Loblaws vs Walmart

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To: Loblaw’s executives
From: -
Date:
Subject: Entry of wall mart on the Canadian market

Food retailing is a huge industry, you from Loblaw’s certainly know that, but other competitors know that too. Wal-Mart is one of those competitors who understand that as well. The food industry is the type of industry where you can be very large at one point and can suddenly disappear under the pressure of competition. Wal-Mart has entered the Canadian market a couple of years ago and I would like to thank you for the opportunity to inform you about how they work and what upcoming possible threads are they bring along. I will also inform you about their weaknesses, where Loblaw’s can take advantage of.

Loblaw’s sells the best possible food quality products and provide the best service for their customers. Wal-Mart however, formerly known as large discount department shop, wants and tries to change.

Possible threats are growing competition on store size, location, innovation, customer loyalty, the overall image, the offer of products(different products) and off course the prices of products. The food industry is crowded and always moving, but Wal-Mart seems to have the lowest cost and the lowest prices. Wal-Mart put a lot of effort in making sure they will be the most innovative chain, but in that in combination with wanting to be the cheapest is a difficult combination. They have managed to do so over the last yers. Important to notice is that their emphasis is not only on food but also all the other products they sell like electronics and furniture for example. Which can been as negative but also positive because they will attract a wide range of customers with that.

An advantage for Wal-Mart is that the bargaining power of suppliers is weak. Wal-Mart is probably their biggest purchaser. And therefore they will do everything to keep them satisfied. Also the recent crisis has made the bargaining power of buyers weak. There is/was a big...
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