As previously mentioned, although Lidl have a relatively low market share, they are currently one of the fastest growing retailers in the market. Porter's generic strategies describe how a company pursues competitive advantage across its chosen market scope. Competitive scope Time | Monday | 1pm to 2pm | The SWOT analysis will help an organisation measure and understand the internal strengths and weaknesses, and the external opportunities and threats facing the firm. Poulter, S., 2014. Their main competition as a value supermarket is Aldi (Bosshart, 2006). Submitted by: 1168212 4.1.4 Technology factors 8 Project objectives and research questions However, in order to maintain their current rate of growth and expansion, Lidl may have to diversify from their current strategies in order to stay competitive and innovative within the UK grocery market. Potential to expand in the UK and acquire a higher share of the UK grocery market. It takes Porters generic, Positive Psychology Areas of Focus in Relation to Interpersonal and Prosocial Behavior. Business 2. Consumers may feel that staff do not pay them enough attention as they are very rushed doing their job responsibilities. II. This would suggest that they are utilising a cost leadership strategy, and are implemented it with incredible effectiveness (Morschett, et al., 2006). 2. International strategy This rapid expansion has made them one of the most dominant and feared competitors in the UK grocery market, with major grocery retailers constantly trying to minimise Lidl’s portion of market share. 3. Employees’ are generally paid a very attractive salary, but have to work incredibly hard whilst on the job. Through this research, he created Porter’s Generic Strategies. [Online] Available at: http://www.ft.com/cms/s/0/2465c426-fd53-11e3-bc93-00144feab7de.html#axzz3giD80B9c, FT, 2015. 1. As their products are so cheap consumers can often think that the quality is not good enough. 5.1 Cost based competitive advantage Although developed over 20 years ago, these strategies play a very significant part in any digital marketing campaign today. 2.1 Porter’s Generic Strategies 5 With the introduction of a deluxe range (Lidl, 2014) they have seen a shift in their strategic position and as they move more towards selling higher/premium quality goods so have they been able to increase their market share within the UK (Potter, 2014) 2.1 Porter’s Generic Strategies This module was set out by M E Porter in 1985 and is known as Porters generis strategies (Mindtools, 2015). The Amazon pricing strategy crushes the competition due to the number of adjustments and speed in a single day. CIM, 2009. 4.1.2 Economical factors 6 Half of UK shoppers visited Lidl, Aldi over Xmas. Date/Year of Module: July 2012 The Generic Strategies can be used to determine the direction (strategy) of your organisation. 2. Bosshart, D., 2006. This means that it is imperative to have stores in reasonably close proximity to national distribution centres. Aldi and Lidl to force ‘big four’ supermarkets into price war to stop stampede of customers to discount chains.               PART 2 – Information Gathering and Accounting/ Business techniques, These figures show that Tesco’s market leader position is being threatened and intensity of competitive rivalry is high. 3.2.3 Bargaining Power of Suppliers 10 Introduction 3 VAT Registration No: 842417633. Has not been able to spread their operations outside of Europe very successfully. 2.     2.2 Bowman’s Strategic Clock 6 An explanation of research approach. However, Paul Polman, Unilever’s, AN EVALUATION OF THE BUSINESS AND FINANCIAL PERFORMANCE OF WM MORRISON SUPERMARKETS PLC BETWEEN 31ST JANUARY 2005 AND 3RD FEBRUARY 2008 Copyright © 2003 - 2021 - UKEssays is a trading name of All Answers Ltd, a company registered in England and Wales. Porter’s Generic Strategies. I. Weihrich, H., 1982. Registered office: Venture House, Cross Street, Arnold, Nottingham, Nottinghamshire, NG5 7PJ. Porter outlines four generic strategies; differentiation, cost leadership, differentiation focus and cost focus (Porter, 1980).. Journal of Retailing and Consumer Services, 13(4), pp. This module was set out by M E Porter in 1985 and is known as Porters generis strategies (Mindtools, 2015). This will help consumers know there is a Lidl nearby. Reference this. The products that are sold the most are the private labeled products like eggs, meat, milk, fresh fruits and vegetables, and the baked goods. Cambridge: Harvard Business Press. Siro, I., Kapolna, E., Kapolna, B. From utilising the information gathered from the 7 P’s analysis, it becomes quickly apparent as to what strategy Lidl are currently pursuing. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. Time selection for this SBU's market. Customer orientated expansion. The three recommendations are; In order to stay competitive in the UK grocery industry, and continue to build upon their UK market share, Lidl should utilise the aforementioned strategies. How Lidl adds value, With the introduction of a deluxe range (Lidl, 2014) they have seen a shift in their strategic position and as they move more towards selling higher/premium quality goods so have they been able to increase their market share within the UK (Potter, 2014) & Lugasi, A., 2008. 4. 5.1 Strengths 10 Brief Background on Aldi 3 This would suggest that they are utilising a cost leadership strategy, and are implemented it with incredible effectiveness (Morschett, et al., 2006). Porters Fiver Competitive forces are some of the most essential tools that Lidl has to use in ensuring that it achieves competitive advantage in the retail sector. With this strategy, the objective is to become the lowest-cost producer in the industry. Based on the 7 P’s analysis, a SWOT analysis can be conducted in regards to Lidl. Annual Reviews in Control, 34(1), pp. We're here to answer any questions you have about our services. Competing through service: Insights from service-dominant logic. 1. The Lidl can apply Porter's generic strategies model to explore how competitive advantage can be created. Introduction 3 & Schramm-Klein, H., 2006. Appetite, 51(3), pp. Wide range of private labels gives them exclusivity and security. :Free Press. Looking for a flexible role? International expansion of other global brands would cause more competition. Michel Porter identified three generic strategies: • Cost leadership. s.l. 4.1 PESTEL Analysis 6 Although the amount of stores that Lidl have in operation is staggering, it is made even more amazing by the fact they only expanded out of Germany 20 years ago (Lidl, 2015). | Nils Wurl | M00367256 | All work is written to order. Haakon Winger Eide  Provide more information on their website about product details in order to enforce quality. 3. [Online] Available at: http://www.birminghampost.co.uk/business/business-news/giant-lidl-distribution-hub-create-8883111, Butler, S., 2014. http://www.theguardian.com/business/2014/jun/27/lidl-launches-store-expansion-programme. COMPETITIVE POSITION AND MARKET POTENTIAL ANALYSIS Cost Leadership Strategy: To defeat its competitors in a market a firm may provide a low-cost product with minimum acceptable attributes. [Online] Available at: http://www.lidl.co.uk/en/659.htm. Type: Lidl’s history begins in the 1930s, when their first store was created in Germany acting as a grocery wholesaler. Assignment Cover Sheet This will then be concluded with a SWOT analysis, with recommendations being drawn up via the utilisation of a TOWS matrix. An analysis of the external business environment and how it affects Lidl 7 Story 1 4.1.3 Social and cultural factors 7 Identification and evaluation of the Strategies, Introduction Disclaimer: This is an example of a student written essay.Click here for sample essays written by our professional writers. They have a variety of distribution hubs across the UK and Europe to ensure that stores are maintaining a constant level of stock (Brown, 2015). A Verizon office building in Irvington, New Jersey in 2010. 456-467. 4. Porter outlines four generic strategies; differentiation, cost leadership, differentiation focus and cost focus (Porter, 1980). Retail Pricing – Higher Profits Through Improved Pricing Processes. A Verizon office building in Madison, New Jersey, U.S.A. in 2010. Competition intensity evaluation As society shifts toward a healthier lifestyle, what is perceived as important by the buyer could be rewarded with premium prices (IfM, 2015) and Lidl could adapt its position to be more in line with a differentiation strategy? Aldi, which opened its first US store in Iowa in 1976, has stuck with the model, insisting the deposit system is key to its low-price strategy. Cooperate with firms operating in the US or Asia to expand operations. MKT2232 Branding and Integrated Marketing Communications Michael Porter uses 4 strategies that an organisation can choose from. Increased revenue could then be funnelled into UK development. From utilising the information gathered from the 7 P’s analysis, it becomes quickly apparent as to what strategy Lidl are currently pursuing. III. 1. 2.2 Bowman’s Strategic Clock The majority of Lidl stores are laid out in a very linear and traditional manner. & Proth, J. M., 2010. 631-640. s.l. Lidl often have in store promotions, but they do not discount their goods as highly as other retailers due to the low prices that already exist. [Online] Available at: http://www.theguardian.com/business/2014/jun/27/lidl-launches-store-expansion-programme. 3.1.2 Economic 8 Contents Content 2. Dyson, R. G., 2004. Dolgui, A. Lidl’s business strategy includes a standardized supply chain which allows it to efficiently operate its business in different countries and also provides an economies of scale. Since then, Lidl has now become one of the largest grocery retailers in Europe, with over 600 stores operating in the UK, and thousands based across Europe (Butler, 2014). Whilst many supermarkets are losing their market share, Lidl’s was increased by a stagger 15.1% from 3.1% to 3.5% (FT, 2015). London: Kogan Page Limited. A Stakeholder Approach  Online presence that showcases the products they have and any deals they may be running. Number of Pages:13 Berlin: Springer Berlin Heidelberg, pp. Morschett, D., Swoboda, B. Originally, the 7 P’s was only comprised of 4 P’s which aimed to address certain issues that would allow a firm to have a more developed understanding of their internal operations. Porter (1985) presented this strategy as one where a competitive advantage is engineered by minimising costs and lowering prices. If you need assistance with writing your essay, our professional essay writing service is here to help! Strong business structure allows them to sell their products at an incredibly cheap price. Primary process of Lidl is to purchase and sell as many goods as possible on a low-cost basis. 20th Aug 2018 Registered Data Controller No: Z1821391. CONTENTS PAGE He goes on … In order to successfully analyse Lidl marketing strategy, a 7 P’s analysis can be conducted, which seeks to analyse some very basic, but significant issues. In this model, five forces have been identified which play an important part in shaping the market and industry. Get help with your Porter's generic strategies homework. Tesco sells approximately 40,000 food products in its superstores, as well as clothing and, The Warwick MBA Brown, G., 2015. Being able to identify these elements will help an organisation to formulate and develop strategies which may build on the strengths, negate the weaknesses, exploit the opportunities or counter the threats (Dyson, 2004). Company Registration No: 4964706. High training standards to ensure employees can scan items fast enough and meet all customer needs. However, if Lidl pursue the adoption of other strategies, they must ensure that their current consumer base is not alienated, or they could end up losing market share. Introduction 2 In-text: (Our History, 2016) ... In-text: (Porter's Generic Strategies, 2016) Your Bibliography: Quickmba.com. 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