Business

Aldi Company is a discount supermarket chain founded in 1913 by two brothers- Karl Albrecht and Theo Albrecht. The founders of the two groups established and operated them but currently they have retired. Aldi is the short for Albrecht Discount and is based in Germany. The company was split into two in 1960 after a dispute. The company is composed of two groups which operate separately-Aldi Nord and Aldi Sud (Plank, 1995). The two groups have many branches internationally and have employed a large workforce. Lidl incorporated is the main competitor to Aldi both in the national and international market (Ponte,  Gibbon, 2005).

Wal-Mart is a public corporation based in America. It operates a chain of discount departmental stores. The company was established in 1962 by Sam Walton. In 1969, it was incorporated and listed in the stock exchange in 1972(Luecke,  Bunnell, 2000). The main focus used by the company is cost reduction so as to make high profits. This approach has been criticized by many people and groups since it has become oppressive to the employees and other stakeholders (McCarthy,  Spector, 2000).

Strategies used by ALDI Company in entering and expanding in foreign markets
Offering low prices - Aldi has maintained low prices in all its markets so as to maintain its customers. The low prices are achieved through cost efficiency measures. The company has reduced costs involved in advertising, storing, promotion, marketing and other operational costs. The company has used cheap advertisement campaign methods in the international market so as to cut down the cost and maintain low prices (Plank, 1995). The low prices have attracted a big customer demand for the products from Aldi groups of business. The company has continued to fight its main competitor in the local and international market-Lidl, through progressive reduction in prices. Aldi has created intense price war after its penetration in the Switzerland market in 2006. Aldi has been able to survive in the markets that are very competitive due to the low price strategy being employed (Luecke,  Bunnell, 2000).

Maintain high profit margins irrespective of the low prices - In the year 2006, Aldi Nord made a profit margin of 2.4  while Aldi Sud made a 4.5 profit margin in the German market (Burke, 2005). Aldi has an objective of stabilizing the profit margins while creating more branches internationally. Focus on low prices has enabled the company to make very high sales leading to high profits (Burke, 2005).

The two groups of businesses operate in environments which allow high profit margins despite the low prices set for their products. These businesses are not listed in the public domain and therefore do not reveal their financial information to the public. This ensures that the shareholders and the public in general do not have a chance to scrutinize the accounts of the company which may disrupt the normal running of activities. The company does not share dividends since it is not publicly listed. These funds are used to expand the investments, reduce costs and maintain a high profit level. The high profits being made by the company have enabled it to penetrate more potential markets, particularly the markets coming up recently in the international scene (Ponte,  Gibbon, 2005).

Aldi has taken the risk of penetrating markets where other competitive companies exist (Burke, 2005). The company has intensified its competition in the Eastern countries. These countries have already established companies which remain a great challenge to Aldi Company, for example, Lidl. The Aldi Company focuses on the changing shopping habits and lifestyles of the customers in these markets so as to penetrate properly (Ponte,  Gibbon, 2005). The customers in these markets have demonstrated the character of being sensitive to price and purchase time. Aldi has focused on these traits to capture a large customer base in these highly competitive markets. Aldi has expanded its branches to smaller towns and cities so as to reach all its customers and to bring the products nearer to them. Recent markets being penetrated by the company are Eastern Europe, Romania, Poland, Hungary and Slovenia. Some of the markets not yet penetrated are Russian markets (Plank, 1995).

Strategies used by Wal-Mart Company in entering and expanding in foreign markets 
The company uses cross-docking inventory system to cut down its costs. This system has enabled the company to reduce costs in sales due to economies of scale. The reduced sales costs have enabled the company to sell at reduced price, hence making more profits (McCarthy,  Spector, 2000).

Wal-Mart has used the strategy of concentrating on a single business to venture the international market. This has enabled the company to achieve a competitive advantage over its competitors who have focused on diversification. The company focuses on timely delivery of goods and refreshing its shelves continuously (Luecke,  Bunnell, 2000).

The company has focused on free-trade-zone distribution centers. This strategy has reduced the operational costs. The cost reduction method has led to high profit margins. The company makes quick transfer of its products to markets with high demands. There is use of high technology in tracing the rate of purchase of all products in all branches. Products are located in branches where they have high demand so as to reduce stock holding costs (McCarthy,  Spector, 2000).

Difference in the strategies used by the companies
Aldi uses the strategy of simplicity and efficiency in capturing its customers (Plank, 1995). Wal-Mart uses the strategy of cost reduction to make high profits. Aldi is a private enterprise and it is not listed in the stock exchange. This strategy has enabled it to maintain confidential information about its operations. Conversely, Wal-Mart is a public corporation which has already been listed in the stock exchange market and must disclose all the financial transactions (McCarthy,  Spector, 2000). Wal-Mart uses the strategy of transferring its products to branches with a high demand for particular products. Aldi focuses on expanding its market by penetrating markets where there is stiff competition as well as markets not yet penetrated. Wal-Mart Company makes its products to be of low price through cut down on its costs by such measures as paying low salaries to employees and use of economies of scale in marketing. Contrary to this, Aldi reduces its prices and focuses on increasing sales volume so as to attain high profit margins (Ponte,  Gibbon, 2005).

How successful the companies are
Aldi has succeeded in its strategies to attain its goals of price reduction and expansion. The company has been able to establish many branches in many countries. The low prices strategy has been achieved through penetration into markets that are sensitive to prices (Ponte,  Gibbon, 2005).

Wal-Mart has been successful in its strategies to some extent. The company has become the biggest of its kind in America. However, there are many objections being received from lobby groups due to the oppressive strategies. The low salaries offered to employees have caused chaos and a lot of people have challenged the companys strategies (Luecke,  Bunnell, 2000).

Conclusion 
The strategies used by a company in its operation can make it successful or failure. Managers must be careful when making decisions on the best strategy to follow. All stakeholders must be involved when making decisions so as to ensure the strategies being adopted are friendly to all people concerned.