I. Where to go?

• Location
- As Aldi’s CEO in Vietnam, we will select Hanoi and Ho Chi Minh City as the
two pioneering cities to implement the plan: Bring the Aldi brand to Vietnam. If
there is certain success in these two big cities, we will expand this brand to other
cities in Vietnam. With the ambition to be a direct competitor to Big C in the
future.

- The reason why our company chose 2 cities above are:

- These are the two largest cities in Vietnam. If our brand hits this place, it will
create a good premise for us to expand our supermarket chain to other cities in
Vietnam.

- The densely populated should lead to higher food requirements than

elsewhere.

- Each person's income is different, but the food quality requirements are
the same. We are confident that: Aldi is a low-cost supermarket brand that can
meet all quality requirements of all customers.

- Hanoi and Ho Chi Minh City will be two potential markets for Aldi to initially
penetrate into the Vietnam market.

 scale
Vietnam opens the retail market, allowing 100% foreign investment in this field
from January 1, 2009. Our country's 85 million population market has a great
attraction to global retail groups, including ALDI Group.

the success of cheap supermarket chains like Aldi especially in Vietnam is

redefining the word "supermarket".
The common people and the middle class buy their own goods - small producers,
farms, household economic entities or cooperatives.

Aldi's store locations are residential, near schools, and in the suburbs.

- These places where are chosen with cheap rental costs and plentiful sources
of visitors.

- Aldi's shop is very simple.

Floor area of the store is only from 300-1,100 m2.

The designs of the stores are all the same.

- This makes opening a store branch simple and fast. Costs will also be
minimized.

Conclusion:

The process of formation and development of Aldi in Vietnam shows that the
cheap supermarket has never been out of date.

This model is clearly demonstrating the capacity to replace the markets to create
a new urban civilization in Vietnam.

 Products:
1.Low- cost Supper Market chains :

- A cost of products is defined by several parts : Base costs , Logistic costs

( transportation and warehouse cost ) , Operating costs ( labor costs , space costs ,
marketing costs…. ) , tax. So a low-cost product is decided by reducing one or
more of them .

- A low-cost supper market is a place containing almost 100% low-cost products

but we can list too much from this , But Aldi is a low-cost products with average
600 products per stores. So we need to choose by their profitability.

- From these 2 points of views , a list product which can be choose :

+ Daily food and water : From local and surroundings small and medium providers
. ( low -base costs , low logistic costs and high demand- high profit margins ).

+ Clothing and shoes : From native small and medium providers who are not
famous but good in qualities. ( low-base costs . medium demand, medium
logistic )

+ Exclusive products : Choose small and medium factory creating an exclusive

product only distributed in Aldi chains ( E.X Medion laptop and Monitor ) with low
prices and high qualities base on Aldi ‘s own qualities.

 Partner cooperative :

Most of their partner is a native small and medium enterprise to reduce base cost
( Aldi doesn’t need to pay for branding which is very high in famous enterprise ) .
Food and products used during the day , Which need to refill every day they
choose surrounding and local provider to reduce logistic cost and keep qualities in
best conditions. To reduce the base cost and keep high qualities of product , Aldi
provide a training for their exclusive suppliers .

Ex: Utxi Aquatic Products Processing ( VN White Vannamei shrimp ),Hd Furniture
Group JSC( table and furniture) ,Quang Viet (Tien Giang) Co., Ltd. ( sport goods )…

2. how to get there?

 Aldi value chain Centralized
Centralized decision making helps coordinate the operations of the
subsidiary in Vietnam .
Aldi and subsidiary can ensure coordination and operation process together . the
centralization of power and authority to subsidiary have the tools to make
essential changes in organizational structure.

 It is also important when one subsidiary’s output is another’s input.

Subsidiary in Vietnam would benefit by purchasing product from the company’s

central purchasing department at a lower cost than it would pay in the open
market.

 Subsidiary buy product at lower cost so the company can sell product at
lower price which makes profit

Aldi maintain strong control subsidiary by :

+ financial resources by subsidiary profits back.

When subsidiary has profit by sell product , profit turn back to parents company

+subsidiaries will enforce company rules uniformly by policies, procedures

The parent company can control all activities of the subsidiary by agreed laws

 strategy
1. The lowest possible price

Today, Vietnamese people give priority to shopping at retail supermarkets over

traditional markets. Because shopping at the supermarket, the prices of all items
are specifically listed, so there is no need to bargain like buying at a traditional
market. However, the disadvantage of the supermarket is that the price is quite
expensive

So this is the advantage of Aldi - a retail supermarket chain that offers extremely
low prices for products. The company eliminates the shopping experience in an
inefficient way. Katrijn Gielens, a marketing professor at UNC's Kenan-Flagler
School of Business, says they can save a percent on costs without compromising
on quality. The company also operates at a lower profit margin than its
competitors. Besides, Aldi also has other tactics to reduce real estate and labor
costs. Aldi's small shops, which occupy only a fraction of that space, are on
average over 1,000 square meters wide, making it convenient for quick and cost-
effective shopping.

2. Online shopping and home delivery

According to recent statistics published by Appota, Vietnam is in the top 20

countries with the highest number of Internet users in the world with 49 million
Internet users. The number of people using only phones to access the Internet in
Vietnam, especially at the age of 18-34, accounts for a very high percentage
compared to the proportion of people using only computers or other devices. Not
only that, Vietnam is a country known to have high mobile connectivity: 55% of
Vietnamese own a smartphone and it is forecasted that by 2020, 8 out of 10
Vietnamese will use mobile phones (Google APAC ) and 46% of people own a
personal computer. This is the driving force for the trend of online buying and
selling in Vietnam in general to be on the rise

3. Exclusive German branded products

According to a survey by Gray Group - USA in 16 Asian countries, 77% of

Vietnamese prefer foreign brands. Meanwhile, the average figure across Asia is
40%. On average, about 4 out of 10 people buy confectionery, canned food and
non-alcoholic drinks, choosing imported products. This survey was conducted on
a nationwide scale by the Vietnam High Quality Business Association, collecting
more than 16,000 responses.

More than 90% of the brands Aldi sells are private labels such as Simply Nature
organic products, Millville cereals, Burman ketchup and specialty bread at
cheaper prices. According to the survey, nearly 90% of products at Aldi are the
brands exclusively distributed by this supermarket. These products not only help
Aldi reduce input costs due to cutting middlemen, but also allow Aldi to strictly
manage the quality, actively change the properties of the product to match the
business strategy. joint venture of the whole chain. Although it is the case no one
wants to happen, but with the "home" products, Aldi can easily return and find
the cause if there is a failure or any problem affecting the customer.

 Facilities and Production Process

Facilities

ALDI has been purchasing their stock from local producers and farmers in order to
ensure their sustainable development. It has plans to convert all its private
labeling packaging to recyclable, reusable or compostable by 2025. It will be even
attracting more environment friendly customers along with saving the
environment. They have been charging their customers for the bags, encouraging
them to bring their own. They are currently working on reducing the waste
created due to home delivery packaging. ALDI has received its GreenChill
certification for using sustainable refrigeration. It has also installed insulated
panels in order to reduce the usage of energy. It should continue to adopt new
environmental friendly ways in order to grow and attract more environment
friendly customers.

Customer’s need: The growth of Aldi is associated with its ability to provide
diverse services, which have enabled them to gain a substantial number of
customers over time. Customers have their expectations of the company.
Customers have been demanding for services at discounted prices. This enables
the customers to attain goods at lesser costs.

Supplier: Suppliers are vital for companies that deal with the marketing of a wide
range of products. Aldi offers a wide range of products. This is one of the
positioning factors for the company. The relevance of the suppliers to the
company is to ensure sustainable supply of goods to the company. Aldi gets its
supplies from different manufacturers and processors. In order to ensure that it
maintains its relationship with its customers, a company has to ensure that it
maintains a stable relationship with its suppliers so that they can keep supplying
quality products. Through the maintenance of a working relationship with their
suppliers, the company is able to get a constant supply of products and services.
Process planning (Low cost strategy)

At Aldi, discounted products are piled up in the middle so that customers can
both refer and continue shopping plans. Sauces are loaded on the frozen shelf to
save space, and at the same time help customers easily make choices about which
sauces for which foods. Fresh produce and bread are left at the end of the
journey so they won't be crushed by other products. By doing this, Aldi stores
always have a "modest" area than their competitors, reducing rental and
operating costs. Some Aldi shops even add a glass roof to save electricity.

According to the survey, nearly 90% of products at Aldi are brands exclusively
distributed by this supermarket. These products not only help Aldi reduce input
costs due to intermediary cutting, but also allow Aldi to strictly manage the
quality, proactively change the nature of the product to fit the overall business
strategy of the whole chain.

Aldi even has the right to cut the number of employees to a minimum. Shelf
arrangements are quick with "divine" cartons, and customers have to pack their
own products after payment, causing the number of employees at the counter to
be reduced. The majority of Aldi supermarkets have just under 10 employees
working at the same time, a very modest figure compared to rivals.

The trolleys at Aldi are always locked together and can only be opened when a
25-cent is inserted. After completing the purchase, the customer will
automatically go back and lock their trolley to get back the 25 cent. Since no
customer wants to lose money, most people will return the car to the right place
and from there Aldi will be able to reduce an additional employee to pick up the
trolley for the supermarket. The trolley being fixed in one place will also limit the
"running" situation, thereby reducing repair and replacement costs.

 Entry Mode
Joint Venture
Joint ventures entail the partnership of companies or individuals for a specific
business purpose. Partners usually establish an limited liability company for
standard joint venture and a Joint Stock Company if the there is a desire to list on
Vietnam’s stock exchanges. For investors purchasing stakes in state owned
enterprises being equitized on Vietnam’s exchanges, the JSC structured will be
required by default. When entering the Vietnamese market, foreign investors can
choose to enter into joint ventures as a majority (ownership >50 percent) or minority
(ownership <50 percent) stakeholder