1. 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. 2. PART 1 Industry Overview
3. 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. 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. 5. PART 2 Company analysis
6. 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. 7. Lidl Current Market Analysis Lidl: Sales by Market 2013 Germany France UK Netherlands Spain Italy Greece Portugal Poland Belgium Czech Republic Other
8. 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. 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. 10. Aldi Current Market Analysis Number of Aldi Group Outlets 2013 Germany US France Netherlands UK Belgium Austria Australia Spain Denmark Switzerland Others
11. 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. 12. USA ITALY CHINA New Market Suggestion PART 3
13. 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. 14. Political Political Stability Tax policies Employment Law Competition regulation Transatlantic Trade and Investment Partnership
15. 15. Economical USA
16. 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. 17. Economical Interest rate USA
18. 18. Economical Exchange rate USA
19. 19. Social Financial Concerns for: 1) Students 2) Middle youth 3) Midlifers 4) Later life USA
20. 20. Technological Online Shopping Trend USA
21. 21. New Market Suggestion Competition | Adapatation | PEST Analysis | Industry Brand Leading Grocery Brand: Walmart, Kroger, Safeway Leading Discounter: Trader Joes, Aldi Overall, discounters grew by 11% in current value terms. This was the strongest growth of any grocery channel. PART 3
22. 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. 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. 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. 25. CHINA New Market Suggestion PART 3
26. 26. Biggest Grocery Market CHINA
27. 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. 28. Political Largest Population Stability on Business Different incentives and securities to the new businesses Entry of WTO CHINA
29. 29. Economical CHINA Favorable Macro Economic Situation. High Pace of Foreign Retailers Expansion. Rising disposable incomes. Increasing Chinas retail grocery market. Urbanization. Internet retailing.
30. 30. Economical GDP per capita (current US$) CHINA
31. 31. Economical Real Interest Rate CHINA
32. 32. Economical Exchange rate CHINA
33. 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. 34. Technological Huge internet usage. Consumer Society Begins Online. CHINA
35. 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. 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. 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. 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. 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. 40. USA ITALY New Market Suggestion PART 3
41. 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. 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. 43. Economical GDP per capita (current US$) Italys GDP per capita is $30,200 and ranked at 30 in the world ITALY
44. 44. Economical Real Interest Rate ITALY
45. 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. 46. Technological Mature logistics and transport networks ITALY
47. 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. 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. 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 Piu Punto Simply Lidl Famila Carrefour Simply Market Super A&O SuperSigma Crai ITALY
50. 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. 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