Strategic Management Analysis of Lidl Malta

STRATGIC
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
TASK 1............................................................................................................................................3
Pestle Analysis.............................................................................................................................3
Porter’s industry Analysis............................................................................................................5
TASK 2............................................................................................................................................6
Mission and Vision......................................................................................................................6
VRIO Model................................................................................................................................6
Business Canvas Model...............................................................................................................8
TASK 3..........................................................................................................................................10
Porter’s Generic Strategies........................................................................................................10
Bowman Clock Model...............................................................................................................12
Horizontal and vertical Integration............................................................................................14
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
The process of strategic management basically involves analysis of internal, external and
competitive environment so that strategies can be developed for the organisations accordingly
(Barney and Hesterly, 2020). Lidl Malta is a part of famous retail brand Lidl and opened in the
Maltese retail segment in the year 2008. The following report will present the analysis of the
retail industry of Malta and the external as well as internal environment analysis so that
appropriate strategies can be suggested and formulated for the expansion of Lidl Malta.
MAIN BODY
TASK 1
Since Lidl Malta is operating in the retail industry of Malta, the entire external environment
relevant to the industry can be analysed using the two models i.e. Pestle Analysis framework for
analysing the external market forces and Porter’s five force model to analyse the industry
framework.
Pestle Analysis
Pestle analysis framework involves analysis of the six different factors that constitute the
external environment of an industry and affect the decision making and strategy formulation of
the company as well (Ward, 2019). These can be evaluated in following manner:
Political Factor: While analysing the retail industry of Malta, it can be adequately said that the
political stability of the country is very well maintained and the rules and regulations are also in
favour of the retail industry (Hruska and Maresova, 2019). There are no trade barriers that have
been developed by the government and also the taxation rates are at a stable level. Lidl Malta can
use the opportunity to easily establish themselves in the market and therefore target increased
number of customers for the company. This is a favourable position for the company and for the
retail market segment which can support the company in its expansions and implementation of
o9ther strategic plans that they want to carry out.
Economic Factor: factors like the purchasing power of the consumers, inflation and interest
rates, GDP of the economy etc. are evaluated in this factor (Best, de Valence and Langston,
2017). Here all the economic aspects that can affect the working of an industry are taken into
consideration. The economy of Malta is emerging as a very strong and stable economy with
abundant of resources and in need for greater exposure to the branded products. For Lidl Malta,
this is an extremely profitable chance of establishing their brand successfully because Lidl is
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already a renounced brand in the external markets of UK etc. and now the retail industry of
Malta can also be captured.
Social Factor: The society of the country in which industry is a very critical factor in evaluating
that whether the industry is favourable or not because only when people approve the products
that are being sold or marketed, only then can a company grow in that particular industry. Since
retail is that industry which fulfils daily requirements and additionally, Lidl Malta has placed
their good quality products at very affordable rated within the market of Malta and therefore
their products are highly preferred by local people (Shieh, 2017). This has placed company in an
extremely favourable position where they can easily gain the additional market share and
confidence of the people thus establishing themselves as a superior brand.
Technological Factor: the technological advancements taking place in the retail industry all over
the world have been very quick and this has impacted the manner in which retail stores all over
the world are operating currently (Lewis, 2017). The retail industry of Malta is not very well
developed in context of technological advancement and they are not so quick in adopting the
different advancements. Lidl Malta therefore has an opportunity to enhance the shopping
experience of the people of Malta because they have all the advancements and therefore can be
implemented at Lidl Malta as ell thus giving them a huge competitive advantage as well.
Legal Factor: Legal compliance and following the different policies and rules that have been
developed by different countries is necessary to ensure that the working of the company is not
interrupted and they can perform their business activities satisfactorily (Fozer and et.al., 2017).
Although there are not many restrictions in the retail industry that is operating in Malta and
mostly the licenses regarding store locations etc. are obtained easily, but Lidl Malta still needs to
ensure that the compliance is not compromised with. Therefore, special precautions need to be
maintained in case any legal risk might arise from the activities.
Environmental Factor: People have become highly environmental conscious now where they
are regularly evaluating the products of the company in their sustainability aspect (Hill, Jones,
and Schilling, 2016). This has affected retail industry as well because the products that they sell
are in bulk and mostly involves energy consumption as well. Lidl Malta can ensure that they are
using sustainable and renewable energy sources even if they have to charge a little higher price
because customer will pay more money if they find that the efforts of the company are truly
making a difference.
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