Case Study Description of Loblaw Companies Ltd.: The Road Ahead
After 24 years at the helm of Loblaw Companies, Canada's largest food retailer, Richard Currie is trying to decide on a strategy for the company's future. The firm's current emphasis on one-stop shopping for everyday household needs has been phenomenally successful. Its portfolio of stores to match local demographics, along with strong private label programs, has made the company one of the top mass retailers worldwide, but what can Currie do for an encore?
Authors :: Ray A. Goldberg, David E. Bell, Ann Leamon
Swot Analysis of "Loblaw Companies Ltd.: The Road Ahead" written by Ray A. Goldberg, David E. Bell, Ann Leamon includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Currie Loblaw facing as an external strategic factors. Some of the topics covered in Loblaw Companies Ltd.: The Road Ahead case study are - Strategic Management Strategies, Leadership and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Loblaw Companies Ltd.: The Road Ahead casestudy better are - – increasing government debt because of Covid-19 spendings, increasing energy prices, wage bills are increasing, increasing commodity prices, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions,
supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Loblaw Companies Ltd.: The Road Ahead
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Loblaw Companies Ltd.: The Road Ahead case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Currie Loblaw, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Currie Loblaw operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Loblaw Companies Ltd.: The Road Ahead can be done for the following purposes –
1. Strategic planning using facts provided in Loblaw Companies Ltd.: The Road Ahead case study
2. Improving business portfolio management of Currie Loblaw
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Currie Loblaw
Strengths Loblaw Companies Ltd.: The Road Ahead | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Currie Loblaw in Loblaw Companies Ltd.: The Road Ahead Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Currie Loblaw in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Currie Loblaw is one of the most innovative firm in sector. Manager in Loblaw Companies Ltd.: The Road Ahead Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Currie Loblaw has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Currie Loblaw has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Sustainable margins compare to other players in Leadership & Managing People industry
– Loblaw Companies Ltd.: The Road Ahead firm has clearly differentiated products in the market place. This has enabled Currie Loblaw to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Currie Loblaw to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Currie Loblaw in the sector have low bargaining power. Loblaw Companies Ltd.: The Road Ahead has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Currie Loblaw to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Currie Loblaw is present in almost all the verticals within the industry. This has provided firm in Loblaw Companies Ltd.: The Road Ahead case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Strong track record of project management
– Currie Loblaw is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy in the Loblaw Companies Ltd.: The Road Ahead Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Analytics focus
– Currie Loblaw is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Ray A. Goldberg, David E. Bell, Ann Leamon can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Training and development
– Currie Loblaw has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Loblaw Companies Ltd.: The Road Ahead Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
High brand equity
– Currie Loblaw has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Currie Loblaw to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Leadership & Managing People field
– Currie Loblaw is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Currie Loblaw in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Loblaw Companies Ltd.: The Road Ahead | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Loblaw Companies Ltd.: The Road Ahead are -
Lack of clear differentiation of Currie Loblaw products
– To increase the profitability and margins on the products, Currie Loblaw needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Currie Loblaw has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Loblaw Companies Ltd.: The Road Ahead, is just above the industry average. Currie Loblaw needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Aligning sales with marketing
– It come across in the case study Loblaw Companies Ltd.: The Road Ahead that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Loblaw Companies Ltd.: The Road Ahead can leverage the sales team experience to cultivate customer relationships as Currie Loblaw is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Currie Loblaw has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Currie Loblaw supply chain. Even after few cautionary changes mentioned in the HBR case study - Loblaw Companies Ltd.: The Road Ahead, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Currie Loblaw vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– After analyzing the HBR case study Loblaw Companies Ltd.: The Road Ahead, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Increasing silos among functional specialists
– The organizational structure of Currie Loblaw is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Currie Loblaw needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Currie Loblaw to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Loblaw Companies Ltd.: The Road Ahead HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Currie Loblaw has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Loblaw Companies Ltd.: The Road Ahead HBR case study mentions - Currie Loblaw takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Loblaw Companies Ltd.: The Road Ahead, in the dynamic environment Currie Loblaw has struggled to respond to the nimble upstart competition. Currie Loblaw has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Loblaw Companies Ltd.: The Road Ahead | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Loblaw Companies Ltd.: The Road Ahead are -
Manufacturing automation
– Currie Loblaw can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Currie Loblaw can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Currie Loblaw can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Loblaw Companies Ltd.: The Road Ahead, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Currie Loblaw can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Leadership & Managing People segment.
Low interest rates
– Even though inflation is raising its head in most developed economies, Currie Loblaw can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Better consumer reach
– The expansion of the 5G network will help Currie Loblaw to increase its market reach. Currie Loblaw will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Currie Loblaw to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Currie Loblaw can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Currie Loblaw can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Creating value in data economy
– The success of analytics program of Currie Loblaw has opened avenues for new revenue streams for the organization in the industry. This can help Currie Loblaw to build a more holistic ecosystem as suggested in the Loblaw Companies Ltd.: The Road Ahead case study. Currie Loblaw can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Currie Loblaw can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Loblaw Companies Ltd.: The Road Ahead suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Currie Loblaw can use these opportunities to build new business models that can help the communities that Currie Loblaw operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Learning at scale
– Online learning technologies has now opened space for Currie Loblaw to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Currie Loblaw in the consumer business. Now Currie Loblaw can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Loblaw Companies Ltd.: The Road Ahead External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Loblaw Companies Ltd.: The Road Ahead are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Currie Loblaw in the Leadership & Managing People industry. The Leadership & Managing People industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Regulatory challenges
– Currie Loblaw needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Leadership & Managing People industry regulations.
Environmental challenges
– Currie Loblaw needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Currie Loblaw can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Shortening product life cycle
– it is one of the major threat that Currie Loblaw is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Currie Loblaw.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Currie Loblaw can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Loblaw Companies Ltd.: The Road Ahead .
Consumer confidence and its impact on Currie Loblaw demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Currie Loblaw needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Loblaw Companies Ltd.: The Road Ahead, Currie Loblaw may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Technology acceleration in Forth Industrial Revolution
– Currie Loblaw has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Currie Loblaw needs to keep up with the evolution of technology in the Leadership & Managing People sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Currie Loblaw in the Leadership & Managing People sector and impact the bottomline of the organization.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Increasing wage structure of Currie Loblaw
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Currie Loblaw.
Weighted SWOT Analysis of Loblaw Companies Ltd.: The Road Ahead Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Loblaw Companies Ltd.: The Road Ahead needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Loblaw Companies Ltd.: The Road Ahead is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Loblaw Companies Ltd.: The Road Ahead is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Loblaw Companies Ltd.: The Road Ahead is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Currie Loblaw needs to make to build a sustainable competitive advantage.