Strategic Analysis of LCBO: Organizational Transformation Case Study

This case study provides a strategic analysis of the Liquor Control Board of Ontario (LCBO) in response to increased competition from grocery stores selling alcohol. The analysis focuses on the challenges faced by CEO George Soleas in 2015, particularly the need to enhance customer loyalty and adapt to technological changes. The case highlights the "Customers first" initiative launched in 2016, aimed at improving customer service and imparting product knowledge to front-line employees. While the emergence of grocery stores posed a risk to LCBO's market share, the company focused on digital transformation, technological innovation, and employee engagement to sustain its revenue and market position. The study emphasizes the importance of organizational change, employee motivation, and strategic adaptation in navigating competitive market dynamics. Desklib provides access to similar case studies and solved assignments for students.

Running head: STRATEGIC ANALYSIS OF LCBO
Strategic Analysis of LCBO
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STRATEGIC ANALYSIS OF LCBO
Response to question 1.
The Chief Executive Officer (CEO) of Liquor Control Board of Ontario (LCBO)
George Soleas faced a tough competition in the year 2015 when the provincial government
awarded licenses to 45 grocery stores to sell alcohol which reduced the market share of
LCBO (Chandrasekhar, 2018). Soleas opined that customer loyalty needs to be increased to
cope with the increased competition (Chandrasekhar, 2018). He had put forward certain
questions which needed to be answered to sustain in the market. His focus was on the method
that needed to be adopted to compete with the retail stores, technological changes, methods of
improving customer experiences.
Soleas had presented certain examples of organisations that were successful in
adopting to organisational changes due to correct strategies. He wanted to bring similar kind
of changes in LCBO as well. Lack of knowledge of road map to change was the major issue
in this process for which he focused on making the employees understand the ways to
change.
The causes of these issues were the emerging grocery stores that got the licence of
selling alcohol which gave the LCBO a tough competition and lack of awareness of the
employees about the way to adopt to the changes within the organisation.
Response to question 2.
In January 2016, the LCBO planned an initiative named as “Customers first” which
was needed for a change caused by the Asset Review Council. In the 1st phase, it was targeted
towards the front line employees. In phase 2, the initiative was targeted towards the
workforce of the company (Chandrasekhar, 2018). A training was imparted at the head office
by eight trainers working in retail operations to train the recipients to serve the customers
better and make them customer centric. Various segments were included in the training such

STRATEGIC ANALYSIS OF LCBO
as greeting the customers, suggesting alternatives to them, engaging customers in social
conversations.
This strategic direction addressed the external challenges of the LCBO since it
imparted product knowledge to a great extent. As compared to other grocery stores, LCBO
has a more scaled up customer service.
Response to question 3.
While the LCBO’s sale faced a major risk due to the grocery stores located near the
LCBO store, there was no reduction in the overall revenue of LCBO (Aguirregabiria, Ershov,
& Suzuki, 2016).. It was forecasted that a revenue of 1$ billion would move from the retail
stores of LCBO to the grocery chain Bird, 2015). The company is expected to go through a
decreased margin since its margins need to be shared with the grocery stores.
Response to question 4.
Due to emerging grocery stores selling alcohols, the LCBO faces a tough competition
(Mariani, & Vastola, 2015). The management of the company needs to adopt strategies that
would best suit the competitive situations. The LCBO will succeed in capturing and retaining
its market share by digital transformation and sustaining its technological innovations. The
employees of the company must be motivated to come up with their opinions to which would
bring in fresh ideas into the organisation. Every company needs to change its policies and
business strategies to cope up with changes in trends across the globe. The risk of reduction
in market share of the company can also dealt by bring in certain transformations into the
organisation. The company must emphasis on making the employees accept the changes for
betterment of the company. Employees need to be educated about the ways to adopt to the
changes the act accordingly.

STRATEGIC ANALYSIS OF LCBO
References
Aguirregabiria, V., Ershov, D., & Suzuki, J. (2016). Estimating the Effect of Deregulation in
the Ontario Wine Retail Market. Report, University of Toronto.[1653, 1674].
Bird, M. G. (2015). The Embedded Crowns. Canadian Political Science Review, 9(2), 1-20.
Chandrasekhar, R. (2018). LCBO: Organizational Transformation [Ebook].
www.iveycases.com. Retrieved from https://www.iveycases.com/
Mariani, A., & Vastola, A. (2015). Sustainable winegrowing: Current perspectives. Int. J.
Wine Res, 7, 37-48.