Loblaw Case Study Solution

Firm History:As stated in the case study, “Loblaw Grocetariaswas founded in 1919 by Theodore Pringle Loblaw J, Milton Crok. In 1947, George Weston, acquired a small stake in the company. Eventually, Loblaw companies limited became a part of George Weston limited, Canadian based company. Now it is controlled by third generation of Weston family. It operates in two distinct segments: food processing and food distribution”. Though Loblaw is into mergers and acquisitions, it has an equal focus on organic growth. It operates in four regions: Ontario, Quebec, Atlantic and Western regions. In 2002, Loblaw became Canada’s largest food distributor with sales of 23.1 billion dollars in 2002 and 122,300 employees.
“Loblaw 's operates a private label program

This makes it susceptible to changes in regulations in either industry. Furthermore, employees of Loblaw are part of UFCW. So any changes in minimum wage policy by UFCW will deeply affect Loblaw’s. Economic: Though Canadian retail market has become saturated, Loblaw’s net income and EPS have been growing at a steady rate. Social: Changing consumer preferences and increase in disposable income have disrupted the retail industry. Additionally, demand for Socio-Cultural: Due increasing double income families, there is an increase in demand for ready-to-heat and ready-to-eat foods. Technology: Over the last few years, technology has advanced in leaps and bounds. Big retailers such as Wal-Mart use technology to drive down their cost and to improve operational efficiency. If Loblaw wants to compete with Wal-Mart, it should start upgrading its IT infrastructure. Additionally, employ tools such as ECCnet to increase

Rivalry among competitors: High: Grocery chains have been growing at a steady rate in the past few years and so has been the competition. Loblaw faces competition from 4 leading chains: Sobey’s(14.7%), Metro(7%), A&P(5.9%) and Canada Safeway(7.4%). In addition to the local retailers, Loblaw’s also faces competition from global retail chains such as Walmart, Costco etc.
Internal Analysis:
SWOT:
Strengths: 1.Largest food retailer in Canada. 2. Strong reputation and a recognizable brand 3. Good quality products at a low price 4. Value added in store services. Ex. Financial services. 5. Good compensation system for employees. 6. Owned stores at prime locations. 6. Has different type of stores which service different type of customers 7. Upgraded stores every 5 years rather than 7
Weakness: 1.Weak IT infrastructure 2. Operates only in Canada 3.Has too many banners under its brand name
Opportunities: 1.Food industry has been growing at a constant rate. 2. The increase in double income families has increased the amount of disposable income people have. 3. ERP has made integration of IT with suppliers easy. 4. ECC net can help Loblaw to increase it’s savings. 5. Growing population and growing number of people with internet connectivity. 6. Growth of specialty chains due to inflow of immigrants. 7. Standardization of