Analyzing Lidl and Aldi Success and UK Retail Market Share Strategies

This project analyzes the strategies employed by Lidl and Aldi to achieve success in the UK supermarket business. It examines factors such as globalization, low-cost operations, and demographic analysis, highlighting how these elements contributed to their market dominance. The project also explores how major UK retail organizations can increase their market share by leveraging strategies like Foreign Direct Investment (FDI), international joint ventures, greenfield investments, and mergers and acquisitions. The paper references several academic sources to support its findings, providing a comprehensive overview of the competitive landscape and strategic approaches within the UK retail sector. The success of Aldi and Lidl is attributed to their superior strategic alignment in commercial and supply chain policies including segmentation, which enables them to work effectively with predictable and stable underlying demand, removing the need for costly buffers. The study provides insights into the competitive strategies that can be used to maintain and enhance market share within the retail sector.

Project

Table of Contents
Project..............................................................................................................................................1
1. Stating the ways through which Lidl & Aldi succeeded in supermarket business ................3
2. Explaining the manner in which top retail sector organization of UK could increase their
market share................................................................................................................................4
REFERENCES ...............................................................................................................................6

1. Stating the ways through which Lidl & Aldi succeeded in supermarket business
Aldi & Lidl are seen as the successful organization in terms of their superior strategic
alignment in between commercial & the supply chain policies that includes segmentation. It
enables the companies in working as more effectively with predictable and stable underlying
demand, this removed need for the costly buffers over uncertainty across supply chain. There are
various factors that helped both the firm in attaining growing success against various retail sector
organization operating under supermarket store that are as follows-
Globalisation- It means as the spread of the technology, products, job and information
around the national cultures and borders. It reflects an interdependence of the nations across the
world that has been fostered through a free trade (Schmid and et.al., 2018). This process plays a
crucial role in the success of both the discount superstores as it provides for integration &
interaction among the people, government and the companies around the globe. It made easier
for the companies to outsource the production process to the countries with the low cost of
labour. An entity could make use of the technology for interacting with the people at global level
which enabled the firm in reducing the prices & cost.
Global economy- In the year 2015, the corporations has achieved combined value of
revenue around 10% of grocery sales. Since the year 2011, both the companies had seen their
UK revenue more than the doubled value because they had created the no-frills strategy which
had been resonated with customers post global or economic crisis. Both enterprise offers limited
range of the products that are owned by it at competitive price which helped the firms to attain
worldwide success.
Low cost operations- Aldi and Lidl has adopted the low price strategy in order to achieve
competitive advantage against its competitors and intends to be more successful when a product
is been fairly generic & high volume units are produced. Both the organizations work closely
with their suppliers for the purpose of minimizing the cost of supply chain so that they are been
able to offer the consumer with some form of an excitement for creating an interest of consumers
and attracting large audience to visit the store (Lauer, 2019). This strategy helps the firms in
attaining a loyal customer base with large market share as compared to the other retailers and this
lets them to success in retail business segment of UK.
Demographics- It reflects the collection & analysis of the broad features regarding the
group of population and business. It is counted as the most useful data for the businesses for

understanding the way to market the consumers and the strategic plans for future trends in the
consumer demand. It allowed the companies in determining size of the potential market and also
helps in identifying whether the product and the services is being targeted towards most
important target audience. Through this the demand of the targeted audience has been analysed
in effective way that in turn helped the firms in delivering the goods as per the specifications and
desires of the customers. This also played as the major factors for the company in attaining
growing success within overall industry and market.
Thus, these were the main factors which played a major role for Aldi and Lidl in their success
over the other big retail firms.
2. Explaining the manner in which top retail sector organization of UK could increase their
market share
The big four retail sectors of UK can increase their market share in several ways as an
emergence of dominant market leader with growing power of the discount stores and conditions
of progressively tightening the retail planning rules and through increasing their engagement in
UK's food retailing & its leading entity with global economy through inward & outward FDI and
the retail global outsourcing network.
FDI- It means as the investment made in form of controlling the ownership in one
country by the firm based on the other country (Alaaraj, Mohamed and Bustamam, 2018). It
enables the top retail company of UK in expanding their market share along with higher level of
sales across the globe. With FDI, retail organizations diversify investment portfolio and can
create a competitive worldwide allocation of the capital.
International joint venture- It reflects the situation when two or more kind of businesses
enter into partnership based on two or more countries. Through this company could be able to
explore new opportunities in relation to international trade. This helps the retail firms in forming
the strategic alliances that allows them in gaining the competitive edge by accessing resources of
the partner including technologies, market, people and the capital.
Greenfield's investment- It is the kind of FDI within which the parent company create
subsidiary in the different countries by building its operations from ground. This would enable
the retail sector companies to increase the control of investors relating to making investment in

existing business and opportunity in forming the marketing partnerships & avoiding an
intermediary costs.
Mergers & acquisitions- It means as the practice where one company combines with the
other company. In the process of acquisition, one enterprise buys the majority shares of the other
firm. The firm which is been acquired do not alter its legal name or the structure by is owned by
parent company. This helps in merging their control and power within the market and also helps
in creating synergy that allows for an increased efficiency of new enterprise and takes the shape
of the returns and saving of cost.
Join ventures- It is also stated as the business arrangement under which more than 2
parties agrees for pooling their resources to achieve particular objective (Maria Stock, Zacharias
and Schnellbaecher, 2017). This facilitates the company with an opportunity in gaining the new
expertise and the capacity. It also enables for entering into the related business or the new market
for gaining access to the modern techniques.
Thus, by using these growth strategies the leading retail firms in UK can capture higher
proportion of the market at global level and can reach competitive edge over discount stores like
Aldi, Lidl etc.

REFERENCES
Books and journal
Alaaraj, S., Mohamed, Z. A. and Bustamam, U. S. A., 2018. External growth strategies and
organizational performance in emerging markets. Review of International Business and
Strategy.
Lauer, T., 2019. Generic Strategies, Outpacing and Blue Ocean-Discussing the Validity of Three
Strategic Management Theories Using Case Studies from Airlines and Grocery
Retail. Theory Methodology Practice (TMP). 15(01). pp.57-66.
Maria Stock, R., Zacharias, N. A. and Schnellbaecher, A., 2017. How do strategy and leadership
styles jointly affect co‐development and its innovation outcomes?. Journal of Product
Innovation Management. 34(2). pp.201-222.
Schmid, S. and et.al., 2018. Aldi and Lidl: from Germany to the rest of the world.
In Internationalization of Business (pp. 81-98). Springer. Cham.