Evaluation of Mexico and Norway as Suitable Markets for Lidl's Expansion

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Strategic International Business Management
Lidl

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Abstract
The aim of this report is to evaluate Mexico and Norway to find out which is a more suitable
market for Lidl to expand its operations. Based on the PESTEL analysis, Mexico is a suitable
market for Lidl because its GDP growth rate is higher, population is higher and legal
compliances are flexible. The five forces framework of Mexico is analysed in this report to
evaluate the competitive intensity in the country and how it affects the operations of Lidl.
The VRIO model is used in this report to find out key resources and capabilities which can be
used by Lidl to gain a competitive advantage in the market which includes human resources,
technological capabilities and financial resources. Lastly, different modes of entry are
discussed for Lidl based on which joint venture is the most suitable option for Lidl.

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Table of Contents
Introduction............................................................................................................................. 3
Task 2....................................................................................................................................... 4
Selection of a market........................................................................................................... 4
Task 3....................................................................................................................................... 6
5-Forces Model.....................................................................................................................6
Task 4....................................................................................................................................... 8
VRIO framework...................................................................................................................8
Task 5..................................................................................................................................... 11
Modes of entry...................................................................................................................11
Conclusion.............................................................................................................................. 13
References..............................................................................................................................14
Appendix................................................................................................................................ 17
Exhibit 1: PESTEL of Mexico................................................................................................17
Exhibit 2: PESTEL of Norway...............................................................................................18
Exhibit 3: Ranking of Attractiveness...................................................................................18

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Introduction
Lidl Stiftung & Co. KG or Lidl is a German global discount supermarket chain which operates
in the retaining industry. The company has established its operations in more than 10,500
locations in 29 countries (Lidl, 2018a). This report will focus on evaluating the retailing
market of Mexico and Norway to determine which one is the suitable market for Lidl to
expand its operations. This report will use 5-Forces model to critically analyse the intensity
of competition in the industry for Lidl in the chosen market. An internal analysis of Lidl will
be analysed in this report by using the VRIO framework to evaluate the key resources and
capabilities of the company which provides it a competitive advantage in the chosen
market. Lastly, various modes of entry will be analysed in this report to recommend the
most suitable mode of entry in the chosen country for its success.