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Executive Summary
Loblaw Companies Limited must develop a corporate strategy in response to Wal-Mart's upcoming expansion in the Canadian market through new Sam's Club locations and possible Supercenters. Loblaw's current success as Canada's leading grocery retailer can be attributed to the popularity of its private label brands, its streamlined operations, and large-scale purchasing efficiencies. Wal-Mart poses a significant threat to this model through its extreme price competitiveness achieved through the use of advanced supply-chain management technology and effective relationships with suppliers. Based on the company's past record of immediate success in new markets, Wal-Mart's decision to open more Sam's Club stores in Canada requires an immediate response from Loblaw's.
Several possible strategies should be investigated and evaluated with the objective of maintaining market share, short-term profitability, quality standards, and long term growth. In response to Wal-Mart's expansion, Loblaw's has the option to:
a) Maintain its future course with its multiple store brands and private labels
b) Launch a new loyalty program and rebrand retail outlets under the Loblaw's name (some would be designated as Loblaw's + Superstores)
c) Place emphasis on expanding the Real Canadian Superstore outlet chain to compete with Walmart Superstores
Analysis indicates that the creation of one common Loblaw's brand would be most beneficial in realizing the company's goals in both the short and long term. A new loyalty program would further solidify Canadians' support of the Loblaw's brand and attract new customers at the same time. This strategy wi ...