Aldi and Lidls Market Strategy: A Comparison

Aldi and Lidls Market Strategy: A Comparison Aldi and Lidl are both successful grocery retailer stores that started off their business in their home country Germany and ended up expanding their markets to almost all parts in Europe. In case of Aldi, they even have their stores in Australia and Unites States. They both had the perfect market strategies for their grocery retail store that helped them increase their profits on a larger scale. While Aldi followed a Hard discount strategy, Lidl followed a Soft discount strategy. Because of their huge success, the companies are now trying to enter the markets of Russia, Croatia, Mexico, Brazil etc. ALDI: Aldi is a German grocery retail store that offers HARD discount i.e. they sell less number of items (store brands) at a very cheap price which increases their profit. Aldi was founded by Karl and Theo Albrecht in the 1960s. Aldi is short name for Albrecht Discount. They had a simple strategy of increasing their sales volume and profit by subsidising the prices of the product. They had a minimalistic approach wherein they did not spend much on the store design, customer care or advertisement. They sold their products in warehouse like stores. By decreasing the prices of the products, they were able to sell more number of products and hence larger profit. Their target consumers were the average budget consumers who prefer quality products at lower prices. They followed the theory of economies of scale. If we were to compare Aldi and Lidl in terms of their sales volume, Aldi could be found to have more market in Germany than in a foreign market. Lidl could be seen to have more sales volume in foreign markets than Aldi. Aldi has now reached market saturation on Germany and is now looking forward to expand their markets further and target a different audience. They had a turnover of  £2.76bn in 2011 (The Grocer, 2011). Aldi has over 9000 stores all around the world now. LIDL: Lidl is also German grocery retail store that offers SOFT discount i.e. they sell larger number of items that include both branded products and store products at lower prices. Lidl was opened in 1973 by Dieter Schwarz in Ludwigshafen, Germany. Lidl entered France in 1988. They now have stores almost all over Europe and also in some parts of South America. COMPARISON- SALES VOLUME: If we were to compare Aldi and Lidl in terms of their sales volume, Aldi could be found to have more market in Germany than in a foreign market. Lidl could be seen to have more sales volume in foreign markets than Aldi. REASONS WHY ALDI AND LIDL CHOSE GREENFIELD INVESTMENT STRATEGY: Greenfield investment strategy is where a company buys a land and builds its store from zero level. Aldi had a strategy of buying lands in remote districts or in regions where the cost of property is low so as to spend minimum and gain maximum. Greenfield investment strategy helps the company to integrate with the culture of a foreign market i.e. if they are targeting a foreign country. Companies could even get tax subsidies from the foreign country they are trying to penetrate on the basis that they provide employment to the locals there. Employing locals is even more beneficial as they help in better understanding of the culture in the foreign land which could in turn help in adapting and modifying their products and strategy according to the cultural differences. Aldi and Lidl were able to adapt better to the foreign markets because of this strategy as it helps in a better understanding of the market in terms of customer preferences and tastes. This strategy had a positive impact on emerging markets as there was generation of employment, exchange of knowledge and increase of living standards. Hence, the Greenfield investment strategy was beneficial to Aldi and Lidl as their primary market strategy while entering a foreign market. TO IMPROVE ITS IMAGE OF AN UNDERCLASS DISCOUNTER IN THE U.K AND IN SWITZERLAND, WHY ALDI ENLARGED ITS PRODUCT RANGE AND OFFERED A HIGHER SERVICE LEVEL TO CUSTOMERS? PROBLEMS AND RISKS ASSOCIATED: Aldi had to depart from its hard discount strategies it had back there in its home country Germany. Of course they had to come up with new strategies to survive and to make profits in the new foreign market. When they entered the UK and Switzerland, they had to face competitions from the local brands already situated there. Also in UK, cheaper goods were looked upon as low in value and quality. Hence Aldi had to increase the prices of goods so as to attract the consumers and ensure that they sell quality products. Only recently they increased the price of milk again in September, 2012. They did this so as to breakdown the image of an UNDERCLASS discounter. Prices in the UK and Switzerland are almost two times of that in Germany. Aldi also did some advertising campaigns to attract customers. In UK they started offering wide options of meat products. The sales have doubled in the UK as of 2012 survey. Aldi also had to adapt their products to suit the customer needs. They did not sell G erman products; instead they relabelled them in Switzerland and also sold regional products to satisfy the customer demands and tastes. This shows the importance of having and understanding strategies to be a winner in a foreign market. RISKS- Since Aldi is breaking way from its image of a hard discount provider and changing its strategy to survive the foreign market by increasing its price range, it could lose its customers to Lidl. In foreign markets like the U.K and Switzerland, Aldi no longer stands as an example of hard discount strategy. They spend money on customer service, advertising campaigns, store building and designing following which increase the selling price of the goods. They now sell quality products at high price. They have started un-using the very basic strategy- selling at low prices for increased profits-for which they were known. Because of their changed image, they are at risk of losing their customers. INTERNATIONALISATION OF LIDL- FAST PUSHING AND ALDI- SLOW AND WELL- CONSIDERED? REASONS? It is true that the internationalisation process of Lidl is fast and pushing while that of Aldis is slow and well considered. Aldis slow and considered approach is quite evident from the fact that it enters a foreign market with a gap of around 10 years. Aldi initially operated in Germany only. It moved to Austria only in 1967 i.e. seven years after its opening and success in the home country Germany. After ten years in Austria it entered the US market. This shows that Aldi first studies the foreign market, the scope for their growth, identifies the target consumers and come up with strategies before venturing into a foreign market. As the case study mentions, in Switzerland, Aldi first targeted German speaking regions of the country following which they penetrated their expansion. Aldi is quite cautious before venturing into a foreign market as clearly shown by the examples above. Lidl on the other hand is quite fast in their approach. They follow a sort of trial and error method. This could be seen by the way they entered Poland and Norway. At times it worked for them, but at times it has also led them to huge losses (for e.g. in Norway) In 2007, when they expanded to Poland, they were able to make huge profits as compared to the rival Aldi. This is because when Lidl entered Poland, there were lesser or no competition in the market and they were able to get a fresh start and attract customers with offers that were new for the Polish customers. On the other hand, Aldi had to face more competition as by the time they entered, the markets had matured and saturated with more competitors. But this kind of adventurous venturing could also be harmful at times for example, in Norway in 2008; Lidl had to sell its stores to the local competitor Rema due to the failure of their strategies. First of all Norway has a unique population density spread and a different geographic location. Because of this the logistics and implementation became costlier and led to losses. The location of the shop was also seen as wrong by Werner Eversten (Head of Lidl, Norway). Also there were some internal management problems like, the top management officials kept changing which in turn affected the strategy and planning process of the company. ADVANTAGES AND DISADVANTAGES OF ALDIS STRATEGY. WHICH STRATEGY DO YOU RECOMMEND TO LIDL IN TERMS OF ITS GEOGRAPHICAL PRESENCE UNTIL 2020? Aldi is known for its well-considered approach. It still has more foreign markets other than in Europe as compared to Lidl. Advantages: Since they go for deep study of the market, the strategies required and the local demands of a foreign market, it works positively for the company as they are able to adapt to a foreign market in a better manner. Venturing into markets like the US added to their profits because they were first to offer discounts and they experienced the First mover advantage. They had fewer competitors there. They work on the theory of economies of scale and penetrate into new markets where this is a new and a strategy never heard of. They avoid risks by carefully studying and analysing the market. DISADVANTAGES: When Aldi entered foreign markets, it had to change its strategies to adapt to the customer demands of that country. As a result it had to bring in customer service schemes, advertisements, pamphlets, store designing which increased their expense. They had to increase their prices to cover for this thus shifting from their hard discount strategy. Due to this they could lose the customers in the lower income strata of the society. They will have to face the common and obvious risk of internationalisation i.e. understanding cultural differences (like in the UK) and facing the local competitors. Strategy for Lidl: Lidl has always entered foreign markets in haste. It never considered the market demands or analysed the scope or the strategies. This could do harm to the company like it did in Norway where they had to sell off around 50 stores. They open a large number of stores simultaneously in a foreign environment which is quite risky and could lead to huge losses and debts. They could have analysed more on the cultural aspect and customer tastes/preferences of the people that exist in a foreign market. They could open a few outlets initially to study the level of acceptance of their store in the foreign market and then go for gradual increasing in number of stores. They could also analyse a foreign market before they enter so as to adapt well into the market and have better strategies. They could consider the location and geography of the country before they venture to avoid huge risks. Lidl could also consider entering emerging markets like India, China, and Brazil where there is a huge market for discounted items. If they could have a well-planned strategy before they enter these markets, they could make huge profits. For example, in India, there is a large young population who are attracted to foreign store outlets and also middle-class population that prefer items in low prices. There is a promising and potential market for Lidl in India and also in China. They could have to deal with the cumbersome regulations by government but with perfect implementation of strategies, they could be a huge success there.

The Internet :: essays research papers

The Internet Imagine life today without the convenience of the Internet. People would actually have to get up out of their comfortable chairs, get in their cars, and drive to the store, the library, the mall, or wherever they wanted to go. Wouldn't that just be a shame? But the Internet has not always been used for the entertainment, in the beginning it was only used by military personnel for communication reasons. In fact, if you were not a computer expert or a genius, you could not even begin to figure out the very complex system known as the Internet. The Internet is the child of several marriages: The government to science, and the telecommunications industry to the computer and software industry. The Internet was the result of some visionary people in the early 1960's who saw great potential value in allowing computers to share information on research and development in scientific and military fields. In, J. Licklider, proposed a global network of computers, and moved to the Defense Advanced Research Projects to develop it. One of Lickliders colleagues, Lawrence Roberts, came close to connecting the first computers in California and Massachusetts, but because the telephone's circuit switching was inadequate the connection was unable to be established. It was not until 1966 that the first Internet was actually conceived. Originally, This project was only meant to be a small network connecting super computers amongst researchers in the United States. This network became known as the Advanced Research Project Agency(Net) or the ARPANET. The innovators of this network wanted to see the ARPANET connect more than just super computers, they wanted people around the United States to be able to use the ARPANET. In 1967 these innovators went to the Association of Computing Machinery Symposium and presented papers to legalize their endeavors. In 1967 they were approved by the ACMS to continue their work, and in 1968 the first software and networking hardware were designed, and by 1969 the ARPANET had connected four universities in the southwestern United States. These schools included: Stanford Research Institute, UCLA, UC Santa Barbara, and the University of Utah. By 1971 fifteen more schools had been added to this network including a university in Hawaii. Although the Internet was constructed for military purposes it was slowly moving away from those roots. The network was becoming so commercial that librarians began automating and networking their catalogs.

Global economic development Essay

If Gwlad want to achieve any economic growth and attain a strong economy as its neighbors in Western Europe it must carry out detailed SWOT analysis. Such an analysis involves determining the country’s strength, weakness, opportunities and threat. One of the major strength that Gwlad enjoys as a country is it strategic location. Being close to the most developed nation in the world then it will be easier to access and export goods abroad to a market which is willing and able to buy. The second strength is the relative peace that the country enjoys and that of the surrounding nation which means that foreign investors will be willing to set up businesses (Anderson, 2007). One of the main weaknesses in this country is low level of industrialization which will translate to low out put and therefore less export compared to other country in the surrounding. Also with a population of just 3 million people it means that the aggregate demand is very low and for multinational who want to venture into such country and market their produce, the low demand expected for their products may discourage them. Furthermore this country seems to be expecting poor infrastructure and this raises the cost of doing business which discourage foreign direct investment (root 2006). The low level of services may be another hindrance to foreign direct investment. Foreign investors Global economic development 2 values a strong financial system that is able to allocate capital efficiently, mobilizing saving, monitor firms, share and diversity risk with the low level of GDP the consumers’ purchasing power is weak and therefore this further reduces the aggregate demand and output levels in the country. Also the country relies on few sectors to support the economy and there is a need to expand on such areas (Carroll, 2006). One of the major threat that the country faces is competition form rivals who are well established and their industries have become stable such that they are able to supply goods in the global market at low cost. Secondly since the country is not a member of European Union then members may impose both tariff and non tariff barriers to trade from goods exported from Gwlad which will increase the prices of good exported on members country. High prices will discourage consumers’ consumption of such goods which will ultimately reduce export and affect the country’s balance of payment. The country should take steps to proceed with privatization of most public corporations since such move encourage foreign direct investment and also improves on transparency and good governance of such companies (ridout, 2005). Since the financial system play a pivotal role on the growth of an economy the government should implement policies designed to streamline the sector. To encourage investment in the country then it is also vital to revise its taxation policies and develop a scheme geared towards benefiting foreign business. Entry of multinationals in the domestic market have some adverse effects in that some of the domestics firm are not strong enough to compete favorably with foreign firms such that they require protection from the government. Therefore the government Global economic development 3 should develop policy geared towards protecting domestic firms and also protecting capital flight which mostly affect the balance of payment of the country if not taken into consideration. To ensure that employment level in the country rises and that multinational does not take advantage of lack of employment policies to bring in expatriate even in areas where local can work then labor policies should be drawn which includes issues of minimal wages to be paid. Regional trading blocks such as the EU and others aid international trade by reducing or eliminating both tariff and not tariff barriers to trade therefore incase Gwlad want to participate more in the global market then it should realign its foreign policies which will enable it to be accommodated in such trading blocks. Active signing of both bilateral and multilateral agreement is necessary in improving penetration to foreign market thereby improving on export which translates to a higher GDP (melchet, 2005). CASE STUDY 2 Though strategic location and the issue of wages rate are considered by a foreign investor in determining whether to invest in a certain country or not, there are other major factors which are first considered. The availability of energy and associated cost are given priority in manufacturing industries since energy cost comprises a huge percentage of manufacturing cost hence one of the main determinants in making investment decision. The level of infrastructure is also considered by business. The possibility of growth and political stability should also be an integral part of such a marketing strategy since these two factors will determine whether a business will grow in foreign market. Through most of the study conducted it has also been proved that vibrant financial system Global economic development 4 also plays a major role in encouraging FDI (zedillo, 2005). On marketing Gwlad I would include such issues as tax system which benefit inventors e. g. tax allowance on investment. To increase foreign income from tourism then issues such as beautiful scenery and variety of wildlife have to be included. Further more technology play a major role in global market and therefore a mention of the technological achievement and possible advancement in technology should be included in the countries marketing strategy as firms currently rely on technology in performing it core business. Case Study 3 Technology advancement have led countries like china and Japan to be the most industrialized and leading exporters in the global Market. Consequently their economy have grown and a country like china with a population higher than the whole of Africa have been able to support its citizen and even offer loans and grant to other nations. Though technological advancement is key to economic development it has to be matched with good governance and visionary leaders who are able to inspire their people to reach new height (Polanski, 2004). In developing the economic policy there are others sectors which should be considered. This includes, health, financial sector which includes among other banks, insurance market, and the capital market and aerospace and automotive sectors in the transport industry. Case Study 4 One of the major strength of developing domestic companies is that it protects capital Global economic development 5 freight which adversely affects the balance of payment and the exchange rate. Domestic companies mostly employ people from within the country which reduces the level of unemployment. The income generated by domestic firms is usually re invested back thereby improving in economic growth. Some of the other income which is distributed as dividend to the owner increases the level of aggregate demand and saving levels due to increase in disposable income. Where aggregate demand increases business will be forced to produce more goods which lead to their growth and expansion (McDonnell, 2003). As saving levels increase businesses will have available capital for investment and through the multiplier effect where investment increase the GDP will also increase therefore accelerating the economic growth of the country. If steps are taken to develop domestic companies then they may grow to a level of being multinationals which will generate foreign income to the country. One of the major threats in developing domestic companies is that in case of harsh economic condition they may not withstand and therefore collapse. There are also possibility of political interference in the management and operation of such firms. Due to the limited fund available it may not be possible to avail all the required capital for expansion which means that such business will be operating below capacity and there will be under utilization of resources. Further more the economy can grow at a very low rate if only the domestic business are relied upon to accelerate growth. Lack of competition will be another weakness in that business will not improve on core area of performance such as technology therefore products will be of low quality and higher Global economic development 6 price with inability o compete in global market. Where competition lack then there is low level of creativity and innovation in products and service development therefore the economy will lag behind (Coparosa, 2004). Where the country is able to attract foreign direct investment then it is able to improve on technological advancement since such investors transfer technology to the host country. Further more since the country is experiencing a capital rationing this foreign firms do not require any form of financing from government and the funds available could be used to develop other sectors where foreign companies are unwilling to invest. Furthermore this foreign firm introduces competition which forces business to produce goods effectively and efficiently. The major threat of encouraging multinationals to invest in the country is that they can kill local industries incase where such firms are not able to compete favorably. Some of the multinational which occupies a greater stake in the economy sometimes dictate or influence the policy made by government to their advantage since where e government fail to comply they threaten to withdraw. One of the main weaknesses of using FDI is the issue of capital flight. Most usually send the profit generated from its operation back to it parent company which adversely affect the economy. However such businesses are able to sustain harsh economic condition and also improve the level of infrastructure in the host country. In using combination strategy the government ensures that domestic firms grow while at the same time attracting foreign direct investment which steers the economic growth. There should be a balance between protecting domestic firms and maintaining Global economic development 7 environment which enables foreign firms to compete fairly with domestic firms (Roca, 1983) Due to shortage of funds that the country experience and other benefits that accrue from having FDI it is advisable that the country employs a combination of strategy if it aim to achieve faster economic development. Case study 5 In persuading multinationals to develop local supply chain then the country have to change policies on taxation of this foreign firms. Issues such as tax allowance on investment can encourage such multinational to set up business to take such advantages of allowance. Also policies that streamline the financing system are also important since the financial system is a factor considered by multinational before venturing into any market. To encourage multinational to undertake research and development in the country then the country should have a well designed policy concerning copyright, trade marks or use of intellectual property. Also where commercial services such as advertising, local research firms and professional service are established and well regulated then multinational can be motivated to use such services. Furthermore policies concerning regional integration are important since it assist business to supply it commodity to other international market without barriers to trade both tariff and non tariff therefore improving on it competiveness in the global market. In addition the transport system is necessary for efficient operation of any supply chain therefore policies should be designed to improve such systems. Global economic development 8 CASE STUDY 6 Where a country is a member of the EU then there is no obstacle on free movement of goods, people and capital therefore the country can easily market and export its goods to members countries thereby improving on its balance of payment. Through the European social fund then the country will be able to improve on its level of employment thereby raising the standard of living of its citizen. The creation of European investment bank will facilitate the economic expansion of the country through creation of new resources. The EU has also developed a well established system of ensuring that competition is fair in the common markets which will therefore means that weak members states such as Gwlad are not exploited or taken advantage of by other strong and developed nations. However being such a member of EU then you have to adopt a common custom tariff and common commercial policy towards non members which may therefore reduce the country aggressiveness to participate in the global market. Countries such as China, Brazil and Australia are the new fastest growing economy in the world hence they provide a ground on which new market can be found. Further more bilateral and multilateral agreement with such country can be more beneficial than joining a trading block for a country with a weak economy (godison, 1988). For a country like Gwlad which need to achieve faster economic development it need to develop free trade agreement with this growing economies as they present a better opportunity for growth than a trading block. CASE STUDY 7 Global economic development 9 One of the merit of having a cluster development policy is having a balanced economy in that you do not allow foreign firm to dominate the local market but also give chance for domestic business to grow and reach a level at which they can compete in the global market . having both local and foreign firm present multinational from influencing government policy with threat to with draw since their position will be taken up by local firms. One of the problems inherent in such a cluster development policy is development of policy which attracts foreign entity while at the same time ensuring protection to domestic firms. The best option of organizing sector development is having specific policies that take special need of each sector rather than general policies which just give a general outlay instead of specific guideline for sector development (madon, 1997). CASE STUDY 8 As the company is ready to employ 30,000 people this will be a great boost to the economy as it will reduce the level of unemployment and ultimately increase the GDP. However where foreign suppliers are contracted to supply good rather than local suppliers this will lead to loss of business and capital flight from the country. Furthermore the demand by this firm that the country liars with the host country of these suppliers to request for a tax break may be an added cost to the country as they may in return ask for other favors which may hurt the economy. The government should agree to give research and development grant but not succumb to demand of allowing foreign supplies to be contracted as this will erode most of the benefit generated. Global economic development 10 References Anderson, AT 2007, ‘Developing m-services: lessons learned from the developers perspective,’ Communication of AIS, VOL. 2007, issue 20. Carroll, M 2006, ‘An interview with Prime Minister Lee,’ Institutional Investors, vol. 40, issue 9. Caporaso, J 2004,’Dependence, dependency, and power in the global system: a structure and behavioral analysis,’ International Organization, Vol. 32 Issue 1. Emerging Markets Debt Report 2000, ‘Political risk: Thumbs up for Brazil, Stormy Clime in Vennie,’ Vol. 13 Issue 4. Godison, N 1988,’London’s place in the global securities market,’ International Affairs, Vol. 64 Issue 4. Madon, S 1997,’Information-Based Global Economy and Socioeconomic Development: The Case of Bangalore,’ Information Society, Vol. 13 Issue 3. Melchet, L 2005,’The Age of Environmental Impasse? Globalization and Environmental Transformation of Metropolitan Cities,’ Development & Change, Vol. 36 Issue 5. Global economic development 11 McDonnell, I & Lecomte 2003,’ Public Opinion and the Fight against Poverty,’ DAC Journal, Vol. 4 Issue 2. polenske, K 2004,’ Competition, Collaboration and Cooperation: An Uneasy Triangle in Networks of Firms and Regions,’ Regional Studies, Vol. 38 Issue 9.

The Effects Of Multiple Interventions On Infants And Young...

In this day and age, multiple interventions are being implemented in order to address the various attachment-related problems that infants and young children experience due to the separation from their caregivers. It was previously mentioned that there was a new area of speciality called infant mental health which has a particular take on attachment between a caregiver and child. They mainly focus on analyzing the support that these children have available to them such as family, social, and emotional. One of their primary focuses for intervention is infant-parent psychotherapy in which the emotional exploration of the parent toward the child is done in the room with the child (Weatherston 2000, 4). Infant mental health specialist might be useful to both foster parents and the children, however, it is mainly aimed at women who are having either postpartum depression, an emotional reaction due to previous pregnancy trauma, or even premature children. There are only a few micro related interventions, therapy is the most popular form. Children develop trauma and PTSD like symptoms due to the separation(s) they experience at a young age. There is a big emphasis put on caregivers being aware of PTSD symptoms so that the child can be linked to the appropriate treatment resources which are the first steps in helping the child to manage and cope with their symptoms (Hieger 2012, 3). In therapy there are two main evidence base treatments that are useful for traumatized children.Show MoreRelatedThe Attachment Of Children And Their Influence On Children1686 Words   |  7 PagesAvoidant Attachment in Children Parents are a vital factor in the development of their children. Many parents fill various roles as teachers, playmates, caregivers, and disciplinary figures; but one of the most important roles that a parent can hold is that of an attachment figure. 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