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How did Aldi crack Tesco’s hold on the market?

Tuesday, July 22, 2014
by Penny Brooks

Some news in the same week as Philip Clarke's high profile departure from Tesco, is that Karl Albrecht, who founded German discount supermarket chain Aldi  with his brother Theo, has died. The success and growth of Aldi (an abbreviation of Albrecht discount) is one of the thorns in the side of Tesco, and one reason for the profits warning that they announced yesterday, along with several other problems that Clarke inherited when he took over from Sir Terry Leahy three years ago. There is plenty to analyse in the criticism of Tesco's strategy, but also worth considering what it is that has enabled Aldi to break into the market, and how they have moved to a position of having 19% of those in the AB socio-economic catergory shopping in their stores.

The Independent has a profile of the Albrecht brothers who returned from the war to take over the family grocery store in Essen in the 1940's, and leave an empire with a global turnover of around €57bn and a claim that 87 per cent of Germans shop at Aldi on a regular basis. The story involves secretive, reclusive owners who have masterminded this global expansion and built secret tunnels to their own golf course. It features a kidnapping and release of Theo Albrecht, after payment of a ransom sum which he had bargained over for days. He demanded tax relief on the payment, claiming it was a business expense.

This item gives five ways that Aldi have cracked the supermarkets, and makes a great contrast to the Tesco story - but it is worth noting the end of the Independent's profile, which warns that in Germany Aldi is embroiled in a furious price cutting war with its discount competitors, Lidl, Penny, Rewe and Edeka, and that Karl Albrecht's death leaves a power vacuum at the top of the organisation - perhaps the effect of poor succession planning.

The do’s and don’t's of pitching for business investment

by Penny Brooks

Here is an article which might be worth hanging on to for the start of next term, when new students start on their Business Studies course. The BBC has spoken to three venture capitalists - not the well-know Dragons, but some different names: the founder of Google Ventures, and managing partners of two funds based in India and in New York. They compare what they look for in a startup, what they avoid, and the best way for businesses to approach them.

What they look for varies between the three, but the theme of commitment and a genuine reason for passion about the business is common to them. What they avoid is more varied, from people who don't listen, to people who want to take a large salary out of the business, and to 'people who need us too much'. However the greatest agreement is over the best way to make an approach, as they all seek out entrepreneurs who are recommended to them rather than those who approach them direct. As Bill Maris of Google Ventures puts it, "We don't take cold calls as we would never be able to keep up with the volume and wouldn't be able to give each one the time it deserves. The best ones will find a way to know someone on the team and get referred in." So working the network is crucial, while simply sending in a CV and Business Plan is never going to work. 

The article links to a page which introduces The Next Billionaires, with items about several entrepreneurs. This includes a range from the founders of WhatsApp to Dr Dre, and from Guo Guangchang, China's answer to Warren Buffett, to Thomas Suarez, a 15-year old who started his first business when he was 11. There is a good opportunity here for a homework research task early in the AS Business Studies syllabus next term, asking students to see what they can find out about a couple of the entrepreneurs and do some early compare-and-contrast work.

AQA BUSS4 Section A CPD Briefings for June 2015

Tuesday, July 15, 2014
by Jim Riley

Advanced notice here of a CPD course that always sells out early. Our AQA BUSS4 Section A Briefing 2015 will once again turbo-charge your teaching planning and preparation for the research theme for 2015 which will be published on 1 September 2014.

This year our Section A Briefings sold out several times over and although we were able to squeeze in three overflow days, we reluctantly still had to turn away teaching colleagues.

So please get your bookings in early for the 2014/15 dates which are listed below. First-come, first served; confirmed bookings only I'm afraid. However, we're offering a nice early-bird booking discount if you can secure your place by 31 July 2014.

Download a booking form here or order directly from our online store. Alternatively, just email Janet Cahill (janet@tutor2u.net) in the tutor2u office.

Dates and Locations

LONDON 7 Oct 2014

LONDON 8 Oct 2014

BIRMINGHAM 9 Oct 2014

LEEDS 10 Oct 2014

MANCHESTER 14 Oct 2014

LONDON 5 Feb 2015

MANCHESTER - 6 Feb 2015

LONDON - 12 Feb 2015

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