Loblaw Essay

2286 Words Mar 23rd, 2015 10 Pages
Introduction
Loblaw Companies Limited’s business strategy of “driving down costs through size and operational efficiencies, and differentiating both its products” has enabled the firm to gain 32% of the food retail market in Canada. Despite this success, Wal-Mart is looking to enter into the mature food retail market with the introduction of their SuperCenters (combining grocery and nonfood items). Wal-Mart is a forceful competitor, and the Every Day Low Prices strategy of Wal-Mart’s Supercenters could wean away traffic from Loblaw’s various value banners. The objective of this paper is employ a PEST analysis and Porter’s 5 Forces Analysis to access the Canadian food retailer industry to decide if Loblaw should continue its current
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Meeting consumers’ everyday needs by being in over 100 gas stations across Canada or upgrading its 63% owned corporate locations every 5 years compared to the industry standard of 7 years to meet customer needs. Real estate ownership provides maximum operating flexibility. It presents operating flexibility to change a store size, make additions, or downsize at the store level to keep up with consumer demand. The culture provides another layer of brand loyalty for Loblaw that is hard to imitate, which makes their time-tested strategy a differentiator.
Good analysis above.
PEST Analysis Even though Loblaw’s strategy is a differentiator and has proven to be successful for a long time, Wal-Mart is a dynamic competitor, and the Every Day Low Prices strategy of Wal-Mart's SuperCenters could takeaway traffic from Loblaw's various value banners. A PEST analysis is created to understand the current Canadian food retail marketplace to understand why Wal-Mart believes there is opportunity to enter this ultra-competitive marketplace. The PEST analysis contains external forces that Wal-Mart cannot directly control, like consumer habits, which means Wal-Mart needs to manage their macro environment in a way that benefits them so they can enter the food retailing industry in Canada.
Political
Wal-Mart is the largest private employer in

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