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Case Study Analysis Using MS Word and MS Excel: Laboratory Exercise

This laboratory exercise case study analyzes Aldi Supermarket's pricing strategy using MS Word and Excel. Students will determine success factors of different pricing strategies employed by global companies by assessing Aldi's aggressive low-price approach. The case study also involves calculating Aldi's ending inventory for holiday baskets in February 201A using the retail inventory method and Excel.

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Abbegail Calinao
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913 views3 pages

Case Study Analysis Using MS Word and MS Excel: Laboratory Exercise

This laboratory exercise case study analyzes Aldi Supermarket's pricing strategy using MS Word and Excel. Students will determine success factors of different pricing strategies employed by global companies by assessing Aldi's aggressive low-price approach. The case study also involves calculating Aldi's ending inventory for holiday baskets in February 201A using the retail inventory method and Excel.

Uploaded by

Abbegail Calinao
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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BM1805

Laboratory Exercise
Case Study Analysis Using
MS Word and MS Excel
Objectives:

At the end of the exercise, the students should be able to:

 Determine the success factors of different pricing strategies employed by global companies; and
 Assess the pricing strategies of global companies in the context of business cases.

Materials:

 Pen
 Scratch papers

Case Study:

Aldi Supermarket

This deep discounter, which also owns Trader Joe’s, is one of the world’s most successful retailers and has
expanded internationally for years. At the end of 2014, Aldi operated more than 10,500 stores worldwide,
including 1,300 in 32 US states, and planned to increase that US footprint by 50%.

While Trader Joe’s competes against higher end food and grocery retailers such as Whole Foods; Aldi ’s core
strategy is simple: offer an acceptable level of quality at very competitive prices. Its assortment consists almost
entirely of private-label products whose prices undercut popular brand name products by 20 – 40 %.
Nonetheless, Aldi achieves significantly higher returns than food and grocery chains who command higher price
positions. How can that be? Three reasons explain why Aldi’s return on sales is more than double the returns
of a traditional supermarket: higher efficiency, lower costs, and capital management. The gross return per
square meter of floor space is 30.3% higher in Aldi than in a supermarket. Personnel costs alone save Aldi the
equivalent of 8.2% of sales. Aldi puts bar codes on all sides of its packages, so that the cashiers do not need
to search for the code to scan. Aldi also saves costs in procurement, where its enormous volume combined with
its negotiation skills enables it to win favorable prices from its suppliers.

Aldi Supermarket is famous for their holiday baskets which they sell for an average of $10 or P450. The cost
per unit incurred by the company for a holiday basket is P200. The beginning inventory of the company for
February 201A has a cost of P1,000,000 with additional purchases amounting to P1,500,000 during the same
month. The total sales of the enterprise for the given month is P2,800,000. Aldi turns its inventory over almost
three (3) times as fast as a traditional supermarket. In other words, goods in their system spend far less time at
a warehouse or on a store shelf. Aldi gets its money quickly, but pays its suppliers much later, and invests this
so-called float to earn short-term interest. Taking all these factors into account, Aldi uses a very aggressive low-
price strategy to earn consistently higher returns than the rest of the sector. Recent data show that Aldi Sud
(one of the two Aldi operating units) had a pretax return on sales of 5.0 % and an after-tax return of 3.7 %. The
comparable numbers for its counterpart Aldi Nord were 3.5 and 3.0 %. The profits from Aldi have made its
founders extremely wealthy. For years, Karl Albrecht and his late brother Theo ranked among the world’s
wealthiest people. They and their descendants had a combined fortune estimated at over $44 billion or almost
2 trillion pesos.

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BM1805

Procedure:

1. Open MS Word and start a new document.


2. Use the suggested outline below in answering the case study following the correct formats.

Font Calibri
Font size 11
Margins 1”
Line Spacing 1.5

CASE STUDY

I. Background
a. It must include a brief summary of the case study.
II. Statement of the Problem
a. What type of price strategy/positioning is being employed by Aldi based on the case study?
b. What is/are the factor/s that contribute/s to the success of the company using its price
positioning strategy?
c. How can the company achieve success by using a different price positioning strategy?
III. Areas of Consideration
a. It must include details and facts from the case, which support the answers to the first and
second question under the statement of the problem.
IV. Alternative Courses of Action
a. It must contain at least two (2) courses of action, which answer the third question under the
statement of the problem. It must also present the advantages and disadvantages of each
course of action.
V. Recommendation
a. It must present the best course of action among the presented alternatives.
VI. Problem Solving
a. It must present the step-by-step computation for the cost of ending inventory for Aldi’s holiday
baskets covering the period of February 201A. The computation must be executed using MS
Excel and must follow the procedure associated in retail inventory method. (Refer to Pages 3-5
of 07 Handout 1.)
VII. Management Lessons Learned
a. It must discuss the personal learnings or takeaways from the case study.

3. The group leader must divide the tasks among his/her members in completing the case study. Before the
end of the laboratory session, the leader must consolidate the accomplished content into a single Word file.

4. Each member of the group shall perform the problem solving part of the case individually using MS Excel.

5. Save the Word file as “Group Number_ProjMgtExer13” and the Excel file as “Surname_ProjMgtExer14”
and place it on the network drive.

Rubric for grading (written report):


CRITERIA PERFORMANCE INDICATORS POINTS
Wrote a concise summary of the case, the areas of consideration
Executive Summary 10
presented, and the alternatives proposed for the case
Adhered to the correct outline and content was organized in a clear
Organization of Ideas 10
and logical manner
Provided necessary research and analysis in support of the statement
Analysis of the problem 10

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BM1805

Proposed a well-thought and well-researched solution to the case


Recommendation 20
study
TOTAL 50

Rubric for grading (oral report):


CRITERIA PERFORMANCE INDICATORS POINTS
Holds attention of the entire audience with the use of direct eye
Delivery contact; seldom looking at notes; and speaks with fluctuation in 10
volume and modulation to maintain audience interest
Provides clear purpose and subject, pertinent examples, facts, and/or
Organization of Ideas 10
statistics; supports conclusions/ideas with evidence
Significantly increases audience understanding and knowledge of the
Audience
topic; convinces the audience to recognize the validity and 10
Responsiveness
importance of the subject
TOTAL 30

Rubric for grading (problem solving):


CRITERIA PERFORMANCE INDICATORS POINTS
Neatness and The spreadsheet has exceptional formatting, and the information is well-
5
Organization organized.
The spreadsheet formulas are well-developed and will correctly
Formulas 5
determine the needed information.
Titles, Labels, and
The spreadsheet contains clearly labeled rows and columns. 5
Headings
The spreadsheet meets all the necessary requirements to interpret the
Content 5
result of the operation.
TOTAL 20

Reference:
Simon, H. (2015). Confessions of the pricing man. Switzerland: Springer International Publishing.

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