Corporate Strategic Management

This report discusses the importance of corporate strategic management in achieving business goals. It explores tools like PESTEL analysis, Porter's five forces, and stakeholder analysis. The case study focuses on Lidl, a German global supermarket chain. Find study material and solved assignments on Desklib.

Corporate Strategic
Management

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
PESTEL analysis....................................................................................................................2
Porters five force model.........................................................................................................5
Stakeholder analysis...............................................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES ...............................................................................................................................1

INTRODUCTION
Corporate strategy includes all those plan of action that will be very helpful for
development of business and achievement of set goals (Engert, Rauter and
Baumgartner, 2016). It is very important for an organisation to create effective and
efficient business strategy in order to gain competitive advantage over other rival
companies. This will lead to build corporate values as well as motivate employees in
order to offer better products and services to customers. Company chosen for this
report is Lidl. This company is one of the well known German global supermarket chain
is which offering its products and services in different parts. Lidl company is dealing in
retail industry and its products and services includes discounted store. This company
was formed in 1930 and founder of this organisation was Josef Schwarz. Headquarter
of Lidl company is located in Neckarsulam, Germany and it is majorly offering its
services in Europe and United State. In this report different techniques that is used for
environmental and resource based analysis. It consist of importance as well as
problems that in included in formulation and implementation of strategy. Evaluation of
key theories as well as different approaches that are associated with business and
corporate strategy. This report includes different models such as PESTEL, porters five
force model as well as stakeholder in order to develop better strategies.
MAIN BODY
There are different types of tools and techniques that could be used by Lidl
company in order to develop better business strategies. It is very important for
respective company to analyse as well as evaluate each and every factor of business
environment that will have impact over business. It is essential for this company to
1

critically analyse these factors as well as their impact over business in order to develop
better business strategies (Feldman, Amit and Villalonga, 2016). This play a crucial role
in overall development of company as well as have huge impact over business. There
are different framework and models that is specially developed with the motive of
providing guidelines to company and this will also help in developing better strategies.
This will lead to achieving goals and objectives or organisations. Different models that
has been used in order to analyse different factors of Lidl company is mention below.
PESTEL analysis
This is a framework that is developed to analyse the external factors of business
environment. There are different factors that will have major impact on business and
this will affect the business functions. It includes political, economical, social,
technological, environmental as well as legal factors. All of these factors will have major
impact over business and it is mention below in detail. Political factor – The factor determines the impact of rules and regulations that
is set by government on business as well as its activities. There are various rules
and policies developed by the government of UK for all those companies which
is dealing in retail sector. Political factor includes instability and stability of
political party, trade restrictions, taxations and other policies and many more.
This factor which has positive as well as negative impact over business. This
factor will help in developing strategies that is lead to long run success of
organisation (Hill, 2017). In order to minimize the negative impact of political
factor of Lidl, this company is following all rules and policies developed by
government.
2

 Economical factor – Economical factor includes changes in rates of inflation,
foreign exchange rates, interest rate and other economical factor. It has been
analysed that UK country has one of the growing economic rate that will lead to
have positive impact over organisation. This will lead to enhance increase in
purchasing power of customers as customers will purchase products which is
offered by respective company. Interest rate that is charged by UK government
will affect the sales and profits of this company. So it is essential for Lidl
company to develop right pricing strategies which will help in attracting more and
more customers towards business. Social factor – This is one of the crucial factor and this will have major impact
over business decisions as well as strategies developed by company. Social
factor includes culture, customer attitude, values, population, demographics and
many more social factor. In order to develop better business strategies Lidl
company needs to analyse as well as evaluate all of these social factor. In order
to have positive impact of social factor on respective business this company is
conducting market research. This will help in understanding the requirements of
customers and lead to full fill their requirements (Honggowati and et. al., 2017).
By this respective company will be able to develop strong and positive image in
market area as well as attract more and more customers. Technological factor – UK country has one of the advance and updated
technology in the world. This will be very helpful for respective company to use
new and innovative technology in market area. By this Lidl company will be able
to increase its business performance as well as productivity. Technological
3

factor will have huge impact over company and this will help respective company
to gain competitive advantage over other rival companies. In order to take
advantage of technology factor on its business this company should use new and
innovative technology in its business process. This will lead to providing between
products and services to customers as well as help in gaining competitive
advantage in market area. Legal factor – Legal factor includes all laws and legislations that is developed by
UK government. These laws are helpful in providing as well as maintaining safety
and security of employees as well as customers. This factor includes intellectual
property, laws, health and safety of consumers, employability laws and other
factors. Lidl company is providing employment to various individual so it is
essential for this company to maintain the safety and security of employees
(Morden, 2016). By this respective company will be able to develop better
relationship with customers as well as achieve desired goals.
 Environmental factor – This factor includes the impact of environment on
business as well as its operations. It is very important for this company to
analyse as well as evaluate environmental factor in order to develop better
business strategies. Environmental factors includes, climate, weather, pollution,
ecological system and other factors. Weather conditions will affect the supply
chain as well as transportation of raw material and products from one place to
another. Continuous changes in environment can have negative impact over
business as well as affect its operations. In order to minimize the negative impact
of these factor on business this company should conduct different corporate
4

social responsibility. This will leads to develop positive as well as strong brand
image of Lidl company in potential market area.
Porters five force model
This model is develop in 1979 by Michael. E. Porters. This model is considered
as an effective tool for understanding the market as well as determining the competitive
position in the market area (Noe and et. al., 2017). Porters five force model includes
fiver major process that will have impact over business. It is essential for Lidl company
to analyse these forces in order to identify its position in competitive business
environment. Different forces of posters fiver forces model in mention below.
Threat of new entrants – This force reflects the impact of new entrant on
business. Lidl is well know company which is providing its products and services from
many years. It has been determined that threat of new entrant will be high when new
company is providing better products and services to customers at lower prices.
Customer will chose products offered by new company over Lidl company when its is
providing high quality products at lower price.
Bargaining power of buyers – Buyers are considered as one of the crucial part
of company and bargaining power of buyers will have direct impact over respective
company. This company is providing its products and services to different parts of the
world as well as many customers (Ogunsiji and Ladanu, 2017). When bargaining power
of buyer increase then it will lead to decrease in profits of the company. Respective
company is offering its products and services to large number of individual customers.
This lead to have less impact on business.
5

Bargaining power of suppliers – Suppliers are helpful in providing raw
material as well as other products to company. So that they can develop products and
perform its business operations. When bargaining power of suppliers are high this will
lead to increase in the cost of organisation. There are many suppliers in market area
which can provide raw material to customers. It includes low switching lost so it can has
been analysed that bargaining power of suppliers which have less impact over
business.
Threat of substitute products and services – There are different type of
products available in market area when can have influence over purchasing decisions of
customers. This is a threat to business as customer can chose substitute products over
Lidl products. This well have moderate impact over company as customers can select
substitute products over products offered by respective company. This will have
negative impact over sales and profits of the company. This company is providing high
quality product and services which lead to increase in loyal customers in targeted
market area.
Rivalry among existing firms – Lidl company is dealing in retail market sector
which is highly competitive. There are many companies which is providing its products
and services in market area (Petrenko and et. al., 2016). There is huge threat from rival
company as any change in their strategies will lead to have direct or indirect impact over
business. It is essential for respective company to develop better strategies as well as
new and innovative products. This will help in gaining competitive advantage over other
rival companies. This force of porters five force model will have high impact on
business.
6

It is very important for respective company to develop as well as implement
strategy in business. This will help in gaining competitive advantage over other rival
companies as well as successful execution of business plan. Strategies play a crucial
role in overall development of business and achievement of desired goals. By
developing effective and strong strategies respective company will be able to perform
better and as well as create better products and services. Lidl company is dealing in
highly competitive environment which will have major impact on its company. This
company needs to develop better strategies in order to reduce the negative impact on
rivalry among existing customers as well as new entrant in market area. There are
various benefits for respective company by successful formulation as well as
implementation of strategies (Rothaermel, 2017). There are range of issues and
problems are inherent in creation and execution of strategies. By developing strong
business strategies respective company will be able to minimize the negative impact of
external business factors. Different importance that is inherent in formulation and
implementation business strategies are mention below in detail.
Importance of formulating and implementing strategy
There are range of benefits by formulating as well as implementation of strategy
for respective company. It's importance in context of business is mention below. Financial benefits: By formulating and implementing strong and effective
business strategy this company will be able to gain financial benefits. Corporate
strategies will leas to conduct business activities in cost effective manner and
help organisation to earn more profits. Development of strategies and its
7

successful implementation is important for enhancing sales and improve
business profits. Competitive advantage: Strategies play a crucial role in gaining competitive
advantage over other rival companies. This company is dealing in highly
competitive environment and it is essential for respective company to create
strong strategies which will lead to gain edge over its competition (Rugman and
Verbeke, 2017). By corporate strategies organisation will be able to capture
business opportunities in effective manner. Minimise risk: It is essential for respective company to minimise risk with is
associate with business and its operations. This will help in enhancing overall
performance of organisation. By analysing the market environment respective
company will be able to minimise the risk and develop better business strategies.
 Optimum utilisation of resources: Formulation of strategies will help company
to identify its business resources as well as lead to optimum utilisation of
resources in better and effective manner.
Stakeholder analysis
There are different stakeholder which are crucial part of company. These
stakeholder will have huge impact on business as well as its activities. Stakeholder
have right to take decision as well as change business activities. It is very important for
Lidl company to analyse as well as evaluate power as well as interest of stakeholder.
This will help company to take better business decisions as well as perform activities in
8

effective and efficient manner. Stakeholder analysis in respect of Lidl organisation is
mention below. Minimum efforts – This includes to those stakeholder that have less power as
well as less interest in business activities. These stakeholder are just monitoring
the business activities and they do not have any impact over organisation
operational (Trigeorgis and Reuer, 2017). All those employees that are working a
lower level are included at this part of stakeholder. Keep informed – This includes all those stakeholder that are interest in business
activities but they have very low power in organisation. It consist of employees as
well as customers of Lidl company who are interested in business activities. It is
essential for this company to keep these stakeholder informed about all fact
which are related to organisation. Keep satisfied - There are many stakeholder which have high power but they
are not much interest in business activities. This includes government and
political party as they are not much interested in the each and every activities of
Lidl company. Government have huge power to take decisions which have direct
impact over company. It is essential for respective to keep these stakeholder
satisfied as they have high power.
 Manage closely- This includes all those stakeholder which have high power as
well as high interest in business activities (Welford, 2016). These stakeholder
includes the owner of respective organisation. They are responsible to managing
each and every activities of business and achieve desired goals. Owners of
9

company should fully engaged by company in order to perform business task in
effective and efficient manner.
CONCLUSION
From the above report it can be concluded that it is very important for company
to develop as well as implement business strategies. This will help in performing task in
effective and efficient manner. Company should manage corporate strategies in order to
achieve direct goals and objectives. It is essential for an organisation to analyse as well
as evaluate each and every factor of business environment. This can have direct or
indirect impact over company so organisation should take right decision in order to gain
competitive advantages over other rival businesses.
10

REFERENCES
Books & Journals
Engert, S., Rauter, R. and Baumgartner, R. J., 2016. Exploring the integration of
corporate sustainability into strategic management: a literature review. Journal
of cleaner production. 112. pp.2833-2850.
Feldman, E. R., Amit, R. and Villalonga, B., 2016. Corporate divestitures and family
control. Strategic Management Journal. 37(3). pp.429-446.
Hill, T., 2017. Manufacturing strategy: the strategic management of the manufacturing
function. Macmillan International Higher Education.
Honggowati, S. and et. al., 2017. Corporate governance and strategic management
accounting disclosure. Indonesian Journal of Sustainability Accounting and
Management. 1(1). pp.23-30.
Morden, T., 2016. Principles of strategic management. Routledge.
Noe, R. A. and et. al., 2017. Human resource management: Gaining a competitive
advantage. New York, NY: McGraw-Hill Education.
Ogunsiji, A. S. and Ladanu, W. K., 2017. A theoretical study of performance measures
in the strategic and corporate entrepreneurships of firms. International journal of
physical sciences and engineering. 1(1). pp.72-80.
Petrenko, O.V. And et. al., 2016. Corporate social responsibility or CEO narcissism?
CSR motivations and organizational performance. Strategic Management
Journal. 37(2). pp.262-279.
Rothaermel, F. T., 2017. Strategic management. New York, NY: McGraw-Hill
Education.
Rugman, A. M. and Verbeke, A., 2017. Global corporate strategy and trade policy.
Routledge.
Trigeorgis, L. and Reuer, J. J., 2017. Real options theory in strategic management.
Strategic Management Journal. 38. pp.42-63.
Welford, R., 2016. Corporate environmental management 1: systems and strategies.
Routledge.