This paper examines the possibilities of expansion for the Hard Discounter Chain "Lidl" that operates in the food and non-food retail sector. The organization is keen to expand on an international scale, and it will be evaluated if the expansion is more likely to be successful by opening a store in Norway or Mexico. The paper will use different analysing models to identify the most attractive target market.
This paper focuses on the country of Mexico to determine its potential as a target market for Lidl's future international expansion strategy. The rationale is processed with a more detailed discussion of a PESTEL analysis of the macro-environmental factors of the selected market. An explicit impact of the macro-environmental factors on the selected market is evaluated. Porter's 5-factor model is applied to critically analyse the competitive intensity of Lidl's industrial environment in the chosen market.
Resources as well as the capabilities of Lidl and their impact on competition as the company enters the market are critically evaluated. The various market entry opportunities are examined, and recommendations are made as to which are available to Lidl. To this end, recommendations are made around the market entry opportunity that will allow the company to make this strategic international expansion a success.
Table of Contents
- 1. Chosen market: Mexico
- 2. Key drivers
- 2.1 Quality of land administration
- 2.2 Market Size
- 2.3 Target Groups
- 2.4 Buyer sophistication
- 2.5 Infrastructure & Quality of road network
- 2.6 Skills and Culture
- 2.7 Organized Crime
- 3. Five-Forces
- 3.1 The threat of entry
- 3.2 The threat of substitutes
- 3.3 The power of buyers
- 3.4 The power of suppliers
- 3.5 Competitive rivalry
- 4. Resources and capabilities
- 4.1 Value
- 4.2 Rarity
- 4.3 Inimitability
- 4.4 Organized
- 5. Modes of Entry
- 5.1 Geographical Strategy: Sonora
- 5.2 Geographical Strategy: Quintana Roo
- 5.3 Target Group
- 5.4 Import/Export
- 5.5 Joint venture and alliances
- 5.6 Marketing and Pricing
- 5.7 Supply Chain Management
- 5.8 Operational management
- 5.9 Investment and Budget
Objectives and Key Themes
This paper analyzes the potential for Lidl's international expansion, specifically comparing the viability of entering the Mexican and Norwegian markets. The analysis utilizes various models to determine the most attractive target market. The study considers macro-environmental factors, market characteristics, and Lidl's internal resources and capabilities to inform its recommendations.
- International market expansion strategy for Lidl
- Comparative market analysis of Mexico and Norway
- Assessment of key drivers influencing market entry decisions
- Evaluation of Lidl's resources and capabilities in relation to market entry
- Analysis of different market entry modes.
Chapter Summaries
1. Chosen market: Mexico: This chapter establishes Mexico as the primary focus of the paper, highlighting the importance of understanding the macro-environment and key drivers influencing Lidl's potential success in the Mexican market. It lays the groundwork for subsequent chapters by introducing the context of Lidl's expansion strategy and the factors to be considered in assessing the Mexican market.
2. Key drivers: This chapter delves into several crucial factors determining the viability of Lidl's entry into the Mexican market. It examines the complexities of land administration, specifically addressing the limitations imposed by Ejido lands and the associated costs of construction permits. Furthermore, it analyzes Mexico's market size, positioning it favorably against Norway, and discusses the characteristics of key target groups, including Mexican citizens, tourists, restaurants, and hotels. Buyer sophistication and the quality of Mexico's infrastructure are also assessed, highlighting their impact on supply chain operations and market entry strategies.
3. Five-Forces: (This chapter's summary would analyze Porter's Five Forces framework as applied to the Mexican market. The summary would discuss the threat of new entrants, the threat of substitutes, buyer power, supplier power, and the intensity of competitive rivalry within the Mexican retail sector. It would evaluate the strength of each force and its implication for Lidl's potential success in Mexico.)
4. Resources and capabilities: This chapter analyzes Lidl's internal resources and capabilities using the VRIO framework (Value, Rarity, Imitability, Organization). It assesses the value of Lidl's existing resources and capabilities in the Mexican context, the uniqueness of its strengths, the difficulty for competitors to imitate them, and the organizational structures enabling the effective exploitation of these advantages. The chapter would likely explore Lidl's proven business model and its adaptability to diverse markets.
5. Modes of Entry: This chapter explores various entry modes Lidl could employ to enter the Mexican market. This includes considering different geographic strategies (Sonora, Quintana Roo), targeting specific customer groups, options such as import/export, joint ventures or alliances, and strategies for marketing, pricing, supply chain management, operational management and investment/budgeting. The chapter evaluates the advantages and disadvantages of each strategy in the Mexican context and its alignment with Lidl’s overall business model.
Keywords
Lidl, international expansion, market entry, Mexico, Norway, retail, hard discounter, market analysis, target groups, supply chain, competitive advantage, resources, capabilities, Porter's Five Forces, VRIO framework, PESTLE analysis.
Frequently Asked Questions: Lidl's International Expansion - Mexico vs. Norway
What is the main topic of this document?
This document is a comprehensive language preview analyzing Lidl's potential for international expansion, specifically comparing the viability of entering the Mexican and Norwegian markets. It uses various models to determine the most attractive target market, considering macro-environmental factors, market characteristics, and Lidl's internal resources and capabilities.
What are the key themes explored in the analysis?
The key themes include Lidl's international market expansion strategy, comparative market analysis of Mexico and Norway, assessment of key drivers influencing market entry decisions, evaluation of Lidl's resources and capabilities, and analysis of different market entry modes. The analysis also considers factors such as quality of land administration, market size, target groups, buyer sophistication, infrastructure, skills and culture, organized crime, and competitive rivalry.
Which market is ultimately chosen for deeper analysis?
While the document initially compares Mexico and Norway, Mexico is ultimately selected as the primary focus for the detailed analysis of market entry strategy.
What key drivers are examined for the chosen market (Mexico)?
The key drivers examined for the Mexican market include: quality of land administration (including complexities of Ejido lands), market size, target groups (citizens, tourists, restaurants, hotels), buyer sophistication, infrastructure quality (road network), skills and culture, and the presence of organized crime.
What frameworks are used in the analysis?
The analysis utilizes several frameworks, including Porter's Five Forces (to analyze competitive dynamics) and the VRIO framework (to assess Lidl's resources and capabilities – Value, Rarity, Imitability, Organization).
How are Lidl's resources and capabilities assessed?
Lidl's internal resources and capabilities are evaluated using the VRIO framework. This involves assessing the value, rarity, inimitability, and organizational support of Lidl's existing assets and competencies within the context of the Mexican market.
What market entry modes are considered for Mexico?
The document explores various market entry modes for Mexico, including geographical strategies (Sonora and Quintana Roo), targeting specific customer groups, import/export, joint ventures/alliances, and strategies for marketing, pricing, supply chain management, operational management, and investment/budgeting.
What are the chapter summaries included in the document?
The document provides summaries for each chapter covering the selection of Mexico, key drivers for market entry, an analysis using Porter's Five Forces, an assessment of Lidl's resources and capabilities using the VRIO framework, and a discussion of various market entry modes.
What are the key words associated with this analysis?
Key words include: Lidl, international expansion, market entry, Mexico, Norway, retail, hard discounter, market analysis, target groups, supply chain, competitive advantage, resources, capabilities, Porter's Five Forces, VRIO framework, and PESTLE analysis.
What is the overall objective of this study?
The overall objective is to provide a comprehensive analysis to inform Lidl's decision-making process regarding international expansion, specifically focusing on a comparative assessment of the Mexican and Norwegian markets and ultimately recommending a viable market entry strategy for Mexico.
- Citation du texte
- Patrick Wiget (Auteur), 2019, Global Expansion of the Discounter Lidl. Strategic International Business Management, Munich, GRIN Verlag, https://www.grin.com/document/976498
