SlideShare a Scribd company logo
1 of 17
Download to read offline
Group:

Kiran Chadaram
Nianjiu Li
Vi Ngo
Sebastien Rosner
Varun Sharma
Jeremy Wong
History of the Firm
Business Definition
•  Founded in 1919; Loblaw Grocetarias
•  By 1947, 113 stores in Ontario; sales of $50M
•  Controlled by third generation of Weston family
•  Largest food distributor in Canada
•  24th largest grocery retailer in the world
•  Sales of $23.1B in 2002 
•  122,300 employees
Industry Definition & Strategic Problem
Business Definition
•  Canadian grocery retail industry
•  Mature industry; low margins (0.5 - 2%), modest growth (4% per year),
and strong price competitions
•  Loblaw’s existing strategy has been successful: drive down costs +
product & store differentiation
•  Wal-Mart, largest retailer in the world, may bring 
Supercentres to Canada
•  If Wal-Mart competes in Canadian grocery, maintain
current strategy or adopt new strategy? 
Loblaw leads
the market
with 32%
market share
PESTLE Analysis
Environmental Analysis
•  Canada: lowest food prices in the world; 2% inflation
•  Rise of double income families
•  Immigration and ethnic grocery
•  Organic foods
•  Online grocery shopping
•  Standardization for ERP systems and ECCnet
Porters’ 5 Forces
Industry Analysis
•  Suppliers: national brands and “loss leaders” vs. shelf space,
promotion execution, and private labels
•  Consumers: low switching cost, price sensitivity vs. brand loyalty
•  Competitors: high concentration, top 5 chains, low margin & strong 
competition in all segments
•  New Entrants: small independents, acquisition by global giants
•  Substitutes: fast-foods, restaurants, take-outs
Key Success Factors
Industry Analysis
•  Operational efficiency ! lower costs, lower prices
"  Integration: supply chain, logistics
"  Information Technology 
"  Process innovation
•  Accessibility & geographic presence
•  Product & service offerings ! customer loyalty
"  Differentiated or value-added
"  Breadth of selection and stock availability
•  Brand equity ! customer loyalty
Resources, Capabilities, & Core Competencies
Firm Analysis
•  Brand equity and loyalty; President’s Choice
•  Experience and expertise in fresh groceries; rigid integration
•  Real estate ownership; operational flexibility and location
•  Low costs from scale advantage
•  Multi-banner & multi-format; covers all price points and segments
•  Regional appeal and community character retained
•  Differentiated products & services
•  PC customer loyalty programs; shoppers data
A Quick Look at Wal-Mart
Competitor Analysis
•  Largest retailer and 6th largest grocery retailer in the world
•  Cost leadership; "Every Day Low Prices" strategy 
•  Scale economies and superior resources (e.g. finance, IT)
•  Questionable labour practices and issues with UFCW 
•  Bargains hard with suppliers
•  Limited expertise in perishables
•  Failed to penetrate German and Japanese markets (why?)
Wal-Mart’s Value Chain & Value Proposition
Value Chain
Sales
Infrastructure
Procurement
Outbound Logistics
Operations
Infrastructure
Technology
Procurement
Inbound Logistics
Marketing
Operations
Procurement
Loblaw’s Value Chain & Value Proposition
Value Chain
Sales
Infrastructure
Procurement
Outbound Logistics
Operations
Infrastructure
Technology
Procurement
Inbound Logistics
Customer Service
Operations
Procurement
Zero-Sum Game
Industry Lifecycle
Includes:
Low marginSlow growth
Price
competition
Alternatives & Business Strategies
Strategic Recommendations
•  Challenge Wal-Mart’s cost leadership?
•  Avoid head-on competition? Differentiate?
•  Exploit Wal-Mart’s weaknesses/Loblaw’s strengths
"  Loblaw’s resources & capabilities; core competencies
"  Relevant to success factors?
"  Imitable or unique? Transferable or replicable?
"  Sustainable competitive advantage?
Think about
the fates of
Target and 
K-Mart
Expanding the Pie?
Strategic Recommendations
Include:
Ethnic grocery
Organic foods
Local sourcing
Cooking
classes
So what actually happened?
Loblaw Today
•  2006: Launch of Joe Fresh brand
•  2009: Acquired largest Asian food retailer T&T for $225M CDN
•  2011: Opened store in Maple Leafs Garden
Over 1,100 new control label products

•  2012: Banished artificial colours and flavours from PC products

•  2011 market shares: Loblaw 29.9%, Wal-Mart 4.3%
•  Now 181 Wal-Mart Supercentres in Canada
Loblaw
continues to
dominate the
Canadian
grocery
business
… according to Wal-Mart
The World
thank you!
merci!

More Related Content

What's hot

Loblaw companies limited
Loblaw companies limitedLoblaw companies limited
Loblaw companies limitedDell
 
Whole Foods market in 2008 - Case Study
Whole Foods market in 2008 - Case StudyWhole Foods market in 2008 - Case Study
Whole Foods market in 2008 - Case StudyCarter Bing Andika
 
Case Study "The De Beers Group - Exploring the Diamond Reselling Opportunity"
Case Study "The De Beers Group - Exploring the Diamond Reselling Opportunity"Case Study "The De Beers Group - Exploring the Diamond Reselling Opportunity"
Case Study "The De Beers Group - Exploring the Diamond Reselling Opportunity"Clemens Jungmair
 
General electric medical systems, 2002
General electric medical systems, 2002General electric medical systems, 2002
General electric medical systems, 2002Sahil Chopra
 
Crown Cork & Seal in 1989 Case study
  Crown Cork & Seal in 1989   Case study  Crown Cork & Seal in 1989   Case study
Crown Cork & Seal in 1989 Case studyAJAL A J
 
Metabical case study analysis
Metabical case study analysisMetabical case study analysis
Metabical case study analysisAyasha Banka
 
Reed Supermarkets - A New Wave of Competition
Reed Supermarkets - A New Wave of CompetitionReed Supermarkets - A New Wave of Competition
Reed Supermarkets - A New Wave of CompetitionHaseebEjaz
 
D.Light Design Case Study Ananlysis
D.Light Design Case Study AnanlysisD.Light Design Case Study Ananlysis
D.Light Design Case Study AnanlysisCherry Malhotra
 
Whole foods market strategic analysis
Whole foods market strategic analysisWhole foods market strategic analysis
Whole foods market strategic analysisRahel Hailu
 
The Microfridge Case
The Microfridge CaseThe Microfridge Case
The Microfridge CaseKaran Jaidka
 
Metabical Case study
Metabical Case studyMetabical Case study
Metabical Case studyTeam Pramkaew
 
Metabical Case Study Analysis
Metabical Case Study AnalysisMetabical Case Study Analysis
Metabical Case Study Analysisandynbg2
 
Presentation on Walmart
Presentation on WalmartPresentation on Walmart
Presentation on WalmartArun Gupta
 

What's hot (20)

Loblaw companies limited
Loblaw companies limitedLoblaw companies limited
Loblaw companies limited
 
Trader Joe's HBS Case Analysis 12.2016
Trader Joe's HBS Case Analysis 12.2016Trader Joe's HBS Case Analysis 12.2016
Trader Joe's HBS Case Analysis 12.2016
 
Lego Outsourcing
Lego OutsourcingLego Outsourcing
Lego Outsourcing
 
Whole Foods market in 2008 - Case Study
Whole Foods market in 2008 - Case StudyWhole Foods market in 2008 - Case Study
Whole Foods market in 2008 - Case Study
 
Case Study "The De Beers Group - Exploring the Diamond Reselling Opportunity"
Case Study "The De Beers Group - Exploring the Diamond Reselling Opportunity"Case Study "The De Beers Group - Exploring the Diamond Reselling Opportunity"
Case Study "The De Beers Group - Exploring the Diamond Reselling Opportunity"
 
General electric medical systems, 2002
General electric medical systems, 2002General electric medical systems, 2002
General electric medical systems, 2002
 
Crown Cork & Seal in 1989 Case study
  Crown Cork & Seal in 1989   Case study  Crown Cork & Seal in 1989   Case study
Crown Cork & Seal in 1989 Case study
 
Metabical case study analysis
Metabical case study analysisMetabical case study analysis
Metabical case study analysis
 
Reed Supermarkets - A New Wave of Competition
Reed Supermarkets - A New Wave of CompetitionReed Supermarkets - A New Wave of Competition
Reed Supermarkets - A New Wave of Competition
 
D.Light Design Case Study Ananlysis
D.Light Design Case Study AnanlysisD.Light Design Case Study Ananlysis
D.Light Design Case Study Ananlysis
 
Whole foods market strategic analysis
Whole foods market strategic analysisWhole foods market strategic analysis
Whole foods market strategic analysis
 
The Microfridge Case
The Microfridge CaseThe Microfridge Case
The Microfridge Case
 
Metabical Case study
Metabical Case studyMetabical Case study
Metabical Case study
 
Metabical Case Study Analysis
Metabical Case Study AnalysisMetabical Case Study Analysis
Metabical Case Study Analysis
 
Signode case study
Signode case studySignode case study
Signode case study
 
Presentation on Walmart
Presentation on WalmartPresentation on Walmart
Presentation on Walmart
 
Metabical
MetabicalMetabical
Metabical
 
Whole Foods Valuation
Whole Foods ValuationWhole Foods Valuation
Whole Foods Valuation
 
Case Study on Walmart
Case Study on WalmartCase Study on Walmart
Case Study on Walmart
 
WalMart Analysis
WalMart AnalysisWalMart Analysis
WalMart Analysis
 

Similar to Schulich MBA SGMT 6000 Loblaw

Kroger Presentation 2014
Kroger Presentation 2014Kroger Presentation 2014
Kroger Presentation 2014Andre Amoureux
 
Business Model Innovation Big Bazaar Case Final Presentation
Business Model Innovation Big Bazaar Case Final Presentation Business Model Innovation Big Bazaar Case Final Presentation
Business Model Innovation Big Bazaar Case Final Presentation Jodi Liu
 
Mc donald`s case strategic management (by adrian magopet)
Mc donald`s case  strategic management (by adrian magopet)Mc donald`s case  strategic management (by adrian magopet)
Mc donald`s case strategic management (by adrian magopet)pari r.k.b
 
Wal-Mart Stores in 2003 (HBS Case 9-704-430)
Wal-Mart Stores in 2003 (HBS Case 9-704-430)Wal-Mart Stores in 2003 (HBS Case 9-704-430)
Wal-Mart Stores in 2003 (HBS Case 9-704-430)Aditya Jhunjhunuwala
 
Canadian Meat Council Presentation - Improving Supply And Retailing of Meat ...
Canadian Meat Council Presentation -  Improving Supply And Retailing of Meat ...Canadian Meat Council Presentation -  Improving Supply And Retailing of Meat ...
Canadian Meat Council Presentation - Improving Supply And Retailing of Meat ...rowenconway
 
Retail industry analysis
Retail industry analysisRetail industry analysis
Retail industry analysisJyoti Bajpai
 
Costco wholesale
Costco wholesaleCostco wholesale
Costco wholesaleneetee1988
 
Wallmart Depth Analysis with Overview and Swot Analysis, Business Trends By M...
Wallmart Depth Analysis with Overview and Swot Analysis, Business Trends By M...Wallmart Depth Analysis with Overview and Swot Analysis, Business Trends By M...
Wallmart Depth Analysis with Overview and Swot Analysis, Business Trends By M...Meghna Baid
 
Channel institutions retailing.pptx
Channel institutions retailing.pptxChannel institutions retailing.pptx
Channel institutions retailing.pptxNishant Agrawal
 
COSTCO Case Study.ppt
COSTCO Case Study.pptCOSTCO Case Study.ppt
COSTCO Case Study.pptNisrin Ali
 

Similar to Schulich MBA SGMT 6000 Loblaw (20)

Kmart pp2
Kmart pp2Kmart pp2
Kmart pp2
 
Walmart project
Walmart projectWalmart project
Walmart project
 
Walmart
Walmart Walmart
Walmart
 
Kroger Presentation 2014
Kroger Presentation 2014Kroger Presentation 2014
Kroger Presentation 2014
 
KeHE China
KeHE ChinaKeHE China
KeHE China
 
Business Model Innovation Big Bazaar Case Final Presentation
Business Model Innovation Big Bazaar Case Final Presentation Business Model Innovation Big Bazaar Case Final Presentation
Business Model Innovation Big Bazaar Case Final Presentation
 
Mc donald`s case strategic management (by adrian magopet)
Mc donald`s case  strategic management (by adrian magopet)Mc donald`s case  strategic management (by adrian magopet)
Mc donald`s case strategic management (by adrian magopet)
 
Big Bazaar
Big BazaarBig Bazaar
Big Bazaar
 
Walmart PPT
Walmart PPTWalmart PPT
Walmart PPT
 
Presentation on Walmart
Presentation on WalmartPresentation on Walmart
Presentation on Walmart
 
Wal-Mart Stores in 2003 (HBS Case 9-704-430)
Wal-Mart Stores in 2003 (HBS Case 9-704-430)Wal-Mart Stores in 2003 (HBS Case 9-704-430)
Wal-Mart Stores in 2003 (HBS Case 9-704-430)
 
Canadian Meat Council Presentation - Improving Supply And Retailing of Meat ...
Canadian Meat Council Presentation -  Improving Supply And Retailing of Meat ...Canadian Meat Council Presentation -  Improving Supply And Retailing of Meat ...
Canadian Meat Council Presentation - Improving Supply And Retailing of Meat ...
 
11 strategic planning in retail
11 strategic planning in retail11 strategic planning in retail
11 strategic planning in retail
 
Retail industry analysis
Retail industry analysisRetail industry analysis
Retail industry analysis
 
Costco wholesale
Costco wholesaleCostco wholesale
Costco wholesale
 
Wallmart Depth Analysis with Overview and Swot Analysis, Business Trends By M...
Wallmart Depth Analysis with Overview and Swot Analysis, Business Trends By M...Wallmart Depth Analysis with Overview and Swot Analysis, Business Trends By M...
Wallmart Depth Analysis with Overview and Swot Analysis, Business Trends By M...
 
Retail Strategy 1
Retail Strategy 1Retail Strategy 1
Retail Strategy 1
 
Wal mart study case
Wal mart study caseWal mart study case
Wal mart study case
 
Channel institutions retailing.pptx
Channel institutions retailing.pptxChannel institutions retailing.pptx
Channel institutions retailing.pptx
 
COSTCO Case Study.ppt
COSTCO Case Study.pptCOSTCO Case Study.ppt
COSTCO Case Study.ppt
 

Recently uploaded

Intro to BCG's Carbon Emissions Benchmark_vF.pdf
Intro to BCG's Carbon Emissions Benchmark_vF.pdfIntro to BCG's Carbon Emissions Benchmark_vF.pdf
Intro to BCG's Carbon Emissions Benchmark_vF.pdfpollardmorgan
 
Pitch Deck Teardown: Geodesic.Life's $500k Pre-seed deck
Pitch Deck Teardown: Geodesic.Life's $500k Pre-seed deckPitch Deck Teardown: Geodesic.Life's $500k Pre-seed deck
Pitch Deck Teardown: Geodesic.Life's $500k Pre-seed deckHajeJanKamps
 
Ten Organizational Design Models to align structure and operations to busines...
Ten Organizational Design Models to align structure and operations to busines...Ten Organizational Design Models to align structure and operations to busines...
Ten Organizational Design Models to align structure and operations to busines...Seta Wicaksana
 
8447779800, Low rate Call girls in Rohini Delhi NCR
8447779800, Low rate Call girls in Rohini Delhi NCR8447779800, Low rate Call girls in Rohini Delhi NCR
8447779800, Low rate Call girls in Rohini Delhi NCRashishs7044
 
8447779800, Low rate Call girls in Tughlakabad Delhi NCR
8447779800, Low rate Call girls in Tughlakabad Delhi NCR8447779800, Low rate Call girls in Tughlakabad Delhi NCR
8447779800, Low rate Call girls in Tughlakabad Delhi NCRashishs7044
 
8447779800, Low rate Call girls in Uttam Nagar Delhi NCR
8447779800, Low rate Call girls in Uttam Nagar Delhi NCR8447779800, Low rate Call girls in Uttam Nagar Delhi NCR
8447779800, Low rate Call girls in Uttam Nagar Delhi NCRashishs7044
 
Annual General Meeting Presentation Slides
Annual General Meeting Presentation SlidesAnnual General Meeting Presentation Slides
Annual General Meeting Presentation SlidesKeppelCorporation
 
(Best) ENJOY Call Girls in Faridabad Ex | 8377087607
(Best) ENJOY Call Girls in Faridabad Ex | 8377087607(Best) ENJOY Call Girls in Faridabad Ex | 8377087607
(Best) ENJOY Call Girls in Faridabad Ex | 8377087607dollysharma2066
 
Youth Involvement in an Innovative Coconut Value Chain by Mwalimu Menza
Youth Involvement in an Innovative Coconut Value Chain by Mwalimu MenzaYouth Involvement in an Innovative Coconut Value Chain by Mwalimu Menza
Youth Involvement in an Innovative Coconut Value Chain by Mwalimu Menzaictsugar
 
MAHA Global and IPR: Do Actions Speak Louder Than Words?
MAHA Global and IPR: Do Actions Speak Louder Than Words?MAHA Global and IPR: Do Actions Speak Louder Than Words?
MAHA Global and IPR: Do Actions Speak Louder Than Words?Olivia Kresic
 
Ms Motilal Padampat Sugar Mills vs. State of Uttar Pradesh & Ors. - A Milesto...
Ms Motilal Padampat Sugar Mills vs. State of Uttar Pradesh & Ors. - A Milesto...Ms Motilal Padampat Sugar Mills vs. State of Uttar Pradesh & Ors. - A Milesto...
Ms Motilal Padampat Sugar Mills vs. State of Uttar Pradesh & Ors. - A Milesto...ShrutiBose4
 
8447779800, Low rate Call girls in Saket Delhi NCR
8447779800, Low rate Call girls in Saket Delhi NCR8447779800, Low rate Call girls in Saket Delhi NCR
8447779800, Low rate Call girls in Saket Delhi NCRashishs7044
 
PSCC - Capability Statement Presentation
PSCC - Capability Statement PresentationPSCC - Capability Statement Presentation
PSCC - Capability Statement PresentationAnamaria Contreras
 
Traction part 2 - EOS Model JAX Bridges.
Traction part 2 - EOS Model JAX Bridges.Traction part 2 - EOS Model JAX Bridges.
Traction part 2 - EOS Model JAX Bridges.Anamaria Contreras
 
Innovation Conference 5th March 2024.pdf
Innovation Conference 5th March 2024.pdfInnovation Conference 5th March 2024.pdf
Innovation Conference 5th March 2024.pdfrichard876048
 
FULL ENJOY Call girls in Paharganj Delhi | 8377087607
FULL ENJOY Call girls in Paharganj Delhi | 8377087607FULL ENJOY Call girls in Paharganj Delhi | 8377087607
FULL ENJOY Call girls in Paharganj Delhi | 8377087607dollysharma2066
 
Buy gmail accounts.pdf Buy Old Gmail Accounts
Buy gmail accounts.pdf Buy Old Gmail AccountsBuy gmail accounts.pdf Buy Old Gmail Accounts
Buy gmail accounts.pdf Buy Old Gmail AccountsBuy Verified Accounts
 

Recently uploaded (20)

Intro to BCG's Carbon Emissions Benchmark_vF.pdf
Intro to BCG's Carbon Emissions Benchmark_vF.pdfIntro to BCG's Carbon Emissions Benchmark_vF.pdf
Intro to BCG's Carbon Emissions Benchmark_vF.pdf
 
Pitch Deck Teardown: Geodesic.Life's $500k Pre-seed deck
Pitch Deck Teardown: Geodesic.Life's $500k Pre-seed deckPitch Deck Teardown: Geodesic.Life's $500k Pre-seed deck
Pitch Deck Teardown: Geodesic.Life's $500k Pre-seed deck
 
No-1 Call Girls In Goa 93193 VIP 73153 Escort service In North Goa Panaji, Ca...
No-1 Call Girls In Goa 93193 VIP 73153 Escort service In North Goa Panaji, Ca...No-1 Call Girls In Goa 93193 VIP 73153 Escort service In North Goa Panaji, Ca...
No-1 Call Girls In Goa 93193 VIP 73153 Escort service In North Goa Panaji, Ca...
 
Ten Organizational Design Models to align structure and operations to busines...
Ten Organizational Design Models to align structure and operations to busines...Ten Organizational Design Models to align structure and operations to busines...
Ten Organizational Design Models to align structure and operations to busines...
 
8447779800, Low rate Call girls in Rohini Delhi NCR
8447779800, Low rate Call girls in Rohini Delhi NCR8447779800, Low rate Call girls in Rohini Delhi NCR
8447779800, Low rate Call girls in Rohini Delhi NCR
 
8447779800, Low rate Call girls in Tughlakabad Delhi NCR
8447779800, Low rate Call girls in Tughlakabad Delhi NCR8447779800, Low rate Call girls in Tughlakabad Delhi NCR
8447779800, Low rate Call girls in Tughlakabad Delhi NCR
 
8447779800, Low rate Call girls in Uttam Nagar Delhi NCR
8447779800, Low rate Call girls in Uttam Nagar Delhi NCR8447779800, Low rate Call girls in Uttam Nagar Delhi NCR
8447779800, Low rate Call girls in Uttam Nagar Delhi NCR
 
Annual General Meeting Presentation Slides
Annual General Meeting Presentation SlidesAnnual General Meeting Presentation Slides
Annual General Meeting Presentation Slides
 
(Best) ENJOY Call Girls in Faridabad Ex | 8377087607
(Best) ENJOY Call Girls in Faridabad Ex | 8377087607(Best) ENJOY Call Girls in Faridabad Ex | 8377087607
(Best) ENJOY Call Girls in Faridabad Ex | 8377087607
 
Youth Involvement in an Innovative Coconut Value Chain by Mwalimu Menza
Youth Involvement in an Innovative Coconut Value Chain by Mwalimu MenzaYouth Involvement in an Innovative Coconut Value Chain by Mwalimu Menza
Youth Involvement in an Innovative Coconut Value Chain by Mwalimu Menza
 
MAHA Global and IPR: Do Actions Speak Louder Than Words?
MAHA Global and IPR: Do Actions Speak Louder Than Words?MAHA Global and IPR: Do Actions Speak Louder Than Words?
MAHA Global and IPR: Do Actions Speak Louder Than Words?
 
Ms Motilal Padampat Sugar Mills vs. State of Uttar Pradesh & Ors. - A Milesto...
Ms Motilal Padampat Sugar Mills vs. State of Uttar Pradesh & Ors. - A Milesto...Ms Motilal Padampat Sugar Mills vs. State of Uttar Pradesh & Ors. - A Milesto...
Ms Motilal Padampat Sugar Mills vs. State of Uttar Pradesh & Ors. - A Milesto...
 
Enjoy ➥8448380779▻ Call Girls In Sector 18 Noida Escorts Delhi NCR
Enjoy ➥8448380779▻ Call Girls In Sector 18 Noida Escorts Delhi NCREnjoy ➥8448380779▻ Call Girls In Sector 18 Noida Escorts Delhi NCR
Enjoy ➥8448380779▻ Call Girls In Sector 18 Noida Escorts Delhi NCR
 
8447779800, Low rate Call girls in Saket Delhi NCR
8447779800, Low rate Call girls in Saket Delhi NCR8447779800, Low rate Call girls in Saket Delhi NCR
8447779800, Low rate Call girls in Saket Delhi NCR
 
PSCC - Capability Statement Presentation
PSCC - Capability Statement PresentationPSCC - Capability Statement Presentation
PSCC - Capability Statement Presentation
 
Traction part 2 - EOS Model JAX Bridges.
Traction part 2 - EOS Model JAX Bridges.Traction part 2 - EOS Model JAX Bridges.
Traction part 2 - EOS Model JAX Bridges.
 
Innovation Conference 5th March 2024.pdf
Innovation Conference 5th March 2024.pdfInnovation Conference 5th March 2024.pdf
Innovation Conference 5th March 2024.pdf
 
Call Us ➥9319373153▻Call Girls In North Goa
Call Us ➥9319373153▻Call Girls In North GoaCall Us ➥9319373153▻Call Girls In North Goa
Call Us ➥9319373153▻Call Girls In North Goa
 
FULL ENJOY Call girls in Paharganj Delhi | 8377087607
FULL ENJOY Call girls in Paharganj Delhi | 8377087607FULL ENJOY Call girls in Paharganj Delhi | 8377087607
FULL ENJOY Call girls in Paharganj Delhi | 8377087607
 
Buy gmail accounts.pdf Buy Old Gmail Accounts
Buy gmail accounts.pdf Buy Old Gmail AccountsBuy gmail accounts.pdf Buy Old Gmail Accounts
Buy gmail accounts.pdf Buy Old Gmail Accounts
 

Schulich MBA SGMT 6000 Loblaw

  • 1.
  • 2. Group: Kiran Chadaram Nianjiu Li Vi Ngo Sebastien Rosner Varun Sharma Jeremy Wong
  • 3. History of the Firm Business Definition •  Founded in 1919; Loblaw Grocetarias •  By 1947, 113 stores in Ontario; sales of $50M •  Controlled by third generation of Weston family •  Largest food distributor in Canada •  24th largest grocery retailer in the world •  Sales of $23.1B in 2002 •  122,300 employees
  • 4. Industry Definition & Strategic Problem Business Definition •  Canadian grocery retail industry •  Mature industry; low margins (0.5 - 2%), modest growth (4% per year), and strong price competitions •  Loblaw’s existing strategy has been successful: drive down costs + product & store differentiation •  Wal-Mart, largest retailer in the world, may bring Supercentres to Canada •  If Wal-Mart competes in Canadian grocery, maintain current strategy or adopt new strategy? Loblaw leads the market with 32% market share
  • 5. PESTLE Analysis Environmental Analysis •  Canada: lowest food prices in the world; 2% inflation •  Rise of double income families •  Immigration and ethnic grocery •  Organic foods •  Online grocery shopping •  Standardization for ERP systems and ECCnet
  • 6. Porters’ 5 Forces Industry Analysis •  Suppliers: national brands and “loss leaders” vs. shelf space, promotion execution, and private labels •  Consumers: low switching cost, price sensitivity vs. brand loyalty •  Competitors: high concentration, top 5 chains, low margin & strong competition in all segments •  New Entrants: small independents, acquisition by global giants •  Substitutes: fast-foods, restaurants, take-outs
  • 7. Key Success Factors Industry Analysis •  Operational efficiency ! lower costs, lower prices "  Integration: supply chain, logistics "  Information Technology "  Process innovation •  Accessibility & geographic presence •  Product & service offerings ! customer loyalty "  Differentiated or value-added "  Breadth of selection and stock availability •  Brand equity ! customer loyalty
  • 8. Resources, Capabilities, & Core Competencies Firm Analysis •  Brand equity and loyalty; President’s Choice •  Experience and expertise in fresh groceries; rigid integration •  Real estate ownership; operational flexibility and location •  Low costs from scale advantage •  Multi-banner & multi-format; covers all price points and segments •  Regional appeal and community character retained •  Differentiated products & services •  PC customer loyalty programs; shoppers data
  • 9. A Quick Look at Wal-Mart Competitor Analysis •  Largest retailer and 6th largest grocery retailer in the world •  Cost leadership; "Every Day Low Prices" strategy •  Scale economies and superior resources (e.g. finance, IT) •  Questionable labour practices and issues with UFCW •  Bargains hard with suppliers •  Limited expertise in perishables •  Failed to penetrate German and Japanese markets (why?)
  • 10. Wal-Mart’s Value Chain & Value Proposition Value Chain Sales Infrastructure Procurement Outbound Logistics Operations Infrastructure Technology Procurement Inbound Logistics Marketing Operations Procurement
  • 11. Loblaw’s Value Chain & Value Proposition Value Chain Sales Infrastructure Procurement Outbound Logistics Operations Infrastructure Technology Procurement Inbound Logistics Customer Service Operations Procurement
  • 12. Zero-Sum Game Industry Lifecycle Includes: Low marginSlow growth Price competition
  • 13. Alternatives & Business Strategies Strategic Recommendations •  Challenge Wal-Mart’s cost leadership? •  Avoid head-on competition? Differentiate? •  Exploit Wal-Mart’s weaknesses/Loblaw’s strengths "  Loblaw’s resources & capabilities; core competencies "  Relevant to success factors? "  Imitable or unique? Transferable or replicable? "  Sustainable competitive advantage? Think about the fates of Target and K-Mart
  • 14. Expanding the Pie? Strategic Recommendations Include: Ethnic grocery Organic foods Local sourcing Cooking classes
  • 15. So what actually happened? Loblaw Today •  2006: Launch of Joe Fresh brand •  2009: Acquired largest Asian food retailer T&T for $225M CDN •  2011: Opened store in Maple Leafs Garden Over 1,100 new control label products •  2012: Banished artificial colours and flavours from PC products •  2011 market shares: Loblaw 29.9%, Wal-Mart 4.3% •  Now 181 Wal-Mart Supercentres in Canada Loblaw continues to dominate the Canadian grocery business
  • 16. … according to Wal-Mart The World