Report on Lidl Superstore Germany

The company is constantly working in the competitive environment which is used to gain the advantage in the market. The main purpose of this study is to focus on the information which is specified in the internal and external which are enjoyed by the company. The super market Lidl is a super store based in Germany which is currently working in the 30 countries with gross revenue of $85.7 billion across the globe according to the survey of 2016. I have chosen the important shares which are working in challenging superstore industry. The superstore is being working with discounted prices which are considered as low price and facing challenges at cheap prices not compromising with quality. The article is based on the micro and macro environment which is used to gain the competitive advantage in the market and to tackle the strategies to face the challenges in the environment. It also recommended in the report which is helpful to improve the operations of the market without compromising in the business model.

Introduction of Lidl Superstore Germany

Lidl superstore is founded in the 1930s as the grocery store in Germany which provide services as wholesaler. As now, the Lidl is becoming the one of the largest company working as super store in the market of Europe with more than 600 stores being working in the UK. Although as the store is based in the Germany, but it works in the UK as well after competing with its strategies for a period of 20 years. The fast growing expansion in the market create the competition in the market which decrease the portion of Lidl level of competition but it could not remove it from the market but they expand their activities to increase the portion of the market. The market portion of Lidl is still small in the market of UK but in the beginning of 2015, the grocery store makes the growth of the company. When the market situation was most likely to decrease there was increase in the portion of the Lidl market which was approximately estimated as 15% from 3% in the 2015. As above discussed, that the Lidl have low market share which become most rapidly growing firm in the market with efficient strategies to increase the portion in the market. The market strategies are based on the Porter’s strategic model, and to analyze the market situation of the company is determined with the SWOT and PEST analysis (Wiggerthale, 2008).

Market strategy analysis of Lidl Superstore Germany

The basic core of the marketing strategies, are consumer demand, product and services satisfaction and the relationship of the customer with the market. One of the important factor in the market is to conduct the analysis which are used to explore the market share to gain the competitive advantage in the market. In order to gain the marketing strategy benefits there must be strategy used by the Lidl is 7P’s analysis which deal with the important issues in the market. These strategies are used to develop the market share with important factors to deal the understanding of the market. In these 7P’s there are also 4P’s which are related to the product, price, place and promotion. This analysis helps the company to sustain in the market by understanding the internal operations of the market (Mortimer, 2015).

·         Product—the quality of the product is being sold in the superstore should be solid with brand name possessing the qualities which are determined in the market to sale the product. The goods are sold in similar in the market which could compete the different stores in the market. If the goods are sold on low prices, customers have negative perception about the product’s quality.

·         Price—pricing strategies are most likely to gain the competitive advantage with the clearing strategies which are being used in the industry. In the most valued to entertain the customers which are offered in cheap prices that are used in the high quality within the low prices.

·         Place—location matters in case of every business which are used to gain the benefits in the market. Lidl is placed in UK and Europe which is segmented in the different market portion which is operated in high quality product.

·         Promotion—the quality of the product should represented in the model which should be well recognized by the people and customers could get better services in reasonable prices.

Porter’s generic strategies of Lidl Superstore Germany

The basic outline for the general strategies of the porter’s model is product differentiation, cost leadership, and cost focus which could be gain through above discussed 7P’s analysis and throughout it is adopted by the Lidl which are perusing by the strategies of selling the product in different environment of the market taking in view the competitors analysis with new and existing competitors and the bargaining of supplier and buyers. However, in order to maintain the current rate of the expansion in the market to diversify the strategies which are stay to gain the competitive advantage in the market to innovate the grocery market in UK and Europe.

SWOT Analysis of Lidl Superstore Germany

SWOT analysis is used to analyze the different internal factors which are used to determine the value of the product in the market.  It is method to analyze the strengths and weaknesses as well as external opportunities and technologies used in the business (Reginald, n.d.). These elements are used to formulate and regulate the policies in the business market to gain the competitive advantage in the market.  The SWOT analysis of the Lidl is explained below:

·         Strength of Lidl Superstore Germany

The structure of the business based on the chain of superstores which are most likely based on the cheap prices with the better quality which could meet the requirements of the customers. There are different levels of the exclusive and security with a huge amount of the stores whole in the UK and Europe. Online availability of the products which are available in the superstore give more chances in the growth of the productivity.

·         Weaknesses of Lidl Superstore Germany

It also has to face some weaknesses which are used to deal to treat the weaknesses in the market which are implemented in the UK market. It could be able to increase the productivity in the market so that it could be possible for the customers to utilize the items in the market so that customers could get the product in the market. There is also misperception in the market, the people think that if the prices are low there are most chances of low quality of the product and they do not purchase.

·         Opportunities of Lidl Superstore Germany

There are most probably chances of getting opportunities which are most likely to get higher share in the grocery market. It would be successfully adopted which is more likely to gain the success in the market to gain the funds to invest in the market with the expansion of range of to gain order in the sell and purchase the different items.

·         Threat of Lidl Superstore Germany

If the Lidl is going to engage with the price and determination of the major issues related with different factors which are used in expanding the business of the competitive market. International growth in the business market which are cause of the competition in the market and may or may not affect the situation in the market.

Lidl’s Macro Environment in UK Market

The market value of the grocery products are most likely to increase in the UK market by $163 billion which was predicted in the survey of 2011-20. This is considered as a significant sector of the growth which is estimated in the growth of the grocery market. Moreover, there are some units in the market which discourage the gain in the market. Lidl is most growing industry in supermarket which is creating profit from the last two years and it should be accepted by the market. These benefits are related to the optimistic views of the companies to develop the competitive strategies in the market to expand the market. In the survey of the 2016, it was decided that if the store is making $7 on the discount which will increase the sales in 2022 and so on the value would be increased from $2.9 billion to $5.66 billion in that year and $8.15 billion in 2020. These estimates are helpful for Lidl as they present a hopeful view for the future and affirm that Lidl should concentrate on creating techniques to make them a reality as their present position gives the conditions to extend.

Lidl has now a piece of the pie of 5.1% while it was at 3.5% in March 2015. Lidl has expounded a methodology which has prompted an expansion in its offers and empowered it to develop and turn into a risk to different discounters as well as to built up general stores as "four of every five (79%) customers state they have already provided to the consumers (Hovav, 2015).

PESTEL analysis of Lidl Superstore Germany

PESTEL analysis is used to determine the factors which are related to the policies define in the customers and suppliers policies in the market (Zentes & Rittinger, 2009). There are different terms which are used to deal with the PESTEL analysis such as:

                                i.            Political environment

Revenue of the people and government is most likely to affect the consumption habit of the consumers.  The revenue of the consumer’s which could be disposable effects the market directly which is consumed on groceries. The crisis in political condition also assumed to be affected in the productivity of the market unit which are more severe to know about the condition of the market. The political conditions are the occasions in UK governmental issues, for example, Brexit may prompt discounters confronting another test as a fall in the pound can prompt an ascent in costs. These issues may create imbalance in the retailing of the products in the market. This can impact Lidl as it sources a wide extent, around 70% of its items in the UK, consequently making them progressively costly after Brexit. With a few pound and increasing costs, discounters may think that its difficult to keep their cost as low as they seem to be.

                              ii.            Economic of Lidl Superstore Germany

The economic issues also affect the consumer’s purchasing power which relates to their income and other economic factors which are used in the increase in the prices. The idea is difficult to spend their earnings on food and other needs which are compulsory to purchase is chosen at first which is most important and then secondary products are purchased.

                            iii.            Social of Lidl Superstore Germany

Lidl has faced many challenges to gain the more customers in the market which could help them to gain the competitive advantage in the market. Now in the current situation lidl is becoming the focused to target the consumers in last decades which are improving the quality of the market strategies to compete with the other retailers. It is mostly intend to change the experience which is assumed by the consumers in the market while purchasing the products. All these highlight on Lidl's association with its clients, its desire to bid and show their jobs at a more extensive scale than simply being a general store. Lidl has comprehended that the relationship and worth it brings to shoppers fortify their image picture and disrepute.

                            iv.            Technological of Lidl Superstore Germany

Lidl is required to focus on the technological improvement in the methods of dealing customers and to meet the requirements of the customers in the market so that they could get a high portion of the market. There may be increase in the job availability with help of more usage of the technology in the dealing with the customers. It could be measured that there may be different methods which could increase the efficiency of the product. However, it could be assumed that the investment in the technological factors which are implemented in the in all the stores owned by the lidl. It could increase the cost of the stores which are most likely to increase the price of the product.

                              v.            Environmental of Lidl Superstore Germany

Consumers are becoming well-aware about the policies which are adopted by the people in past therefore there is a well discipline policies which could moderate the prices of the products and maintain stability in the market. Where the economic conditions are stable there are most chances to develop the market. It is compulsory to develop the strategies in the market which could resolve the issues in consumer market. Focusing on such activities improves the brand picture Lidl depicts and permits Lidl to demand their estimations of obligation and regard. In any case, then again, Lidl needs to minimize its expenses to give shoppers their worth unit, modest costs. Henceforth, it doesn't have the assets to put resources into a tremendous measure of green advancements and eco-accommodating activities. This is underlined by the way that it was positioned second most untrustworthy store, on a positioning dependent on ecological proficiency just as item supportability.

                            vi.            Legal  of Lidl Superstore Germany

The environment of the grocery store is most likely to be respond in the market with laws and regulations such as in pricing matters. There are proper rules and regulations which are used to adopt by the store management. In this case the efforts of the Bridgend could be described which are used in the support of the customers and the management which is compulsory to adopt by the management. Thousands of the warehouses are used to compensate the market gap which could be developed in the representation of the union. This shows Lidl experiences issues and is prepared to react to them and go to a trade off when it is required, so as to keep away from reputational expenses and negative effects.

Porter’s five force model of Lidl

With the assistance of the Porters Five Forces Model examine of retail industry will be broke down in the accompanying. In the examination the purchasers will be the end-buyer and the providers will be nourishment producers, ranchers, and agrarian co-agents (Mehjabeen, 2018). The players in this analysis will be grocery stores, hypermarkets and discounters which are explained below:

·         Buyers power of bargaining

If the retailer adopts changes there is no need to change the attitude of the consumers as consumers are the one who are income provider to the retailer. In today’s world consumer are more conscious with the health and fresh food requirements as compare to cost and convenience. Another significant actuality is the cost. Since there is a wide scope of enormous retailers in Germany the customer faces no exchanging expenses and consequently the retailers must have an appealing value plot. All things considered the purchaser control is moderate and could be easily handled.

·         Bargaining power of supplier

The German retailers are serving in the market with a range of different supplier with their different strategies to make sure that the market is stable in all the steps. They mostly avoid accessing the possible delays in the delivery of the fluctuations in the price and helping to stable the prices which are considered as positive aspect in the market. Suppliers are moderate to deal the retailers in a way so that it could be used to get the market retention in the ratio of the customers.

·         New entrants of Lidl Superstore Germany

It is difficult for new entrants to enter the market as a result of the forceful promoting and estimating plans of the enormous retailers in the business. In any case there is low passage and leave costs in the food retail industry and the adjustments in customer's conduct give new participants a potential specialty to enter the market effectively. Other than the low developments rate makes the business not excessively attractive to new entrants. In end the danger of new entrants are moderate in nature which could be accessed by the retailers.

·         Threat of Substitute  of Lidl Superstore Germany

The substitute in the food industry represented in the fast food industry and in restaurants business which increase the customers demand by getting fresh food ordering online and could be get by just in your place. More direct alternative are the families who are restricted the use of product which are long term available by kept in the refrigerator as it may harmful for the health and they prefer to purchase fresh product. Therefore the threat of the alternatives is most likely to be weak as compare to other industry.

·         Rivalry of Lidl Superstore Germany

The existing competition in the market creates the situation of the rivalry in the food industry. Primary purposes behind this are the not existing exchanging costs for the buyers. The similarity in the fundamental results of the huge retailers pushes them into an aggressive estimating plan. This leads the value wars. These are supported by the purchasers who are currently looking at to an ever increasing extent. They examine extraordinary offers and the least cost. The German food retail industry has a great deal of contenders. In this manner in an end contention is solid in this industry to compete with the competitors and get competitive advantage in the market (Sauter-Servaes & Nash., 2007).

VRIO Analysis of Lidl Superstore Germany

VRIO analysis is identification of the different attributes which are connected with the activities of the organization to get the competitive advantage in the market (Lin, et al., 2012). There are four basic components which explain the VRIO analysis of the lidl explained below:

a.       Valuable of Lidl Superstore Germany

The organization must possess the abilities which are used to exploit the resources in such way that it could be helpful to get the competition in the market. Resources should be valuable as it could satisfy the customers who are using the products of lidl. This value may make by expanding separation in existing item or losing ground its cost. Is these conditions are not met, organization may prompt aggressive drawback. Thus, it is important to consistently survey the investigation of Lidl organization's training and assets value.

b.      Rare of Lidl Superstore Germany

The assets of the examination of Lidl organization that are not utilized by some other organization are known as rare resources of the industry. Rare and important assets award a lot of upper hands to the firm to get the advantage in the market. Even t could be only possible for the firm if it utilized the rare resource in well manner so that competitive advantage could be get.

c.Imitate of Lidl Superstore Germany

Most likely it is assumed that the resources are costly and could not afford by the industry in low cost and the basic feature of the lidl is to provide the goods to customers in low cost so that there could be more customer retention as compare to other stores. The resource imitation is expensive as is traditional and contains social complexity.

d. Organized of Lidl Superstore Germany

Resources are not used to exploit the product but these are used to gain the compatibility in the market with other products provided by the competitors. Lidl should be organized its management system in a way to deal with the policies and strategies in the market which are utilized to gain the competitive advantages.

Marketing strategy directions and recommendation

The UK and Germany is most likely to increase the competitive advantage in the market with compatible policies in the market. There may be different tools which are used to increase the sale in the market. It could be increase by adopting the online services to increase the customer reliability. In reality as we know it where innovation has taken over pretty much every activity we do, it is important to target clients likewise by means of innovation. Lidl UK ought to ponder building up a web based shopping administration to see a flood in the quantity of clients. Web based shopping just as require capital yet lead to long term of profitability (Morschett, et al., 2006).

There must be approach which could be attain by attaining the trust of the customers which means in a way to get the customer satisfaction which is adopted by the industry in such way that the customers will prefer to use the products of the lidl. The loyalty scheme prepares the customers with treating some issues which could be attached with the use of the strategies which are useful for the customer’s reliability.  Lidl has been developing and setting its place in the market other than of difficulties, for example, pundits for its unsustainable practices and troubles in getting a handle on a massive number of customers because of the modesty of low quality that individuals still partner to the general store. To relocate their image and proceed with their extension Lidl is centered around building up their stores and publicizing just as items and on offering quality items by keeping their costs low. To get further growth, Lidl should be likewise to get fully informed regarding the innovation around our day by day lives by giving an online assistance just as steadfastness conspires. Growth and development are significant yet keeping their piece of the overall industry and supporting their present position ought to be a center distraction (Gonzlez-Benito & Gonzlez-Benito, 2005).

 REFERENCES of Lidl Superstore Germany

Gonzlez-Benito, s. & Gonzlez-Benito, J., 2005. The role of geodemographic segmentation in retail location strategy.. International Journal of Market Research, 47(3), pp. 295-316..

Hovav, T., 2015. Business models analysis of Finnish food retailers-Case K-chain, S-chain and Lidl-How to determine right channel to enter grocery retail market as a new supplier with new products in Finland.

Lin, C., Tsai, H.-L., Wu, Y.-J. & Kiang, M., 2012. A fuzzy quantitative VRIO-based framework for evaluating organizational activities.. Management Decision,, 50(8), pp. 1396-1411..

Mehjabeen, L., 2018. Assessing Attractiveness of Banking Industry of Bangladesh by Applying Porter’s 5 Forces Model.. International Journal of Business and Management Future,, 2(1), pp. 55-62.

Morschett, D., Swoboda, B. & Schramm-Klein, H., 2006. Competitive strategies in retailing—an investigation of the applicability of Porter's framework for food retailers. Journal of Retailing and Consumer Services,, 13(4), pp. 275-287.

Mortimer, G., 2015. Move over Aldi, Lidl may be next for Australian market.. The Conversation,, Issue 15.

Reginald, G., n.d. "MARKETING AND SWOT OF RETAIL GROCERY.".

Sauter-Servaes, T. & Nash., A., 2007. Applying low-cost airline pricing strategies to European railroads. Transportation Research Record,, 1995(1), pp. 1-8.

Wiggerthale, M., 2008. Last Stop-Supermarket: The Scoop on Tropical Fruit.. Oxfam Germany, Berlin..

Zentes, J. & Rittinger, S., 2009. Retailing in Germany: Current landscape and future trends.. In European Retail Research, pp. 153-182.