Introduction

LIDL Stiftung and Co.KG is an international supermarket chain that was founded in Germany and currently operating more than 10,000 stores across the Europe and United State. In order to increase the market share and providing updated consumer service the company is planning to execute a hybrid model for their supermarket chains where both online and offline merchandising activity will be executed. However, to make these changes through incorporating nationwide online shopping and delivery services, a significant modification in the current business model will be required. In order to evaluate the required changes the Soft System Methodology by George Pólya will be used in this section.

Essential components of LIDL’s operation within the UK

LIDL has opened its first store in UK in 1994 and after that it has consistently growing in the supermarket chain industry. Currently in UK, LIDI has 800 stores. Alongside with discount supermarket to grow within the industry LIDI has launched several other business across the Europe including United Kingdom. The value of LIDL within the customers is that it is a discount retail chain, where the price of the products are set by setting additional discount on the original price tag. It means that the customer can buy products from LIDL in lower price than the original price. LIDL UK is a well-known market chain within the lower to middle economic population of UK. In October 2009, LIDL has linged LIDL movies that are the online rental service for DVDs. In 2020 LIDL has launched its bakery business named LIDL Bakeries across the Europe including UK. In the month of August in 2013 the UK division of LIDL has launched an online photo service that for printing photos and photo gifts with its conventional method of discounted price.

2 Recognising the problematic situation of LIDL UK 400

LIDL is currently one of the top 5 supermarket chain and one of the most renowned discount supermarket chain across the Europe. However, in UK the grocery market share of LIDL is less than 5%. Recently the company is facing a huge challenges because of the competitive market sharing with Aldi.

3. Evaluation of the Problem Situation

In order to implement the hybrid model LIDL has to face some major issues in infrastructural, operational and human resource related factors. In order to identify the problem that can cause after implementing the Hybrid model can be identified through using the service gap model. The service gap model enables to find the major gaps between the providers and customers. While implementing the hybrid model the Gap 5 of the Gap model may become major issue in this case. Because of having online exposure within the consumers and because of the low experience of this organisation in the online e-commerce platform marketing, the consumers can perceive the service in a way completely different than the company might be trying to present. Equally the management perception might also become completely wrong due to poor market research and investigations within online platform. Management of LIDL can also miss-understand or misinterpret the consumer expectation due to lack of information. Hence, Gap 1 might become a major issue. LIDL does not have any experience of shipping and delivery services. Therefore, for online purchasing and delivery facility LIDL might fail to operate the service delivery operations correctly because of lack of experience, which can also lead to competitive disadvantage. Not only in case of on-location delivery, in online purchasing and transaction facilities the service of LIDL might fail, while causing a huge destruction of market reputation. Hence the Gap 3 of Gap model of Service quality is also a major issue for implementing hybrid model in LIDL.

4. Conceptual Model

In order to address the issues identified above LIDL can implement several new innovative technological interventions for the ecommerce platform. LIDL have to develop their own online platform for e-commerce system considering both browser and mobile software. In this platform they can use third party IT consultancy for both cloud based facilities and e-commerce that incudes online transfers. Apart from using the third party vendors for e-commerce facilities the company have to develop a delivery system. As of now they can utilise third party delivery partner for short term. In long run they can use their own shipping and delivery system.

3. Comparison of different model and possible solutions 350

The major competitor of LIDL in the market of UK is Aldi and some other strong competitor in the UK grocery market is Tesco, Asda, Sainsbury’s and Morison’s. In the UK grocery and supermarket industry these companies are utilising individually unique operational model for their service deliver. In order to compare the different operational principles used by these competitors the Five Operation Objectives have been used in this section, which includes speed, quality, costs, flexibility, and dependability of the service.

The major competitor Aldi executes their hybrid facilities through their own online platform and third party delivery partner. Aldi has their own online e-commerce website, where customer can purchase and the materials can be deliver to doorsteps. It increases the flexibility and dependability on the online portal and online consumer services. However, it requires a significant amount of additional cost for maintenance of online transaction system safety and facilities. The quality of the online portal is not high enough because it is handled by a supermarket chain, not an IT organisations. Similar online platform has been also used by Tesco. However, due to recent pandemic issues and high cost of online operations Tesco stopped their online e-commerce facilities for uncertain period. ASDA UK and Morrison’s also uses online delivery partners for their online e-commerce facilities. ASDA uses Uber Eats for their both online operations and delivery. Similarly Morrison’s uses Amazon UK for their online grocery e-commerce facilities and delivery. These complete dependency on third party partners for online e-commerce platform and delivery system reduces the cost significantly while increasing the speed.

Aldi Deliveroo

ASDA Uber Eats

Amazon UK partnership

Four Vs

Five Operation Objectives

4. Comparison of different solutions 350

5. Final Selection and rationale 200

Customer Value

6. Responding to parcel conundrum 200

7. Conclusion 150

Part 2

Part 3 800

1. Introduction

2. Resource Requirement for Implementation

3. Balance Score card for Business Performance Measurement

4. Conclusion

Resource under Research

bbc.com, 2019. The Parcel Conundrum. [online] BBC News. Available at: <https://www.bbc.com/news/magazine-18709348> [Accessed 10 October 2020].