Lidl Hrvatska d.o.o. operates in a highly competitive retail industry by applying a cost leadership strategy, which has enabled it to position itself as one of the leading discount chains in the country. By offering customers a wide range of products (both food and nonfood items), an efficient value chain, and a broad network of strategically located logistics and distribution centers and stores, Lidl Hrvatska d.o.o. manages to maintain competitive product prices, thereby attracting numerous customers, especially those sensitive to prices. In the first part of the paper, before a detailed elaboration of the financial and strategic analysis, the concepts necessary for understanding the methods and approaches used are explained. The strategic and financial analysis provided an in-depth insight into the state of the company, identifying the fundamental factors of current and future competitive advantages and sustainable operations. Furthermore, the analysis revealed the strengths and opportunities that the company can capitalize on, as well as the weaknesses and threats it needs to be wary of. Based on the conclusions drawn from the analyses and current trends in the retail industry, future potential directions for the company's strategic development were identified.