Environmental Analysis and SWOT Analysis of LIDL

This report provides an environmental analysis of LIDL, a German international discount retailer chain, using PESTEL analysis and SWOT analysis. It includes a summary of issues such as risk of supply chain, exit of Brexit, increase competition, change in demand of consumers, and change in policies and procedures. The report also provides recommendations for improvement such as shifting towards a low carbon economy, focusing on price, offering private brands with differentiation, and enhancing customer capabilities.

Principles of Marketing

Table of content
• Introduction
• Macro environmental analysis
• Micro environmental analysis
• SWOT analysis
• Summary of issues
• Market research
• Recommendations
• Conclusion
• References

Introduction
On the business there is direct or indirect impact of environmental analysis
which involves process of determining relevant factors that affects functioning. The
environmental analysis is performed for knowing potential influence on particular
business aspects of general and operating environments on operations of business.
The following report is based on LIDL. It is German international discount retailer
chain which operates over 11000 stores across Europe and US. It is an retail
company established in 1932 by Josef Schwarz. It has focus on discount market,
larger super markets and cash and carry wholesale market.

Environmental analysis – Macro
The macro environmental analysis involves PESTEL analysis which is part of
strategic management that enable in evaluating and identifying opportunities and threats
which might affect business. The PESTEL analysis tool is used by marketer for evaluating
external marketing environment. Following factors are mentioned below-
• Political factor
• Economic factor
• Social Factor
• Technological factor
• Legal factor
• Environmental factor

Environmental analysis – Micro
This is related to immediate edge of organisation which directly influences the
organisation on continuous basis. This involves the elements of competitors, customers and
many more which are important in company for monitoring and analysing. This affects the
performance and decision making. Following elements are involved which is mentioned
below-
• Suppliers
• Company
• Customers
• Competitors
• Public

SWOT analysis
It defines to situational assessment which is a technique of
strategic planning and strategic management that help individual and
organisation in determining its strength, weakness, opportunities and threats
that are related business competition. The internal and external factors both
are examined in SWOT analysis. In context to Lidl SWOT analysis is been
done which is mentioned below-
• Strengths
• Weaknesses
• Opportunities
• Threats

Summary of issues
From the above analysis of Macro, Micro environmental analysis and SWOT analysis various issues
is has been determined which affects the business functioning of Lidl.
• Risk of supply chain
• Exit of Brexit
• Increase competition
• Change in demand of consumers
• Change in policies and procedures

Market Research
The procedure of determining the market viability for new service or product through
research is directly conducted with potential customers is referring to market research. The target
market is discovered by company and gets opinions, feedbacks from consumers regarding their
interest in product or services. The Brexit affected the Lidl as it warns British suppliers that it will
combat in rising cost. Under the world trade organisation rules the Lidl transportation of goods
and from EU is suffered from tariffs (Womick, J., 2019).

Recommendations
It is been analysed from the above that Lidl company is facing several challenges from
the perspective of micro, Macro and SWOT analysis for which recommendation is provided for
improvement. The company face environmental challenges which is recommended to shift
towards low carbon economy and focusing on efforts of energy efficiency, renewable and waste
reductions across operations. With the increase in competition it is recommended to Lidl for
adopting intensifies strategies to compete by focusing on price, offering private brands with
differentiation, add on of more fresh options in product and to enhance customer capabilities.

Conclusion
From the above it is concluded that company is affected from environmental analysis of
micro, and macro factors along with Swot analysis. The company is required to recognise the threat
and openings of external environment in order to increase profitability and performance. In retail
industry the change in environment requires to analyse industry changes as to cope up with
competition and protecting from outside factors. The Lidl is focusing on repositioning their brand
and for expansion by developing stores and advertisement of its products. it also focusing on offering
quality products by keeping its prices low.

References


Aggarwal and et. al., 2019. Cause-related marketing and start-ups: moderating role of cause involvement. Journal of Global
Responsibility.


Beirman, D., 2020. Restoring tourism destinations in crisis: A strategic marketing approach. Routledge.


Fillis and et. al., 2020. Handbook of Entrepreneurship and Marketing. Edward Elgar Publishing.


Harrison, A. (2014). Business environment in a global context. 2nd Edition, Oxford University Press.


Kim and et. al., 2020. The effect of CSR on corporate image, customer citizenship behaviors, and customers’ long-term
relationship orientation. International Journal of Hospitality Management, 88, p.102520.


Lindgreen and et. al., 2020. How to develop original, courageous ideas in business marketing research.


Mansur and et. al., 2019. Value of innovation and marketing performance. International Review of Management and
Marketing, 9(3), p.127.

Thank you