas. Aldi is known for its cost-saving practice to ensure that customers get low-priced products (Gebel & Askinasi, 2019). One of the symbols of the organization is poorly furnished shops. The organization wants to be simple, cheap, but good. With this culture, employees are only allowed to brainstorm ideas to ensure that customers get low-priced products. The company’s innovators are guided to avoid introducing practices that are likely to increase the prices of goods. Therefore, the organization’s culture is integral in guiding employees in adopting cost-effective innovation.
The second approach used by the organization to manage innovation is the global strategy. This is a strategy in which a company grows to enter the worldwide market. The goal of creating a global strategy is to boost sales all around the globe. Although the organization started in Germany as a small grocery, it now operates globally (Gebel & Askinasi, 2019). The strategy helps Aldi in acquiring and learn important ideas for its development. The organization also believes that they are likely to attract talents across the globe through expansion who can generate ideas that resonate with its culture. In addition, with its size and success, Aldi can influence its employees to adopt cost-effective ideas. Therefore, the strategy ensures that the organization attracts and retains new talents.
Recommendations for Strategic Changes
The organization has traditionally been resilient to retailer reactions that seek to dilute its core offering and new kinds of internet competition. Theo and Karl formed the business on the grounds of offering discounted products to consumers in the market (D. Brandes, 2019; N. Brandes, (2019). However, the competitive advantage it currently has in markets is dwindling and will continue to do so in the future. Aldi must consider what would happen if shoppers’ value was increasingly determined by their ability to use voice assistants rather than price alone (Kingsnorth, 2019). Its brand has been founded on what it has not yet done in terms of alternative supermarket formats over the years. Unlocking its innovation potential requires looking at what it can afford to say no to and what it cannot. Therefore, the organization should consider adopting others ways to remain competitive in the market.
Aldi should strive to adopt modern marketing strategies to reach more customers. Marketing is an important practice for the effective performance of an organization (Kingsnorth, 2019). It ensures that the organization remains relevant in the market by appealing to the public. Although Theo and Karl have used discounting techniques to sell their brand, there are certain modern marketing strategies that the organizational authority might use to drive the organization’s growth. These methods will assist the organizational authorities in defeating competitors and maintaining the organization’s competitive advantage. In addition, it will ensure that the organization attracts and retains more customers. Modern marketing strategies are helping contemporary organizations reach out to their customers in the market easily.
The first market strategy that Aldi should adopt is affiliate marketing. This type of business approach enables businesses to reach out to a large number of people (Patrick & Hee, 2019). It is based on the fact that a large number of people use the internet to progress in their professions all over the world. As a result, Aldi may rely on websites like these to market its brand to a specific audience. Webmasters will be responsible for marketing Aldi’s brand and products to their audience through their channels. As a result, Aldi’s discounts and mission will ultimately become known to a huge number of people, which could boost the organization’s sales. Thus, the company will be able to reach many customers across the globe and increase its market share.
Internet advertising is another cost-effective promotional tool Aldi marketing managers can utilize to reach their stated purpose. Internet marketing has been found to influence business profitability (Kingsnorth, 2019) significantly. To attract a large number of customers, Aldi management can request that their technical department construct such advertisements. Aldi will be able to place advertisements on a variety of sites. For example, Wal-Mart is recognized for using this internet ad strategy to push fresh deals to targeted customers (Ajitha et al., 2019). The technological team keeps track of its target audience’s social media operations and uses that information to target them with online ads. Therefore, using this marketing tool, the organization will be able to reach internet users and convert them into customers.
Conclusion
The success of Aldi is linked to its low-pricing strategy to attract more customers. Theo and Karl founded Aldi based on offering products at a low cost. The company adopts cost-effective strategies to maintain its pricing. To manage its innovation, Aldi uses its organizational culture to guide idea generation and implementation. For example, the employees are not supposed to develop ideas that would drive up prices. However, the organization might lose its competitive advantage due to the changes in the market. Today, contemporary organizations are using technology to attain a competitive advantage. They can consider using Internet ads to market their products and attract customers. Therefore, Aldi can also use technology to improve efficiency, reduce the cost of operation and attract more customers.
References
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