UK Supermarket Industry-Relative Position of Aldi - Essay Example

Competitive rivalry in UK supermarkets are driven by advertising battles, sales promotion campaigns, price competition, introducing new products, provision of warranties and guarantees and after-sales services improvements. Threats attached to the new entrance are minimal as product differentiation enables existing firms to build good brand image culminating to strong customer loyalty (Onsman, 2003, p.111). The market is controlled by Tesco, Sainsbury's, ASDA and Safeway with nationwide branches and overseas high risks investing hence barriers for new entrance based on large capital constraints and difficulty to access distribution channel with new channels hard to establish.

Aldi’s trio-principle; consistency, simplicity, and responsibility make it thrive. Aldi’s DNA and culture is driven by cost-effectiveness based on lower staffing and payroll cost but higher wages than rivals hence high capability in-store levels than rivals driven by investment in sophisticated till systems focusing on staff training (Onsman, 2003, p.122). It operates limited opening hours to avoid keeping shoppers for longer hours in stores and refutes add on facilities to remain cost-effective.

Aldi’s secrecy of success lies on invisible strategies (Secret Culture) such as understanding essential defining features lying beneath the surface; unwritten cultural rules, values, and standards hence Aldi’s competitive advantage.