The Strategic Evaluation of Lidl

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The Strategic Evaluation of Lidl’s within the UK Market. Submission Date: 26 January 2014 Contents Introduction 3 1. Analysis of the competition faced by Lidl within the UK food retail industry 4 2. The Strategic position of Lidl 5 2.1 Porter’s Generic Strategies 5 2.2 Bowman’s Strategic Clock 6 3. An analysis of the external business environment and how it affects Lidl 7 3.1 PEST Analysis 7 3.1.1 Political 8 3.1.2 Economic 8 3.1.3 Social 8 3.1.4 Technological 8 3.2 Porter’s Five forces Model 9 3.2.1 Threat of New Entrants 10 3.2.2 Threat of Substitutes 10 3.2.3 Bargaining Power of Suppliers 10 3.2.4 Bargaining Power of Buyers 10 3.2.5 Competitive Rivalry within the Industry 10 4. How Lidl adds value…show more content…
With the introduction of a deluxe range (Lidl, 2014) they have seen a shift in their strategic position and as they move more towards selling higher/premium quality goods so have they been able to increase their market share within the UK (Potter, 2014) 2.1 Porter’s Generic Strategies This module was set out by M E Porter in 1985 and is known as Porters generis strategies (Mindtools, 2015). It can be used to analyse a firm’s competitive advantage and scope. Lidl have adopted a cost leadership strategy by selling high volumes at low margins and their scope is broad. Diagram 2: Porters generic strategies This has benefited Lidl especially during the recession (Gloger, 2012) as consumers were turning to the discount stores to reduce the expense of grocery bills. However, as Lidl aim to improve the quality of the products they offer and introduce strategies to improve their shopping experience such as bakeries (Foottit, 2014), healthy tills and a unique nutritional labelling system (Lidl, 2015), this may change over the years to come. As society shifts toward a healthier lifestyle, what is perceived as important by the buyer could be rewarded with premium prices (IfM, 2015) and Lidl could adapt its position to be more in line with a differentiation strategy? 2.2 Bowman’s Strategic Clock Bowman’s Strategic clock is another useful tool to analyse the Macro-environment that surrounds Lidl. It takes Porters generic
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