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Lidl SWOT Analysis

This document analyzes Lidl, a German global discount supermarket chain operating in the UK, using a SWOT analysis. It identifies Lidl's strengths as its pricing policy, global scale, rapid expansion, and efficient operating model. Weaknesses include being a niche player and reliance on discount format. Opportunities for growth include expanding internationally and broadening product offerings. Threats consist of increased competition from discount rivals and other retailers as well as potential economic uncertainties from Brexit. The SWOT analysis aims to understand Lidl's characteristics and strategic positioning in order to help it adapt and improve its performance.

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Razvan Paul Covaliu
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779 views

Lidl SWOT Analysis

This document analyzes Lidl, a German global discount supermarket chain operating in the UK, using a SWOT analysis. It identifies Lidl's strengths as its pricing policy, global scale, rapid expansion, and efficient operating model. Weaknesses include being a niche player and reliance on discount format. Opportunities for growth include expanding internationally and broadening product offerings. Threats consist of increased competition from discount rivals and other retailers as well as potential economic uncertainties from Brexit. The SWOT analysis aims to understand Lidl's characteristics and strategic positioning in order to help it adapt and improve its performance.

Uploaded by

Razvan Paul Covaliu
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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LIDL

SWOT Analysis
In the current economic capitalist system with its different typologies, elements such
as ‘learning’ and ‘knowledge’ have become the main key success factors on an international
scale, with, as a consequence, intangible resources gaining relevance in the business world.
The economic battle between competing companies has moved from the tangible resource
plan, such as capital, raw materials, land, machinery and equipment, to the intangible
resource plan, where elements such as knowledge and ability to use them (knowledge-based
management) play a fundamental role. In this respect, the knowledge has become the basic
resource of the companies, the way that they can obtain power, prestige and wealth in the
economy and in the modern society. This principle applies equally to individuals,
organizations, public institutions, companies, regions or even states, and SWOT analysis can
represent an important tool in this respect.
The aim of the actual analysis is to emphasize the most
important characteristics of ‘Lidl’, a German global discount supermarket chain that operates
in the dynamic market of the UK (Lidl, 2019). Moreover, in order to achieve this
characteristics, a SWOT analysis will be used, in order to point out the main characteristics,
potential issues, identify the relevant opportunities.
Hence, regarding Lidl, it has to be highlighted that Lidl
is a chain of supermarkets based out of Germany but with operations across Europe, United
Kingdom and the United States of America. Operating in around 28 countries and with
approximatively 300,000 employees, its products include meat, vegetables, groceries,
everyday collections and garden products. Founded in 1973, It is currently one of the most
important food retailers in Europe and has been in business in the UK since 1994. Moreover,
it now has 760 stores and 13 distribution centres across the UK and employs about 22,000
people (Lidl, 2018). However, regarding Lidl, it can be highlighted
that in order to better understand its characteristics, a SWOT analysis will be used. In this
respect, the primary use of SWOT is in the identification of strategic options by linking
internal and external factors that influence the observed system, maintaining the same
approach for this project. On the same line of thought, SWOT is representing an acronym for,
as it follows, Strengths, Weaknesses, Opportunities and Threats (Parsons, 2018).
Lidl strengths, in this respect, are,
as it follows, its pricing policy, being a global hard discount operator, its rapid expansion
capacity, a very efficient cost-based operating model, its unique organization structure. As
well, extremely important is Lidl’s effective operations strategy. Thus, like almost all
discount stores, Lidl also has a strong focus on operational effectiveness. Starting its
operations from from their warehouse until the end of the supply chain process, through
technology tools the retailer has tried to improve productivity while keeping a strict tab on
costs, maintaining high standards and work ethics, improving the processes permanently.

Lidl’s weaknesses can be synthesised, as it follows: the fact that is still only a niche
player in most markets where it is present, exclusive stake on discount format, and
relationship with some brand manufacturers. Moreover, a systemic weakness for Lidl, cause
of its’ success, as well, is that, Comparing Lidl to other supermarket chains, such as Asda or
Tesco (mainly in the UK market), Lidl has a relatively small number of employees in each
store to help customers in product search and address their queries. Hence, this could be
considered a problem from some customers perspective, as they sometimes need assistance in
product-search, affecting their perception over Lidl and being, as a consequence, a
vulnerability for Lidl.
Referring to its opportunities, expansion on the national market and
international markets, namely in the UK, improving its customer service approach and
policies, and extending the product offerings, especially brands and fresh products,
considering the current volatility of the market and customers expectations, higher and higher
on such a competitive market, especially in the UK.

Lild’s threats can be highlighted, as it follows: increased complexity of the operating


model, the general context, politic and economic, and an example, in the UK, ‘Brexit’
implications with its lack of certainty; competition on the premium segment from other
formats; competition from other discount retailers. The main competitors of Lidl in the UK
are Aldi, Morrisons, Asda, Sainsbury’s and Tesco. In addition to this, they also face
competition from online stores like e-bay, Amazon (online shopping).

As a conclusion, in a dynamic and volatile environment, with continuous challenges,


Lidl has to adapt and improve permanently its strategy, in order to maintain and improve the
quality standards and sales, in all the contexts, at a global level.
References

Lidl (2019) About Us. Lidl. Available from: https://www.lidl.co.uk/about-us


(Accessed: 08/12/2019).

Lidl (2018) A Lidl Bit of History. Available from: https://careers.lidl.co.uk/en/our-


history-1819.htm (Accessed: 08/12/2019).

Parsons, N. (2018) What Is a SWOT Analysis, and How to Do It Right (With


Examples). Available from: https://www.liveplan.com/blog/what-is-a-swot-analysis-and-
how-to-do-it-right-with-examples/ (Accessed: 08/12/2019).

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