Company Overview

ALDI Einkauf GmbH & Co which is abbreviated as ALDI is recognized as a German based retail enterprises executing its business operations across the world. The German based retail business firm has been set up in 1948 by two indomitable brothers Theo and Karl (Aldi.com.au 2018). The organization has efficiently expanded itself as one of the improved and well-established environmental nutrient retail commercial business firm constituting around 7000 stores across the world. It has observed that Aldi in 2001 has initiated its business functions in various developed countries like Australia, China, Austria, and Denmark and in the United States (Chung 2016). Within Australia, the company operates its business as ‘Aldi Süd’ and has been an ideal exemplification of a proficient procedure based retailer. Aldi functions chiefly as a ‘value for money’ retail enterprise primarily emphasizing on cost leadership and HR practices. In addition to this, Aldi specializes within the domain of staple items along with daily economical household items. Aldi Stores primarily functions a series of grocery stores in Australia and provides a wide ranging offerings of baby care products, chocolate, coffee, skin care products and other household items (Aldi.com.au 2018).

Alid Stores Supermarkets Pty Ltd identified as a foreign-owned classified enterprise primarily functions in the superstore as well as grocery stores industry. The organization has been headquartered in Minchinbury as well as New South Wales and has been operating solely in Australia (Corporate.aldi.com.au 2018). Aldi Stores Supermarkets has been operating wide ranging supermarkets as well as grocery stores in parts of Australia whereby the business comprises of over 380 stores operating in New South Wales along with Australian Capital Territory as well as Queensland and Victoria (Aldi.com.au 2018).  In a very short span, Aldi has been positioned in the top 10 retailers in Australia. The company has further influenced several grocery prices, enhanced the notions and perspectives as well as the excellence of label goods with their own exclusive brands philosophy and has initiated a range of market-leading endeavours which have not been experienced by the Australian retail sector (Chung 2016).

The primary mission at Aldi, Australia relies on providing incredibly exceptional and high quality products at surprisingly economical price range. The company has been relentlessly working to enhance the strategies and approaches through which they function in order to benefit their employee base, customer range and local communities (Aldi.com.au 2018).  Aldi has been committed to sell only cage-free eggs in the next 5 years and firmly prohibit its suppliers from using any animals for their products. Aldi furthermore has complied with the Australian Livestock Processing Industry Animal Welfare Certification Scheme (AAWCS) that aims to guarantee superior animal welfare activities (Corporate.aldi.com.au 2018). One of the primary missions of Aldi in sourcing responsible tuna fish has been considered to be industry-dominated.  Aldi has been constantly developing its business model by employing comprehensive analysis and further concentrating on fundamental areas (Aldi.com.au 2018). At the same time, Aldi has persistently strived for well-established and competent solutions for the advantages of its stakeholders.

Mission and Values

Furthermore, in order to attain overall vision, Aldi Australia stands by certain values such as:

• People- The core element to the success of the company which tends to stimulate the achievement of the business (Chung 2016).
• Quality- Aldi efficiently purpose to provide quality excellent product and high quality of the services and work they offer.
• Simplicity- The Company competently drive efficiency as well as low cost business model in order to sustain their economical price range and retain customers without compromising in quality (Rao 2018).

Reports by Reynolds (2014) reveal that above 35% of Australian grocery purchaser exhibit greater level of inclination towards Aldi that is a highly impressive statistic for a chain with series of outlets located in three vital states. Aldi’s business practices has been immensely successful in regions of Victoria and New South Wales with around 50% of each state’s grocery purchasers in Aldi stores. Aldi shares of Victorian market since 2015 has witnessed a rise from 13% to 16.1%. While during the same time, Coles’ market share has declined from 36% to below 30% whereas Woolworths has sustained its position at around 35% (Rao 2018). Aldi’s current business practices have been structured as limited partnership which signifies that the company does not come under the requirements to be audited to the Australian Securities and Investments Commission.

However Aldi foods one of the Aldi companies reveals that it comprises of around 20% in the gross revenues of limited partnership and signify Aldi Foods as a diminutive proprietary enterprise regulated by international company (Barrowclough 2016). Other reports by Vigani and Olper 92014) indicate that Aldi has produced at around $5 billion in revenues that further results to the taxable earnings of $270 million and income tax rate of around $82% million.

Aldi being one of the leading retailers of Australia has considered that “people are the key to every achievement and success.” (Aldi.com.au 2018) Thus, there has a value for efficient HRM practices and strategies which primarily emphasize on smooth delivery of a sector-leading training package. The employee base has further been provided by highly enthused and the recruitment or hiring procedures reports for the variety of vigorous and motivated people (Barrowclough 2016). Aldi has fundamentally emphasizes on the improvement of welfare and betterment of the employees thus constitutes a highly competent HR system which has been implemented within the organizations. Vigani and Olper (2014) noted that one of the essential initiatives relied on the fact that Aldi has been identified the first trader to efficiently offer female employees with fully paid maternity leaves and other benefits. Furthermore, the organization has been strategizing to pay increased pay scales in comparison to other similar retailing companies operating in Australia (Korn et al. 2017). Aldi working environment and benefits offered to employees have been regarded as highly exemplary and thus has been rated highest among its other competitors (Reynolds 2014).

Aldi’s Contributions to Animal Welfare Activities

Taking into consideration the ideas of Resource Based Theory, it has been observed that the human resource system within Aldi can be implemented with a view to offer a highly Sustainable Competitive Advantage (Kozlenkova, Samaha and Palmatier 2014). This theory however has proposed that this theoretical aspect could attain its success with the accomplishment of four fundamental requirements within Aldi.

• The human resource practices within Aldi must be proficiently implemented with the perspective to enhance and improve the business practices within the organization (Kozlenkova, Samaha and Palmatier 2014).
• The talent sets situated within the human resources must be atypical, thus an evaluation of employment strategies as well as HR development strategies aim to signify that these sets of talent and competence would be highly exceptional in characteristics.
• However, due to the capable HR strategies and approaches along with their implementation replication of talents by competition can encounter high level of challenges (Armstrong and Taylor 2014).
• Lastly, HR must not be formed out of redundancy further owing to advanced technologies and because Aldi being within the Australian retail sector, this area will not be relevant as the company would necessitate Customer Service Representation (CSRs).

Jones (2015) noted that the explanation competitive gain in any sector must be effectively leveraged by the HR improvement functions. Eventually HR strategies of Aldi have encountered certain degree of intricacies in justifying its value and position in Aldi. However, by enforcing HR strategies to support regular business actions have further resulted to the expansion of Strategic HRM within Aldi. Price (2016) indicates that HR strategies primarily participate in the corporate strategy of Aldi rather than focusing on operations and management. Furthermore Aldi has to sustain its cost of operations at the economical level and must be serving crucial role with the aim to attain it (Aldi.com.au 2018). HR managers extensively evaluated the association between Human Resource and the business strategy of Aldi, Australia in the increasingly level of approval of domestic resources as essential supply of competitive gains which has been offering authority to HR’s contention that people serve a highly considerable role in the success of Aldi (Aldi.com.au 2018).

Atapattu (2015) stated that company has been executing its operations and assertively sustaining its fundamental areas of competence to maintain economical price range by primarily relying on its employee base. Its strategic HR practices primarily depend on selecting appropriate ways and approaches to employee suitable candidates for the appropriate role or designation thus applying most efficient practices to attain organizational goals (Kozlenkova, Samaha and Palmatier 2014).

Aldi, Australia along with its great level of inclination towards high level products and services and further offering exceptional value for its consumer base has attained substantial significance for its effectual approaches of employee development and training (Thals 2015). Aldi in Australia has placed immense value and importance on providing newly employed staffs with essential knowledge and skills in order to proficiently execute their tasks and responsibility assigned to them. Studies by Bailey et al. (2015) stated that for the major section of on-the-job training at Aldi stores in Australia, the assigned store manager serves a role of an employee trainer. Such a training procedure has been used to provide adequate skills and knowledge to the recently recruited store assistants to learn the way operate the stores and experience wide ranging facets of the business Aldi deals with. However, off-the-job training has been efficiently provided for improving forms of transferable skills and abilities which can be utilized at various parts of the Aldi retail business (Brewster, Chung and Sparrow 2016). Aldi’s off-the-job training typically aims to offer employment law, influencing competencies, performance evaluation along with Aldi Management System. Studies on Aldi’s HR strategies and practices indicate that for each crucial aspect of training Aldi efficiently decides the value and importance between on-the-job and off-the-job employee knowledge development. However, off-the-job primarily includes additional costs such as payments to training institutions (Brewster et al. 2016). These trainings further imply that employees acquiring these knowledge development courses are fully unemployed that can further lead to the rise of payroll costs and expenses. On the other hand, Vigani and Olper (2014) stated that balanced against these expenses are at the beneficial side which the company generates from off-the-job training. These further incorporates the advantages of comprising more enthused staff, substantial level of efficiency and hire staffs possessing greater level of talent and capacity to provide enhanced customer services. It has been noted that Aldi typically offers opportunities for youths in Australia where the apprenticeships are open to 16-18 years of aged people (Korn et al. 2017).

Aldi’s HR Practices and Strategies

Aldi Apprenticeship

Source-(Aldi.com.au 2018)

Development is regarded to be divergent to the concepts of training. Employee development programme has been designed to develop the skills and abilities within the employees who are extensively concerned with Aldi’s business (Aldi.com.au 2018). This can further constitute certain level of disadvantages and challenges as it tends to provide workers with substantial degree of value and importance in the Australian job market. However, (Rao 2018) revealed that Aldi has shown utmost willingness to encounter such risks as the company has been highly committed in providing most-effective approaches and benefits to its employees. The retail placement scheme of Aldi primarily invites university students for a 1 year placement and further facilitates the selected employees to exhibit their capacity which they can offer to the business and vice versa (Barrowclough 2016).

Aldi Training and Employee Development

Source: (Aldi.com.au 2018)

Aldi Australia’s Managing DirectorBronwyn Post operating at the Brendale region has revealed that the company has proposed that the National Employment Standards (NES) must be efficiently shaped in order to facilitate employers as well as employees to develop greater level of agility to establish practical and sound supplementary working hours above the standard 38 works week (Corporate.aldi.com.au 2018). This further has been purposed to permit employees work for the duration they wish to and further improve the competence and capacity extent of employers to utilize labour in a more productive manner (Korn et al. 2017). Furthermore, as a significant example generated from Aldi’s recent experience related to wide ranging of Australia, a union with exposure of small number of employees was able to arbitrate late in the approval process and on issues irrelevant to the employees it professes to represent (Reynolds 2014). Such unjustified delay had exhibited unconstructive consequences for both the company as well as the employee base in relation to instability, financial costs and diversion from managing any forms of business.

Aldi has persistently employed major section of its employees on a permanent part-time work basis. It has been noted that staffs are ensured to be rostered an average number of hours and further will receive payment at the minimum level (Aldi.com.au 2018). The employees furthermore obtain considerable number of paybacks and benefits related to permanent employment that includes paid leaves.

Aldi Australia Employee Relation

Source: (Aldi.com.au 2018)

Conclusion

Aldi in relation to corporate strategy has been employing integrated cost leadership or differentiation strategy which tends to acknowledge the philosophical understanding of Aldi’s “where all people are able to buy grocery of highest quality at lowest price”. Furthermore, recruits have been receiving increased rate of remuneration, compensation along with paid leaves, maternity leaves and benefits and further acknowledge enhancement of skills and capacities (Akbar and Ahsan 2014). The HRM strategy of Aldi has been efficiently aligned to its business strategy and has been identified as a brilliant case of the way appropriate industry strategy can be employed given highly exceptional outcomes and further maximising its resources and improving its capacity level (Brewster et al. 2016). However a highly enhancing quality HR strategy with well-implementation is considered to be highly fundamental to attain the goals and objectives within Aldi that sustain integrated Cost Leadership and Differentiation Strategy (Collings, Wood and Szamosi 2018). Thus Aldi’s Effective HRM strategies and practices have been stimulating its level of performance and serve a crucial role in the organization. Some staffs receiving satisfactory remuneration and executing specific tasks and responsibilities reduce the potential of errors resulting to an operational quality for the organization (Brewster, Chung and Sparrow 2016). 

Sustainable Competitive Advantage through HR System

From the above analysis, the following set of recommendations has been made for Aldi to attain its HR aims and objectives to comply with its corporate expansion strategy.

• It has been determined that for recent expansion or development, there can be identified certain capability gaps within the organization which essentially needs to be accomplished at the primary stage. Powell (2018) proposed that to successfully accomplish the capability gaps, the activist as well as the reflector learning techniques must be implemented on recently recruited employees of Aldi. The activist approach would competently produce improved ideas while the reflector approach tends to develop the staffs as their leaders by illustrating them on the approaches of executing a specific task.
• It is highly suggested by Barrowclough (2016) for Aldi to essentially prioritize and focus on their strategies and approaches in a way it can be effective on management trainee program to develop stores at primary stages so that newly recruited staffs can perform smoothly under the supervision of managers. After managers being adequately competent to execute assigned roles and responsibilities, the greater critical accountability lie on Aldi to shed light on process of mentoring as well as coaching approach for resourceful outcomes along with professional development of employee base (Reynolds 2014). This approach must be employed for promoting higher level of collaboration and competence for both managers and employees towards the purpose and goal of the company which is to sustain its competitiveness and growth in the Australian retail sector.

References

Akbar, S. and Ahsan, K., 2014. Analysis of corporate social disclosure practices of Australian retail firms. International Journal of Managerial and Financial Accounting, 6(4), pp.375-396.

Aldi.com.au 2018. ALDI Supermarkets – Good Different – ALDI Australia. [online] Aldi.com.au. Available at: https://www.aldi.com.au/ [Accessed 12 Sep. 2018].

Aldi.com.au 2018. Responsibility at ALDI – ALDI Australia. [online] Aldi.com.au. Available at: https://www.aldi.com.au/en/about-aldi/responsibility-at-aldi/ [Accessed 12 Sep. 2018].

Armstrong, M. and Taylor, S., 2014. Armstrong’s handbook of human resource management practice. Kogan Page Publishers.

Atapattu, M.R., 2015. Customer agility, smart shopping apps and their implications: Customer relationship management systems in the digital age (Doctoral dissertation, Queensland University of Technology).

Bailey, J., Price, R., Pyman, A. and Parker, J., 2015. Union power in retail: Contrasting cases in Australia and New Zealand. New Zealand Journal of Employment Relations, 40(1), p.1.

Barrowclough, A. 2016. Aldi, the rogue retailer. [online] Theaustralian.com.au. Available at: https://www.theaustralian.com.au/life/weekend-australian-magazine/how-aldi-supermarkets-created-converts-in-australia/news-story/c9a22fdae3419fba96471adc61ae374e [Accessed 12 Sep. 2018].

Brewster, C., Chung, C. and Sparrow, P., 2016. Globalizing human resource management. Routledge.

Brewster, C., Houldsworth, E., Sparrow, P. and Vernon, G., 2016. International human resource management. Kogan Page Publishers.

Chung, F. 2016. Aldi overhaul fresh food, refurbish stores. [online] NewsComAu. Available at: https://www.news.com.au/finance/business/retail/aldi-to-overhaul-fresh-food-refurbish-stores/news-story/3988aeca338b1834f31658895c6fdeac [Accessed 12 Sep. 2018].

Collings, D.G., Wood, G.T. and Szamosi, L.T., 2018. Human resource management: A critical approach. In Human Resource Management (pp. 1-23). Routledge.

Corporate.aldi.com.au 2018. ALDI Australia – Find out more about ALDI & Partner With Us. – ALDI Australia. [online] Corporate.aldi.com.au. Available at: https://corporate.aldi.com.au/ [Accessed 12 Sep. 2018].

Jones, P., 2015. Materiality in corporate sustainability reporting: A research note on the UK’s leading food retailers. Journal of Management Cases, p.42.

Korn, O., Brenner, F., Börsig, J., Lalli, F., Mattmüller, M. and Müller, A., 2017, July. Defining Recrutainment: A Model and a Survey on the Gamification of Recruiting and Human Resources. In International Conference on Applied Human Factors and Ergonomics (pp. 37-49). Springer, Cham.

Kozlenkova, I.V., Samaha, S.A. and Palmatier, R.W., 2014. Resource-based theory in marketing. Journal of the Academy of Marketing Science, 42(1), pp.1-21.

Powell, D. 2018. Aldi Australia accused of “copying” local designers’ products for special buys range – SmartCompany. [online] SmartCompany. Available at: https://www.smartcompany.com.au/business-advice/intellectual-property/aldi-australia-accused-of-copying-local-designers-products-for-special-buys-range/ [Accessed 12 Sep. 2018].

Price, R., 2016. Controlling routine front line service workers: an Australian retail supermarket case. Work, employment and society, 30(6), pp.915-931.

Rao, S. 2018. What ALDI’s stores won’t have. [online] NewsComAu. Available at: https://www.news.com.au/finance/business/retail/aldi-australias-future-store-locations-no-online-experience/news-story/924dc67fe5be1c29d118f24fdd539d6b [Accessed 12 Sep. 2018].

Reynolds, E. 2014. Why do Aussies love Aldi?. [online] Available at: https://www.news.com.au/lifestyle/food/why-do-australians-love-aldi-the-secrets-to-the-supermarkets-phenomenal-success/news-story/fb4c5e30228f5f23b720f7b0caee3018 [Accessed 12 Sep. 2018].

Thals, K. 2015. Why Aldi staff are better off compared to the big chains | The New Daily. [online] The New Daily. Available at: https://thenewdaily.com.au/money/work/2015/10/14/aldis-latest-trick-hurt-coles-woolies-aldi-managers-earn-comparison/ [Accessed 12 Sep. 2018].

Vigani, M. and Olper, A., 2014. GM-free private standards, public regulation of GM products and mass media. Environment and Development Economics, 19(6), pp.743-768.