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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…show more content…
When Loblaw introduced President’s Choice (PC) private label it was a rare resource that granted them temporary competitive advantage in the food retail market. It is a rare resource; but why is it only temporary. It’s a strong brand. Loblaw’s President’s Choice private label itself could not confer any advantage for the company if it was not organized to capture the value from them. Loblaw’s senior management team that averages 18 years of experience has created systems, processes, policies, organizational structure, and culture to be able to fully realize the potential of the President’s Choice brand. Good Incentivized by stock options senior management not only pays top wages and benefits to all employees to create a great working culture, they continued to utilize the competitive advantage the President’s Choice brand to increase customer loyalty. President's Choice Financial program provides Loblaw’s consumers with financial services, such as everyday banking, loan, and investments. Also, they developed brand loyalty through a redemption points system, where consumers could trade their loyalty points for free groceries. These added values are what will keep Loblaw’s strategy a differentiator. The seasoned and experienced management team, as well as performance based pay has made the culture at Loblaw to constantly strive to improve the private label value proposition, which in turn makes it hard for competitors to imitate the brand loyalty PC brand
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