1. International Strategy Of
Lidl & Aldi
Group A
Xiaoxi Cai , Shuo Shi, Yuanqin Zhuang, Zhengdong Zhang,
Wing Yan Hung, Farhan Zubair
 BST 248 International Marketing  Lecturer: Dr Stephanie Slater

2. PART 1
Industry
Overview

3. Industry Overview
12.5
15.5
11.5
3
4
2
5.5 5.5
4.5
0.
4.
8.
12.
16.
20.
Convenience Stores Discounters Modern Grocery Retailers
Estern Europe
Western Europe
World
Grocery Retailers Market Growth 2009-2014

4. Industry Overview
Market Share by Geographic Location
5.4
0.1
0.7
5.6
9.8
3.6 3.6
11
7
0.2
1.8
10.2
11.4
4.6
3.7
13
7.8
0.3
3
11.8
12.6
5.6
3.8
15
0.
4.
8.
12.
16.
World Asia Pacific Australasia Eastern Europe Latin America MEA North America Western
Europe
2003
2008
2013

5. PART 2
Company
analysis

6. Lidl Current Market Analysis
• 2012/2013 fiscal turnover: €48.9 billion totally
• German discounter channel: stagnate but still
expected for growth
• International expansion becomes essential
• Successful reason: big range of products + low
prices
• “Fast and pushing” internationalisation approach

7. Lidl Current Market Analysis
Lidl: Sales by Market 2013
Germany
France
UK
Netherlands
Spain
Italy
Greece
Portugal
Poland
Belgium
Czech Republic
Other

8. Lidl SWOT Analysis
German Market Has Mature and
Flat Outlook
Stagnant Domestic Growth
No Presence Outside EU
Relatively Small Comparing to
Other Brands
Private Label Products
Online Selling
Quality Goods with
Reasonable Price Range
Low Pricing Strategy
WEAKNESS
OPPOR-
TUNITY
Further Expansion in the EU
Entering Africa and Asia
Providing Wider Product Range
Click&Collect
STRENGTH THREAT

9. Aldi Current Market Analysis
• 2012/2013 fiscal turnover: €25
billion in Germany
• German discounter channel:
stagnate but still expected for
growth
• International expansion becomes
essential
• “Slow and Well considered”
internationalisation approach

10. Aldi Current Market Analysis
Number of Aldi Group Outlets 2013
Germany
US
France
Netherlands
UK
Belgium
Austria
Australia
Spain
Denmark
Switzerland
Others

11. Aldi SWOT Analysis
German Market Has Mature and
Flat Outlook
Stagnant Domestic Growth
Incomplete Shopping Experience
for Consumers
Allegedly Known as A Store For
Low Quality Products
Relatively Small Comparing to
Other Brands
Low Pricing Strategy
Low Costs
Efficient Operating Strategies
US Presence Drives Sales
WEAKNESS
OPPOR-
TUNITY
Further Expansion in the EU
Invest In Advertising
Entering Africa and Asia
Providing Wider Product
Range
Click&Collect
STRENGTH THREAT

12. USA
ITALY
CHINA
New Market
Suggestion
PART 3

13. New Market
Suggestion
PART 3 USA
PEST Analysis|
Adapatation |
P
Political
Economical
Technological
E
S
T
Competition |
Social
Stability
Tax
Law
Trade partnership
GDP
Interest Rate
Exchange Rate
Consumer Preference
E-commerce
Smart phone

14. Political
Political Stability
Tax policies
Employment Law
Competition regulation
Transatlantic Trade and Investment Partnership

15. Economical USA

16. Economical
GDP
0
55000
110000
165000
220000
275000
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
US Food and Beverage Stores GDP (Gross output)
Food and Barege Growth
USA

17. Economical
Interest rate
USA

18. Economical
Exchange rate
USA

19. Social
Financial Concerns for:
1) Students
2) Middle youth
3) Midlifers
4) Later life
USA

20. Technological
Online Shopping Trend
USA

21. New Market
Suggestion
Competition |
Adapatation |
PEST Analysis |
Industry
Brand
Leading Grocery Brand: Walmart, Kroger, Safeway
Leading Discounter: Trader Joe’s, Aldi
Overall, discounters grew by 11% in current value terms.
This was the strongest growth of any grocery channel.
PART 3

22. Industry
-1.2
-1.1
-0.7
1.
1.7
2.8
3.6
4.1
Food/Drink/Tobacco Specialists
Other Grocery Retailers
Independent small grocers
Forecourt Retailers
Hypermarkets
Supermarkets
Convenience stores
Discounters
Sales in grocery Retailers by channel
% value growth 2012-13
USA

23. Brand
Grocery Retailers brand Shares % Value 2013
0.8
0.9
1.1
1.2
1.4
1.4
1.4
1.5
1.5
1.6
1.9
3.
3.3
6.9
25.5
Aldi
Giant Eagle
Trader Joe's
7-Eleven
Albertson's
Food Lion
Whole Foods
Meijer
Super Target
Super Stop & shop
H-E-B
Publix
Safeway
Kroger
Walmart
Grocery Retailers brand Shares % Value 2013
USA

24. Online order
Collect In
store
Place
Promotion
Product
4P Adaptation
Social
network
Promotion
Festival
Promotion
New Market
Suggestion
Adaptation |
Competition |
PEST Analysis | Price
Modify for
US
Private
Label
Clean
Stores
Nutrition
Informatio
n
Friendly
Staff
Organic
options
low price
strategy
suited
to the
US market
PART 3

25. CHINA
New Market
Suggestion
PART 3

26. Biggest Grocery Market CHINA

27. New Market
Suggestion
CHINA
PEST Analysis|
Adapatation |
P
Political
Economical
Technological
E
S
T
Competition |
Social
Stability
Largest Population
Trade partnership
Different business incentives
Entry of WTO
GDP
Interest Rate
Exchange Rate
Specialized service
Safety first
Western-style appeal
Demand for high quality
Perception of western products
Presence of private labels
Huge Internet Usage
Online Business
PART 3

28. Political
Largest Population
Stability on Business
Different incentives and securities to the new businesses
Entry of WTO
CHINA

29. Economical CHINA
Favorable Macro Economic Situation.
High Pace of Foreign Retailers’ Expansion.
Rising disposable incomes.
Increasing China’s retail grocery market.
Urbanization.
Internet retailing.

30. Economical
GDP per capita (current US$)
CHINA

31. Economical
Real Interest Rate
CHINA

32. Economical
Exchange rate
CHINA

33. Social
1) specialized service.
1) Safety First.
2) Western-style appeal.
3) Demand for high quality.
4) Positive perception of western products.
5) Presence of private labels.
CHINA

34. Technological
Huge internet usage.
Consumer Society Begins Online.
CHINA

35. New Market
Suggestion
Competition |
Adapatation |
PEST Analysis |
Industry
Brand
Leading Grocery Brand:
China Resources Enterprise, RT Mart , Wal-Mart
Majority of leading grocery retailers are domestic
companies.
The discounter channel is negligible.
PART 3

36. Industry
Sales in Grocery Retailers by Channel:Value Growth 2014
2009.9
655.7
551.2
246.1
58.2
25.9
3.5
Supermarkets
Hypermarkets
Independent Small Grocers
Food/Drink/Tobacco
Specialists
Convenience
Forecourt Retailers
Discounters
CHINA

37. Brand
Grocery Retailers Brand Shares: % Value 2014
0. 0.5 0.9 1.4 1.8 2.3
RT Mart
CR Vanguard
Carrefour
Lianhua Supermarket
Jia Jia Yue
NGS-mart
Auchan
Wumart
CHINA

38. More…
Dia switches from discounters to supermarkets.
The joint venture of CRE and TESCO proved to be competitive.
Domestic retailers perform better than multinational players.
The increasing growth of high-end supermarkets.
New strategy for lidl, set up a joint venture with RT mart as a
supermarket.
CHINA

39. Keep the
pricing
competitive
in premium
level.
Price
Promotion
Product
4P Adaptation
Adapt
promotional
strategy
Advertise on
TV and
Internet
New Market
Suggestion
Adaptation |
Competition |
PEST Analysis | Place
Local
adaptation.
Premium
private
label
products.
Food
safety.
Locate in
urban areas
Location
with
convenient
transpor-
tation
Online
distribution
PART 3

40. USA
ITALY
New Market
Suggestion
PART 3

41. New Market
Suggestion
PEST Analysis|
Adapatation |
P
Political
Economical
Technological
E
S
T
Competition |
Social
Stability
International relationship
No restriction in EU
Long lasting Lawsuits
GDP
Interest Rate
Customer habits
Customer preference
Logistics
PART 3

42. Political
Stable political regime
Good international relationships
No restriction to the importation and exportation within the
EU (28 countries)
Long lasting and expansive lawsuits
ITALY

43. Economical
GDP per capita (current US$)
Italy’s GDP per capita is $30,200 and ranked at 30 in the world
ITALY

44. Economical
Real Interest Rate
ITALY

45. Social
Unconfident with modern issues, e.g. Internet
Prefer private label products
Young adults (18-29) presents high level of
consumption of energy drinks
ITALY

46. Technological
Mature logistics and transport networks
ITALY

47. New Market
Suggestion
Competition |
Adapatation |
PEST Analysis |
Industry
Brand
Leading Grocery Brand: Coop, CONAD, Selex
Leading Discounter: Eurospin Italia, Lidl
Overall, discounters in Italy have the highest percentage
of value growth at 2.9%.
PART 3

48. Industry
Sales in Grocery Retailers by Channel: % Value Growth 2013/2014
2.9
1.4
0.9
0.1
-0.3
-0.5
-0.9
-1.
Discounters
Supermarkets
Convebuebce Stores
Hypermarkets
Other Grocery Retailers
Forecourt Retailers
Independent Small Grocers
Food/Drink/Tobacco Specialists
ITALY

49. Brand
Grocery Retailers Brand Shares: % Value 2014
7.1
5.1
4.9
4.2
2.8
2.5
2.3
2.1
2.1
1.8
1.6
1.6
1.6
1.5
1.5
Conad
Ipercoop
Esselunga
Coop
Auchan
Eurospin
Emme Più…
Punto Simply
Lidl
Famila
Carrefour
Simply Market
Super A&O
SuperSigma
Crai
ITALY

50. Price
Promotion
Place
4P Adaptation
Public
Relationship
Television
and social
media
Special offer
Promotion
New Market
Suggestion
Adaptation |
Competition |
PEST Analysis | Product
Store location:
Northern and
central region
Pleasant and
clean store
environment
Use logistics
system
Not provide
e-commerce
for now
Product quality
Private label
products
Healthy food
Ready Meals
Reduce baking
section
low price
strategy
suited
to the
Italy market
PART 3

51. THANKS
Group A
Xiaoxi Cai , Shuo Shi, Yuanqin Zhuang, Zhengdong Zhang,
Wing Yan Hung, Farhan Zubair
 BST 248 International Marketing  Lecturer: Dr Stephanie Slater