MGMT4032 Winter 2018: Sobey's Inc. Sustainable Seafood Strategy

This case study provides an in-depth analysis of Sobey's Inc., a major Canadian food retailer, and its strategic approach to sustainable seafood supply. It begins by outlining the company's history, problem statement, and internal SWOT analysis, highlighting strengths like strategic decision-making and weaknesses in supply chain energy reduction and waste minimization. The analysis then delves into financial performance, using income statements to demonstrate growth, and a resource-based view, emphasizing tangible and intangible assets. An external PESTLE analysis examines political, economic, social, technological, legal, and environmental factors, followed by Porter's 5 Forces to assess industry competition, new entrants, supplier power, customer power, and substitute threats. The study further discusses organizational aspects supporting strategy execution, presents two strategic options (sustainability of supply chain and appointment of SFP), evaluates these options, and recommends collaboration with NGOs for sea life development, including an implementation plan involving donations and technological assistance to these organizations, and finally, concludes with the benefits of Sobey’s sustainable practices.

Running head: BUSINESS STRATEGY
BUSINESS STRATEGY
Name of the Student
Name of the University
Author note:

1BUSINESS STRATEGY
Introduction
Sobey’s Inc is one of the largest Food retailers in Canada which specializes in sea food.
The company had started from a small beginning when John William Sobey started a small meat
business in 1907. Now it operates a billion dollar business employing 97000 people in total. This
exponential growth has been possible due to strong business strategy and ethical standards of the
company. There are 10 million customers that the company serves every week. The company
strongly upholds the idea of sustainable business and promises to maintain sustainability in
acquiring the sea food which it sells.
Problem Statement
“To establish a sustainable seafood strategy and implement effective energy reducing and
waste minimization program throughout the organizational structure.”
Sobey’s Analysis
Internal
SWOT
Strength- The strength of the company lies in its strategic decision making. The company
has a number of banners under its umbrella all of which are popular, these are “IGA extra, IGA,
Foodland, FreshCo, Price Chopper, Thrifty Foods, and Lawton’s Drug stores”. So it has a strong
base in the country.
Weakness- Weakness of the company lies in its supply chain where the company is facing
problems to implement energy reduction and waste minimization.

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Opportunity- The retail chain has a better history of practicing sustainable trade practice
and taking care of the environment. More and more people are becoming aware of the
environmental threats, so they are choosing Sobey’s over others.
Threats- The main threats are the competitors like Overwaltes Food Group, Safeway Inc
and Walmart. They are growing at fact pace.
Financial ratio analysis
Financial ratio analysis includes the process of comparing financial state of the company
of the present with the past. It is usually done in quarterly or yearly basis. The financial condition
of the company in the same time of the last quarter is compared and analyzed. This gives a clear
picture about whether the company is improving in its business or deteriorating.
Figure 1: Sobey’s Income statement

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In the above income statement of the company it is evident that the earnings of the
company have increased by 8 million dollars. The total sales have increased by 289 million
dollars just in one year. The increasing ratio of sales and income of the company gives a clear
indication of the continuous growth of the company that is unhampered. The company has
increased its stores by the year which adds more customers and increases revenue of the
company.
Resource Based View
The resource based view is the strategy of understanding a firm’s competitive advantage
based on the superiority of the resources available with the firm. There are mainly two kind of
resources that are available with a company, the tangible resources which are physical and the
intangible which are conceptual. The properties of a company are tangible and the goodwill is
the intangible resource.
In this case Sobey’s own a huge value of property all through the country, presently it has
1300 stores. The company enjoys an established goodwill in the customer’s mind. The 97000
strong employee base forms its human resource base. Therefore, in resource based view Sobey’s
is strong enough to sustain in the market and continue to grow in all terms.
External
PESTLE
Political- The company is one of the largest economic entities in the country with more
than 1300 food stores and 98000 employees. There might be some political problems among the
employees who may for certain demands create problems, but the human resource of the
company is efficient enough to handle such situations.

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Economic- The company in 2012 has achieved a total sale of 16,045 million which makes
the company one of the largest tax payers in the country. Economically the company is stable but
sudden tax reforms may affect the business.
Social- The company initiated a social campaign called TheFish which garnered 27
million responses, this was aimed at educating the people about the need for conserving sea life.
Hence socially the company has goodwill.
Technological- Technological innovation would help the company in better management
of its resources and minimizing wastage which is a problem in the company’s context. The
company is working with Sustainable Fisheries Partnership or SFP, to improve its strategies of
fishery and acquiring raw materials.
Legal- The company is completely supportive of the legal measures taken by the
government and other agencies to establish a sustainable sea ecosystem. Any new legislation in
the environmental or financial front may make way for change in strategy.
Environmental- The Brundtland Commisssion compares the two aspects of environment
and development to be inter connected and necessary, the company completely agrees to the
view of the commission and abides by all the practices of sustainable development and excludes
ishes that are endangered from the list of its products.
Porter’s 5 Forces Analysis
This model of external analysis developed by Michael Porter aims to analyze the various
external forces that work on a business and to understand the strategy and structure of the
company. Sobey’s 5 force analysis is as follows,

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Competition in the industry- There are a number of companies that are closely competing with
Sobey’s which include Overwaitea Food Group, Loblow Companies, Safeway Inc, Metro Inc
and Walmart. All of these companies are aiming to achieve higher sales and better goodwill than
Sobey’s. Greenpeace certified Overwaitea as the best sustainable sea food business, whereas
Loblow is Canada’s biggest retailer in food. Sobey must keep it strategy strong enough to remain
in competition.
Potential new entries in the industry- Most of the competitors are existing big players and there
is less chance of new players becoming a threat to Sobey’s business. The field is too vast and
needsa lot of capital to get established. Walmart is expanding its business in new horizon’s and
investing more in its seafood business, this may pose as a threat of competition.
Power of Suppliers- The company depends to a large extent on the suppliers who are actually
catching the live sea stock and supplying these to the stores. Most of the companies dealing with
the same products have many common suppliers Therefore the suppliers get a chance to bargain
and increase the rates when there is a scarcity of certain particular species of sea food. Sobey’s
have a long history of doing business in the field, therefore it has good relationship with the
suppliers.
Power of the Customers- The customers have a number of options in retail brands to shop from,
also the goodwill of the company depends on customer perception and satisfaction. The company
serves more than 10 million customers each and every week, which has helped Sobey’s become
very strong in customer service. Most of the customers have a very high image of Sobey’s in
their mind.

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Threat of Substitute products- Sobey’s mainly deal with seafood products, substitute products
can be meat and meat based processed food items. However, the customers who are specifically
looking for seafood items would not look for any other substitutes. The quality seafood products
of the company would suffice for them.
Organizational aspects that support good strategy execution
The company had a small beginning in 1907 as a meat delivery business by the founder
John William Sobey, which grew leaps and bounds in the following years and reached a sale of 1
billion dollars in 1987. This was possible because of the able leadership of Bill who was the
president, David who was the executive vice president and Donald who looked after the finance,
all of them grandsons of the founder. In 2012 the company had a 16 billion dollars’ business with
1300 stores. It is evident that good strategy and timely execution has led to such tremendous
success.
Good strategy decision of the company includes, selling of sea food that are not
endangered, and not just tagged as “sustainable” by some private body; also the company took
social initiatives like TheFish which educated customers about need of preserving sea ecosystem
and how Sobey’s was working in that decision. The company engaged SFP (Sustainable
Fisheries Partnership) to manage its improvement plans including its supply chain management.
Two strategic options and Evaluation
1. To push for greater sustainability of its seafood supply chain-
The company has been instrumental in taking substantial measures in including
more sustainable practices in its business. The company deals with seafood, and due to
overfishing and unsustainable practices sea life is getting highly affected and more and

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species are entering the endangered list. However, because consumers were not aware of
the same the company started a policy to capture transparent data and develop
measurement system to transform the supply chain and make it more sustainable.
2. The appointment of SFP-
Strategically the collaboration of the Sustainable Fisheries Partnership has pushed
the company miles ahead of many of the competitors who were still working with
untrustworthy private bodies for certification of sustainability. SFP is nonprofit
organization which is business oriented and provide a more trustworthy tool to enable the
companies to achieve improvement in sustainability.
A recommendation with major implementation plans
Recommendation- The company must engage in collaboration with the NGO’s working
for development of sea life. This will make the seafood sustainability better and the company
will gain good will which will have a long term positive effect on its business.
Implementation Plan- Business does not include just selling of products and profit
making. It requires long term sustainability. The company may form a list of NGO’s that are
working to preserve and protect sea life. The company may donate the money required for more
efficient preservation or may provide technological assistance. This will make the impression
that the company is responsible towards its duty towards sea sustainability, and just like it
acquires its raw material from the sea it gives back enough to sustain and balance the sea life.
Conclusion
Sobey’s Inc has been wonderfully maintaining the balance of doing sea food business and
ensuring sustainability in sea life. It has taken all measures possible to ensure a proper and

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ethical supply of its products. The company is growing at fast pace due to its strong business
policy and is successful in becoming a multibillion dollar company.