Competitive Strategy of Aldi Company - Essay Example

The company has managed to integrate information technology into its operations improving efficiency and at the same time spending heavily on advertisements (Wells & Haglock, 2008). This is one area where Aldi has failed making the company less known compared to Walmart. In this case, Aldi's ambitious plans to locate new stores globally should be guided more by the move of the main competitor.

For instance, opening to areas where Walmart has stores will open the company to competition. The competition will stimulate their growth rather than being in areas where there is no competition (Porter, 2008). According to Porter's five forces model, some factors have a likelihood of reducing the company's overall productivity. Threats related to new entrants in the store line can challenge them just as Walmart did. The company needs to have sound strategic plans to counter such issues.

The bargaining power that the suppliers have should be countered by a variety of suppliers to outsource goods. The bargaining power that buyers have should equally be countered through reduced costs to attract more customers. Threats of substitute goods can be countered by introducing a wide range of products (Porter, 2008).