Essay on Loblaw Companies Limited

1353 Words Oct 7th, 2008 6 Pages
The grocery industry has a relatively high market commonality; a lot of grocery stores are somewhat related in terms of technologies used, labor force and the products or services offered in the stores. Differentiation with other competitors is key for survival in this highly competitive industry.

External Environment
Demographic Segment
Canada’s demographic trend is very unique due to the increasing number of immigrants and its aging population. Ethnics come to Canada mainly from China, South Asia, Middle East, Central and South America, and Caribbean. The increase in immigrants create a demand for the grocery industry to carry a broader line of products that cater to its multicultural customer base. Furthermore, Canada’s aging
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Whereas “President’s Choice” is their most recognized food brand in Canada, the economical brand “no-name” was developed to target price conscious consumers.

Alternatives Loblaw should change its strategy.
Pros: One of world’s most profitable company, Wal-Mart is a major threat to Loblaw and it is well known as a strong cost leader in retail stores. The faster is the better. By changing its strategy and reacting swiftly, it will prevent or at least soften Wal-Mart’s blow to Loblaw’s sales and market share.
Cons: Loblaw has been in the grocery market for a long time and therefore has refined its procedures over time. A large scale company like Loblaw will have a hard time changing its direction. Furthermore, there may be resistance to change from employees. In addition, they would be at risk to loosing its loyal customers as well as concerns regarding the changing quality of product and services.

Loblaw should not change its strategies.
Pros: Although Wal-Mart and Loblaw share similar commodities, their resources are different and Loblaw has its unique advantages to reach a broader base of consumers. By keeping its strategies, it can avoid extra expenses, time and effort, and can focus on what it’s doing right now.
Cons: Not taking action is a high-risk bet for Loblaw, considering how much success Wal-Mart has in the retail industry.

Loblaw should not change its

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