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LIDL

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on 7 April 2014

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Transcript of LIDL

Strategic and Management review of LIDL in Malta
MGT 1011
Introduction to Business Management
Borg Owen - 444691M
Camilleri Gabriella - 285294M
Casha James - 69395M
Cassar Shaun - 398695M
Cauchi Robert - 116993M
Mission Statement
‘’ We respect cultural variety and recognise differences in values and traditions."
Introduction
Lidl is a German global discount supermarket chain operating over 10,000 stores across Europe with more than 6 stores in Malta and 1 recently opened store in Gozo.
It has played a major role in the supermarket industry in the Maltese islands due to various factors and values.
Values
Fair with internal staff and clients

Economic, social and environmental responsibility
The Organization Today
SWOT Analysis
Internal
External
Positive
Negative
Strengths
Private labelling
Strong online presence
Located where discounted products are needed
People from different incomes can benefit from such products
Lidl has more than 10,000 European stores
One of Lidl's Stores
Relatively small brands compared to others
Other well established companies which offer more competitive prices
Products and service sometimes lack quality to keep prices down
Tax structure
Weaknesses
Gain further stronghold in European markets through the opening of more stores in populated areas.
Expanding into other economies.
New products and services that can increase profit to the company such as delivery of products and online shopping.
Opportunities
Threats
Increase in labor costs and rates of interest.
Price wars with other supermarket chains.
Changes in government policies in the retail industry to increase competitiveness.
Tesco: One of LIDL's main competitors in England
Michael Porter : 5 Forces Model
Rivalry with existing competitors
When Lidl officially opened its outlets for the first time in Malta, six years ago, the company knew of the well cemented supermarkets which many customers were loyal to.
Lidl’s strategy is to offer good quality products at relatively lower prices in order to give an economical option to such competitors.
Lidl, which has over 10 thousand outlets all over Europe, manages to get a hold of cheap products at a good quality, which is why in turn retail prices are relatively cheaper.
It regularly sends leaflets & magazines to households promoting their products/offers.
Entrants would not have such an ability, not to mention the fact that customers are now very loyal to Lidl itself.
Threats for entrants
Threats for Substitute Products
Several goods offered by Lidl are produced by the company itself, which is a partially why they are quite cheap in comparison.
Other companies do the same abroad, and some are imported in Malta, yet Lidl manages to have better resources due to its wider stretch, thus the possibility to offer such low prices.
Bargaining with suppliers
Since most of the products offered by Lidl are of their own company, it is of utmost importance that supplies are received as planned.
The system of importing supplies are monitored regularly to meet the definite requests in order to avoid misunderstandings.
Customer Loyalty
Lidl, just as any other successful supermarket, offers several benefits to customers in order to make them loyal to the chain.

These benefits include:
Free parking
Enough stock for popular products
Cleanliness and tidiness in all stores
A friendly and well trained staff.
How did the organisation get here ?
Political Factors
Political factors includes laws and regulations of a state.
Lidl needs to abide the Maltese laws and also with E.U. Directives & Companies Act
It also has to find a compromise with the planning authorities
Economic Factors
These are external factors which a company does not have the power to control them. Examples of economic factors are:
Inflation Rates
Economic Growth
Interest Rates
Exchange Rates
LIDL expands its stores in countries where there is economic growth.
Socio-Cultural Factors
These are factors that the society beliefs in.
These factors are difficult to change them because they are the cultures and values of the society in which LIDL chooses to open it's store in.

Building Customer Relationship through caring for these values is essential for the growth of the company and this means that LIDL puts customers at the central and the main Goal.

In Malta, LIDL helps charitable organizations through donations and fund-raising.
Technological Factors
Technology helps companies reduce costs while getting more in touch with the customers.

LIDL makes use of:
Easy Card Payment
Technological cash points
Lidl Website & Facebook Page
Smartphone app
Printed Advertisements
Due to the ongoing expansions, a lot of new employees are employed which leads to new ideas and innovations.

Vacancies are first offered to the existing employees who wish to progress further within the organisation.

Continuous training is offered to new and existing employees to keep with the latest skills.
Changes in Management Style and Culture
To keep pace with this change Lidl`s strategy is to :
Expand to other countries and open more stores in Malta and Gozo.
Extended Opening Hours.
Opens on Public Holidays.
How have the organisational structure and systems kept pace with this change.
The Main drivers of change are :
Technology
Competition
Employees
Internal and External key Issues and drivers of change.
Where is the organisation going ?
Economic Factors
Stronger company’s economy which would result in more profit.
Increase in number of stores but keep employees proportional to level of production to keep costs down.
Always expanding and investing to reach more clients.
Changes in the local economy make it essential for LIDL to be flexible in its offers and pricing
LIDL help economy because it employs people and pays taxes on profits.
Socio-Cultural Factors
Lidl Malta and Puttinu Cares Foundation alongside Children with cancer helping funding treatment and other amenities.
Lidl Malta help the Puttinu Foundation raise funds in the 5th year of operations and when opening the Qormi store.
Social Networking used to communicate directly and indirectly with clients, gathering feedback to improve service but also advertising products.

Technological Factor
Stores equipment more environmentally friendly thus reducing emissions and cutting down on costs.
Security equipment for safety of employees and customers.
Technological ways to keep food and stores clean and increase the level of hygiene.
Use of technology for better marketing strategies and to remain up-to-date
Trends and Shifting Grounds
Life is not static – ever-changing – everything has to adapt and be dynamic.
Recessions, constant bad weather, governmental changes/instabilities – all have to be calculated when LIDL has to promote their new products and offers.
Trends like Facebook which is good because it's fast for feedback while promotions on it reach a lot of people.
Competitive Advantages
They offer the best prices on the majority of the products.
Most of the brands of products sold by Lidl are owned by it.
Most of thee products sold at Lidl are exclusive and can’t be found at any other supermarket.
It is a worldwide organisation, therefore more stable and recognised.
Long history behind it, therefore experienced and knowledgeable.
The Bake-Off which is an important section which attracted many clients.
Strategic options
Clients satisfied as much as possible.
Keep current advantage LIDL has – Low pricing, higher profits.
Keep increasing the number of Stores in Malta and equipping better the ones already open.
And that
“Standards remain top notch and always aim for better services and quality”
- Chris
Money-back Guarantee.
Freshness in all products provided – now also Organic food is being provided.
No long queuing at the Cash Desk by having multi cashes working at the same time.
Wide selection of products which other competitors do not sell.
The fact that they have 6 main outlets in Malta and another in Gozo and always increasing.
Large and free areas for parking.
Political Factors
Political factors includes laws and regulations of a state.
Lidl needs to abide the Maltese laws and also with E.U. Directives & Companies Act
It also has to find a compromise with the planning authorities
Full transcript