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Bare Essentials: The ALDI Way of Retailing, by Dieter Brandes
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A former company executive explains the guiding philosophies of the global retail giant ALDI, whose 50-year history and successful spinoff Trader Joe's has made it a corporate leader on the scale of Wal-Mart and General Electric. Simplicity, not discount, is discussed as the answer to the company's driving question Why should customers visit your store? The corporate culture, philosophy, working principles, and organizational methods of ALDI are explained as the major factors for the company's extraordinary growth and success. This insider's perspective on the company offers lessons on consumer retailing and management that will be useful to aspiring business professionals.
- Sales Rank: #678156 in Books
- Brand: Brand: Cyan Communications
- Published on: 2004-09-01
- Original language: German
- Number of items: 1
- Dimensions: .29" h x 6.12" w x 9.26" l, .75 pounds
- Binding: Paperback
- 256 pages
- Used Book in Good Condition
From the Inside Flap
Facts about ALDI - With Wal-Mart, ALDI is the most successful retailer in the world - Its founders, Karl and Theo Albrecht, are the wealthiest men in Europe, and the third richest in the world according to Forbes - ALDI operates in 10 European countries, in the United States and in Australia - Its stores stock only the 700 key items that consumers buy to meet their everyday needs - On each item it sells, ALDI achieves revenues 20 to 100 times greater than those of Wal-Mart
Many European retailers are feeling the pinch. Constrained consumer spending and continuing controversy over the impact of the euro are damping down growth and squeezing margins in the retail sector. Yet food discounter ALDI is bucking the trend, enjoying huge increases in turnover and record profits. What are the secrets of its success?
In the first book about this little-known success story, former ALDI manager Dieter Brandes reveals the principles that underpin everything ALDI does, starting with simplicity. He shows what the company has in common with other great industry leaders such as General Electric and Wal-Mart, and explains how the ALDI brand of management works.
The ALDI system is not exclusively a retail discount system, but a management and organization system that can be applied in any business. Companies in industries as diverse as IT, banking and manufacturing, as well as entrepreneurs and start-ups, all have much to learn from the way ALDI manages its operations.
At a time when most organizations are getting more and more complex, the ALDI story illustrates the power of simplicity. By making value to its custormer its guiding principle, ALDI has established itself as one of the world's foremost retail giants. This book helps the reader understand the inner workings of an organization that has prided itself on remaining an enigma - until now.
About the Author
Dieter Brandes is a former managing director of ALDI. He is an organizational strategy consultant.
Most helpful customer reviews
32 of 32 people found the following review helpful.
Less is more: the ascetic culture of a low-cost retail giant
By Peter Leerskov
This book is the untold inside story from a former executive of German retail discount giant Aldi. Some of the advices that I recall from the German edition are the following (they are all interrelated):
ASCETICISM AS A BASIC PRINCIPLE. This word is usually connected to people avoiding physical pleasures and comforts, esp. for religious reasons (e.g. monks). In this context, it's more focused on what you can do without: headquarters, external market study, management consultants, and highly complex information technology. Instead Aldi focuses on a simple price strategy (everyday-low-price), undifferentiated product assortment, and avoid luxury.
THRIFTINESS AS A GUIDING PRINCIPLE. Everybody's talking about cost consciousness, but at Aldi this is second nature. There's a continuous avoidance of unnecessary costs on all levels.
INTERNAL RECRUITING OF HIGH-LEVEL MANAGERS. This principle is also recognised in bestseller "Good to Great". It's also a strong signal to internal candidates that they can expect to be next in line ... so be patient, you're time will come. The principle makes sure that top-managers fit the company culture. The negative effect is that you occasionally will be lacking the fresh eyes from outside.
LIVE THE DECENTRALISED ORGANIZATIONAL CULTURE. Aldi believes that the most efficient enterprise exists, when the overall direction set by the central unit is clear and remainder of the decisions are left to the decentralized organization - closer to where the action is.
MAKE A VIRTUE OF A NECESSITY. Many firms focus on doing some things unusually well. That's not necessary. The best service is often just doing the obvious and necessary tasks in a simple way.
CONTINUOUS IMPROVEMENTS. Instead of believing in huge cost cutting exercises or grandiose concepts like business process reengineering, Aldi believes in all employees' ideas to reducing costs. They are close to day-to-day work and can best evaluate what needs to be done to continually make things simpler and less expensive. This idea is closer to the [Japanese] quality concept of continuous improvement (evolution) than any [American] management fads on cost reduction based on organizational revolutions or merger-mania.
STICK TO YOUR KNITTING. Do only what you can do really well. Retailers are to trade with consumers; producers are to produce. Don't diversify, stick to the core business. Concentration is important for efficiency.
NO PUBLIC APPEARANCES. The attitude is that the public information is useful only to the competition. The managers' self-manifestation won't bring any competitive advantage for Aldi. This principle probably only works, since it's a private company. In the brave new world of war for talent and capital, this attitude probably will have to be adjusted.
SIMPLICITY IN PRACTICE. Avoid strong central staff and a big headquarters. The practice in the line of business is much more important than any theoretical staff work. Line managers do all special tasks. Focus on lean organizational hierarchies, clear decision authority, clear targets, and simple execution.
If you want to understand some of these productivity principles by low-cost companies better, let me recommend that you also check out "Less is more" by Jason Jennings. The companies cited in that book are Ikea, Ryanair, The Warehouse, Nucor, etc.
Peter Leerskov,
MSc in International Business (Marketing & Management) and Graduate Diploma in E-business
5 of 5 people found the following review helpful.
The INSIDE story
By A. Brenninkmeijer
Brandes worked as a ALDI director and set up ALDI in Holland amongst other things. I read the book in German and it is great. A must if you work in retail. Brandes worked at Aldi and wrote this book to strengthen the company's "institutional memory".
1 of 1 people found the following review helpful.
It is discipline, stupid.
By Choong Hwan Roh
Discipline is as much critical for business success as profit.
A great book for every businessman as well as retailers.
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