Lidl Strategy Evaluation Report: Strategic Analysis

This report presents a detailed strategic evaluation of Lidl, a global discount supermarket chain. It begins by outlining Lidl's vision, mission, and objectives, emphasizing its focus on high-quality products and customer satisfaction. The report then applies several analytical frameworks to assess Lidl's competitive position, including VRIO analysis to evaluate its resources and capabilities, PESTLE analysis to examine the external environment, and Porter's Five Forces to understand industry competitiveness. The report also reviews Lidl's existing strategies and incorporates the Ansoff Matrix for strategic planning. The analysis covers various aspects, such as Lidl's low-pricing strategy, store layout, and expansion plans, including self-checkout systems and new store formats. The report concludes with recommendations based on the analysis, aiming to provide insights into Lidl's strategic direction and future growth opportunities. This report uses internal and external factors to develop relevant strategies within the context of the organization.

6002 Strategy
Evaluation

Table of Contents
INTRODUCTION...........................................................................................................................3
Vision, Mission and Objectives in setting the strategic direction of organisations................3
Assessing a competitive advantage by application of VRIO analysis...................................4
PESTLE framework analyse the external environment.........................................................5
Porter’s Five Forces Model....................................................................................................6
Porter's Five Forces in context to Lidl.............................................................................................7
Review the organisation’s strategy. .......................................................................................8
Ansoff Matrix...................................................................................................................................8
Tactics:...................................................................................................................................9
CONCLUSION..............................................................................................................................12
REFERENCES .............................................................................................................................13

INTRODUCTION
Strategy evaluation is a process that includes analysing the strategic plan & assessing the
way goals have to be assessed to achieve the laid strategies. Strategy evaluation is internal
analysis that has to be used as a part of strategy evaluation or internal analysis as part of
strategic analysis to make further decisions related to the strategy. It is a process that involves
answering of questions about the progress of vision, strategic focus (Carruthers and Hordyk,
2019). Lidl is a German international discount supermarket chain that is operating 10,000 stores
across Unites states and Europe. Present report is based on making a detailed evaluation of the
vision mission, objectives of the strategic direction. There is application of VRIO framework,
PESTLE analysis, Porters five forces model and based on this analysis for formation of
organisation's strategies.
Vision, Mission and Objectives in setting the strategic direction of organisations
Overview of the organisation: Lidl is a global discounted supermarket chain that is operating
across 10,000 stores across different parts of the world including Europe and UK. They are
focussing on their low pricing strategy to provide a unique and hassle free experience for their
customers with a simple store layout. The brand aims to revolutionize the shopping experience of
the present and prospective customer base (Prasad, Khanduja and Sharma, 2018). The mission
& vision statement of Lidl is emphasizing on ensuring a market with leading quality &
maximization of value by constantly optimizing & innovating the efficient process that is driven
by constant efforts of people and technology.
Vision: Vision of Lidl is to enhance the lives of customers by offering them with high quality
products to create high value in market. To ensure higher customer satisfaction.
Mission: Mission of Lidl is to deliver high customer satisfaction,.
Objective: The main objective is to ensure that a market is carted with high quality and value by
focusing on constant innovation & optimization of the efficient process. All the efforts are
together combined with people and technology to work towards achievement of laid objectives.
There are some of the laid objectives in context of Lidl for the present report as
mentioned below:
Such objectives are mentioned below:

 Lidl is willing to plan self checkout systems across their London stores
 Opening of new local store format in Balham
 Enhancing of revenue by 2 percent in the coming financial year that is 21-22.
Assessing a competitive advantage by application of VRIO analysis
VRIO analysis is a analytical technique that is used foe evaluation of the organisations
resource to achieve the competitive advantage. VRIO is a acronym that is based on vision and
mission statement.
Valuable: all the resources available with a organisation are highly valuable but some
resources are leading to attainment of competitive advantage for the organisation. Such as local
food product range, financial resources, employee alignment, patent rights are some of the
Valuable resources that are leading to achievement of higher completive advantage for Lidl.
Rare: there are some of the resources that are rarely available with a organisation as
compared to their competitors (Ferjani, Mann. and Zimmermann, 2018). In Lidl these rarely
available resources includes patent rights, local food product range and financial resources.
Imitability: There are some of the resources that are not easy to be imitated by other
competitors. Strong financial resource are only posses by few organisations in the retail industry
and local food products are a attribute of Lidl that is not easy to imitate and can lead to high cost
for organisation.
Organisation: Financial resources have to be organised to capture higher value as these
resources have to be strategically invested in right place by avail the opportunities and dealing
with the threats. Another resource that is local food products are the most crucial for Lidl as it is
going to assist them in getting a long run competitive advantage.
From the above mentioned different aspect it can be concluded that some of the resources
that are proving Lidl with the competitive advantage includes the food product range that is
leading to achievement of the right competitive advantage for Lidl.
Patent rights Financial
resource
employee
alignment
local food products
Valuable Yes Yes Yes Yes
Rare Yes Yes No Yes
Imitability No Yes No Yes

Organisation No No No Yes
Achievement of
temporary
competitive
advantage
Short term
competitive
advantage
No competitive
advantage
Long run
competitive
advantage
It can be concluded from the above made VRIO analysis that the local food product range
is a resource and a strength of Lidl that can assist them in achievement of their laid objectives in
the present research work. Such as it will assist Lidl in Opening of new local store format in
Balham and also for the purpose of Enhancing of their present revenue by 2 percent in the
coming time period.
PESTLE framework analyse the external environment
Lidl is a international discount supermarket that is present in Germany. It was founded in
the year 1940 and is operating ion most parts of Europe. They are having approx 10,00 stores
majority of which are located in UK. It is the fifth best retail brand across world with a net
income of approx 82.4 billions.
Political factor: Lidl is having their majority of stores located in different parts of UK. UK is
having political stability as their strength though Brexit has create lot of political debates and
uncertainties but it is also anticipated that it may create opportunities for further expansion of
brands. UK is ranked as 5th largest economy by nominal GDP (Al-Ali, 2020).
Economical factor: Financial and economic elements includes the monetary development that is
vitality of commercial enterprises & increment of expenses in utilisation of automotive
fundamentally because of the increase in fuel costs. Interest for more proficient auto-mobiles is
now high as compared to situation in past. According to data collected as per February 2020 the
unemployment rate of UK has fallen by 0.2 percent that is leading to higher contribution to share
of economy.
Social factors: Lidl is focussing on considering different cultural elements that is leading to
achievement of the right competitive advantage. They are working towards stocking of different
items that is used by different religions across UK. For the purpose of launching the new store in

Technological factors: development and innovations in large organisations leads to better
management of overall economy functioning. In context with Lidl there is a four year deal with
UK technology that is specialising in 3D visualisation & augmented reality. The national
development team is also working closely with Yorkshire based CGI as they are willing to
further expand in UK. There is a virtual resolution that is assisting retailer national development
team for areas of planning process and public engagement. In present strategic plan of Lidl there
is planning of self checkout systems across their London stores for which there is need of
financial investment to be done in order to enhanced the ease to launch their stores.
Legal factors: There are some of the legal laws that have to be adhered Lidl as a retail brand that
includes laws of minimum wages, holiday pay, maternity leaves for the purpose of ensuring
proper adherence. It also includes Equality act 2010 for protecting the workforce in Lidl from
being discriminated because of gender, race, colour or any such type of differences (Bowen,
Appiah and Okafor, 2020).
Environment factors: The changing external environment has lead to Lidl adopting various
environment friendly measures that includes modernized way of handling waste disposal by
recycling. There has been adherence to numerous legislations from government to present
vitality credit projects by focussing on eco accommodating products such as licensing
organisations are willing to join new techniques for green business and reduction of effects of
waste generated from vehicles.
From the above mentioned different aspects it can be concluded that there are different
laid down objectives that have to be achieved in the present business strategic plan.
Porter’s Five Forces Model

Porter's Five Forces in context to Lidl
Porter's Five Forces is one of the simple and powerful tool to understand the
competitiveness regarding the environment of business which is to identify the potential
profitability of strategy. In context to Lidl, it can be helpful in identifying the environment of
industry which are there having the ability to affect the profitability where there is need to adjust
accordingly. This one is used for close watch on the rivals of Lidl where they can examine other
factors. There is identification of five forces which make the competitive environment to
increase the profitability. Such forces are discussed further (Yahaya 2016).
Competitive rivalry- This is the one which generally focus on the number along with
strength of the company Lidl in which there is need to know about the number of competitors
which are there in the market with same types of product or services. There is need to identify
how the competitors are there can compete by using which type of strategy. Rivalry is high and
competitors are having the ability to steel customers by providing attractive offering like reduced
price, providing supplementary product as gift, vouchers etc. Introducing the self checkout
system can be one of the big advantage and tremendous strength with high profit along with
productivity.
Supplier power- There is need to determine the supplier potential of Lidl in relation to
get the advantage of having better supplier with numbers of alternatives which are there for
providing products as supply to the new store which is going to be there (Lages 2016). Better
supply helps in attracting large customer base to the company which can leads to provide them
the products which are required by them. Having different alternatives allows you to chose the
cheaper one which can give Lidl to the better profit.
Buyer power- Lidl need to identify the customer base which are there to buy there
product and to attract other customer there is need to decrease the cost of product and also
introducing the self checkout system can help in attracting more customer due to its time saving
service and due to opening of new store with attracting new customer base can help in increasing
the revenue.
Threat of substitution- In this competitive market specially in supermarket there is
always threat of substitution. When there is higher availability of substitute product in the market
this can make competitor to come with substitute and can easily steel that products customer.

Any substitute which is easy and cheap and are having the ability to weaken company position
along with threatening the profitability (Porter 2016).
Threat of new entry- This is the one which is always there in the market which is threat
of new entry which can came with dominating offering along with less cost price of product
which can easily attracts the customer base of Lidl. Company need to have durable barrier to
enter the Lidl market and should have the key technology which should be inimitable. This can
help in getting protect from such problems.
Review the organisation’s strategy.
Summary: There are many different types of external and internal factors that are posing a
impact on the present strategy of a organisation. In preset scenario based on the internal and
external analysis of Lidl there has been development of certain strategies that can assist in the
formation of relevant strategies in context of the organisation.
Ansoff Matrix
This is the one which helps the marketers to understand the risks inherent which is in
growing their business which is developed by business manager and applied mathematician H.
Igor Ansoff in year 1957. There are four strategies of Ansoff Matrix which are going to be
discussed further.
Market penetration- This is the one in which there is increasing sales of the existing
product in existing market. In this there is need to create more awareness about the existing
product in relation to increase the sales. Lidl in this case need to effort more for increasing the
sales which requires the cost strategy where the price of existing product should decrease in case
the increase the sales of such product. Decreasing the price of product can help in to attract
customer but this may also lead to decrease in profit (Hossain and et. al., 2020).
Product development- This is the one where there is introduction of new product in the
existing market which is there can help in increasing the profit along with help in increase the
revenue of the company. This strategy is employed when company is having the enough research
about the market which is there to be the costumer of that product and are able to buy product

which leads to high sales. Lidl is not introducing any new product at this time so, this strategy is
not going to help it out in reference to increase the customer base along with increase in profit.
Market development- This is the strategy in which company enters with its existing
product in whole new market which is said to be the expansion of business in new geographical
area along with customer segments etc. This strategy is the one which can be used as the best
strategy for the company Lidl according to this time. Where there is introduction of new store
along with company is introducing new technology which is self checkout systems could be
more attract the customer which can help in creating the high customer base and can lead to get
the high profitability. Here, Lidl by opening store in Balhan which is able to attract the customer
and also can contribute in enhancing the revenue (Celik and et. al., 2019).
Diversification- This is the one in which there is introduction of new product in new
market for this there is requirement of both market and product development. There are two
types of diversification which can be employed by a firm which is related diversification or
unrelated diversification. Related diversification is the one in which firm is familiar with that
market and unrelated diversification is the one where organisation don't having any experience
and considered as high risk strategy. This strategy is full of risk which should not be used by the
company Lidl in related to avoid the risk of loss along with taking care of brand name which
should use the appropriate strategy for the company.
From the above strategy, Lidl should use the market development strategy to case of
introducing the self checkout system as the new technology and due to opening of new store.
Tactics:
In order to focus on achievement of the laid down strategies there is need to focus on
development of certain tactics that can lead towards achievement of the laid down strategies in
the present business situation. There is analysis of 4 P of Lidl in order to further formulate
strategies as mentioned below:
Marketing mix strategies to achieve the laid objectives of the present business strategic business
plan.
Tactics
Product Lidl can focus on their new projects that includes specialist
creative artists with focus on 3D visualisation and CGI in

order to achieve high growth of business (Pitt and Treen,
2017). They are also working for launching of the Facebook
messenger chatbot for the purpose of advising customers.
Price Lidl is well known for offering product at discounted rates.
The main focus of the brand is on use of penetration pricing.
It refers to low pricing techniques for enhancing the sales of
products (Wibisono and Koesrindartoto, 2020) (Odukoya, ,
Bowale and Okunlola, 2018) (Chanias, Myers and Hess,
2019) (Hania and Ahmad, 2017). They can use the advantage
of private label brands as core strategy to enhance the sales of
their products.
Place Lidl is proving both offline and online facility for their target
segment of customers, apart from this with the present
outbreak of Covid virus in different parts of the world they
have also expand their online delivery system that is helping
this brand in competing with their rivals,. There is also focus
on avoiding of long queues at checkout areas of their stores in
order to reduce the crowd and work as per the government
issues guidelines.
Promotion In Lidl there is focus on digital transformation as a IT
landscape from inflexible application to a Modern software
platform, that is based on driving the IT architectures for
delivering of openness, agility and speed to enable the digital
real time enterprise. There has to be more emphasis on use of
digital marketings strategy for the purpose of promoting their
new store formats. There is also a need to focus on cost
effectiveness as another laid objective is to enhance the
revenue and profitability percentage. For this there has to be
adoption of several cost effective measures for promotion of
their new stores.

From the above mention tactics of marketing mix aspect that can be used by Lidl in order
to achieve their laid objectives in the limited time frame. There are different associated attributes
that can be applied according to the suitability of the location for Lidl (Wehinger 2018).
Monitoring and evaluation: After completion of the specified time duration there has to
be monitoring and evaluation of the laud objectives whether it has been achieved or not. In the
present scenario all the three objectives will be evaluated and its achievement will be monitored.

CONCLUSION
It can be concluded from the above mentioned different aspects that there are different
laid objectives in a particular strategic evaluation provides various techniques that can be applied
in context of organisations for the purpose of making a detailed evaluation of the way such laid
objectives can be strategically achieved at a given point of time. Process of strategic
management leads to achievement of higher competitive advantage at a given point of time based
on available resources in a organisation. Such tools & techniques are applied for the purpose of
making a industry analysts. Marketing mix is a tool that leads towards formulation of suitable
tactics which can assist in achievement of the laid business objectives.

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