Loblaw Companies Limited Case Study
Loblaw Companies Limited Case Study
Table of Contents
Introduction 3
External Analysis 4
Internal Analysis 8
Alternatives 9
Recommendation 10
References 11
Introduction
Loblaw Companies is facing the greatest competitive challenge of its recent history with the launch of Wal-Mart into their markets. Having originally entered the market in 1994 through the acquisition of 122 Woolco Stores, Wal-Mart is planning to open their first SuperCenter in Canada imminently. Known for their Every Day Low Price (EDLP) value proposition, exceptionally efficient supply chain, logistics and ERP process execution, marketing aimed at budget-conscious buyers, and product selection, Wal-Mart is a strategic threat to Loblaw. While Wal-Mart is a strategic competitive threat, Loblaw must also stay focused on coordinating their competitive strategy to also stay ahead of dominant grocery competitors including Sobeys, Metrics, A&P, and Canada Safeway. In addition, wholesale clubs, specialty chains, convenience stores and online shopping are additional considerations to keep in mind when defining a strategic response o Wal-Mart. Any competitive response on Loblaw’s part must support and strengthen competitiveness in each of these other channels, or the company risks becoming out of balance from a competitive standpoint. Pricing as a competitive differentiator for Loblaw is not to be taken in isolation; there must also be a concerted approach to look at the company first from an operational performance perspective. In conjunction with this systematic approach to evaluating Loblaw competitiveness at the Operations level, new strategies must be put into place to further strengthen and sustain customer loyalty at each of the retail channel levels as well. The Wal-Mart threat is the most lethal when Loblaw responds only with price as a differentiator.
External Analysis
Overall the Canadian retail food industry
Table of Contents
Introduction 3
External Analysis 4
Internal Analysis 8
Alternatives 9
Recommendation 10
References 11
Introduction
Loblaw Companies is facing the greatest competitive challenge of its recent history with the launch of Wal-Mart into their markets. Having originally entered the market in 1994 through the acquisition of 122 Woolco Stores, Wal-Mart is planning to open their first SuperCenter in Canada imminently. Known for their Every Day Low Price (EDLP) value proposition, exceptionally efficient supply chain, logistics and ERP process execution, marketing aimed at budget-conscious buyers, and product selection, Wal-Mart is a strategic threat to Loblaw. While Wal-Mart is a strategic competitive threat, Loblaw must also stay focused on coordinating their competitive strategy to also stay ahead of dominant grocery competitors including Sobeys, Metrics, A&P, and Canada Safeway. In addition, wholesale clubs, specialty chains, convenience stores and online shopping are additional considerations to keep in mind when defining a strategic response o Wal-Mart. Any competitive response on Loblaw’s part must support and strengthen competitiveness in each of these other channels, or the company risks becoming out of balance from a competitive standpoint. Pricing as a competitive differentiator for Loblaw is not to be taken in isolation; there must also be a concerted approach to look at the company first from an operational performance perspective. In conjunction with this systematic approach to evaluating Loblaw competitiveness at the Operations level, new strategies must be put into place to further strengthen and sustain customer loyalty at each of the retail channel levels as well. The Wal-Mart threat is the most lethal when Loblaw responds only with price as a differentiator.
External Analysis
Overall the Canadian retail food industry
References: Loblaw Financials (2004) – Analysis of Loblaw Companies Limited. Mergent Online Financial Database. Accessed July 13, 2007. Michael E Porter (2008). THE FIVE COMPETITIVE FORCES THAT SHAPE STRATEGY. Harvard Business Review: Special HBS Centennial Issue, 86(1), 78-93. Retrieved July 14, 2008, from ABI/INFORM Global database. (Document ID: 1406854351). Susan Reda (2005, September). What you don 't Know About RFID! Stores, 87(9), 26-27. Retrieved July 16, 2008, from ABI/INFORM Global database. (Document ID: 895457311). ----------------------- Figure 2: Porters’ Five Forces Industry Model