Ght Case Analysis

Case #3 Analysis- Loblaw Companies Limited

Recommendation:

Although Lederer has a strong and stable approach to competing in the grocery industry, Loblaw could remain successful, as it is in its current position, with a few alterations to help ‘shake up’ the company strategy.

Loblaw has many advantages that can allow them to compete on a level higher than other grocers could. With Wal-mart being a major competitor to Loblaw, it will have to naturally keep an eye on the different approaches Wal-Mart takes in order to gain a competitive advantage.

Suggestions to Improve:

1) Maintain the strategy of differentiating its products and stores and driving down costs through size & operational efficiency

Rationale: According to Loblaw’s financial statements, their revenues are consistently growing and satisfying customers with their multi-format approach and meeting everyday needs. Their ownership of corporate stores also provides flexibility at the operational level and their control label program has resulted in cost efficiency.

2) Reorganize the structure and strategy to differentiate from Wal-mart

Rationale: To be competitive in terms of upcoming rivalry of Wal-Mart, Loblaws should:

a) Not compete directly with Wal-Mart; avoid cost leadership strategy

b) Customers- provide more variety of instant foods to meet the demand and focus highly on perishable products since Wal-Mart has limited expertise on them

c) Suppliers- support supply chain management by using ERP system

d) Focus exclusively on store differentiation: each store must have clear identity of market segments (eg. No Frills and Loblaw)

e) Scale and real estate- take advantage on ownership of the property. Expand and redesign to meet changing customer needs.

Enhancing technology and a definite use of ECCnet system can provide a strong supply chain logistics function. Due to its advanced relations with its staff, Loblaws has an advantage with public...