Family Business

Family Business

MOKHICHEKHRA NIYAZOVA KHAYATOVNA. 24.05.2016

ALDI ( Al brecht Di skont)

MIRSHOD NIYAZOV

Location:

Based in Germany

10.000 stores in 19 countries: 3

Spain, Denmark, France, Benelux countries (Aldi North)

Ireland, UK, Hungary, Slovenia, (Aldi South)

• US & Australia

Company Introduction

Profile:

global discount supermarket chain 1

only 700 - 1.000 products → no-name-products 2

Additional Information:

250.000 employees worldwide 4

https://www.aldi-sued.de & http://www.aldi-nord.de

normal supermarket: 35.000 products

since 1973 Siepmann Foundation owns 100% of Aldi South & Markus Foundation of Aldi North Management: 6 Operating management of Aldi North consists of a governing board - Theo Albrecht Jr. Aldi South is led by a coordinating council Transfer: 7 Theo & Albrecht took the business from their parents and led it Future???" width="640"

Aldi - a Family Business?

• Ownership (majority of shares): 5

Aldi Nord & Aldi Süd wholly owned by family trusts -- since 1973 Siepmann Foundation owns 100% of Aldi South & Markus Foundation of Aldi North Management: 6

Operating management of Aldi North consists of a governing board - Theo Albrecht Jr.

Aldi South is led by a coordinating council Transfer: 7

Theo & Albrecht took the business from their parents and led it

Future???

Foundation Board

Government

Government

Lawyer

Classification of Family Business - Generation in charge 8

Anna Albrecht sen.

Karl Albrecht sen. (1886-1943)

Karl Albrecht (1920-2014)

Mia Albrecht (1923-2013)

Cäcilia Albrecht

Theo Albrecht (1922-2010)

Bethold Albrecht jr.

Theo Albrecht

jr. (1950-)

Gabriele Mertes

Babette Albrecht

Katja Albrecht

Karl Albrecht jr. (1947-)

Peter Heister

Beate Heister (Albrecht)

Peter Max Heister (1967)

5 children: ?

1 child: ?

quadruplet (1990)

Family business can be classified by the generation in charge

Theo & Karl: Aldi-South & North Founder

Karl jnr.: 3 times cancer, now lawyer

before death of Aldi brothers managed by several experienced exterial manager

→ Cousins Confederation:

More family is involved so the Company needs more organization & external to run the company

Life Cycle of ALDI (Lewis & Churchill: 1983)

War between the heirs of Aldi for a fortune of 22.000 million

CONFLICT MANAGEMENT 9

On the one hand is Theo Albrecht Jr., with his lawyer and confidant always, Emil Hubery and chief operating officer of the company, Marc Heussinger.

In the opposite is Babette, the widow of his brother Berthold, who died in 2012, along with their five children.

CONFLICT MANAGEMENT 9

• For years, the heirs do not talk and communicate only through their lawyers. Both sides accuse each other of several failures in private life.

• In addition to 120 million euros and costs of the process of inheritance, in the last three years the family of Berthold has bifurcated portion of the profits of the company.

The decision is in the hands of the courts, still has not been resolved.

BIBLIOGRAPHY

SOURCE OF INFORMATION

6 Frank, Susanne. Für Aldi kanns teuer werden. Focus.

1 Frind, Annkathrin. Wie Aldi die Welt erobert. Handelsblatt. Online. http://www.handelsblatt.com/unternehmen/handel-konsumgueter/discounter-expansion-wie-aldi-die-welt-erobert/12040076.html.

7 No name. Aldi-Nord. Online. Aldi-nord.de

9 No name. Guerra entre los herederos de Aldi por una fortuna de 22.000 millones de euros. ABC. Online. http://www.abc.es/economia/abci-guerra-entre-herederos-aldi-fortuna-22000-millones-201604250612_noticia.htm.

8 No Name. The Aldi Succession - Lessons for Family Business. Online. http://www.withersconsulting.com/aldi-family-succession/.

3 No name. Welcome to Aldi. Online. http://www.aldi.com.

BIBLIOGRAPHY

SOURCE OF INFORMATION

4/5 Wagstyl, Stefan. Karl Albracht, Co-Founder. Financial Times. Online. http://www.ft.com/cms/s/0/d9aa0f70-10f1-11e4-94f3-00144feabdc0.html#axzz49IS9Y4w3.

2 Williamson, David. Strategic Management and Business Analysis.301. Online. https://books.google.es/books?id=IrJACwAAQBAJ&pg=PT462&lpg=PT462&dq=only+700+-1.000+products+aldi&source=bl&ots=-wh894omeO&sig=-iVSJW5NxxWTU-YqAckoFk6G1pM&hl=de&sa=X&ved=0ahUKEwjPr8DMn-vMAhWKDRoKHQQJCIEQ6AEIHTAA.

Family Statements

"Our advertising is the cheap price"

“ Our only consideration when we are working out a product’s price is how cheap can we sell it”

Karl Albrecht, 1953¹¹

The revolutionary idea of ​​the merchant brothers: as cheap as possible, shops with small ranges, no decoration, practical and with absolutely no frills, small number of staff. It remains the only statement of the company's history. Company is offering the possibility to it’s customers to save time and money

Aldi customers have discovered that they can save time and money without sacrificing quality. Company affirms “ALDI, our small differences are making a big impact – in store and in your wallet.” 10

Family Statements

Keep information about family and the whole business confidential

There is still today very little known about ALDI. After he was kidnapped and held for 17 days in 1971, he led a withdrawn life, family and information about business refrained from giving interviews or appearing at public functions or being photographed.

Ownership

Information about ownership of the company is highly secured, but it is known that 100% owned by the family.

In 1961, Karl and Theo separated their spheres of retail influence into Aldi South and Aldi North. As the brothers have aged, they have gradually turned the business over to their sons and outside managers. Theo's sons - Theo junior, and Berthold - are members of Aldi North’s administrative council. Karl's son, Karl junior, left Aldi South for health reasons, and Karl turned over its day-to-day administration to Ulrich Wolters, a Bavarian retailer. Legally, the regional companies are independent entities. Strategic decisions, however, are made in tandem by the two groups via an executive board. Purchasing is also done centrally using two purchasing companies. Profits do not flow directly into the pockets of the Albrecht brothers, but into two separate foundations, one for Aldi North and one for Aldi South.

Succession

1948 Theos and Karl’s mother’s small grocery store was taken over

1960 the decision was made to split the group into two, called Aldi Sud, run by Karl, and Aldi Nord, run by Theo.

2008 the owner of Aldi Nord, Theo died at age 88

The owner of Aldi Sud, Karl died earlier in 2014 aged 94

Theo and his brother Karl, who is two years older, laid the cornerstone for what became their discount empire in 1948 when they took over their mother's small grocery store. In 1961, they changed the name to Albrecht's Discount or "Aldi" for short. Within decades, they had built a retail chain worth billions, one which permanently changed the way food retailing was done in both Germany and across the globe. In the early days of Aldi it appears that the brothers ran their business in the same way as many siblings. They divided responsibilities into silos so that Karl focused on purchasing while Theo was in charge of sales and store management. The original Aldi business was split in 1962 into Aldi Sud, controlled by Karl, and Aldi Nord controlled by Theo. It is reported that this was over a disagreement about selling cigarettes. ‘Brothers divided by a cigarette paper’.

Karl died earlier in 2014 aged 94 - his brother died six years ago at 88 - and there are doubts about whether the idiosyncratic group can continue to tolerate its own peculiarities now that they are both dead. Following Karl’s death there was a power struggle between the professional managers and the Heister family which runs Aldi Sud. The ambitious family are thought to be worried about Aldi’s domestic business, as it has been overtaken in recent years by rivals such as Lidl and Netto.

According to Manager Magazin , one leading member of Sud thinks not, and said that within the next five years it should take control of Nord. That might fall foul of anti-trust regulation. It might also be complicated by the foundations which divide up the two halves of the business between the family members. But it raises the prospect that the family’s ambition could see a business which separated five decades ago once again become united.

External factors of past and current state

Past

Current

The post-war period

Less competition

The economic and political enlargement of the European Union

In the early 1960s, antimonopoly committee was forced to look for new markets

Strong competitors like TESCO, ASDA, Lidl, Netto which also follow the same kind of pricing strategy has what ALDI has followed.

+

-

Competitive advantages of Aldi

Lean production 12

Reducing costs and eliminating waste

• Continuous improvement
• Allows flexibility across tasks and roles
• Time-based management
• Sales contained in less time, so staff costs less
• Reduced use of power/heating etc
• Sales contained in less time, so staff costs less
• Reduced use of power/heating etc
• Just-in-time production
• Stock only bought when needed
• Releases working capital
• Eliminates storage costs

• Techniques most often used in manufacturing industries
• Principles equally apply to service industries
• Lean’ avoids waste or duplicated effort

• Focuses on using resources efficiently

Corporate social responsibility 13

• Product Safety
• Health & Nutrition

• ALDI Supplier Standards

• Palm oil, Forestry
• Fish, Animal wellfare
• GM food, Organic

• Responsible drinking

Supporting charitable organisations

• Financial donations
• Donations of products.

• Reducing carbon
• Energy efficiency
• Impact of refrigerants
• Reducing, reusing and recycling.

• H igh quality range

• Rewarding performance
• Culture of openness, transparency and diversity

Top Management 14,15

Chief Executive Officer

Managing Director

General Managing Director of Aldi Ireland

Managing Director

General Managing Director of Aldi UK

MAIN STRATEGIC PROBLEMS 16

PRICE WAR

DIFFERENT STRATEGIES

EE.UU

Germany

GOOD FOR THE END COSTUMER

DEVASTATE FOR ORGANIZATION

DIFFERENTIATION

LEADERSHIP IN COSTS

MAIN STRATEGIC PROBLEMS 16

CHANGE IN CONSUMER HABITS

INCREASED COMPETITION

DUE TO STRONG GLOBALIZATION

FEW YEARS AGO, PEOPLE WORRIED FOR PRICES

ACTUALLY, PEOPLE NOT CARES PAY MORE FOR ECOLOGICAL PRODUCTS

SOURCE OF INFORMATION

Bibliography

10 ALDI Homepage. ALDI History. Online

https://corporate.aldi.us/en/aldi-history/.

16. Arantxa Iñiguez. ALDI y Lidl se enzarzan en una lucha de precios. El economista. Online

http://www.eleconomista.es/empresas-finanzas/noticias/6885561/07/15/Aldi-y-Lidl-se-enzarzan-en-una-lucha-de-precios-por-los-productos-de-marca.html

13. No name. Aldi Corporate Responsibility. Aldi.Online

https://corporate.aldi.co.uk/en/responsibility/corporate-responsibility/

14. No name. Company overview of Aldi. Bloomberg. Online

http://www.bloomberg.com/research/stocks/private/people.asp?privcapId=5209176

SOURCE OF INFORMATION

Bibliography

12. No name. Competitive Advantage Through Efficiency,Lean Production. Businesscasestudies. Online

http://businesscasestudies.co.uk/aldi/competitive-advantage-through-efficiency/just-in-time.html#axzz49Iz7cyst

11 No name. Mr. Aldi junior (†58) Berthold Albrecht: Selbst sein Tod war ein Geheimnis. Online

http://www.express.de/news/mr--aldi-junior---58--berthold-albrecht--selbst-sein-tod-war-ein-geheimnis-4831578.

15. No name. Divisional structure,How aldi works. Aldi. Online

http://aldiuscareers.com/about-aldi/divisional-structure