Swot Analysis of "Loblaw Companies Ltd.: Differentiation in the 90s and Beyond" written by Ray A. Goldberg, Thomas N. Urban includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Loblaw 90s facing as an external strategic factors. Some of the topics covered in Loblaw Companies Ltd.: Differentiation in the 90s and Beyond case study are - Strategic Management Strategies, and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Loblaw Companies Ltd.: Differentiation in the 90s and Beyond casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, increasing household debt because of falling income levels, increasing transportation and logistics costs, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, etc
Introduction to SWOT Analysis of Loblaw Companies Ltd.: Differentiation in the 90s and Beyond
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Loblaw Companies Ltd.: Differentiation in the 90s and Beyond case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Loblaw 90s, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Loblaw 90s 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.: Differentiation in the 90s and Beyond can be done for the following purposes –
1. Strategic planning using facts provided in Loblaw Companies Ltd.: Differentiation in the 90s and Beyond case study
2. Improving business portfolio management of Loblaw 90s
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Loblaw 90s
Strengths Loblaw Companies Ltd.: Differentiation in the 90s and Beyond | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Loblaw 90s in Loblaw Companies Ltd.: Differentiation in the 90s and Beyond Harvard Business Review case study are -
Training and development
– Loblaw 90s 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.: Differentiation in the 90s and Beyond 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.
Operational resilience
– The operational resilience strategy in the Loblaw Companies Ltd.: Differentiation in the 90s and Beyond 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.
Successful track record of launching new products
– Loblaw 90s has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Loblaw 90s 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.
Innovation driven organization
– Loblaw 90s is one of the most innovative firm in sector. Manager in Loblaw Companies Ltd.: Differentiation in the 90s and Beyond Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Loblaw 90s is present in almost all the verticals within the industry. This has provided firm in Loblaw Companies Ltd.: Differentiation in the 90s and Beyond 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.
Learning organization
- Loblaw 90s is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Loblaw 90s is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Loblaw Companies Ltd.: Differentiation in the 90s and Beyond Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Loblaw 90s has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Loblaw Companies Ltd.: Differentiation in the 90s and Beyond HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Loblaw 90s has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Loblaw 90s to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Loblaw 90s has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Loblaw Companies Ltd.: Differentiation in the 90s and Beyond - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Sales & Marketing industry
– Loblaw Companies Ltd.: Differentiation in the 90s and Beyond firm has clearly differentiated products in the market place. This has enabled Loblaw 90s to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Loblaw 90s to invest into research and development (R&D) and innovation.
Strong track record of project management
– Loblaw 90s is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Loblaw 90s 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, Thomas N. Urban 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.
Weaknesses Loblaw Companies Ltd.: Differentiation in the 90s and Beyond | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Loblaw Companies Ltd.: Differentiation in the 90s and Beyond are -
Aligning sales with marketing
– It come across in the case study Loblaw Companies Ltd.: Differentiation in the 90s and Beyond 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.: Differentiation in the 90s and Beyond can leverage the sales team experience to cultivate customer relationships as Loblaw 90s is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Loblaw 90s has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Loblaw 90s even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Capital Spending Reduction
– Even during the low interest decade, Loblaw 90s 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.
Need for greater diversity
– Loblaw 90s 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.
Interest costs
– Compare to the competition, Loblaw 90s has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Increasing silos among functional specialists
– The organizational structure of Loblaw 90s is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Loblaw 90s needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Loblaw 90s to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Ray A. Goldberg, Thomas N. Urban suggests that, Loblaw 90s is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
No frontier risks strategy
– After analyzing the HBR case study Loblaw Companies Ltd.: Differentiation in the 90s and Beyond, it seems that company is thinking about the frontier risks that can impact Sales & Marketing 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.
High cash cycle compare to competitors
Loblaw 90s has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow to strategic competitive environment developments
– As Loblaw Companies Ltd.: Differentiation in the 90s and Beyond HBR case study mentions - Loblaw 90s 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Loblaw Companies Ltd.: Differentiation in the 90s and Beyond has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Loblaw 90s 's lucrative customers.
Opportunities Loblaw Companies Ltd.: Differentiation in the 90s and Beyond | 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.: Differentiation in the 90s and Beyond are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Loblaw 90s can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Loblaw 90s can use these opportunities to build new business models that can help the communities that Loblaw 90s operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Loblaw 90s to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Loblaw 90s to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Loblaw 90s 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.
Better consumer reach
– The expansion of the 5G network will help Loblaw 90s to increase its market reach. Loblaw 90s 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.
Leveraging digital technologies
– Loblaw 90s can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Loyalty marketing
– Loblaw 90s has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Loblaw 90s 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Loblaw 90s is facing challenges because of the dominance of functional experts in the organization. Loblaw Companies Ltd.: Differentiation in the 90s and Beyond case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Loblaw 90s can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Loblaw 90s in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
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 Loblaw 90s 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.
Buying journey improvements
– Loblaw 90s can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Loblaw Companies Ltd.: Differentiation in the 90s and Beyond 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.
Threats Loblaw Companies Ltd.: Differentiation in the 90s and Beyond 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.: Differentiation in the 90s and Beyond are -
Increasing wage structure of Loblaw 90s
– 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 Loblaw 90s.
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 Loblaw 90s in the Sales & Marketing sector and impact the bottomline of the organization.
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. Loblaw 90s needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Loblaw 90s business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Loblaw 90s 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.
Shortening product life cycle
– it is one of the major threat that Loblaw 90s is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Loblaw 90s will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Stagnating economy with rate increase
– Loblaw 90s can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Loblaw 90s with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Loblaw 90s has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Loblaw 90s needs to keep up with the evolution of technology in the Sales & Marketing 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Loblaw 90s 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.: Differentiation in the 90s and Beyond .
Weighted SWOT Analysis of Loblaw Companies Ltd.: Differentiation in the 90s and Beyond 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.: Differentiation in the 90s and Beyond 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.: Differentiation in the 90s and Beyond 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.: Differentiation in the 90s and Beyond 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.: Differentiation in the 90s and Beyond 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 Loblaw 90s needs to make to build a sustainable competitive advantage.