Question

Give a complete SWOT & PESTLE Analysis for Loblaw Companies Limited

Answer 1

SWOT Analysis for Loblaw Companies Ltd:-

Loblaw’s Strengths:

1. Strong brand name

2. Canada’s largest food distributor

3. Position of market share sales of more than $32 billion, 1,000 stores, and 136,000 employees.

4. Economy of scale and large knowledge and experience in Canadian market.

5. Wide geographic coverage (all Canadian provinces)

6. Company’s strategy to control the cost through efficiencies and differentiate its products and its stores.

7. Several private-label brands such as President’s choice, No Name, Organic Pc, and Joe Fresh)

8. 22 different brand banners such as Loblaw, Fortinos, No Frills, Zehrs, Wholesale Club, and Atlantic Superstore.

Loblaw’s Weaknesses:

1. Lack of adequate global distribution capability

2. Lack of experience in managing general merchandise inventory

3. Stores are underperforming

4. Weak management

5. Complicated corporate structure

6. High prices of products relative to key competitors

7. No clear strategic direction

8. Too much underutilized plant capacity.

Lablow opportunity :-

1:- Expanding into new geographic market

2.Entering into joint ventures that can expand the firm’s market coverage

3. Online sales

4. Growing its discount segment, becoming the low-price leader

5. Openings to exploit emerging new technologies

6. Proven products innovation capabilities

7. New management team and new business team.

Loblaw’s threats:

1. Walmart experience in global market has continually pushed its general merchandise dominance forward while developing its food business.

2. Intense competition

3. Canadian food market had been growing at less than 1% a year

4. Canadian market is attracting foreign investment.

PESTLE analysis is one the significant and widely used tool or framework mostly by organizationswith the intent of considering the market environment before commencing the process of marketing. In fact, the analysis of the environment needs to feed all planning aspects as well as it should be continuous. The internal environment of an organization includes internal customers or staff, wages, office technology and finance etc. whereas the micro environment includesthe external customers of an organization, distributors or agents, competitors and suppliers. Additionally, the macro environment includes legal and political factors, sociocultural forces, economic forces and technological factors.such analysis, it is important that it should be used on regular basis so that an organization would be able to identify the trends. The effect of the particular external factors or forces might have extreme consequences for the specific department or divisions, also the analysis better helps companies in clarifying the needed or required changes, thus identifying the potential options.

The factors or forces are discussed below;

Political forces:-

These are the Loblaw Companies Limited forces that tends to be altered by the influence of government on the infrastructure of country. The political factors may involves environment regulations, employment laws, tariffs, tax policy, trade restrictions, political stability and reforms. It is noteworthy, that the charities needs to be included where a government are not willing services and goods to be provided.

Economic factors:-

The Loblaw Companies Limited economic factors or forces involves interest rates, inflation, and growth of economy, cost of living, working hours, wage rate and exchange rates. Combining these factors, it last greater and inevitable impact on organization.

Social factors:-

The culture or social influence on certain businesses vary from country to country. It is significant to consider these factors. The social factors includes safety and health consciousness, various demographics, population growth rates and cultural aspects.

Technological factors:-

Notably, Loblaw Companies Limited technology is one of the most important way of being competitive in the highly competitive market arena. Not only this, it drives globalization, the factors includes environmental and ecological aspects, and available services as well as products. An organization should innovate and be compatible with the technologies.