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Aldi & Lidl

In: Business and Management

Submitted By GoldenChris
Words 1159
Pages 5
Aldi and Lidl: International Expansion: Case study

Answer 1
Greenfield Investment strategy is associated with companies expanding its business outside its national borders. Greenfield investment is one such example where the company sets off in an effort to establish its business operations from the scratch. in recent years it is evident that the strategy of these two companies has tilted in favor of the Greenfield investments.
There are various factors responsible for both Aldi & Lidl in choosing Greenfield investment as a primary market entry strategy.

Some of these factors are as mentioned below: Degree of freedom:
Greenfield investment involves setting up business in the manner as perceived by the investors. They are free to choose their own suppliers, channel of distribution and so this freedom allowed the two companies to change required strategy whenever required in order to adapt to different market conditions in different countries. This strategy involves few rules, regulations, licensing issues that allowed the company to cash in on the brand name, which means ability to attract new customers with relatively low costs. Resource & efficiency: Since Germany had already been exploited, the companies¶ seeked for ways of acquiring resources at much lower rates. So by choosing this stategy , , would help them to compete in the markets with major supermarkets and hypermarkets as they could drive down the costs of products that would lead to attracting more cunsumers loyalty .
This could enable them to maximize their market share.

Other Factors:

Political developments: the end of communism 1990¶s allowed for privatization and expanding their business in international fields had become much easier as a result,.
Technological aspects:
Developments in technology over the years had made it possible to reduce the time and effort for...

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