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Case Study of Strategic Management.

Autor:   •  March 19, 2019  •  Case Study  •  1,187 Words (5 Pages)  •  565 Views

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BUS3001 – Strategic Management  – Case 2               Loblaw in Canada’s stagnant grocery market

Mohammed Mazhood – 101102590 , Hyunju Kim - 100759697

2-6-2019


 

Table of Contents

The Problem(s) identified in this case are:        3

Strategic Analysis         4

Key Oranization Resources:        4

Porters’s five forces:        5

Strategic recommendation and reasoning:        6

Recommendations:        6

Reasoning for recommendations:        6


The Problem(s) identified in this case are:

  • Due to inflation on fresh produce prices, depress margins across the supply chain.

Increase cost pressure on the industry, including rising minimum wages in some provinces, increase transportation cost and ongoing trade war with U.S., resulted in price inflation in food products.

  • Price Competition

Its all about competitive environment, everyone is competitive, and Nobody wants to lose any market share. Price wars ongoing in Canadian Market for a while now, most consumers informed and looking forward for the cheapest price offerings.

  • Non-Traditional Competition Costco and Walmart threaten to steal market share.

The price gap between Traditional Grocery Stores and Costco and Walmart has narrowed. Costco and Walmart expansion in Canada, Competitive prices and provided one stop shopping experience for customers help them secure healthy market share in Canadian market.

  • Reacting to changing tastes and preferences of Canadian consumers.

Consumers are more concern about health and the food they buy, they want organic safe food and they also want a greater choice of food with look, taste, nutritional value and convenience as the key factors. And they look for assurance that food is produced in an environmental responsible manner


Strategic Analysis

Tool 1: Key Organization Resources for Loblaw

Resource

Characteristics

Indicators

Tangible

Resources

Financial

Annual Revenues $45 billion

Multi banner and Multi-format: Covers all price pints and segments

Regional appeal and community character retained

Physical

More than 2,300 stores including drug stores and Operates 27 distribution centers. Loblaw has the largest fleet of trucks in Canada

Real state Ownership: operational flexibility and location

Wide geographic coverage throughout all Canadian provinces.

Large amount of fixed assets

Intangible

Resources

Technology

Integration with Teradata Solutions Helped Loblaw to reduce inventory throughout the supply chain. Implementation of retail logical data model improved their business capabilities like demand focus accuracy, demand planning and vendor collaborations.

Distribution Network optimization and segmentation

Reputation

 Brand equity and loyalty: President choice, No name and Joe Fresh

PC customer loyalty programs integrated with shopper’s drug mart.

President choice organic products

Experience and expertise in fresh groceries

Differentiated products and services

Human Resources

  • Close to 200,000 Employees
  • Loblaw Company provides different communication and feedback tools to keep employees informed and keep up to date.
  • Continues Employee Development and student Internship
  • Community Involvement
  • Diversity Training and awareness
  • Recognized as one of Canadas Top 100 Employers (2019) and Greater Toronto’s Top Employers (2019)
  • Attractive Financial Benefits and Compensation
  • Recognized as one of Canadas Best Diversity Employers (2018)

Tool 2: Porter’s five forces

  • Bargaining Power of Suppliers:

There are numerous manufactures with various substitutions possibilities and low switching costs. And Manufactures pay for their shelf space and position in the stores. So, supply force has little no bargaining power.

Promotion execution and private label enhance some power for suppliers.

  • Threat of New Entrants:

Threat of new entry is very low as capital requirements of the industry is very high with requiring large inventories.  High level of knowledge and experience in the industry is necessary for success. Most of the customers are loyal towards a store.

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