Essay About Loblaw Wholesales Clubs And Wal-Mart

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Exhibit 1: Porters 5 Forces: Canadian Weiner Industry THREAT OF NEW ENTRANTS = LOW (No Power) Capital Requirement: High Economies of Scale: High Learning Curve: High Customer Loyalty: High SUPPLY (Minimal Power) Grocery product manufacturers RIVALRY (Most Power) Grocery Chains: Sobeys, Metro, A&P, Safeway, Wal-Mart, Loblaw Wholesales Clubs: Costco, Sams Clubs Specialty Chains: Whole Foods Inc. Convenience Stores Online Shopping: Grocery Gateway BUYER (Some Power) Individual and family consumers SUBSTITUT E (No Power) #206605513 Figure 3: Major Canadian Grocery Chain Competition Comparison Price # of Stores in 2002 # of Employees in 2002 Sales in 2002 Market Share in 2002 Loblaw Low 1,129 122,300 $23.1 Billion 32% Wal-Mart Sobeys Low Medium N/A N/A $2.76 Billion 3.7% 1,500 33,000 $10.41 Billion 14.7% Metro Medium 833 10,733 $5.15 Billion 7.0% Safeway Medium 214 28,000 $3.48 Billion 7.4% A&P Medium 240 N/A $3.99 Billion 5.9% 8 Figure 4: VRIO RESOURCE Low Price Customer Loyalty Cost Efficiencies Control Label Program (PC) Store as a Brand Program Lead Market Share Supply Chain Management Real Estate PC Financial/ Gas Stations Distribution Network Real Canadian Superstores VALUABLE RARE INORGANIZATION SUSTAINABLE IMMITABLE ADVANTAGE YES NO NO YES ? YES YES YES YES YES YES YES YES YES YES NO NO YES YES YES NO YES NO NO YES YES YES YES YES YES NO YES YES NO YES YES YES YES YES YES YES YES YES YES YES ? ? YES YES YES ? YES ? ? YES Source: Beamish, Paul W. Cases in Strategic Management Eighth Edition, Case 3: Loblaw Companies Limited, McGraw-Hill Ryerson, 2006 #206605513 ADMS 4900 CASE STUDY: LOBLAW NOTES >John A. Lederer, president of Loblaw Companies Limited >Wal-Mart to expand with Sams Club wholesale to provide groceries to consumers, emerging as a supercenter. Increase competition of Loblaw >Globally, groceries had pushed sales 30% for Wal-Mart >Canada specific case Strategy >Loblaw current strategy: driven by 1. Driving down costs by size and operational efficiencies and 2. Differentiating products and stores. Strategy was consistent and transparent Industry Overview >$66.8 billion food