Strategic Analysis Report: Lidl's Expansion into Bangladesh Market

This individual strategic management report examines Lidl's proposed expansion into Bangladesh. It begins with an executive summary and introduction outlining Lidl's global presence and objectives. The report then delves into external and internal analyses, employing tools like PESTLE analysis to assess political, economic, social, technological, legal, and environmental factors in Bangladesh, and Porter's Five Forces to evaluate the competitive landscape. Internal analysis utilizes the VRIO model to assess Lidl's resources and capabilities. The report identifies strategic options and directions, concluding with a summary of findings and recommendations for Lidl's successful entry into the Bangladeshi market. The analysis highlights opportunities such as a growing economy and low tax rates, while also considering threats like competition and evolving market conditions.

Individual Strategic
Management Report

Executive Summary
The Lidl wants to explore its business into Bangladesh. And this is the best option for the
company as Bangladesh is an emerging country with the GDP of 110.61 billion pounds which is
helpful for the company to grow their business and sustain in the market for long run. The large
number of customers can be attracted to company and sales of the company can increase by
applying various strategic. It includes the porter five analysis and the pestle analysis as well. It
also vrio analyses which will help the company to work in the effective manner. The report
includes the tools like the pestle swot and vrio analyses as well.

Table of Contents
Executive Summary ........................................................................................................................2
INTRODUCTION ..........................................................................................................................4
External Analysis:.......................................................................................................................5
Internal Analysis:......................................................................................................................10
Strategic Options:......................................................................................................................14
Strategic Directions:..................................................................................................................15
CONCLUSION .............................................................................................................................15
REFERENCES..............................................................................................................................16

Topic: Individual strategic management report
INTRODUCTION
Lidl has opened their first independent store in 1930. It has expanded itself over Europe
at present time. In 1994 the company Lidl has opened their first store in the United States too.
Lidl had its headquarter in Lisbon, Portugal. The founder of the company is Josef Schwarz. The
company is operating its business among 10,000+ in 28 European countries and United States.
There are 315,000 employees are working with the company. The main aim of the company is to
provide the best quality products at low price to their customers. The annual turnover of the
company is 474.5 million British pounds. The company's turnover is raising every year and
company is doing well within past few years. The company is going to expand its business to the
Bangladesh. And thus, company can target business according to their set objectives. Company
would be facing the challenges of the low profitability and the market share. It is discussed in the
report, the company would expand in the other countries because the company would expand
their business in the other countries. The company is using the globalization for achieving the
success.
OVERVIEW
VRIO MODEL
Vrio model is used by the companies for identifying the industry and the business
environment as well.
Valuable
valuable includes the value of the products and the services provide by the company. The
ere are various opportunities and the threats which are affecting the company performance and
the performance of the product in the market. The cost or value of the product is different in the
market by the difference in the value of the product. It would review the values of the resources
which are identified and the these are constantly changing according to the business conditions.
The valuable resources like the material which are used by the company in making the product,
and they are valuable because product would not be make in the effective. Human resource like
the employee of the company which are making the products.

Rare
resources would be identified by the few companies and the company would be working
as per the resources and the customers. The situation of the company would work in the effective
way which would result in the better preference of the company in the market. The companies
are using the identical resources and using the resources In the effective way which would help
the company not improve the performance. Resources are the employee and the distribution
channels which are rarely improved by the company and so the company would use the rare
techniques for improving the resources and using these resources.
Imitate
imitation of the products is possible in the market because the customers are attracts
towards the brand. The company must take the strict actions against these products because it is
affecting the company the performance of the product in the market. The company need to have
the effective resources for the product and also company must improvise the product
accordingly. The low quality of the substitute product is affecting the product goodwill in the
market and so the affect the goodwill of the company. No this resource cannot be imitated by the
competitors in the market, but they could come up with the new strategies for attracting the
customers.
Capture value
the value of the product and the services is must be captured and analysed. These would
affect the sales of the company and the management systems and the polices are affected due to
these factors. The value of the firms must be analysed and evaluated as well. It would improve
the performance of the company in the market. The organization must use the strategy and
implement these resources in the effective way. So the company would achieve the long term
objectives.
External Analysis:
PESTLE Analysis -

A PESTLE Analysis is the framework for analysing key factors that are Political,
Economic, Social, Technological, Legal and Environmental which influence organization from
outside. The PESTLE Analysis for the Lidl is as follows -
Political Factor -
Bangladesh is the speedily changing as dominant two-party system which is Awami
League and BNP. Thus, parliamentary democracy is to be followed in it. It is very beneficial for
Lidl to expand its business in Bangladesh as the country has low tax rate that is 27.5%. The Lidl
for expanding into the Bangladesh need to be more aware about the political factors of the
company as the country follow decentralisation thus this can be helpful in the growth of
company (Bryce, 2017). They can establish their products and strategies according to that so that
they can survive in the market for long term and strongly compete with other rivals present in the
market.
Opportunities
(1) low tax rate
(2) decentralisation
Threats
(1) political conditions of the country
(2) compete the rival in the market.
Economic Factor –
The economic growth of the Bangladesh is very good which is helpful for Lidl for
attaining the stable growth in country after establishment of business there. Trade facilitation
measures are taken by the country for reducing present physical & non-physical barriers of
transportation which is helpful for the Lidl in expansion of their business they can easily
transport their good to the Bangladesh (Dagnino and Cinici, 2015). The GDP of the Bangladesh
is 110.61 billion US dollars which is very significant for the company in growing their business
their so company can get huge revenues and profits in that country while conducting their
business activities there. Bangladesh also had a support from USA government and there are not
many rules and regulation for import and export business in Bangladesh.
Opportunities

(1) rise in gross domestic product
(2) support of the USA government
Threats
(1) developing economy of the country
(2) not much scope for the new companies
Social Factor –
Bangladesh culture is the most interesting thing. As the culture and religions of
Bangladesh are colourful. Thus, it is helpful for the company in implementing heir business
strategies according to that so that they could easily attract the consumer to the stores and form
the promotional and marketing strategies according to their culture and religions which is helpful
in gaining huge interest of customers attracted towards them. The education system and their
policies for the businesses are impressive so Lidl could easily implement strategic business
strategies which can be further fruitful for them in gaining huge revenue. They also have a
business policy for maintaining the foreign trade among the countries. Bangladesh is good at
business world and has gathered the huge attention of businesses towards the country with
marvellous business culture.
Opportunities
(1) easily attract the customers
(2) gain huge revenue because of the easy attract of the customers
Threats
(1) education system and their policies
(2) business policies are not strict
Technological Factor –
Bangladesh is moving forward with the faster technological development in the country
so they are implementing expansion plans for that which can be further helpful for the Lidl to
expand their, as the company is running their business with the advance technologies which is
helpful for them in conducting their business activities. Technological inundation in Bangladesh
is helpful for the company in expanding their business to these countries and thus they can gain
huge revenue by emphasising their main interest on developing new technologies for the quality

products to their customers at the low cost (Hitt, Ireland and Hoskisson, 2016). Thus, Lidl can
explore their business activities there as the Bangladesh is growing and developing country.
Opportunities
(1) use of the latest technology
(2) explore the business
Threats
(1) need high investment
(2) lack of the skilled employees
Legal Factor -
The legal business environment of the Bangladesh procures that there is no need to put
any minimum capital for starting a business so it is very helpful for the Lidl to expand to that
country a start the company with any minimum cost. The process of start-ups requires 37 days
which is costing at 88% income per capita income. But it is so time consuming process so
company can take a more time in completing this process. The legal factors of the country must
be acknowledged by the Lidl so that they can easily perform their business activities (Bailey and
et.al., 2018). The company can perform their business activities and form strategies according to
that so that they can attain huge revenue and profit while conducting business in Bangladesh.
Opportunities
(1) not so strict rule and regulation
(2) easy entry of the new entrants
Threats
(1) requires the time for setup
(2) more legal formalities
Environmental Factor -
Country is more moving froward with the sustainable growth with ensuring better
protection from climate change and natural disaster. As the company is careful about the waste
material which are left after the production of company. The company recycle and reuse the
waste in their production which is helpful for the country as well company. Thus, the company
can easily perform their activities and operations easily so that they can compete with their rivals

in the market. As the Germany also not allow the companies to produce the products which are
harmful for the country and environment.
Opportunities
(1) support environment
(2) using the recycle products
Threats
(1) rivals in the market
(2) banned of the Germany products
Porter's Five Forces Analysis –
porters five forces model is identifying and analysing the five competitive forces of the
market which would affect the industry. Through the help of the five forces model the company
would use the model for the to identify the strength and the weakness.
Threat to new entrants –
Bangladesh is developing country with the GDP of 110.61 billion pounds which attracts
more companies to come and avail their business activities there. So the company Lidl had to
improve their business strategies and operation so that they can perform and compete well with
their rivals. The strategies which are implemented by the company are too old for surviving in
the country thus they had to update them for the growth of business (Webb, 2017). There is huge
competition in Bangladesh as there are already many supermarkets. Thus, the Lidl had to from a
unique place in the marketplace for sustaining in the country for long term. With effective brand
marketing and promotion, they can easily reach to the wide range of public.
The company would not enter the market because the company would face the barriers like the
strict rule and regulation in the country which would avoid the global conies to enter the market.
Threat of substitutes -
The company has a huge threat from its substitute as there are many substitutes for the
company which are available in the marketplace. The company should go through research and
development for making better products at cheap rates and attract the large number of customers
to the company stores. The copyrights and patents are helpful for the company to save their
products from other rivals to get copied and maintain their uniqueness in market and thus
company can grow easily in the market. The other can copy the product but the overall product

can't be copied by anyone. There are many competitors in market who can make substitute of the
company's products which are produced and served by them.
Bargaining power of customers -
The company should manage the customer in light of the fact that the customer in
Bangladesh are continually searching for deals and that can prompt the company's demolition.
Lidl is as of now giving the best of value in low value which will have a command over the
customers and that will likewise enable the clients to get happy with the items that this company
is attempting to sell. The customers primary point is to get the items in as moderate cost as
conceivable with great quality and on the chance that they obtain in that they are fulfilled and
will get faithful to the company. In Bangladesh, it is anything but difficult to discover faithful
customers and get customers to the stores (Lasserre, 2017). If there are few buyers the buyer of
the market would have the power to put the term and the conditions. If there are more buyers,
they do not have the power not put the term and the condition because buyer view will be
different and the y would be one on the same problems.
Bargaining power of suppliers -
The Lidl should discover various providers for raw material since they should have a
direction on the provider. An individual who is totally subject to the company's purchasing the
raw material from them will attempt to build the cost with the goal that they can cause benefit
however the company cannot get it from that purchaser and move to another provider (Hecklau
and et.al., 2016). Having a direction on the provider is generally excellent in light of the fact that
the Lidl will cause benefit in the event that they to get the raw material for inexpensively the best
of raw material in light of the fact that there completed great should be of the best quality.
It there are few suppliers the buyer would have the power in the market and if there are many
suppliers there would be no power of the buyers. Suppliers are affecting the market and the
market conditions as well.
Competitive rivalry -
The competition in Bangladesh is solid and huge and to make place for themselves in the
market it will be hard for Lidl, so they should attempt to cause commercials and advancements to
get the organization to have an incredible opening. Getting customers to the store is a simple
undertaking yet making them faithful to the store is troublesome so the company should give the

best of value to low rates with the goal that the Lidl can develop. There are a ton of retailer stores
in the store so making a place for themselves will be the harder task for the company. Due to the
increase in the competition the companies are facing the problems and the company would not
work effective conditions. Existing competitors are improvising the product and the company
would not work in the effective manner.
Internal Analysis:
Value Chain Analysis -
At some places, you have talked about India and at other places, you have been
talking about Bangladesh. You need to focus on one country and talk about the
same country in all your analysis
Inbound Logistics -
The raw material which are being brought in bangladesh will have low rates as indicated
by the rate of the raw material in the first nations of the company. There will be more individuals
ready to offer raw material to the company and the company will effectively get more order on
its providers. There is an absence of work in the country and most of the number of inhabitants
in the country are into agriculture which will assist the company with getting raw material for
items effectively. Lidl will think that it’s extremely simple to get providers for itself and will
have the option to settle in Bangladesh effectively and will make an enormous benefit (Augier
and Teece, 2018). The company would purchase the product and store it in the registered place
of the company where it would be transported through the roads. Products are stored in the bulk
and the products would be purchased in the effective manner.
Operations -

The raw material which is effectively accessible in the country will be changed over into
completed items and the estimation of the raw material will be expanded and the company can
make an immense benefit out of it. The raw material which the company takes must be taken at a
low cost with the goal that the cost of the completed item can be expanded on account of the
generation strategy likewise requires some investment and exertion. Wages additionally must be
paid to the representatives of the company and that requires the company to set significant
expenses of the completed result of the Lidl. The operations are the storage of the inventory of
the market and the arrangement of the equipment and the services. The company would store the
products in the warehouses of the company.
Marketing, sales and Service-
The company had to improve their marketing and sales strategies for raising their
production level and revenue which are helpful in attracting wide range of consumers to the
company. The strong and effective methods of promotion and marketing should be adopted by
the company to sustain in the market for long term. The company should form their strategies
according to the cultural background of Bangladesh. They can promote for their company
through advertisements, televisions, social media and radio etc.
Services -
The company should mainly emphasis on the services which are provided to their
customers at the store so that the consumer should willing to visit the store again thus more and
more customers will be attracted. So, the Lidl should train and develop their employees
according to that they can satisfy their customers by rendering the awesome service to them. And
thus, they can build loyal customer trust and bond with their customers and satisfy customer will
help them to raise their sales and revenue in short time period (Morschett, Schramm-Klein and
Zentes, 2015).
Value chain analysis
Value chain Analysis is the strategic planning technique which is used for helping
organization or person in identifying strengths, weaknesses, opportunities and threats which are