3.1.2 Economic 8 High training standards to ensure employees can scan items fast enough and meet all customer needs. This bibliography was generated on Cite This For Me on Monday, May 23, 2016. This would suggest that they are utilising a cost leadership strategy, and are implemented it with incredible effectiveness (Morschett, et al., 2006). 2. 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. Haakon Winger Eide  Lidl do not current have any loyalty schemes present in the UK, as they believe their pricing model is enough to incentivise consumers. 3.2.5 Competitive Rivalry within the Industry 10 “This is to certify that the work I am submitting is my own. This Master’s Thesis is carried out as a part of the education at the  University of Agder and is therefore approved as a part of this    education. Tesco’s famous loyalty club card can still be named, Tesco Retail Business Analysis           If you need assistance with writing your essay, our professional essay writing service is here to help! Johnson controls is thinking of a tax inversion merger with Tyco international to reduce their tax burden. | Sara-Sofia Broberg | M00373321 | SWOT analysis is a method or ‘framework’ used for business analysis. [Online] Available at: http://www.ft.com/fastft/260632/half-of-uk-shoppers-visited-lidl-aldi-over-xmas. An analysis of Lidl’s current marketing strategy will be conducted, with particular emphasis on the 7 P’s of marketing. Porter (1985) presented this strategy as one where a competitive advantage is engineered by minimising costs and lowering prices. The Amazon pricing strategy crushes the competition due to the number of adjustments and speed in a single day. Lidl expansion to crank up pressure on big stores. What makes the Company “Strong” in the Market. This module was set out by M E Porter in 1985 and is known as Porters generis strategies (Mindtools, 2015). He then subdivided the Focus strategy into two parts: "Cost Focus" and "Differentiation Focus." Extend the usability of their website to accept click & collect orders or even delivery. [Online] Available at: http://www.dailymail.co.uk/news/article-2539064/Aldi-Lidl-force-big-four-supermarkets-price-war-stop-stampede-customers-discount-chains.html, Ruddick, G., 2015. Brown, G., 2015. 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). 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. This has been cardinal to Lidl capturing market share, whilst producing considerable profits. Later he divided the focus strategy in t two sub categories namely Cost focus and Differentiation Focus. Environmental Analysis 5 Porter’s generic strategy is given after VRIO analysis Market expansion Strategies are given with the possible opportunities and threats for Lidl. LIDL Integrated Marketing Campaign However , Tesco likewise incorporates the differentiation technique (Baroto ainsi que al., 2012), hence chasing a crossbreed strategy merging the two, whilst Lidl only follows the no-frills cost leadership approach (Geppert ain al., 2015). Submission Date: 26 January 2014 The information analysed using the model can be used by strategic planners for Lidl to make strategic decisions. Verizon Communications, Inc., the parent company of Verizon Wireless, has a generic strategy (Porter’s model) and intensive growth strategies that emphasize quality as a competitive advantage in the telecommunications industry. Porter’s Generic Strategies. Marketing strategies and organization structures for service firms. As well as operating in the UK, it has stores in the rest of Europe and Asia. ANALYSIS FRAMEWORK Michel Porter identified three generic strategies: • Cost leadership. Cooperate with firms operating in the US or Asia to expand operations. 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. 4.1.2 Economical factors 6 Construct firm barriers of entry to deter other organisations from entering the UK grocery market and potentially encroaching on Lidl’s market share. Porter's Generic Strategies Michael Porter has described a category scheme consisting of three general types of strategies that are commonly used by businesses to achieve and maintain competitive advantage. The Lidl can apply Porter's generic strategies model to explore how competitive advantage can be created.       : The Real Cost of Living in a Low Price, Low Wage World. Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com. 1. 3. CIM, 2009. The TOWS Matrix — A Tool for Situational Analysis, San Francisco: Long Range Planning . Porter S Generic Strategies. Journal of Retailing, 83(1), pp. Market Identification of Aldi 4 However, this does not imply that the University answers    for the methods that are used or the conclusions that are drawn. Morschett, D., Swoboda, B. 2.2 Bowman’s Strategic Clock 6 Utilise the significant amount of exposure across the UK and Europe to construct barriers of entry for other low-cost grocery retailers. In the early 1980s, he set out to uncover the ways companies maintain long-term advantages over their competitors. PART 1 – Project Objectives and Overall Research Approach. If the achieved selling price can at least equal (o… In 2013, Amazon had changed prices on about 40 million products in just one day. 3.2 Porter’s Five forces Model 9 Funnel revenue back into the UK market by creating more stores across the UK. Story 2 Increased revenue could then be funnelled into UK development. Number of Pages:13 Registered Data Controller No: Z1821391. Principles of Marketing. 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. Finally a conclusion is drawn with suggestion for the strategic managers of Lidl. Introduction of new product ranges that cater to an upper-class demographic. s.l. Word Count:1688 III. :Prentice Hall. Middlesex University , BA Marketing 2.1 Porter’s Generic Strategies These initial strategies as described by Porter were: Cost Leadership (cheap, no expenses), Differentiation (unique or premium products) and Focus (a specialised service or market). An introduction to Porter’s Generic Strategies Michael Porter, an economic researcher, examined the competitive behaviors that comprise successful businesses. Generic strategy This would suggest that they are utilising a cost leadership strategy, and are implemented it with incredible effectiveness (Morschett, et al., 2006). Lidl’s own range of private brands can be used to deter price wars and comparisons. Lidl will often exhibit their brand colours, yellow and blue, throughout their stores or surrounding areas. Seminar tutor | Dinesh Nanayakkara | Lidl’s projection of sales for 2018 is $1,041 Million, Lidl’s future sales growth prediction is 1,929 Million in 2019, $2,753 Million for 2020. Porter outlines four generic strategies; differentiation, cost leadership, differentiation focus and cost focus (Porter, 1980).. Journal of Retailing and Consumer Services, 13(4), pp. Porter, M. E., 1980. [Online] Available at: http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/11736662/Supermarkets-could-increase-prices-to-pay-for-living-wage.html. I will analyze the benefits and risks of such a merger on the companies involved as well as their employees. Registered office: Venture House, Cross Street, Arnold, Nottingham, Nottinghamshire, NG5 7PJ. From utilising the information gathered from the 7 P’s analysis, it becomes quickly apparent as to what strategy Lidl are currently pursuing. Product (Quality, brand name, service line, warranty, capabilities, facilitating goods, tangible clues, price, personnel, physical environment and process of service delivery): Price (Level, discounts and allowances, payment terms, customers own perceived value, quality/price interaction and differentiation): Place (Location, accessibility, distribution channels and distribution coverage): Promotion (Advertisements, personal selling, sales promotion, publicity, personnel, physical environment, facilitating goods, tangible clues and process of service delivery): People (Personnel training, discretion, commitment, incentives, appearance, interpersonal behaviour, attitudes and customer behaviour/degree of involvement): Process (Policies, procedures, mechanisation, employee discretion, customer involvement, customer direction and flow of activities): Physical (Environment, furnishings, colour, layout, noise level, facilitating goods and tangible clues): Porter outlines four generic strategies; differentiation, cost leadership, differentiation focus and cost focus (Porter, 1980). 2. An explanation of research approach. Competing through service: Insights from service-dominant logic. Annual Reviews in Control, 34(1), pp. Porter outlines four generic strategies; differentiation, cost leadership, differentiation focus and cost focus (Porter, 1980). Potential to expand in the UK and acquire a higher share of the UK grocery market. Porter uses the industry framework and the generic strategies to develop many interesting ideas about what he terms the "generic industry environments": fragmented industries, emerging industries, mature industries, declining in-dustries, and global industries. 3.1.1 Political 8 Cambridge: Harvard Business Press. No plagiarism, guaranteed! 2. Competition intensity evaluation With regards to business operation, both companies follow Porter’s cost leadership strategy. 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. Lidl have adopted a cost leadership strategy by selling high volumes at low margins and their scope is broad. As their products are so cheap consumers can often think that the quality is not good enough. 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. Based on the 7 P’s analysis, a SWOT analysis can be conducted in regards to Lidl. We're here to answer any questions you have about our services. Furthermore, this could result in them following a combination of generic strategies, as the introducing of upper-class brands, in combination with their current business structure, would suggest a differentiation strategy is in place. If Lidl were to engage with a price war with other major grocery retailers then they could force competitor’s prices down. All work is written to order. 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). *You can also browse our support articles here >, http://www.birminghampost.co.uk/business/business-news/giant-lidl-distribution-hub-create-8883111, http://www.theguardian.com/business/2014/jun/27/lidl-launches-store-expansion-programme, http://www.ft.com/cms/s/0/2465c426-fd53-11e3-bc93-00144feab7de.html#axzz3giD80B9c, http://www.ft.com/fastft/260632/half-of-uk-shoppers-visited-lidl-aldi-over-xmas, http://property.lidl.co.uk/cps/rde/xchg/lidl_uk/hs.xsl/5187.htm, http://www.dailymail.co.uk/news/article-2539064/Aldi-Lidl-force-big-four-supermarkets-price-war-stop-stampede-customers-discount-chains.html, http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/11736662/Supermarkets-could-increase-prices-to-pay-for-living-wage.html. Consumers could have a negative perception of the quality of Lidl’s products as they are sold for such a cheap price (Siro, et al., 2008). Kotler, P., Armstrong, G. & Saunders, J., 2008. 1. 101-110. Module Code: IB8010 COMPETITIVE POSITION AND MARKET POTENTIAL ANALYSIS Michael Porter identified three generic strategies (cost leadership, differentiation, and focus) that can be implemented at the business unit level to create a competitive advantage. London: Kogan Page Limited. 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 Assignment Cover Sheet Table of Contents Porter’s generic competitive strategies are useful tools that will likely assist with the management, growth and profitability of your business to create sustainable competitive advantage. Felsted, A., 2014. Porter called the generic strategies "Cost Leadership" (no frills), "Differentiation" (creating uniquely desirable products and services) and "Focus" (offering a specialized service in a niche market). Submitted by: 1168212 Booms, B. H. & Bitner, M. J., 1981. These ideas were introduced in the book Competitive Strategy by Michael Porter.. From utilising the information gathered from the 7 P’s analysis, it becomes quickly apparent as to what strategy Lidl are currently pursuing. A firm’s success in strategy rests upon how it positions itself in respect to its environment. Free resources to assist you with your university studies! B. E. M., 2007. Also, on top of the main competitors, Aldi and Lidl have taken over the grocery market in times of recession. Successfully expanding abroad can provide more funds to invest in the UK. 4.1.5 Environmental Factors 8 Employees’ are generally paid a very attractive salary, but have to work incredibly hard whilst on the job. 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). Provide more information on their website about product details in order to enforce quality. Lidl have a reliant focus on selling quality products at the cheapest cost possible. Identification and evaluation of the Strategies, Introduction Date/Year of Module: July 2012 Supervisor  Andreas Falkenberg  Kumar, N. & Steenkamp, J. 2. Determination of the specific market for SBU   In this model, five forces have been identified which play an important part in shaping the market and industry. Study for free with our range of university lectures actually accept orders and sell products professional...., a SWOT analysis can be conducted, with particular emphasis on the framework of the company competition to. By our professional essay writing service is here to help are often very similar to the UK acquire. 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