Expanding of Lidl in Spain - Doc
Added on 2020-10-22
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Expanding of Lidl in Spain
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1Information on the selection business organisation................................................................1Discussion on the allocated business environment................................................................3Application of Appropriate analytical approach....................................................................5Use and application of appropriate data and examples..........................................................6CONCLUSION................................................................................................................................8REFERENCES................................................................................................................................9
INTRODUCTIONBusiness expansion is a strategy in which the growth is achieved by increasing thenumber of outlets in which the consumer's can buy a company's products and services. In globalcontext, company's main objectives is to enhance its customers across countries and its salesrevenues (Crystal, 2013). The expansion of business in regions of countries can be opportunityfor organisation to attain growth and development. Strategic decision have been made byorganisation to adopt challenges and accomplish their objective of enhancing businessoperations across countries. This report covers the information about the selected businessenterprise “Lidl”, which is a German global discount supermarket chain based in Germany. Further, discussion on business environment which is allocated to organization is alsocovered along with the application of appropriate analytical approach. At last, appropriate dataand examples have been used and applied in context of organisation. Information on the selection business organisation Lidl has been present in Spain since 1994, as part of its international expansion, thecompany has started its first store in city of Lleida. Company is positioned in the discountsupermarket segment, providing the affordable shopping services to consumers in the market.Spain has been an attractive country which provided a potential market of around 45 millionpeople. In retail segment, discount was still a nascent segment with massive potential ofdevelopment within the large scale distribution sector (Clark, 2012). Management of Lidl analysed that value preposition of their business is based uponoffering quality products at very competitive prices and it was likely to achieve success in Spainand time has proved them correct. In Spain, presently company have 535 stores and ninelogistics platform which supplies and provide assistance to their retail network. During itstenure of 20 years in Spain, company has made a cumulative investment of over 2.2 billionEuros during out their 20 years in the country.Things that differentiate Lidl from its competitors are its offers of quality products at thebest price, a combination which seems difficult in order to achieve but it is fully guaranteed bytheir business model (Baker, 2012). Its Aggregated group buying strategy differentiates themfrom competitors and provide them a key competitive advantage. 1
In addition to this, strategic decision of company provides understanding that they areplanning to develop 40 new stores in SPAIN as a part of their record breaking investment ofaround €350 million in 2018, a third higher than that of 2015. The main reason behindconstruction of new stores is aimed at increasing its presence in areas under which the companyis not has its existence and also at modernising and expansion of its store holdings. Lidl will continue its business operations in order to maintain its business strategy andcontinue offering Spanish customers the cheapest prices without the making any compromiseon the quality of its products and services (Lasserre, 2017). Company also address that essentialincrease in sales it has seen in recent year and also provide focus on ensuring sustainablegrowth and it is planning for new logistics facilities in the future. Apart from this, company aggregates the demand of customer for a particular product forthe overall group and buy it within the most competitive market. As the Spanish retail sectorpresently offers high quality goods and services at competitive prices, presence of Spanishproducts in Lidl stores is continuously increasing, not only in the company's 535 store in Spainbut also in its other 10000 stores across 26 countries. At present, more than 70% of company'smarket share in Spain is made of products which are provided 500 domestic suppliers ascompared to 38% in the year 2008. Although, company's has continuously sustained its market share and increased its salesrevenues by implementing cost leadership strategy (Alshamaila, Papagiannidis, and Li, 2013). InSpain, retail sector is considered as highly competitive industry with various key players andcommercial stores that serves large population of around 45 million customers. Company's business model depending upon the basic principles of discounting philosophywhich provides them essential competitive advantage and enable them to expand their businessoperations in SPAIN. This strategy helps Lidl to maintain its leadership in cost without theconsumers having to sacrifice the best quality when buying their products and services. Thesustainable growth which company has achieved in previous year indicates that their model willprovide them support in business expansion and achievement of growth in market. Discussion on the allocated business environment Business environment consist of all external environmental factors that affects the waysthrough company functions including its employees, customers, management, supply & demand2
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