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Aldi and Lidl: From Germany to the Rest of the World

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Internationalization of Business

Part of the book series: MIR Series in International Business ((MIRSIB))

Abstract

Within the retail industry, the grocery discount segment has grown in importance during the last decades. Aldi and Lidl are the two leading grocery discounters worldwide. The present case study outlines the internationalization of Aldi and Lidl. Not only market entry strategies but also target market and timing strategies as well as the standardization-differentiation controversy are addressed.

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Notes

  1. 1.

    See Anonymous (2015a).

  2. 2.

    See Anonymous (2014a).

  3. 3.

    White (1995).

  4. 4.

    See Lebensmittel Zeitung (2015a).

  5. 5.

    See Warschun and Schmidt (2011, p. 4).

  6. 6.

    See Colla (2003, pp. 58–59).

  7. 7.

    See Roth (2016, p. 36).

  8. 8.

    See Institute of Grocery Distribution (2011).

  9. 9.

    See Lebensmittel Zeitung (2015c).

  10. 10.

    See Borger (2015, p. 9).

  11. 11.

    See Anonymous (2015b).

  12. 12.

    See Nielsen (2002, 2008) and Planet Retail (2008).

  13. 13.

    See Lingenfelder (1995, p. 298) and Twardawa (2006, pp. 381–383).

  14. 14.

    See Anonymous (2003) and Peitsmeier and Heeg (2004, p. 35).

  15. 15.

    See Dawson (2000, pp. 123–127) and Liebmann and Zentes (2001, p. 259).

  16. 16.

    See Olbrich and Peisert (2004, p. 52).

  17. 17.

    See Lebensmittel Zeitung (2008).

  18. 18.

    See Brandes and Brandes (2015, p. 16).

  19. 19.

    See Brandes and Brandes (2015, p. 11 and p. 16).

  20. 20.

    See Brandes and Brandes (2015, p. 14).

  21. 21.

    See Brandes and Brandes (2015, p. 96).

  22. 22.

    See Lebensmittel Zeitung (2008).

  23. 23.

    See Brandes (2001, p. 28) and Lebensmittel Zeitung (2007, p. 33). In this case study, there will be no further distinction between Aldi Nord and Aldi Süd. Both entities are considered as one company.

  24. 24.

    See Planet Retail (2008).

  25. 25.

    See Anonymous (2017).

  26. 26.

    See Keuchel and Kolf (2016, p. 6).

  27. 27.

    See Planet Retail (2008).

  28. 28.

    See Lebensmittel Zeitung (2007, p. 28).

  29. 29.

    See Anonymous (2005, p. 17, 2014b)

  30. 30.

    See Kolf and Ludowig (2015, p. 1).

  31. 31.

    See Seidel (2015, p. 6.)

  32. 32.

    See Anonymous (2005, p. 17) and Jensen and Schwarzer (2014a, p. 30).

  33. 33.

    See Lebensmittel Zeitung (2008).

  34. 34.

    See Lebensmittel Zeitung (2008) and Schmid et al. (2013, p. 549).

  35. 35.

    See Lebensmittel Zeitung (2008).

  36. 36.

    See Brandes (2001, p. 123).

  37. 37.

    See von Schlautmann (2008).

  38. 38.

    See Dagens Næringsliv (2008).

  39. 39.

    See Biehl (2006).

  40. 40.

    Translated quotation that appeared in VG (2007).

  41. 41.

    See Jensen and Schwarzer (2009, p. 64).

  42. 42.

    See Anonymous (2010) and Jensen and Schwarzer (2012).

  43. 43.

    See Planet Retail (2008).

  44. 44.

    See Brestel (2005, p. 24).

  45. 45.

    See Anonymous (2004, p. 16).

  46. 46.

    Martin Bailie as cited in Creevy (2008).

  47. 47.

    See Hickmann (2008); Stock (2004); Van Den Steen and Lane (2014, p. 2).

  48. 48.

    See Comtesse (2017) and Heilmann (2008).

  49. 49.

    See Aldi (2016) and Ough (2016).

  50. 50.

    See BBC (2014).

  51. 51.

    See Rudolph and Meise (2012, p. 147).

  52. 52.

    See Anonymous (2011a), Hein (2012, p. 14), Jensen and Schwarzer (2014b) and PwC (2012, p. 21).

  53. 53.

    See Anonymous (2012).

  54. 54.

    See Anonymous (2013).

  55. 55.

    See Anonymous (2016).

  56. 56.

    See Euromonitor (2016).

  57. 57.

    See Anonymous (2014b).

  58. 58.

    See Jensen and Schwarzer (2014a).

  59. 59.

    See Anonymous (2011b).

  60. 60.

    See Anonymous (2011a).

  61. 61.

    See Anonymous (2014c).

  62. 62.

    See Seidel (2015).

  63. 63.

    See Anonymous (2014d), Hielscher (2015) and Louven (2005).

  64. 64.

    See Anonymous (2014e, p. 18).

  65. 65.

    See Anonymous (2015c).

  66. 66.

    See Kontio (2013).

  67. 67.

    See Preuß (2017, p. 2).

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Correspondence to Stefan Schmid .

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Questions

Questions

  1. 1.

    Mintzberg states that, in addition to planned strategies, we can also find emergent strategies.

    1. (a)

      What evidence do you observe for the emergent character of strategies in the case of Aldi and Lidl? What reasons may be behind the fact that not all of Aldi’s and Lidl’s strategies were carefully planned?

    2. (b)

      Do you believe that Aldi and Lidl would have been equally or even more successful if they had planned their strategies more carefully? Please justify your reasoning.

  2. 2.

    Porter distinguishes between cost leadership, differentiation and focus strategies.

    1. (a)

      How would you characterize Aldi’s and Lidl’s strategies in terms of Porter’s strategy options?

    2. (b)

      What are the advantages and disadvantages of Aldi’s and Lidl’s strategies compared to other strategic alternatives (in terms of Porter’s strategy options)?

  3. 3.

    One option within internationalization strategies is greenfield investment. Although Aldi and Lidl entered some foreign markets via acquisitions (see, for instance, the acquisition of Hofer by Aldi in Austria in 1967), they mostly opt for greenfield investments.

    1. (a)

      Please discuss the reasons why Aldi and Lidl are choosing greenfield investments as their primary market entry strategy.

    2. (b)

      If you were a member of the Aldi or Lidl top management team, would you recommend alternative market entry strategies in the future? Please justify your reasoning.

  4. 4.

    Both Aldi and Lidl are active in the discounter segment of the retail market. Simultaneously, there are similarities and differences between the two firms.

    1. (a)

      Please establish an international SWOT analysis for Aldi and Lidl. To simplify your analysis, please focus on the home market of Germany and two other foreign markets. You are invited to use the information from the case and additional sources.

    2. (b)

      Please illustrate the similarities and differences of the two firms based on your SWOT analysis.

    3. (c)

      Based on your SWOT analysis, which company (i.e., Aldi or Lidl) will, in your opinion, be more successful over the next 10 years? Please use several criteria that help you define and operationalize success.

    4. (d)

      What recommendations would you give Aldi and Lidl with regard to their strategic development for the next 10 years? Please elaborate in detail on corporate, business and selected functional strategies.

Please note that, for some of the questions, the case study is only a starting point. You will have to search for additional information to answer the questions.

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Schmid, S., Dauth, T., Kotulla, T., Orban, F. (2018). Aldi and Lidl: From Germany to the Rest of the World. In: Schmid, S. (eds) Internationalization of Business. MIR Series in International Business. Springer, Cham. https://doi.org/10.1007/978-3-319-74089-8_4

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