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 - – central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, wage bills are increasing, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices,
there is increasing trade war between United States & China, increasing household debt because of falling income levels, 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 -
High switching costs
– The high switching costs that Loblaw 90s has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
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.
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.
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.
Superior customer experience
– The customer experience strategy of Loblaw 90s in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
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.
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.
Low bargaining power of suppliers
– Suppliers of Loblaw 90s in the sector have low bargaining power. Loblaw Companies Ltd.: Differentiation in the 90s and Beyond has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Loblaw 90s to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
Organizational Resilience of Loblaw 90s
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Loblaw 90s does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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 -
Skills based hiring
– The stress on hiring functional specialists at Loblaw 90s has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Loblaw 90s is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Loblaw Companies Ltd.: Differentiation in the 90s and Beyond can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Loblaw Companies Ltd.: Differentiation in the 90s and Beyond, in the dynamic environment Loblaw 90s has struggled to respond to the nimble upstart competition. Loblaw 90s has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Loblaw Companies Ltd.: Differentiation in the 90s and Beyond, it seems that the employees of Loblaw 90s don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Loblaw Companies Ltd.: Differentiation in the 90s and Beyond 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 Loblaw 90s has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Loblaw 90s, firm in the HBR case study Loblaw Companies Ltd.: Differentiation in the 90s and Beyond needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
Products dominated business model
– Even though Loblaw 90s has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Loblaw Companies Ltd.: Differentiation in the 90s and Beyond should strive to include more intangible value offerings along with its core products and services.
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 -
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.
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.
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.
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. Loblaw 90s can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Loblaw 90s can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing 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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Loblaw 90s 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.: Differentiation in the 90s and Beyond, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Loblaw 90s has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Loblaw Companies Ltd.: Differentiation in the 90s and Beyond - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Loblaw 90s to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Loblaw 90s in the consumer business. Now Loblaw 90s can target international markets with far fewer capital restrictions requirements than the existing system.
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.
Developing new processes and practices
– Loblaw 90s can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing 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.
Creating value in data economy
– The success of analytics program of Loblaw 90s has opened avenues for new revenue streams for the organization in the industry. This can help Loblaw 90s to build a more holistic ecosystem as suggested in the Loblaw Companies Ltd.: Differentiation in the 90s and Beyond case study. Loblaw 90s can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 -
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 Loblaw 90s.
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.
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 dependence on third party suppliers
– Loblaw 90s high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
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 .
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.
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.
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.: Differentiation in the 90s and Beyond, Loblaw 90s may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Loblaw 90s in the Sales & Marketing industry. The Sales & Marketing 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.
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.
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.
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.
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.