MGMT1101 Final Project: Strategic Analysis of Loblaws Incorporation

This report provides a comprehensive strategic analysis of Loblaws Inc., a major Canadian supermarket chain. It begins with a summary of the company, including its history, market position, and core business. The report then delves into a SWOT analysis, identifying Loblaws' strengths (strong brand image, employee-focused culture), weaknesses (underperforming stores, lack of differentiation), opportunities (quality improvements, in-store experience enhancements), and threats (competition, economic downturn). An environmental analysis is conducted using the PESTEL framework, examining political, economic, social, technological, environmental, and legal factors impacting the company. The report also includes a stakeholder analysis, organizational structure and design discussion (mechanistic model), employee motivation strategies (intrinsic motivation, Maslow's hierarchy), and control and recommendation procedures (feedforward, feedback, market, bureaucratic, clan control). The report concludes with references to support the analysis, providing a detailed overview of the company's strategic position and recommendations for future success.

Running head: RESEARCH AND ANALYSIS
RESEARCH AND ANALYIS
Name of the Student:
Name of the University:
Author Note:

1RESEARCH AND ANALYSIS
Summary:
The organization that has been chosen for analysis can be mentioned as Loblaws
Incorporation. The company is basically a Canadian supermarket chain and has its stores within
Alberta, Quebec as well as Ontario. The company was acquired by George Weston Ltd. and as a
result Loblaws Inc. was established. Initially Loblaw was created as a food empire by means of
the holistic purchase from the different grocery as well as retail manufacturers (Arasti et al.,
2017). The company was established in the year, 1919 and had its headquarters based at
Brampton (Arasti et al., 2017). Ontario. By the end of the year, 2005, the supermarket chain
emerged as the largest supermarket chains within the economic context of Canada and it acquire
more than 34.9% of the overall market shares (Beamish & Lupton, 2016). Loblaws is concerned
with the sale of different general grocery, pharmacy, alcoholic beverage products as well as other
general merchandise. The company is classified under the retail industry and the key market for
the brand is within Ontario, Canada. Also, as a company Loblaw aims at improving health and
wellness outcomes for the citizens of Canada by provisioning superior quality food products. The
report intends to conduct an external and internal strategic audit of the company along with the
evaluation on the environmental constraints. Further, a stakeholder analysis would also be
conducted and organizational structure and design would be discussed in detail. Also, employee
motivation strategies would be discussed and along with the same, organizational control and
recommendation procedures would also be discussed in the report.
SWOT Analysis:
The predominant strength of the company can be explained as its strong brand image.
The strong brand image has enabled the organization to sustain within the competitive market

2RESEARCH AND ANALYSIS
place and at the same time continuously expand on its business strategies. Most importantly, the
operation of the company across the different Canadian provinces has enabled it to serve to a
broader customer base (Bui & DeVillers, 2017). Apart from the same, the availability of
president’s organic products has also enabled the company to generate increased amount of
company revenue. Also, Loblaw is considered to be an employee savvy organization and invests
significantly in training and development of the workforce. Also, it adapts significant measures
to ensure increased employee satisfaction and this can also be considered as a primary strength
of the organization. Also, the company enjoys an effective leadership position by virtue of which
it has managed to acquire 80% of the overall market share within Canada (Dang et al., 2020).
Further, it should also be mentioned that the company has effectively sustained within the market
against the market competitors which can again be mentioned as strength of the company. The
mentioned strengths can be utilized for better marketing and product promotion process.
On the other hand, the weaknesses can be mentioned as the ‘poor performance or
underperformance’ of some of the stores that has considerably impacted the growth of the
company within the retail industry. Another weakness can be considered as the inconvenience
experienced by the employees while locating stores (Bui & De Villers, 2017). This has also
resulted in deprivation of the customer base. Also, the lack of differentiation in terms of the
business model of the company has enabled the competitor companies or rival companies to
mimic the business model of Loblaw and enter the market (Dang et al., 2020). In order to prevent
the identified weaknesses from diminishing company revenue, an application would be
developed by virtue of which customers would be able to locate the stores across the different
regions and would also be able to browse through the available products. Also, the company

3RESEARCH AND ANALYSIS
would need to strengthen the existing business model such that it cannot be mimicked by
competitor companies.
In terms of opportunities, there is ample scope for introducing improvement in terms of
quality standards and focusing on the provisioning of in-store experience to the consumers. The
company has exclusively focused on maintenance of quality standards but has been receiving
complaints within the low-cost category of goods. The company can effectively work on the
provisioning of quality over the low-cost range of times. Also, the company can work on
improving the in-store ambience and incorporate facilities such as self-checkout as well as
customized quality schemes for imparting customers with a unique shopping experience
(Beamish & Lupton, 2016).
Threats on the other hand, comprise of intense level of competition from the rival
competitor companies as well as diminishing Canadian economy. The demand for grocery retail
is diminishing considering the previous years and it is directly impacting the overall productivity
of the company against the competitor companies (Arasti et al., 2017). The mentioned threats
can effectively be tackled by introducing product innovation for attracting more consumer
demand.
Environmental Constraints:
In order to analyze the environmental constraints of the company, a PESTEL analysis
would be conducted. The PESTLE analysis would comprise of evaluation of the political,
economic, social, technological, environmental and legal aspects.
Political:

4RESEARCH AND ANALYSIS
The political factors that can determine the stability of the company within the market
place are immense, considering the existing political structure and organization of the country.
However, the company is vulnerable to sudden changes within the political regimen or sudden
government decisions on business operations within the country (Dang et al., 2020). Higher level
of taxations imposed by the government might result in deprivation of market profits.
Economic:
Economic factors that directly regulate the stability of the market environment for the
company can be mentioned as inflation rate, foreign exchange rate, gross domestic product
value, current stage of the economic style as well as the overall interest rate. The mentioned
factors would directly regulate the business climate for the company in order to operate within
the supermarket retail industry. Currently, the company operates within a stable economic
environment and the GDP of the nation is expected to grow within the near future which is
expected to result in profitable returns for the company (Arasti et al., 2017).
Social:
Social factors comprise of the demographic attributes of the Canadian population that
directly impact the demand for the products marketed and sold by the company. Considering the
rise in demand for organic products and veganism, the company needs to be on the lookout for
introducing a wider variety of organic products within the grocery segment such that it can
appropriately satisfy the changing consumer demands (Bui & De Villiers, 2017). Also, the
company requires ensuring stringent quality standards so as to render excellent quality services
to the consumers.
Technological:

5RESEARCH AND ANALYSIS
Technology is one aspect that can assist with the dismantling of the pricing strategy as
well as the nature of the competitive market place of a concerned industry within a stipulated
period of time. The company should be on the constant lookout for introducing technological
innovation in the form of online store development applications or up gradation of the
technological interface of the organizational operations department in order to sustain within the
retail industry and the competitive market place (Beamish & Lupton, 2016).
Environmental:
Environmental conditions such as the current climatic and weather conditions impact the
performance of the company within the retail industry. Harsh winters in Canada might interfere
with the transportation of the raw materials and finished goods to the different outlets (Koiwanit,
2018). Also, change in climatic conditions due to global warming in countries that are now
characterized with mild winters would result in the wastage of products such as winter clothing
and merchandise. Also, considering the environmental impact of the products, the company must
adapt effective CSR strategies for the promotion of positive environmental outcomes (Dang et
al., 2020).
Legal:
Legal factors that determine the stability of Loblaw supermarket can be mentioned as
stringent adherence with discrimination laws, health and safety laws at work as well as
adherence with quality assurance standards. Also, compliance with data protection laws and
intellectual property laws are essential for ensuring that the company continues to operate
without any legal implication (Arasti et al., 2017).
Stakeholder analysis:

6RESEARCH AND ANALYSIS
The company operates with the collective functioning of the primary, secondary and the
tertiary stakeholder. The primary stakeholders comprise of the customers and the employees for
the organization. The secondary stakeholder for the organization comprises of the investors,
suppliers and the vendors and the tertiary stakeholders comprise of the community and the
government. For Loblaw supermarket, each of the stakeholders is important for the maintenance
of a smooth organization function but the organization prioritizes its primary stakeholders that
include the customers and the employees. The justification for the same can be explained as its
direct link to the strong brand image which is a result of the sincere employee efforts and priority
of the customers (Edmond & Soliman, 2017).
Organizational structure and design:
The organizational structure of Loblaw would comprise of four organizational elements
comprising of formalization, span of control, centralization and departmentalization. The
following organization structure would be appropriate for the organization (Hochstein, 2016).

7RESEARCH AND ANALYSIS
Fig: Organizational structure for Loblaw Supermarket
(Source: As created by author)
The organizational structure at Loblaw supermarket would be based on the mechanistic
model. The model would exclusively be complaint with the characteristics of high specialization,
rigid departmentalization, and clear chain of commands, narrow spans of control, centralization
as well as higher formalization. Compliance with the mechanistic model would ensure high
employee formalization and lower executive formalizations. This would help maximize
organizational productivity (Johanson, 2019).
Motivating employees:

8RESEARCH AND ANALYSIS
Intrinsic motivational theory would be considered for reinforcing motivation within the
employee base (Mikkelsen et al., 2017). Maslow’s hierarchy of needs theory would be followed
in order to foster motivation within the workforce (Fallath & Syed, 2018). Apart from the same,
effective reward and recognition programs would be introduced such as employee recognition
programs and incentivization for accomplishing improved employee productivity and outcomes
(Mikkelsen et al., 2017).
Control and recommendations:
The organization would be based on a combination of feed forward control and feed-
back control. For monitoring management and strategic performance, KPIS or controls would be
implemented before the commencement of organizational activity such as setting of monthly,
quarterly or annual sales target (Carson, 2017). On the other hand, feedback control would be
implemented in departments such as customer service to introduce scope of innovation. Also, the
organization would be based on a combination of market control for keeping up with market
standards, bureaucratic control for maintaining discipline within the organization and clan
control for regulating employee behaviors (Muda et al., 2018). Apart from the same, evaluation
of organizational performance would also be determined with the help of balanced score card,
corporate governance and well as consumer feedback surveys (Edmond & Soliman, 2017). The
use of balance score cars would assist with financial, business innovation and internal business
environment audit. Also, corporate governance would assist with evaluation of the business
performance and stability within the market place (Muda et al., 2018). Customer surveys would
help to monitor fulfillment of customer expectations.

9RESEARCH AND ANALYSIS
References:
Arasti, M., Khaleghi, M., & Noori, J. (2017). Corporate-level technology strategy and its linkage
with corporate strategy in multi-business companies: IKCO case study. Technological
Forecasting and Social Change, 122, 243-252.
Beamish, P. W., & Lupton, N. C. (2016). Cooperative strategies in international business and
management: Reflections on the past 50 years and future directions. Journal of World
Business, 51(1), 163-175.
Bui, B., & De Villiers, C. (2017). Business strategies and management accounting in response to
climate change risk exposure and regulatory uncertainty. The British Accounting
Review, 49(1), 4-24.
Carson, P. (2017). Corporate Response. Greener Marketing: A Responsible Approach to
Business, 307.
Dang, Q. T., Jasovska, P., &Rammal, H. G. (2020). International business-government relations:
The risk management strategies of MNEs in emerging economies. Journal of World
Business, 55(1), 101042.
Edmond, J., & Soliman, F. (2017). The Impact of Balance Score Card Implementation on Supply
Chain Firms. In Decision Management: Concepts, Methodologies, Tools, and
Applications (pp. 557-575). IGI Global.
Fallatah, R. H. M., & Syed, J. (2018). A Critical Review of Maslow’s Hierarchy of Needs.
In Employee Motivation in Saudi Arabia (pp. 19-59). Palgrave Macmillan, Cham.

10RESEARCH AND ANALYSIS
Hochstein, E. (2016). One mechanism, many models: A distributed theory of mechanistic
explanation. Synthese, 193(5), 1387-1407.
Johanson, J. E. (2019). Strategic Governance. In Strategy Formation and Policy Making in
Government (pp. 143-161). Palgrave Macmillan, Cham.
Koiwanit, J. (2018). ENERGY EFFICIENCY AND ENVIRONMENTAL IMPACT ANALYSIS
IN GROCERY STORE MARKET IN CANADA. International Journal, 15(49), 30-36.
Kuvaas, B., Buch, R., & Dysvik, A. (2018, August). Individual variable pay for performance,
incentive effects, and employee motivation. In annual meeting of the Academy of
Management, Chicago, USA.
Mikkelsen, M. F., Jacobsen, C. B., & Andersen, L. B. (2017). Managing employee motivation:
Exploring the connections between managers’ enforcement actions, employee
perceptions, and employee intrinsic motivation. International Public Management
Journal, 20(2), 183-205.
Muda, I., Erlina, I. Y., & AA, N. (2018). Performance Audit and Balanced Scorecard
Perspective. International Journal of Civil Engineering and Technology, 9(5), 1321-
1333.