The Strategy of Loblaw Companies Limited - Essay Example

? Case Report October Despite the type of strategy a strategy must at the minimum must be considered an integratedoverarching concept of how the business or organization will achieve it objectives and reach its short term and long term goals. Donald Hambrick and James Frederickson present a framework for strategy design insisting that a strategy has five distinct elements (Hambrick & Fredrickson, 2005, p 51). Providing the answers to five questions will distinguish these five elements allowing them to form a unified whole. Loblaw Companies Limited is the largest food retailer in Canada and also a leading provider among general merchandise, financial products, pharmacies and financial services. They have over 1000 corporate and franchised stores and they employ more than 135,000 employees, both full time and part time. As such they are one of Canada’s largest private sector employers (Loblaw Companies Limited, 2011). Strategies of a company should contain the answers to pertinent questions as to how the company will be a leader among their competitors, where will they base their activity, what is outlined in the company’s business and marketing plans to assist the company in reaching goals, how fast and in what order should our actions be planned to get where we want to be and in what economic ways will we realize our returns (Hambrick & Frederickson, 2005, p 3). Deciding the arena, or where the company will be active should not be a generalized decision but as specific as possible in order to focus strongly in implementing successful strategy that will allow them to expand and consider the possibility of one day reaching the status of a product, service, or company that could be considered general by the population. There are very few of these we consider to be general, meaning they are obviously the leader and most often thought of in a particular industry with little competition; the fact is that they just are and there aren’t many decisions to be made or choices when a product, service or company reaches the status of being general. Though there are many general products, such as bread, shoes, cars , etc. there are actually very few that when we think of the general word there is only one choice that comes to mind. This would also be considered defining the scope of the business (Collis, Rukstad, 2008, p2). While Loblaw’s mission is to be ‘Canada’s best food, health and home retailer their mission also includes innovative products at great prices (LobLaw Companies Limited.-2, 2008)’. Loblaw’s chose as it’s arena restoring innovation by making their brands and assortment of products worth changing supermarkets for and targeting consumers with specific brands and assorted product specialties that are hard to find in other supermarkets. Their brands wanted to strengthen and also revitalize product development, to simplify and also to grow. These areas are considered the arena the company has chosen to be active in. Core priorities of the company also describe strategy the company will use to achieve goals and reach milestones. LobLaw operations planned to focus on achieving greater performance and increasing engagement among colleagues, strengthening the customer experience, simplifying assortments and improving price perceptions (LobLaw Companies Limited.-2, 2008) Enhanced decision making support, an improvement in company infrastructure, along with better talent retention, motivation and development are also vehicles the company’s strategy includes in order to reach the goals their plans have outlined. Various vehicles are less effective than those which are concentrated and strong efforts utilizing only a few strategies at once in order to focus efforts. Differentiator’s used by LobLaw are those factors and attributes that LobLaw will use to differentiate itself among competitors; while not necessarily having one product that is used as differentiator among competitors companies can also have the best combination of differentiators can allow an advantageous marketplace position (Hambrick, & Fredrickson, 2005). Differentiators in 2008 included a signature campaign kickoff, the launch of over 600 new food product brands, an inexpensive and cheap clothing line branded Joe-Fresh and a complete review and overhaul of their home product lines (LobLaw Companies Limited.-2,2008, p 6). Loblaw is also focused on all brands and products being always available, ensuring the store in constantly replenished and there is never a need for the consumer to look elsewhere for the same brand or product. Their price differentiator’s were 2-4% than their competitors in their superstores and 6-8% higher than their benchmark competitors in their Great Foods stores. Pricing is reviewed regularly within the company and can easily be changed with marketing data and results (LobLaw Companies Limited.-2, 2008, p 7). Staging is the speed and sequence of major moves made within the company, this decision can be an important one determining how well new products, stores, innovations and ideas are accepted (Hambrick, & Fredrickson, 2005, p55). Staging decides which initiatives comes first, and in what order, speed, and sequence major moves follow. LobLaw decided on first defining corporate social responsibility and in 2007 followed a strategy that first allowed them to launch PC Angus Burgers, with sales reaching over 4 million, following a TV advertisement campaign for PC Indian Naan Bread which allowed them to successfully market and sale a years’ worth of this new product. There was a concentrated effort on optimizing current pilots with plans to enhance and roll out additional stores once successful (LobLaw Companies Limited.-2,2008, p1). Their staging included key new product promotions and introductions with less initial focus on the expansion of LobLaw stores and facilities as they strengthened their differentiators. LobLaw’s economic logic included a nice selection of exclusive brand name products, wholesale pricing in several of the LobLaw branches, and four chains considered to be hard discount stores. Weekly price positions were monitored and price zones were restructured. Investments were made on banners following a product priority basis and after an implemented plan of testing; this program was rolled out to 233 stores. Priorities included cost reduction plans; a focus on their ‘always available’ differentiator and in 2010 began to be prepared to invest in furthering infrastructure. To create a strategy statement LobLaw first created and implemented a strong strategy (Collis, & Rukstad, 2008, p8). Taking all of the LobLaw strategy into consideration a statement should include and highlight important aspects of their strategy along with touching on future goals and current successes. Strategy Statement “LobLaw uses new and innovative product introduction and branding to allow shoppers to identify with and depend on our ‘Always Available,’ policy of premium product placements. As a large company with several types of chain locations it is our focus and idea to become the leader in innovation, pricing, and brand recognition while meeting the goal of successfully getting shoppers to switch stores in order to take advantage of our exclusive brands and ‘Always Available,’ policy.” “Our expansion plans will be secondary to meeting customer demands though these will reflect increases in in our customer base as we ensure that we keep up in all locations to the demand for our products, wholesale and discount chains.” After reviewing the LobLaw strategy implications for the company show that they have plans to be in business long term and are willing to use testing appropriately to build up their company reputation in order to ensure the success of their many ventures. Their strategy focuses on ensuring they are using appropriate vehicles, staging and economic logic in order to reach their company goals and that they are willing to allow plans to develop fully and reach their full potential before expansion, meaning greater strength. References Hambrick, D., & Fredrickson, J. (2005). Are You Sure You Have a Strategy? Academy of Management Executive, 19(4), 51-62. Retrieved October 1, 2012, from Northwest Center for Organizational Research Loblaw Companies Limited. (2011). Company Overview. Loblaw Companies Limited. Retrieved October 1, 2012, from http://www.loblaw.ca/English/About-Us/company-overview/default.aspx Collis, D.J. & M.G. Rukstad, 2008 Can you say what your strategy is? Harvard Business Review (4) 82 -90.   LobLaw Companies Limited.-2 (2008). Making LobLaw the Best Again. Lowlaw.Ca. Retrieved 2012, from http://www.loblaw.ca/Theme/Loblaw/files/doc_financials/LCL%20Business%20Review%20February%202008.pdf Read More