Loblaw Companies Limited Case Study Essay

Words: 2131
Pages: 9

Loblaw Companies Limited Case Study

Table of Contents

Introduction 3
External Analysis 4
Internal Analysis 8
Alternatives 9
Recommendation 10
References 11

Loblaw Companies is facing the greatest competitive challenge of its recent history with the launch of Wal-Mart into their markets. Having originally entered the market in 1994 through the acquisition of 122 Woolco Stores, Wal-Mart is planning to open their first SuperCenter in Canada imminently. Known for their Every Day Low Price (EDLP) value proposition, exceptionally efficient supply chain, logistics and ERP process execution, marketing aimed at budget-conscious buyers, and product selection,
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This program has on average cost suppliers up to $4M to participate in (Reda, 2005). There is a duality of power that suppliers have in the retailing industry globally and it is accentuated in Canada, as the market is split into smaller regional retailers and larger, more capitalized ones. Loblaw must continue to aggressively pursue electronic enablement of their suppliers to stay on parity with Wal-Mart and other potential market entrants.
Buyer Power
There is significant buyer power in the Canadian retail industry, as is illustrated by the 4% growth rate as of 2002. With the exception of ethnic and organic markets which have a 20% growth rate, the industry is for the most part flat in terms of performance. The battle for customer loyalty is intense and the loyalty cards are only marginally effective. As Loblaw has learned, the loyalty cards have contributed to market share growth when combined with marketing efforts that include market penetration strategies, frequency of communication and strategies, and personalized marketing in the forms of customized flyers. Buyers are now also forcing innovation into the global retailing industry, as many couples have both husband and wife working. This is forcing the innovation of Home Meals Replacement (HMR) and is one of the more promising categories for all retailers globally. Loblaw needs to respond