SWOT Analysis of Lidl
Lidl Stiftung & Co. KG is a leading retail chain international company. This German company was founded by Josef Schwarz in 1932. The headquarter of Lidl is in Neckarsulm, Germany. Fruits, Vegetables, health and beauty, fresh meat, wine, beer, bakery, baby products, cleaning and household, deluxe, chilled, flower market, and much more are some important products and services of Lidl. In 2020, the annual revenue of the company was 97.8 billion Euros. Lidl plans to achieve a net sale of 130 billion Euros by 2026. Let’s read the SWOT Analysis of Lidl.
The company has got so many competitors like Boots, Aldi, Kroger, Walmart, Carrefour, Woolworth, Walgreens, Ikea, Amazon, Target, Home Depot, eBay, and much more. In this article, we are going to discuss the SWOT analysis of Lidl in detail. It is a proven strategic management tool that helps to identify its strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are the internal factors whereas opportunities and threats are the external factors.
SWOT Analysis of Lidl
Company Name: Lidl Stiftung & Co. KG
Founders: Josef Schwarz
Founded: 1932, Germany
Headquarters: Neckarsulm, Germany
Parent Company: Schwarz Gruppe, Dieter-Schwarz-Stiftung
CEO: Gerd Chrzanowski (Sep 2020-), Ignazio Paterno (Aug 2019-)
Type: Retail Industry
Sector: Lifestyle and Retail
Tagline: Where quality is cheaper
Unique Selling Proposition: The brand offers quality goods at attractive prices.
Customers: Price-sensitive consumers who have a limited budget for shopping.
Target Consumers: Households
Global net sales: (2021) US$ 1,424.0m
Strengths of Lidl | SWOT Analysis of Lidl
Award-Winning Brand:
In Germany, Lidl is an award-winning brand. Its aim is to strengthen the brand’s name and provide high-quality products. In 2020, the company won the Most Reputable Supermarket Award. They have also won the Cheapest Supermarket Award, and the Fresh Flower Retailer Award of the Year (2017). This shows the brand’s strength in the competitive market.
Own-Label Products:
The company provides a huge range of services and products at its outlets. Lidl sells these products under its own brand name or label. It enables the brand to save costs on products and supply chain expenditures. Hence, it reduces manufacturing costs and the company can generate more profits. It will be good for the company’s profitability and market share. The brand also offers various promotional discounts and deals. All these factors have helped Lidl to maintain its prominent position in the market.
Discounts and Deals:
In Germany, the brand is famous for its discounted offers, promotions, and deals. They have achieved the status of a discounted store. That’s why customers love to shop everyday products from the brand. They offer discounts on high-quality and premium products so that everyone can buy them. It reflects the brand’s commitment to the consumers. The company sells both international as well as locally made products. More than 70 percent of the goods that Lidl offers in the United Kingdom market are derived from British traders.
Robust Network:
The brand has a growing and very large network in the United Kingdom. In the UK, they have got 800 stores and 13 distribution centers. They have a network of more than 11000 stores in the UK and Europe. The company has hired more than 315000 employees to date.
Excellent Customer Service:
The company provides high quality and a huge variety of products to the consumers. Its stores or outlets remain open on the weekends and even on Sundays. This kind of excellent customer service forces customers to shop from Lidl stores.
E-commerce:
In 2018, the company launched the mobile app name “Lidl Plus” and “Supermarket Loyalty Card”. It was such a good move for the company to increase its sales through a digital platform. The company has made significant progress during the pandemic just because of its ecommerce and digital services.
Strong Cash Flow:
The company’s cash flow system is highly robust which enables it to invest in new projects, products, and services. It is one of the major strengths of the brand in the market.
Weaknesses of Lidl | SWOT Analysis of Lidl
- Insufficient Workforce:
As we mentioned above, the company has a huge network of stores across the UK and Europe but they don’t have enough employees to run the business smoothly. The shortage of workforce is one of the major weaknesses of Lidl. It is hard to give the best customer service with limited employees. They need to hire more workers in order to increase their efficiency.
- Scandals and Controversies:
Bad reputation, controversies, or scandals can jeopardize the overall brand image of the company in a matter of seconds. Controversies regarding selling horse meat, poor quality, and employee problems are some weaknesses that should be addressed timely to avoid any inconvenience. Such events or happenings can be bad for the company’s image.
- Supply Chain Problems:
Many shelves of different products like toilet rolls, vegetables, and bread were empty due to the shortage and supply chain issues. Lidl should analyze these factors thoroughly to avoid such issues in the future. They are facing problems in the supply chain. They are not friendly, cooperative, and collaborative with their supply chain partners. For example, Lidl didn’t receive the distribution trucks that were not on time. Moreover, they also have a shortage of truck drivers.
Opportunities for Lidl | SWOT Analysis of Lidl
- Expansion in Europe:
Currently, Lidl is operating in more than 32 countries with a strong network of 11000 stores. It is one of the most famous and fastest-growing retail chain brands in the UK. They do not have a strong presence in Europe. The brand can open new stores in different countries of Europe to diversify its business and reach. They can exploit available resources to gain the highest market share.
- The United States Market:
The company is present in the United States with 300 stores and supermarkets. Lidl is planning to open up 600 more stores in the United States. It will be an excellent move and helps it to increase its brand awareness and sales. Lidl should take benefit of the US market because it is a leading consumer market in the world.
Threats to Lidl | SWOT Analysis of Lidl
- Intense Competition:
It is a fact that the brand is growing at a very fast pace in Europe and the UK. But, the British market is pretty much crowded with so many big players like Sainsbury, Aldi, Tesco, Morrison, and ASDA. They are disturbing each other’s market share and profits by offering more high-quality products at competitive prices.
- Changing Customer Preferences:
The overall political condition of Europe is very volatile after the Brexit deal. This thing has changed the customer preference and shopping decisions. This factor would impact the business performance of the company.
Final Thoughts | SWOT Analysis of Lidl
We have concluded after conducting this in-depth SWOT analysis of Lidl that it is a leading retail chain company in the UK and Europe. The brand should pay attention to its strengths and opportunities in order to mitigate weaknesses and threats. They should develop strong and friendly relationships with supply chain partners and workers. On the other hand, they should offer more discounts and exclusive deals on different products to get the attention of shoppers.
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