The future geographical presence strategy of Lidl includes expansions into the new markets such as Brazil, Mexico, Russia and USA. This is an effective market expansion strategy that promises to increase Lidl’s global presence, and at the same time boost the revenues of the company significantly. However, further recommendations related to international market expansion can be made for Lidl, that if implemented would contribute to achieving global aims and objectives of the company.
Specifically, Lidl should also enter into Chinese and Indian markets as well, because the great number of potential customers living in these countries may ensure the greater level of profitability compared to the markets of Brazil, Mexico, Russia and USA.
If the amount of financial resources possessed by Lidl allows the expansion to all of the above named countries than the relevant plans should be devised and implemented. However, if the choice needs to be done between Brazil, Mexico and Russia in one hand, and India and China on the other hand, in terms of international expansion, the preference should be given to the latter group of countries due to the following reasons:
Firstly, the total amount of population living in China and India exceed several times the total amount of population living in Brazil, Mexico and Russia. Moreover, Chinese and Indian population have a similar mindset as German people in terms of associating cheap price of the product with the value, and therefore there are reasons to believe that Lidl’s core strategy of offering low priced products will prove successful in these countries.
Secondly, even though China and India are developing in fast paces, still the average standard of life in these countries are considered to be poorer than the average standard of life in Brazil, Mexico and Russia, and therefore people in China and India may prefer to buy products in discounted process offered by Lidl.
It has to be noted that these recommendations are made only on the basis economic reasoning, and full SWOT and PESTEL analysis should be conducted by analysing the impact of each individual factor to the proposed expansion plan by Lidl management before taking any final decisions regarding their geographical presence strategy until 2020.