Business strategies in the retail supermarkets industry: A comparative case study analysis of Costco and Aldi

Abstract

This exploratory research aimed to study business models and strategies adopted by international retailers – Aldi and Costco in Australia and investigate their relevance in the New Zealand supermarket industry. Existing literature on the concepts of business model, strategy and competitive advantage was explored. A case study approach was taken to study business models and strategies of the selected cases and inductively derive key business strategies to break structural barriers and position competitively. Data was collected from multiple secondary sources to ensure the authenticity of the information while several strategic management models and frameworks were applied in the data analysis to overcome the reliability issues. The findings of this study suggested how Aldi and Costco have gained power over buyers and competitive advantage using their unique business models and strategies. Based on the findings, a cost leadership strategy with a cost-efficient operations style business model was recommended to break the structural barriers and position competitively within the New Zealand supermarket industry. Furthermore, the significance of organisational culture, building customer loyalty and continuous innovation to support business model and strategy was emphasised for a sustainable competitive advantage.