LIDL's Market Success and Management

This assignment examines the factors contributing to LIDL's successful market penetration. It delves into the company's management structure, analyzing its effectiveness compared to competitors like ALDI. The analysis considers LIDL's operations in Greece and its global expansion strategies. Additionally, it explores relevant theories on corporate sustainability and organizational behavior within a global context, drawing from academic sources and online resources.

Business Organisations and
Environments in a Global
Context

Table of Contents
INTRODUCTION...........................................................................................................................1
BACKGROUND INFORMATION OF LIDL................................................................................1
BUSINESS ENVIRONMENT........................................................................................................4
APPLICATION OF ANALYTICAL APPROACHES...................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
If an organisation wants to expand their business in some other nation then, it is required
for them to examine their surroundings in an adequate way as it can affect their business either
directly or indirectly (Ferraro and Briody, 2017). Present assignment is associated with problems
which have to be examined by LIDL. These types of troubles need to be taken into under
consideration while opening a new store in Greece. These difficulties will be related to
management of staff members, competition and risk of expansion along with unfamiliar market
and many more. There are some techniques which can be utilized by the manager to determine
issues such as PESTLE analysis and Porter's five forces which are going to be discussed in this
assignment.
BACKGROUND INFORMATION OF LIDL
This organisation was established in the year 1930 as a small grocery store. Their first
outlet was established in 1973 and at present, they are operating business on a large level. In
1990, they were selling their goods in Germany only but now, they are providing their products
and services across the world (Kirton and Trebilcock, 2017).
In the UK, they opened their store in 1995 and after two years, they had more than 550
outlets over there. Their vision is that they want to cater high quality items to their clients at a
lower value. They render their products to people at discounted price. Now, they are going to
expand their business in Greece also and therefore, they have to analyse business environment in
an effective and efficient manner. LIDL is providing variety of items to their users such as fruits,
vegetables, bakery, flowers, wines, beers, frozen items and many more.
Size and financial performance of LIDL: In 2015 – 16, income of company was almost
£120 million and approximately, 50000 workers are working with them. Operating revenue of
firm was near £300 million during the year 2016. As they are going to expand their business in
Greece; therefore, they will improve their market share as well as profits (Del Giudice,
Carayannis and Maggioni, 2017). This will assist them to taking benefits from their competitors
across world.
1

From the above mentioned data, it has been interpreted that there are various supermarket
stores which are operating their business in country. It has been seen that market share of LIDL
is increasing rapidly as they are providing quality products at reasonable rates. As compared to
them, ALDI’s market share is less i.e. 17.6. It is the foremost competitor of LIDL. Apart from
this, market share of Tesco and ASDA is going down which will provide direct impact on their
reputation (Murray, Skene and Haynes, 2017).
2
Illustration 1: Market share of supermarkets
(Source: Jefford, 2017)

Management structure of LIDL: They are the biggest supermarket chain which is doing
their business in many nations. Now, they are going to expand their business in Greece also and
therefore, it is fundamental for them to analyse their market effectually. Chairman and CEO of
firm is Karl – Heinz Holland. Name of Deputy Chairman is Holger Albrecht. Their fundamental
objective is to provide variety of items to their users by maintaining proper quality and in
addition, prices are very much moderate which aid them to attract numerous people towards
them (Andriof and et. al., 2017). Apart from this, they want to maintain their relations with staff
members effectively as this will work as a motivation for them and they will be able to
accomplish their work in an efficient manner within specific period of time.
3
Illustration 2: Food retail market
(Source: Riley, 2017)

(Source: Carpenter, 2017)
Current international operations of LIDL: As per the recent research, it has been
determined that it is a top retail sector in UK which is providing various kinds of goods to their
customers. Organisation is doing their work at the global level which helps them to access new
marketplaces. as a result, they can easily enhance their customer base. LIDL is providing more
than 150 kinds of goods to their clients and thus, they will accomplish their requirements easily.
Furthermore, they are planning to add more items in their outlets so that people can buy all goods
of their choice under a single roof (Schotter and et. al., 2017).
BUSINESS ENVIRONMENT
In the UK, retail market is much developed and thus, there is less focus amongst both
supply and demand of goods. As there are many outlets of supermarket thus, there is no
circumstance of gap in supply as well as demand. Therefore, it will cater some chances to many
players like local, regional and niche so that they will operate their business in many places in
the UK. As per the recent condition, if any individual wants to open a store in retail segment
4
Illustration 3: Management structure of ALDI

then, this will be highly risky as it will take a lot of time to take business at a large level. But,
this will create some chances to got acquisition and merging of these kind of stores. Hence,
information related to environment of Greece is mentioned as beneath:
Economical environment: The economy of UK is much wide in entire world. It has been
noted that GDP of Greece was almost 194.9 billion USD in the year 2015. This rate is decreased
by .5 % in 2016. Apart from all of this, approx 1.5% individuals are working in the sector of
agricultural and .09% of total gross domestic product. In 2016, population of United Kingdom
was 65.64 million and it is estimated that it will reach to 70 million till 2020. In which,
population of Greece was 10.75 million in the year 2016.
Country Statical profile: Greece 2017
Unit 2009 2010 2011 2012 2013 2014 2015 2016
GDP per
capita
USD
current
PPPs
30 396 28 203 26 141 25 284 26 098 26 431 26 358 26 691
Economic
growth
Annual
growth %
-4.3 -5.5 -9.1 -7.3 -3.2 0.4 -0.2 0.0
Imports % of GDP 28.8 30.7 32.3 e 33.1 e 33.2 e 34.9 e 31.8 e 30.8 e
Exports % of GDP 19.0 22.1 25.5 e 28.7 e 30.4 e 32.5 e 31.9 e 30.2 e
Inflation
rate: food
Annual
growth %
1.9 0.1 3.1 1.5 0.0 -1.7 1.8 -0.2
Exchange
rate
AUD per
USD
0.72 0.76 0.72 0.78 0.75 0.75 0.90 0.90
(Source: OECD iLibrary, 2017)
Apart from all of this, long term interest rate of Greece is almost 11% in November, 2017
which is less as compare to last month (Guo, Huy and Xiao, 2017).
Cultural and Political environment: Political surrounding of Greece is much effective.
As indicated by constitution of congress and federal courts, president of nation share their
5

reserve privileges with national regulatory body. Along with this, sovereignty power is given to
state ministry body by national government. Fundamental distinguish amongst various political
aspect of Greece and another developed nations is that, many authorities are provided to supreme
court as well as national government of Greece as compare to other countries. Additionally, there
is low effect of third party which is comparatively high in another states. These controls will be
in various kinds such as laws, acts, prohibitions and many more. In Greece, there is freedom of
expression to individuals but there are many components which restrain their privileges, such as
legal, cultural, political, economical and so forth. Apart from all of this, in Greece, there is much
diverse as well as free press but ownership of media is with political government which interrupt
into this sort of freedom (Kannothra, Manning and Haigh, 2017). New organisations which are
entering at marketplace, it is not easy for them to utilize new and unique digital techniques into
their business.
Social as well as cultural surrounding of Greece is entirely distinctive as compared to
other nations. Its economy is enhancing day by day which is providing opportunities to people to
run their business over there. Along with this, both culture and society plays an eminent part in
improvements and advancement of this state. The major key advantage is that, racial diversity is
much rich which gives an outcome of immigration, high expectancy of life, workforce diversity
and so on. Rather than this, persons of Greece render high value to independence, self respect
and in addition individualism. As a result, they will get success and cater growth and
advancement to economy of nation. At this place, old individuals want to leave separate from
their children as they want to live their life alone without any support of their child.
Basically, individuals do not want to create any sort of relations with other; therefore,
they will face difficulty in cooperating with another people. Essential reason behind it, their
interdependences. They never want to do their task in groups. Even there is competition amongst
friends, spouses, siblings and families (Walgenbach, Drori and Höllerer, 2017). It will provide an
adverse affect to their nation. But it has been noted that, at the time of negative circumstances
they work together without any problem which present their unity as well as strength.
6

(Source: Greece religions, 2017)
As indicated by above graph it has been comprehended that in Greece, there are almost
98% population which belongs to Orthodoxy and 1 % individuals are Islamism and remaining
part belongs to others.
Basically, in each and every city business suit along with tie is preferred by persons.
Colour of suit will be dark, for an example blue, grey. Girls or ladies will wear jackets with their
dress and many kinds of colours will be select by them, such as ivory, blue, greyish, shirt of
white colour etc. They think that these type of colours boost their motivation and confidence and
in addition it gives them conservative appearance.
They prefer to do discussion at the time of meal and it may be related to their business.
Persons do communication during lunch or dinner time (Hahn and et. al., 2017). They never give
gifts to each other but instead of this they prefer to give and accept written notes. Smoking is not
allowed here and even many laws are formulated by government to prohibit smoking.
Legal and Financial systems: As indicated by legal system of Greece, federal act
comprises license and patent, which portrays that if there is any argument raise in this context
then, this has to be sort out in national tribunal only. Instead of this, legal framework of state is
7
Illustration 4: Religions in Greece

much same with national structure but one an only difference amongst them is state legal system
resolve only those issues which are related to state laws.
Fundamentally, legal framework describes procedure which enforce legislation in the
society. It demonstrates privileges and duties which are connected with an individual. Essential
legal aspects in Greece is civil, religious and common act. Various law sources are mentioned as
beneath: Constitutional Law: It is like a formal document which portrays supreme court's power.
National constitutional act was develops from constitution of Greek; where, state law
creates from an individual state formation (Ferraro and Briody, 2017). Statutes and ordinances: It passed on three kinds of level such as local, state and
national. Common law: With assistance of this, any court will describe law. Along with this, facts
which are associated with specific cases are basically compared with past judgements
which is taken by committee. Thus, it has been comprehended that this law used by
people when their present case is much connected to past so that adequate decision will
be taken.
 Administrative law: This is developed through administrative bureau which describes
purpose of legislative administration who passed acts.
Henceforth, from above study it has been understood that as LIDL is going to expand
their business in Greece so that they have to accept uncertainty (Kirton and Trebilcock, 2017).
There are many segments in Greece where regulatory body restricted outsiders to invest
their money into this, such as commercial fishing, broadcasting, defence, banking, power
generation, mining rights, communication and many more. In these sectors only Greece
individuals will invent their fund. If any outsider wants to do invest then, they have to file a
report to national ministry body under certain laws:
 Agricultural Foreign Investment Disclosure Act 1978
 International Investment and Trade in Services Act 1976
Instead of all of this there is no acts are formulated by government to make control over
exchange of currencies. No foreign investors will get incentives on their investment as regulatory
body never allow them.
8

Registration formalities: To register a firm, incorporation certificate has to be filled by
director of LIDL with State Secretary (Del Giudice, Carayannis and Maggioni, 2017).
Financial structure of Greece comprises financial market (Future, option and equity
market), non – financial institute (insurance associations) as well as banking system (For
example: commercial, saving, foreign, credit union and many more).
Fundamental roles and responsibilities of government is to create some laws for nation;
therefore, organisation will do their business by following them.
APPLICATION OF ANALYTICAL APPROACHES
PESTLE analysis of LIDL: There are many extrinsic elements which can provide affect
to an organisation positively or negatively. It is stated as beneath:
Political Factors  As company is going to expand their market in Greece;
therefore, it is fundamental for them to follow rules and
regulations of that nation (Murray, Skene and Haynes,
2017).
 While taking decision for their firm, they have to follow
all laws.
Economical Factors  Cost of labour is much high in Greece then, thus they
need to increase price of their goods.
 Association has to follow tax policy of country.
Socio-Cultural Factors  Regulatory body of state wants best quality items and
services from firm so that they can keep up their health
in an effective manner.
 Purchasing power depend on income of people.
Technological Factors  As there are many new techniques are introduced day by
day; thus, it is fundamental for LIDL to opt them
(Andriof and et. al., 2017).
 They can take their business online to enhance their
customer base.
Environmental Factors  It is must for an organisation to reduce wastage; as a
9

result, they can keep their environment safe.
 There are many regulations are formulated by
government in this relation.
Legal Factors  It will comprise many laws, such as health and safety,
competition and employment (Schotter and et. al.,
2017).
Porter's Five forces analysis of LIDL: This can be mentioned as below: Threats of New entrants: As competition is increasing on regular basis; therefore, chance
of new entry at marketplace get enhanced. There is less chance of new entry in retail
sector as there are numerous supermarket in country. Bargaining power of supplier: There is no need for manager to bargain with any supplier
because they have their own manufacturing house. Bargaining power of buyers: As competition is much high in this segment; thus, there is
high bargaining power of purchasers. Threat of substitute: LIDL is having patent right on their entire goods so that they is no
circumstance of any utility item at marketplace (Guo, Huy and Xiao, 2017).
 Rivalry among competitors: There are many competitors of LIDL at market, like ALDI,
ASDA, TESCO and so on.
CONCLUSION
From above mentioned assignment it has been comprehended that there are various sorts
of problems are facing by company when they are going to do their business in Greece such as
management of workers, not much familiar with market, competition, expansion risk and so on.
It is not easy for employer of company to manage their staff members over there as rules and
regulations are totally different of Greece. To analyse external environment there are two
methods discussed in this assignment, i.e. PESTLE and Porter's five forces. Apart from this, to
reduce risk firm can tie up with some another association.
10

REFERENCES
Books and Journals:
Ferraro, G. P. and Briody, E.K., 2017. The cultural dimension of global business. Taylor &
Francis.
Kirton, J. J. and Trebilcock, M. J., 2017. Hard choices, soft law: Voluntary standards in global
trade, environment and social governance. Routledge.
Del Giudice, M., Carayannis, E. G. and Maggioni, V., 2017. Global knowledge intensive
enterprises and international technology transfer: emerging perspectives from a
quadruple helix environment. The Journal of Technology Transfer. 42(2). pp.229-235.
Murray, A., Skene, K. and Haynes, K., 2017. The circular economy: An interdisciplinary
exploration of the concept and application in a global context. Journal of Business
Ethics. 140(3). pp.369-380.
Andriof, J. and et. al., 2017. Unfolding stakeholder thinking: theory, responsibility and
engagement. Routledge.
Schotter, A. P. and et. al., 2017. Boundary spanning in global organizations. Journal of
Management Studies. 54(4). pp.403-421.
Guo, Y., Huy, Q. N. and Xiao, Z., 2017. How middle managers manage the political
environment to achieve market goals: Insights from China's state‐owned
enterprises. Strategic Management Journal. 38(3). pp.676-696.
Kannothra, C. G., Manning, S. and Haigh, N., 2017. How Hybrids Manage Growth and Social–
Business Tensions in Global Supply Chains: The Case of Impact Sourcing. Journal of
Business Ethics. pp.1-20.
Walgenbach, P., Drori, G. S. and Höllerer, M. A., 2017. Between Local Mooring and Global
Orientation: A Neo-Institutional Theory Perspective on the Contemporary Multinational
Corporation . In☆ Multinational corporations and organization theory: post millennium
perspectives. pp. 99-125. Emerald Publishing Limited.
Hahn, T. and et. al., 2017. Advancing research on corporate sustainability: Off to pastures new or
back to the roots?. Business & Society. 56(2). pp.155-185.
Online:
Carpenter, S., 2017. Management structure of LIDL. [Online]. Available through:
<http://slideplayer.com/slide/8489466/>.
Greece religions. 2017. [Online]. Available through:
<https://www.haikudeck.com/greecemaddox1-education-presentation-sHKwqxBX4Q>.
Jafford, K., 2017. Supermarket of LIDL growth speeds up again. [Online]. Available through:
<http://www.cityam.com/226919/trouble-for-the-big-four-as-aldi-and-lidl-growth-
speeds-up-again->.
OECD iLibrary. 2017. [Online]. Available through:
<http://www.oecd-ilibrary.org/economics/country-statistical-profile-greece_20752288-
table-grc>.
Riley, G., 2017. LIDL enters the US grocery industry. [Online]. Available through:
<https://www.tutor2u.net/economics/blog/lidl-enters-the-us-grocery-industry>.
11