6533032
Description
Mind Map by David Evans, updated more than 1 year ago
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Created by David Evans
about 8 years ago
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Porter's Five Forces
Model on Lidl
- Threat of substitution
- Competitors prices on an
average are not as cheap.
- No loyalty rewards
for customers.
- Other competitors in the market
offer customer loyalty cards and
bonuses to help increase
number of returning customers.
- Rivals such as Tesco and Asda do a lot of advertising
compared to Lidl. (see appendix 8).
- No charges to
customers to switch
supermarkets to shop
from.
- Other rival companies offer many more
complimentary goods than Lidl's which can lead to
many customers to switch supermarkets.
- Competitors prices on an
average are not as cheap.
- Supplier power
- Lidl is a power
company which
automatically makes
the supplier
powerful.
- Lidl is currently a star in the boston matrix meaning it has a high
market share with the potential to become a cash cow in the future.
This is because they still have an opportunity to grow their company.
However because of this other competitors may use the same strategy
as Lidl which gives suppliers more power.
- Lidl is loyal to british
farmers and will continue
to support them
- The suppliers are able to cope with
the high demand at cheap prices.
- Lidl is a power
company which
automatically makes
the supplier
powerful.
- Threat of new entry
- Already a high amount of
competition in the market.
(see appendix 3).
- Potential competitors would need a lot of
capital to invest to begin with in order to pay
for rent, rates, stock, employees and also time
to allow the business to be recognised to
become profitable.
- All competitors are in the middle of a price
cutting war which makes the market share
unappealing to potential new companies.
- Lidl is showing other potential rivals their success by opening up more and
more branches in the UK. Armstrong (2016) claims "Aldi and Lidl are plotting to
open more than five times as many new supermarkets as their 'Big Four' rivals
combined."
- Already a high amount of
competition in the market.
(see appendix 3).
- Competitive rivalry
- Aldi have a similar setup and
strategy by buying fewer
ranges in order to reduce COP.
- No short term
market share
growth possibility
unless at the
expense of a rival
company.
- Majority of competitors have different
strategies on how the business is run.
For example Tesco buy stock
consistently which gives them a better
reputation towards the supplier,
whereas Lidl's use the JIT approach.
- High amount of competition in
price in order for supermarkets
to maintain demand.
- Aldi have a similar setup and
strategy by buying fewer
ranges in order to reduce COP.
- Buyer power
- Easily able to compare prices and quality of their products
with competitors online, for example the use of
www.supermarkets.co.uk
- Lidl have many customers which
makes them have less influence on
the business.
- Nothing is stopping the
customers from shopping
elsewhere.
- Easily able to compare prices and quality of their products
with competitors online, for example the use of
www.supermarkets.co.uk
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