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Case Analysis 1

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Business
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Harvard University
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The Ripple Effect of Supermarket Wars
1. Aldi is creating competitive rivalry by positioning the prices of its products very low,
hence attracting more customers. The rivalry comes in when other stores equally reduce
their prices so that they get to compete on the same level as Aldi. Additionally, Aldi
focuses on in-house operations such as producing its own branded goods and performing
its own marketing and advertising. This also pushed other stores to adopt an in-house
approach as a way to reduce costs.
2. Amazon’s purchase of Whole Foods will cause a significant reduction in prices, and this
will affect Aldi as it tries to expand in the United States. It will cause the shares of other
stores, including Aldi to drop significantly. In response to Amazon’s strategic move, Aldi
will have to lower the prices of its specialty goods to be able to still compete in the
industry and in the same markets as Amazon.
3. In a competitive market, and in an industry where companies compete through rivalry,
Aldi is most likely to respond to Amazon’s competitive strategies, and the same applies
to Amazon responding to Aldi’s strategies. This is because the two companies have a
strong hold in the market and therefore respond effectively to maintain their competitive
advantages. The strategic responses are aimed at maintaining brand loyalties that the
companies have in the market, and show the companies’ capabilities and motivation.
4. Walmart and Costco will have to strategically reduce their prices and this will cause the
competitive rivalry. With the expansion of Aldi in the United States market. Walmart and
Costco will have to seek an expansion in other ways in order to tactically hold their place
in the market. These are the only ways the stores will maintain the high competition in
the market and be able to retain their customers, if not attracting more customers.

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1 The Ripple Effect of Supermarket Wars 1. Aldi is creating competitive rivalry by positioning the prices of its products very low, hence attracting more customers. The rivalry comes in when other stores equally reduce their prices so that they get to compete on the same level as Aldi. Additionally, ...
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