Loblaw Companies Limited: Preparing for Wal-Mart Supercenters
Case 16
1. The grocery industry is a commoditized industry, which makes it difficult for grocers to sustain through differentiation. Buyer power is high and thus, cost leadership and operational efficiencies are critical. There is fierce competition amongst various grocery stores, with the main players such as Loblaw and A&P holding multi-banner stores in various market segments. Traditional grocery stores also lose some of their market share to drug stores, convenience stores and other retailers who have entered the industry. Threat of substitutes from fast-food and take- away outlets is not as prevalent, since many grocery stores have started stocking ready-to-eat meals and have deli services available for consumers. Competitive pressures are increasing in the industry with the potential entry of Wal-Mart and new delivery methods such as the internet.
2. grocery store industry witnessed a lot of changes. Competitive pressures in the industry are increasing and several new competitors including wal-mart are entering the market. New methods of delivery such as the interned are making it difficult and challenging for traditional based stores to comply. Customer preferences are diversifying and different demands are increasing. In addition to the price war that strike the markets. The maturity of the industry, characterized by flat demand combined with the growth aspiration of the dominant suppliers makes the industry a competitive battleground. Competitors work toward driving costs down while responding to swiftly changing consumer tastes. Grocery managers therefore are challenged to provide the marketing mix of tomorrow, emphasizing speed, flexibility, and early identification of trends directed at segmented and rapidly evolving markets. The mass consumer market has been replaced by hundreds of highly diversified mini-markets for which grocery companies have to design custom made solutions.
3. Key Success Factors of the grocery industry include the
1. The grocery industry is a commoditized industry, which makes it difficult for grocers to sustain through differentiation. Buyer power is high and thus, cost leadership and operational efficiencies are critical. There is fierce competition amongst various grocery stores, with the main players such as Loblaw and A&P holding multi-banner stores in various market segments. Traditional grocery stores also lose some of their market share to drug stores, convenience stores and other retailers who have entered the industry. Threat of substitutes from fast-food and take- away outlets is not as prevalent, since many grocery stores have started stocking ready-to-eat meals and have deli services available for consumers. Competitive pressures are increasing in the industry with the potential entry of Wal-Mart and new delivery methods such as the internet.
2. grocery store industry witnessed a lot of changes. Competitive pressures in the industry are increasing and several new competitors including wal-mart are entering the market. New methods of delivery such as the interned are making it difficult and challenging for traditional based stores to comply. Customer preferences are diversifying and different demands are increasing. In addition to the price war that strike the markets. The maturity of the industry, characterized by flat demand combined with the growth aspiration of the dominant suppliers makes the industry a competitive battleground. Competitors work toward driving costs down while responding to swiftly changing consumer tastes. Grocery managers therefore are challenged to provide the marketing mix of tomorrow, emphasizing speed, flexibility, and early identification of trends directed at segmented and rapidly evolving markets. The mass consumer market has been replaced by hundreds of highly diversified mini-markets for which grocery companies have to design custom made solutions.
3. Key Success Factors of the grocery industry include the