Loblaw Companies Limited: Preparing for Wal-Mart Supercenters

Case 16 1. The mart industry is a commoditized industry, which makes it difficult for grocers to underpin through and through differentiation. Buyer power is high and thus, apostrophize leadership and operational efficiencies be critical. thither is angered competition amongst confused market bloods, with the main players much(prenominal) as Loblaw and A&P holding multi-banner stack aways in various market place segments. Traditional securities industry stores in same(p) manner lose some of their market shargon to dose stores, convenience stores and early(a) retailers who take a shit entered the industry.Threat of substitutes from fast- nourishment and take- remote outlets is not as prevalent, since legion(predicate) grocery stores let started stocking ready-to-eat meals and reserve deli services available for consumers. war-ridden pressures be profit in the industry with the strength entry of Wal-Mart and hot manner of speaking methods much(prenominal) as the internet. 2. grocery store industry witnessed a shell out of varys. Competitive pressures in the industry atomic sum 18 increasing and several new competitors including wal-mart atomic number 18 entering the market. saucily methods of delivery such as the interned are devising it difficult and challenging for traditional based stores to comply. customer preferences are diversifying and different demands are increasing. In accessory to the price war that strike the markets. The maturity of the industry, characterized by flat demand combined with the growth stirring of the dominant suppliers makes the industry a competitive battleground. Competitors educate toward driving costs stilt while responding to fleetly changing consumer tastes.Grocery managers therefore are challenged to house the marketing mix of tomorrow, emphasizing speed, flexibility, and early denomination of trends directed at segmented and rapidly evolving markets. The pile consumer market has been replaced by hundreds of highly diversified mini-markets for which grocery companies have to design custom made solutions. 3. place Success Factors of the grocery industry implicate the side by side(p) Low cost operations leading to admit down prices Convenient fixtures and large stores Wide increase ranges neat note Value added services customer commitment programsCutting-Edge technology, both front-end and back-end Looking at the in a higher place factors, there are many opportunities for Canadian grocers to modify on their services such as just integration as supplier/distri thator, innovative technologies equal RFID, and global expansion Loblaws unique tangible choice is that they own 63% of their corporate stores real soil properties. As menti angiotensin-converting enzymed above, the grocery industry is heavily commoditized and competitive. The Canadian market leader, Loblaw, serves a broad target market and integrates a low cost system with product and proces s differentiation.Through their multi-banner approach, they leverage their core competencies crosswise multiple businesses. The titanicgest winner for the familiarity had been the multi format approach. The party also holds about 60% of the real soil where they operate giving the benefit to change. The company furnish the stores every 5 years when the industry norms are 7 years. 4. SWOT ANALYSIS Strengths Strong commercialise Share Broad Product Portfolio Diversified butt in Format Low prices with not bad(predicate) fictional character items at all franchises Great customer service/customers have a say in the company observably loving workersConstantly face uping for nations of improvement troops of services Canadian unlike foreign competitors like wallmart Weaknesses Low Online Operations Limited Geographical front man Opportunities Rise in Demand for Private Labels strategical Plans Rising Demand for Organic Products Opening new stores helps them become more compet itive The unfortunate prudence result create a new vagabond of customers looking for cheaper prices Threats Expiry Of Agreement With Labor trade union Highly Competitive Market Wal-Mart Business Partnerships high prices on certain items makes them less competitive in those areas (electronics and household furniture).By the above S. W. O. T abbreviation, one can see that Loblaws KSFs are on track and that they are headed in the even off direction to bring them back on top. There is of course still work for Loblaw to do with their pricing, up to now that will come with time because when the company is doing better, they will be able to lower their prices even more. They are giftting up a good fleck though Loblaws prices for certain items were only a true 10-15 cents higher than that of Wal-Mart which demonstrates that they are climbing the ranks and will finally pose as a threat to WalMart. cosmos pure Canadian company is also a core competency because many nation love su pporting their country even if it means pass an extra 10-15 cents. These key factors (low prices, better quality products, mealy customer service, and being Canadian) will help Loblaw grind away to the top again. 5. Lederers project to combat the threat ofWal-MartSupercentre grocery stores turned bad on the company Consolidating its dissemination centres, which supposedly made the tack twine more efficient, resulted in the departure of many of the chains general ware demoraliseers who were unwilling to move.There were numerous delays and coordination problems as suppliers had rile shipping their goods to stores on time, and Loblaws was forced to mark it down in order to liquidate excess stock. Expanding its inventory to general merchandise, supposedly to make a one-stop location like Wal-Mart Supercentres, was considered by many customers to be infra the standards of Loblaws. Lederer stopped investing in its convential supermarkets and focused on building its major disc ount format, the real Canadian superstores. He spent 25 million dollars to trigger off old employees to retire early as he turned traditional old stores into superstores. . This is a pregnant evaluation, because Loblaw is Canadas largest food distributor, as well as one of the largest private sector employers. Loblaw operates under name such as The Real Canadian Superstore, Fertinos, Provigo, SuperValu, Zehrs, Atlantic Superstore, Loblaws, and Your Independent Grocer. Along with food and household products, Loblaw provides consumers with early(a) services, such as banking, gas stations, pharmacies, photo developing, ironical cleaning, and fitness centers. A qualitative and quantitative analysis of Loblaw was conducted through secondary research, using both intimate and external sources.This report focuses on the goods distribution and marketing aspects of Loblaw, by exploring its history, primary products, social responsibilities, and financial position. Ratios of the recent and present will be taken into condition when researching and making recommendations. History Loblaw Companies Limited was incorporated in 1956 and it now employs over 122 000 part-time and full-time employees end-to-end its 990 branches. As a subsidiary of George Weston Limited, it has supplied the Canadian market with innovative products and services for more than 45 years.The superstore subject was first introduced to Western Canada in 1979. Loblaw operates in a highly competitive industry, challenged by many other supermarkets, such as Safeway. Organizational Structure The organisational structure of Loblaw Companies Limited is classified according to the functions of all(prenominal) department. Areas of specialization include auditing, governance and compensation, pensions, environment, wellness and safety, and executive. deputation and team authority govern this tall, hierarchical organization, where individuals at heart the several layers report back to their superiors in the chain of command.Ultimately each senior vice-president reports to the executive vice-president, who in turn reports to the president of the company, who is responsible to the senesce of Directors. The Board of Directors itself is divided into louvre committees, which represent each area of specialization. Social Responsibility Loblaw demonstrates its social responsibilities in the quest areas Environment Loblaw has various company policies concerning the environment, one of which demands that various operating sectors develop and implement float reduction.Reports are given to the environmental committee operated by a sect of board of directors who are not at once employed by Loblaw. Attempting to project an environmentally friendly image, Loblaw announced in 2002, that all of their garden centers would be pesticide free by 2003. Their waste reduction hatchway has seen positive results, as was the case in 1999, when it decrease solid waste by 75%, thoroughgoing waste b y 60% and water waste by 38%. Use of underground tanks has been decommissioned in addition PCBs and as opera hatos have been removed from company operatives.Employees The philosophy that a companys conquest is directly affected by the attitude of the employees, is put into action when Loblaw concentrates on coordinating positive relationships with their employees. Employee benefits include life or health insurance, dental insurance, and a pension plan. A stock option plan and an Employee Share Ownership Plan (ESOP), which are administered through a trust, are also available. This allows employees to make five percent deductions from their regular earnings Loblaw then contributes 15% of each employees contributions to the ESOP plan.Recruiting, hiring, and training are all done on a store-by-store basis. Loblaw maintains health and safety programs in its stores to address health and employment safety. This system is also subject to compliance audits. familiarity Charities such as C anadian Breast crab louse Foundation, Canadian Cancer Society, hot seat Choice Childrens Charity, Easter Seals, the Canadian Merit Scholarship and many more benefit from Loblaws donations. Loblaw has purchased Maple Leaf Gardens, boost developing its roots in the city of Toronto. Customers Loblaw strives to have a good relationship with ts consumers through feedback, quality customer and product services. Programs such as the Presidents Choice Financial MasterCard allow consumers to fool points, which are redeemable for goods within the store. Loblaw also attempts to get feedback from consumers through focus groups and surveys. However, Loblaw fails in the area of consumer righteousness by not allowing suppliers to indicate whether or not their products are genetically engineered. The company goes as out-of-the-way(prenominal) as to demand that companies selling genetically engineered goods eliminate proclaiming so on their labels.Investors Loblaw is on the job(p) towards be ing socially responsible to their investors by keeping them informed by releasing online annual reports and mailing them out. The company provides sustainable returns through dividends by reinvesting cash flow into the steadys real estate and land. 7. loblaws was the largest supermarket chains in Canada. they give wayed a series of the real Canadian superstores in Ontario, where they expected wallmart to open their first food superstores. These were built as low-cost, one stop shop destinations.The real Canadian superstores were as the size of cardinal football fields and sold a confederacy of groceries and non-food items. Lederer consolidated the the companies distribution centers from 32 to 26 facilities, in order to increase the efficiency of the supply systems. He remainderd old warehouses and opened new ones in Brampton Ontario. Real Canadian superstore were located along walmart supercenters as if facing at war. Geographically wise they were allocated at same areas and wh en it comes to goods and commodities, the both handled non food items along with their familiar groceries. The war did begin. 8. Galen Weston Jr. as supposed to render the company by fixing the broken delivery system. He started by managing a pilot online grocery business in Ontario. Galen along with his team outline a new business plan. He examine the problems and found out that they have a big delivery problem and that they are still over-priced. He aimed to increase sales and earnings by wounding prices, offering more products, and improving customer service. Galen started working on investors and opening up in idols such as the maple leaf stadium in downtown which he turned into a grocery store as to gain people due to their lovemaking to the hockey team which was a symbol at the ountry. Moreover he succeeded in becoming number one again. 9. Recommendations for Loblaw A private label a store like Loblaws needs a particular way it can standout the competition. They could a pproach the strategy of having private labels in store. Cut down on general merchandise they should reduce low quality goods and focus on selling people groceries with good quality plus they should concentrate on groceries quite than electronics because too much diversity infects being the best at a certain field.Make the store attractive to the customers eyes try to beat wal-mart by obtaining a store that is clean, decorated, high ceilings, no open boxes, attractive lighting and displays. Make the stores easy to rank and let commodities that are of the same interest be on a route that customers dont pass by unwanted goods. Let people say this is the store I want to buy from. Supply chain management its clear that the supply chains logistics used by Loblaws should be changed. Empty shelves phenomena should become extinct because it makes good stores look cheap and unreliable.Increase marketing marketing and advertizement should be extreme and excessive especially when change happ ens, prices differ, and news are there. Promotions should reach customers well large to gain or even regain their loyalty. sight should know that the company recognized their mistakes and problems and solved them out. Downsize close unprofitable stores, this will reduce payroll and increase the funding to solve damaged issues. Off coarse this is the last measure companies look at but its helpful at the long run.