Case Study: Loblaw

Lindsey Palminteri

BUS 485

Case #2 Assignment

Executive Summary:

Loblaw Companies, based in Canada, has recently found out that Wal-Mart will be launching into the markets. It is now facing the greatest competitive challenge with the new launch. Wal-Mart is planning to open their first supercenter in Canada and with their everyday low price, product selection, target market, efficient supply chain and logisitics, it is a strategic threat to Loblaw. Not only is Wal-Mart the threat, however, Loblaw must stay focusd on their already ahead of the game outlook on other competitiors of the Canadian market such as Safeway, Sobeys, Metrics and A&P. Not only are those now a threat, but a bunch of other factors come into play as well, as the industry grows, such as wholesale clubs, online shopping and convience stores. Loblaw needs to figure out what their next move will be in being competitive with its newest competitior, Wal-Mart.

Identification:

Leading presence

Loblaw is currently the leader in the market share and it can continue to be as long has it stays competitive to Wal-Mart. In the US, Kroger remained the number one grocery retailer in the States until 2002. Wal-Mart’s grocery department was first introduced in the States in 1988 which means that there is some time for Loblaw to continue its competitive edge against Wal-Mart before they dominate in the Canadian market.

Customer Loyalty Program

This factor will probably be the most important factor that will help Loblaw maintains its current market share. Currently Wal-Mart doesn’t have a customer loyalty program for its customers. The customer loyalty program was launched with President’s Choice Financial, where customers receive points when they shop at any Loblaw chai...

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... illustrated by the 4% growth rate, need to underscore the urgency for Loblaw to aggressively contain the more industry-wide problems of rapidly expanding packaging costs and the need for making their supply chain more efficient. This latter weakness of the entire Canadian marketplace is one that Wal-Mart will target with their initial launch into the market. There is also the threat of consolidation throughout the industry, and while Loblaw has capitalized on this with a series of successful acquisitions reslting in the addition of over 200 stores distributed throughout Canada and the U.S. To this point Loblaw has been successful in capitalizing on consolidation, yet this is a persistent threat. In addition to all these other factors, the continuing increase in the price of oil has continued to drive up the costs of operating all distribution channels and operations