Norway is the selected country as the selected country is politically stable in nature in comparison to Mexico Country. The country is highly developed in nature along with modern country with strong kind of economy. The country had strong growth of the different kinds of foreign investments during the last few decades in comparison to the other countries in the market (Baker and Cronin 2015). The economy of Norway has shown robust kind of growth from the beginning of the industrial area and the standard of living is high in nature in comparison to the different European countries in the market.
From the PESTEL analysis, this can be seen and noticed that the political aspects are stable in nature of Norway in comparison to Mexico. Furthermore, this can be noticed that due to the strong political aspects along with different policy reforms, Lidl will be able to expand their business in a proper and positive manner. The international relations are strong in nature in Norway and this will be helpful for Lidl in managing their operations in the respective country in a positive manner. The political system of Norway encourages the strategic planning and provides the necessary data which is essential for the successful expansion program.
Secondly, this can be seen that the economic aspects are positive in nature in Norway wherein the GDP growth rate of Norway is positive in nature wherein the GDP of the country is 39,883.2 crores USD till the year 2017. Lidl will gain huge profitability and revenues in the market in an effective manner as the GDP of the country is huge and this will create positive impact on the business as well (Baker and Cronin 2015). As Norway is prepared in containing towards the economic progress of the different companies which wants ton expand their presence in Norway. Lidl is one such companies which wants to expand their business operations in Norway as there is huge scope for the growth of the company in a positive manner.
Furthermore, the social factors played a major role for the growth of Lidl in the Norway market. It can be seen that Norway is one of the developed nations wherein this can be seen that the rate of unemployment is less and this is efficient in nature for the overall growth of the company in a positive manner. In Norway, this is being noticed that the educational aspects along with the purchasing power of the individuals are high which will be beneficial for the success of the firm Lidl in the respective market as well (Savino, Manzini and Mazza 2015).
From the various surveys, this has been noticed that there are different changes in the cultural aspects of the individuals in Norway such as automation along with innovation in the different check out processes in the supermarkets. This will be beneficial for the overall effectiveness of Lidl and they will gain competitive advantage in the respective competitive market as well.
The technological factors play a major role for the expansion of Lidl in the Norway Market. This has been noticed that there are various factors such as technology transfer wherein the Brick and Mortar model can be applied by the Lidl in order to expand their operations in the respective market (Laufs and Schwens 2014). In the Norway market, there are different kinds of innovations in the different kinds of markets which will be beneficial for the overall success of Lidl and gain more competitive advantage in comparison to the other competitors in Norway supermarket sector.
Additionally, this has been noticed that there is spending on research and development which is one of the major positive aspects and this will be beneficial for the supermarkets in the entire competitive market. As the educational aspects of Norway is strong in nature and the individuals have the power to analyse the technological awareness which is being seen in the market of Norway in a positive manner. From the different surveys, this can be seen that in supermarkets, proper technological innovation is mandatory in nature as this will attract more customers and gain competitive advantage.
Moreover, there are legal factors which are effective in Norway economy and this will be beneficial for the overall growth of Lidl in the respective economy. There are different legal norms along with policies which is inclusive of the health and safety of the employees play a major role in the different organizations as the government of Norway feels that employees are the major part of the business unit. There are different advertising standards which can be used by Lidl in order to grow in the Norway market and this will help the company in trading in a successful manner as well.
Lastly, environmental factors are strongly followed in Norway market in which this was seen that there are different laws of controlling pollution in the market. There are euro emission standards which will be beneficial for maintaining the different kinds of factors which play a major role in managing the operations successfully (Fong, Lee and Du 2014).
The analysis of the structure of the industry is required to be undertaken as this will help in managing the different effective resources for gaining competitive advantage. Therefore, in order to analyse and identify the competitive business environment of Lidl in Norway market, the Porter’s Five Forces Model can be used in an effective and efficient manner which are as follows:
Threat of Substitute Products and Services
The threat from the different substitute products and services is less in the Norway market for the different food items along with medium to high for the different non-food items (Foxall 2014). While expanding their business, Lidl needs to focus mainly on the quality of the products and services which are being offered to the customers in the respective market. As there are very few substitutes available in the Norway market which are highly expensive and quality is high and unique in nature as well, this can be beneficial for Lidl to lower the prices of the different products in an effective manner and this will help them in managing their effectiveness in an appropriate manner as well (Frösén and Tikkanen 2016).
Lidl needs to focus on the differentiating their products as this will ensure that the different buyers see the different products in a unique manner and gain competitive advantage in the market effectively as well. The proper understanding of the needs of the customers plays an essential role in managing the different demands of the customers and fulfilling them as well (Lidl.com. 2018).
Threat of Entry of New Competitors
The economies of scale are difficult in nature in the supermarket industry in which Lidl operates. In Norway market, this can be seen and analysed that differentiation of the product is strong in the Norway market as the customers in the respective market prefer the unique kinds of products and services rather than the standardised kinds of goods. In such scenario, Lidl can take advantage of the respective scenario by taking advantage of the economies of scale of Norway supermarket industry wherein they will be fighting off the other new entrants and this will help them in gaining cost advantage as well (White et al. 2018).
Furthermore, in order to focus mainly on the building of their position in the Norway market, this can be seen that Lidl needs to focus mainly on the innovation along with differentiation of the different products and services from that of the different new entrants. Proper brand image is required to be built by the company in Norway market as this will help them in retaining customers in the market effectively as well.
Intensity of the Competitive Rivalry
In Norway, this can be seen and identified that there are less competitors in the respective market. There are only few competitors in the Norway market in terms of providing the unique services to the different customers (Elenkov 2018). There are different aspects which can be used by Lidl in order to become more competitive in nature. As the supermarket industry is growing at a high pace in Norway market, Lidl needs to focus mainly on the new segment of the customers in winning the ones from the different existing companies.
Furthermore, the fixed costs are high in nature in the Norway supermarket industry wherein this can be a disadvantage for the Lidl supermarket in the Norway market. Lidl can conduct proper market research which will be beneficial in nature in analysing the demand and supply situation effectively and gain more competitiveness in the market as well.
Bargaining Power of Buyers
The differentiation of the product in the Norway market is high in nature and this means that there is huge pressure to purchase at low prices which makes the buyers price sensitive in nature. In Norway market, there are different kinds of buyers who are price sensitive in nature and this makes the bargaining power of the buyers weak in nature (Spanjol 2018). Lidl can tackle the respective aspect in the organization with proper implementation of the innovation of the products along with differentiation of the products in order to attract more buyers. The differentiation of the product along with the quality of the product are essential to the different buyers as this will help them in building strong customer base and build brand loyalty as well.
Bargaining Power of Suppliers
Lastly, there are number of suppliers in the Norway industry wherein there are different kinds of other supermarkets. The different suppliers in the Norway market who are having various standardised suppliers and this is effective in nature in managing the operations in a positive manner (Chernev 2018). In the Norway market, Lidl can purchase the different raw materials from the suppliers at low cost and this will be beneficial for the overall success of the firm. As the industry is essential for their suppliers in the market, Lidl can receive huge benefit from development of close kinds of relationships with the different suppliers wherein the both of them will be benefitted effectively as well (West, Ford and Ibrahim 2015).
The internal environment analysis of Lidl is essential to be identified and analysed in an effective manner which will be helpful in providing various kinds of internal value-adding activities which makes the firm competitive in nature (Proctor 2014).
Lidl is operating in more than 30 countries in the entire globe and this is one of the major aspects wherein the headquarter of the supermarket helps in taking care of the different local stores and the stores are responsible for taking care of the different customers in the market as well. There are different challenges faced by Lidl in order to save paper and the different associates try to create different kinds of aspects which will help them in becoming more successful in the respective approach (Hunt 2017).
Human Resource Management
There are more than 60% of the different managers who are responsible for the different kinds of career development programs. The different employees are being encouraged in an efficient manner and the company strive to gain excellence. The employees are receiving the competitive wages along with comprehensive benefits. There are different benefits which is inclusive of the medical coverage along with leave of absence along with different other scholarship programs (Josephson, Johnson and Mariadoss 2016).
Development of Technology
There are different technologically advancements in the different activities which are being used by Lidl and this makes them one of the most innovative supermarkets in the entire market. The bar codes of the different products which are being swiped in the checkout aisle, this kind of information is directly sent to the different warehouses of Lidl and this kind of Just-in-Time delivery approach helps the company in reducing the overhead costs.
Operations
The main aspect relating to the different operational activities of Lidl is inclusive of recycling approach which helps the different operations in an effective manner. There are different kinds of recycling programs wherein the main encouragement is to provide the different vendors to encourage by reducing the packaging and this will help in reducing the use of the energy (Varadarajan 2018).
Primary Activities
Inbound Logistics: The inbound logistics operations of Lidl are complex in nature and this is inclusive of the different supply of more than hundred of product categories in different stores in the entire world (Banerjee 2017). The economies of scale are one of the major reasons for the creation of value in Lidl and Lidl tries to make the regular investments as this will help in increasing the overall capacity of the logistics so that the economies of scales can be exploited to a large extent. In order to become competitive in nature than the other competitors in the market, Lidl has to rely on suppliers and offers the different customers with different kinds of less prices (Rossi, Vrontis and Thrassou 2014).
Operations- Lidl operates in the retailing sector and there is huge growth in the respective sector during the last few years. In the present scenario, Lidl is operating in more than 30 countries in the entire worldwide which helps them in making them the most effective kind of retail store in the entire market and the operations of Lidl are becoming successful.
Outbound Logistics: There are different distribution centres of Lidl in different countries and areas and the technique of inventory or stock management which is being used by them is then transferred to the different stores which helps them in making them more effective in the different approaches (Felzensztein, Brodt and Gimmon 2018). This helps them in keeping the entire inventory along with costs of transportation low in nature and this helps in eliminating the different inefficiencies and these kinds of benefits are being passed on to the different customers in an effective manner.
Marketing and Sales: The marketing strategy of Lidl helps in attempting in order to associate with the overall brand image with different kinds of products assortment of the different products and due to the prices, which are highly competitive in nature as well. Lidl uses the both offline along with online channels and the main motive of the company to shift their focus mainly on the different kinds of online channels as this will help in increasing the overall sustainability of the company in the supermarket industry (Dennis, Melewar and Mauri 2018).
Service: Previously, this was being seen that Lidl was not perfect in terms of providing proper customer service in the entire market. The main reason was the low pay of the different customer representatives and this has helped them in increasing the more competitors in the market. However, in the present scenario, this has been noticed that the CEO has taken different actions in order to improve the present scenario in order to gain more sustainability in the market effectively as well (Mcdonald 2016).
From the value chain analysis, this can be analysed and identified that the most relevant activities in entering into the Norway market are as follows:
Inbound Logistics- This is one of the aspects which can be used by Lidl in Norway market as the Lidl have their own warehouses and this will be beneficial for them in attracting more customers and this helps them in being more competitive in nature.
Marketing and Sales- The main marketing aspect of Lidl is the customer satisfaction wherein the major aspect is to understand the different kinds of aspects which will be beneficial for the overall firm in the Norway market to become more competitive in nature.
There are various entry modes available for Lidl in order to enter the Norway market which will be beneficial for the overall success of the firm. There are few entry modes which can be taken into consideration are described as follows:
Joint Ventures or Partnership- This is one of the most suitable aspects of the entry mode for Lidl in the Norway market. This aspect can be applied as this will help in overcoming the different ownership restrictions along with cultural differences in an effective manner. There will be huge potential for learning and this will help them in gaining more competitive advantage in comparison to the other competitors (Paley 2017).
In this aspect, the Lidl supermarket has to make very less investment and this can be beneficial for them in becoming more competitive in nature as well in the entire market as well of Norway.With the help of partnerships, this can be seen that the different other companies in the market can provide local knowledge on the different skills and the distribution network which are mandatory in nature for the new entry of the firm in the respective market (Paley 2017).
Franchising- This is the other alternative option which can be used by Lidl in order to enter into the Norway market and gain more competitive advantage in the entire Norway market. Franchising is the type of marketing and distribution in which the franchisor will help in granting to the group of individuals the right of selling the different goods and services to the different customers in the entire market. This can be the other suitable option which can be taken into consideration by Lidl in becoming more competitive in nature.
The main advantage of franchising is to reduce the failure of the business and this will help in establishing proper market share. The financing of the business becomes easier in nature wherein this will be helpful in maintaining proper relationships with the different suppliers and this will help in gaining competitive advantage. However, on the other hand, this can be seen that there are few disadvantages which is inclusive of the different restrictions and there is bad reputation of the company as well. Additionally, this can be seen that there are different kinds of bas reputation and this is inflexible in nature and this will be reducing the different kinds of marketing changes and this reduces the growth of the business (Gereffi and Fernandez-Stark 2016).
From the above suitable options, this can be seen and identified that the most suitable entry mode strategy is joint venture or the partnership strategy by Coop Supermarket in the entire competitive market. Lidl can use the joint venture option in an effective manner which will help in analyzing the different kinds of new insights and expertise which will be beneficial for the overall success of the firm. Furthermore, there will be better resources such as the specialized kind of technology along with capital of Coop will be effective in nature in gaining more competitive advantage as well (Moutinho, Curry and Davies 2015).
Furthermore, this can be seen that both the companies will be sharing the risk and costs and this will be supportive in nature in gaining competitive advantage. The joint ventures can be flexible in nature and this will be helpful in nature in managing the different kinds of aspects in a proper manner. Additionally, Lidl will help in building relationships along with networks and this assists in managing the different kinds of risk of discrimination. The logic behind the partnership of Lidl and the Coop will help in bringing the cultural aspects into consideration and this will be helpful in managing the overall effectiveness.
Additionally, this can be seen and analyzed that there are different kinds of managerial skills which are helpful in being more effective in nature. As Lidl is one of the most effective supermarkets, this can be analyzed that there are different kinds of discount operations which can be helpful for the two supermarkets in gaining competitive advantage in the market effectively (Hamilton-Hart and Stringer 2016). Due to the technological competence, this can be seen that cultural aspects can be taken into consideration by Lidl in relation to Coop which will be beneficial for the overall competitive advantage in the entire market.
Lastly, therefore, this can be recommended that the joint venture is the best suitable strategy for entry of Lidl in the Norway market in an effective manner (Liebl 2018). The main idea of the joint venture option for Lidl to expand their business operations in Norway is to become one of the most successful supermarkets in the entire globe and gain competitive advantage. The joint venture strategy is used by Lidl as this will be proper sharing of the technology along with along with confirming with the different regulations of the government in the market as well.
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