Strategic Management Report on Lidl's Expansion in China

Individual Strategic Management
Report

Contents
EXECUTIVE SUMMARY.............................................................................................................3
INTRODUCTION...........................................................................................................................1
EXTERNAL ENVIRONMENTAL ANALYSIS............................................................................1
PESTLE Analysis........................................................................................................................1
Porter’s five forces.......................................................................................................................3
INTERNAL ENVIRONMENTAL ANALYSIS.............................................................................4
VRIO Model................................................................................................................................4
IDENTIFICATION OF COMPETITIVE STRATEGIES...............................................................7
Bowman’s Clock Model..............................................................................................................7
STRATEGIC DIRECTIONS.........................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

EXECUTIVE SUMMARY
For running a business successfully, it is essential for an organisation to implement effective
strategies at workplace, which could only be possible by adopting the concept of strategic
management. It shows ways by which a firm can develop better strategies to enhance both
internal and external capabilities of business. From this report, it has been analysed that the
selected company Lidl has potential to expand its operations in countries like China.

INTRODUCTION
Strategic management is a process of managing and controlling the strategies of an
organisation which helps organisations to grow and develop in a business environment. Strategic
management helps an organisation to review its options for growth by which they can acquire its
target market (Ackermann and Eden, 2011). The main aim of this report is to develop an
understanding about the strategic directions which can be evaluated using both internal and
external business environment. For fulfilment of this aim, case study of Lidl is selected which is
a German based retail organisation dealing in retailing industry. This organisation is a global
chain of discount supermarket which operates across Europe and United states. Retail industry of
Europe is rapidly growing but also is aggressively competitive. This organisation is planning to
expand its business operations in Asian market as it is facing challenges in its current market due
to limited target market; for which an Asian country is selected that is China.
In this report, internal and external analysis is conducted along with identification of
challenges and strategic management approach which this organisation will face and use while
expanding its operations. At last, various conclusions are developed which can help Lidl to select
an appropriate strategic direction for their expansion.
EXTERNAL ENVIRONMENTAL ANALYSIS
Business environment for an organisation is usually divided in two categories that is external
and internal. External environment of an organisation helps to evaluate opportunities and threats
which are present in the marketplace in which company is operating (Ansoff and et.al., 2018).
External environment of industry and company, both impacts the operations of an organisation.
In order to analyse the external environment of Lidl, Porter’s 5 forces and PESTLE analysis is
conducted below:
PESTLE Analysis
PESTLE is a technique which helps in evaluating the external market of an organisation. In
context of Lidl, current strategic positioning is analysed in which opportunities and threats which
can be faced in its expansion plan are explored as follows –
Political environment – This environment is the combination of various elements such as
political stability, rules and standards regarding import and export. Current political environment
of Europe in which Lidl operates is stable due to which this organisation gets benefited from its
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