If you simply ‘roll out’ your business abroad, you’re setting yourself up for costly misconceptions.
Many German SMEs are expanding internationally because their domestic market is becoming too small. That makes sense. The mistake is often made at one point: they believe that the successful model simply needs to be ‘exported’. Lidl’s experience in the US shows how important it is to learn, focus and go local.
Starting point: Known, but not understood
Lidl has been operating in the US since 2017. The company continues to work on being perceived as a “full-service supermarket”. In a discussion, it was reported that the company’s research revealed: Only 58%of people in states with Lidl branches were even aware that Lidl is a food retailer.
This is a classic internationalisation problem: the product may be good – but the market does not understand your role.
What Lidl concludes from this: density rather than area
Several recent reports describe the strategic focus: Lidl does not want growth at any price, but rather targeted growth in markets where it already has a presence.
The logic is tough, but sensible: without regional density, logistics, marketing efficiency and brand perception are costly. With density, unit costs fall – and visibility rises.
“As global as possible, as local as necessary”
Another report summarises a guiding principle: as global as possible, as local as necessary – including a focus on market density.
This is worth its weight in gold for SMEs, because it is a clear rule of action:
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Standardise where it reduces costs.
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Localise where it influences purchasing decisions.
The SME Transfer: 5 questions before every international launch
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What are we really known for there? (not: what do we want to be known for)
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Which local peer group does the customer have in mind?
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What minimum density do we need for sales/service/marketing to be efficient?
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What needs to be local (product range, service, pricing logic, distribution channel)?
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Which key figures determine after 90 days whether we scale up or make adjustments?
Where AI-supported research makes the difference here
Internationalisation often fails due to ‘soft’ assumptions:
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Competitors are misjudged.
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Customer logic is derived from Germany.
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Local cost and service realities are underestimated.
AI can quickly generate a robust picture of the external environment: competition, pricing logic, regional clusters, job advertisements, supply chain signals, customer feedback patterns. People must then draw the strategic conclusions: focus, adaptation, timing.
What SMEs can take away from this
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Success abroad requires density or a very clear niche.
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Brand awareness is not the same as understanding one’s role.
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‘Piloting’ is cheaper than ‘rolling out’.
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Measure after 90 days – and then act decisively.
Sources (selection): Grocery Dive; Supermarket News; NJBIZ; The Packer.
