New Strategic International Business Management

Running Head: MANAGEMENT 0
STRATEGIC INTERNATIONAL
BUSINESS MANAGEMENT

MANAGEMENT 1
Abstract
This report outlines strategies of Lidl in light of international business issues with application
of various management theories and framework such as Pestle framework, value chain
analysis, porter five forces framework and so forth and then offers a creative strategic
solution to a Lidl for entering into the Mexico as the potential target market considering
international expansion strategy. Lidl is one of the leading global discounter superstore chain
functioning in 32 countries globally. The company is known for its offering of good value
products, offers and giving value for money. In relation with PESTEL analysis of Lidl, the
business environment for Lidl can be favourable. As per five forces analysis, there is low
threat of new entrants in Mexico and the bargaining power of suppliers is also low. However,
the bargaining power of buyer and rivalry among existing players is high. VRIO framework
is also being used to analyse the internal competence of the firm with question of
valuableness, rarity, imitability and organisation. Ultimately, the preferable entry mode
identified for Lidl to enter into the Mexico market is Greenfield Investment.

MANAGEMENT 2
Table of Contents
Task 2 - PESTLE Analysis........................................................................................................3
Task 3 – Five Force Framework................................................................................................5
Task 4 – VRIO Framework........................................................................................................8
Task 5 – Mode of Entry...........................................................................................................10
References................................................................................................................................12
Appendix..................................................................................................................................14
Task 1...................................................................................................................................14

MANAGEMENT 3
Task 2 - PESTLE Analysis
The pestle analysis is presented below of Mexico as this country favours more to Lidl in
terms of long term growth and sustainability as well as performance.
 Political Factors – It considers the policies changes by the government in terms of
new regulations and procedures directly or indirectly impacts the business practices,
performance and growth. Mexico is the second largest country in Latin America by
population and the government takes out a greater role while taking important actions
for many industries and businesses. With entering into Mexico, Lidl will also be
having an opportunity to expand into the markets of Canada and USA as Mexico has
good relations with these nations considering the NAFTA agreement (Barrera, 2017).
However, Lidl needs to be at alert while collaborating positively with different
regulatory bodies, as the local government have the potential to impact business
practices significantly.
 Economic Factors – Any company can gain various opportunities in the country
where the economy is stable and strong as it offers the business a potential to stand
long in the business environment. Furthermore, industry growth and trends also
emphasis significant position to the country economy like the Mexican retail stores is
projected to witness a CAGR of 6.7 per cent by 2024 (Mohol, 2019). The consumer
and retail industry is one of the industry of Mexico that has the potential to exceed
country average national future growth. Moreover, Mexico is a developing market
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