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Administrative Studies
ADMS 4900
Brian Dunn

LOBLAWS COMPANIES LIMITED Main analysis: - Time-tested strategy (OLD): use CF -> invest in future, own real estate -> future biz opp, use multi-format to maximize market share over the longer term, focus on food but serve the customer’s needs, focus on food -> serve clients’ needs, create loyalty + enhance price competitiveness, implement+execute plans, constantly strive to improve the value. Implement and execute plans/prog flawleslly, strive to improve the value proposition. - Objectives on strat: 1. Drive down costs thru size/op effi, differentiating products and stores. - Industry overview: g rate = 4%, food retailining 66.8M; operated @ LOCAL/PROV/NATIONAL. Competed on D side, co-op on S side. Loblaws -> focus on organic growth. - Consumers: grocery consumers go same time, same store, same G/S, etc. Megastores use tech by mega-grocers to gain leverage over competition. 3 ways to build revenus: inc. # of households shopping, inc. shopping trips, inc. basket size. What’s happening: ready-to-heat and east -> increasing -> due to double income families -> reducing unprocessed cooking ingredients -> grocers developed new categories like HOME MEAL REPLACEMENT and on-site cooking demos. - Suppliers: supermarket = landlord of the shelves. Suppliers = payers to the “house,” for advertising and such. (listing fees, slotting, over/above allowances, vender, etc.) The higher a supplier’s market share to a grocer’s, the more power it commanded and v.v. Mega-grocers use EPR tech and such. Suppliers use industry assoc., to push for STANDARDIZATION in the EPR programs to avoid overlapping systems. Megas look for LR with suppliers for cost-efficiencies - Competitors: sobeys = 15% share of the Canadian food market, 30000 ee, 10.41B sales in 2002, banners: IGA and PriceChoppers Metro = 5.15B sales in 2002, 10733 ee, banners: Super C, labels: Econochoix, Super C, Irresistible A&P = stores in prime loc of Ontario, 3.99B in 2002, 3 banners: Food Basics, Dominion and A&P in Ontario. Canada Safeway = 28% market share, 28000 ee, 3.48B sales in 2002. - Wholesale Clubs: 30-50$ annual fee -> offer products @ low price for bulk, profitable format in Canada. In US, Costco (toward small biz owners) vs. Sam’s Club ( trying to capture Wal-Mart customers) - Speciality Chains: ethnic grocies, organic foods. Whole Foods Inc vs. Loblaw’s PC Organics products. - Convenicen Stores: grown faster than supermarkets. 6629 (1997) to 8324 (2002) - Online Shopping: account for 100B sales in CAN. CON: electornic security. PRO: 57% internet users in 2002 -> grocery orders 800 to 1000/day, avg. order = 120$. - Competitive Outlook: LARGE ent to CDN market = Whole Foods, niche market for organic and WAL-MART, acquired 122 Woolco stores. MID-SIZED GROCERS
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