Loblaw Companies Limited Case Study

Loblaw Companies Limited

Strategic Plan
Presented to Galen Weston Jr.,
Executive Chairman of Loblaw Companies Ltd and Professor Imran Saleem,
University of Toronto

Submitted by Group 4 on March 30, 2010 Table of Contents

Loblaw Companies Limited Strategic Plan 1
Table of Contents 2
Loblaw Companies Limited Summary 3
History 3
Current Vision 3
Short Term & Medium-Longer Term Plan 3
Detailed Financials 4
Industry and the Competitive Analysis 4
SWOT Analysis 5
New Vision 6
The new Mission 7
APPENDIX 8
Exhibit 1 – Loblaw Companies History and Market Standing 8
Exhibit 2 – Competition 8
Exhibit 3- Financial Analysis 9
Exhibit 4 – SWOT Analysis 10 Loblaw Companies Limited Summary
History
Loblaw
This was off set by an increase of $2,125 million in operating expenses year over year, of which $800 million was due to the goodwill impairment for the Provigo Stores in Quebec. This caused the operating income to decline to $289 million from $1,401 million in 2005 and the company overall to report a loss in 2006 of approximately $ 219 million. This in turn caused its market price to decline at the end of 2006.
All of the Financial Ratios show a drastic decline year over year due to this heavy impairment in good will. If you remove the $ 800 million in good will impairment the actual profit would be $581 million and although the Financial Ratios are still lower then 2005 they are much more consistent year over
Wal-Mart has been developing very fast in the United States and became the country’s largest grocer in a short period of time –they might be going for the same success in Canada. As part of its success Wal-Mart has an established an EDI system which allows them to connect with their suppliers, distribution centers, and retains data about store activities. In order to meet the threat of emerging competition, Loblaw should take the opportunity to purchase and customize its own inventory system. New logistics tracking technologies for keeping in-demand products on its shelves and the delivery of its goods on time are available and will have the added value of ensuring Loblaw Companies become more consumer focused and cost efficient. This will help Loblaw alleviate the risk of the competition surpassing them in local supply-chain logistics, giving them the advantage in the local territory and opportunity to expand to domestic and local products available in the market