Loblaws Case Study

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Wednesday April 18th, 2012
BUS 800, Section 131
Professor: Jim Diodati
Individual Case Assignment
Turnitin ID#
243102298
Joseph Nicosia
500198044

TABLE OF CONTENTS

Strategic Recommendations3
Appendix
A: Industrial Analysis6
B: PEST Analysis6
C: Key Driving Forces 7
D: Porter’s Five Forces Analysis7
E: Strategic Group Map7
F: Key Strategic Factors8
G: Competitor Analysis8
H: Attractiveness of Industry 8
I: Mission and Vision Statement8
J: Value Chain9
K: Financial Analysis9
L: SWOT Analysis10
M: Issues10
N: Rationale for Issues10
O: Execution Strategies10

Strategic Recommendations
Issues:
As one thoroughly analyzes the Loblaw’s Companies Ltd. it is identified that Loblaw’s success is determined by their willingness to serve their customers with high quality products at a level of customer satisfaction at every location. Loblaw’s has transformed the persona of a general grocery store to a superstore with all the necessities for their customers. With such drastic changes and new implementations Loblaw’s success in Canada is correlated to their innovated ways to attract their customers. But there is always room for improvement, especially in a market where new entrants are low but large companies can overwhelm. There are three major issues that Loblaw’s can address to further succeed in this industry. Firstly, Loblaw’s is lacking global presence, by narrowing their market strictly in Canada. Secondly, the Loblaw’s competition is growing fierce in such a small market like Canada, and larger global corporations are infiltrating this market. Loblaw’s need’s to continue their industry leading dominance in this market. Lastly, Loblaw’s methods of innovating their technology has been industry leading, but how are they going to remain on top and evolve their technology to retain market share and maintain desire profits. Rationale for Issues

In this modern global trade era, it seems ridicules that a large company like Loblaw’s, whom maintain the highest level of market share in Canada, a market that is small but hard to conquer, has no global presence. It seems that companies like Wal-Mart, Target or Costco, have been able to enter the Canadian market not as a start-up or a new entrant but an existing corporation with set strategies and methods to subvert new market shares. They are capable of pursuing this Canadian market because they have the cash flow, executive support, and customer awareness to attack a new domain. Wal-Mart has this customer awareness that gives them an edge when entering new markets. Loblaw’s must follow this approach of expanding globally to maintain a firm grip on the Canadian market and challenge other competitors in new markets.

The retail industry is a very competitive industry and will continue to be competitive in future years. The leading cause of this high competitive industry is cost; customers want a store where they can purchase all their commodities in one location at the lowest possible cost. Corporations are competing with one another to reduce the cost for consumers but also to retain a high profit margin. This becomes more difficult when new entrants such as Wal-Mart, Canadian Tire and Shoppers Drug Mart are expanding their food selection and offering new incentives such as a low cost gas station. The idea in which these companies are trying to pursue, is essentially having a large assortment of products, in one location, making it a one stop shop for their customers, where they can purchase any commodity or necessity they need. Loblaw’s has to address this issue, because these new entrants like Target and Wal-Mart have a positive brand equity established in Canada because of the surrounding areas like the United States. Having this brand equity makes it easier to take market share away from Loblaw’s.

Information Technology (IT) is an important aspect in running a large corporation like Loblaw’s; from inventory trackers to...
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