LOBLAW 3

[robharris]

Assess the actions taken by John Lederer and his executive team to
prepare Loblaw and The Real Canadian Superstore for the advent of Wal-
Mart Supercenters. Try to separate strategic decisions from executive
decisions. Did Lederer need more time?

[r_nei...@yahoo.com]

Although I admire Mr. Lederer and the executive team's inititive in
making strategic changes in Loblaw's structure, I think it was a bit
premature in implementing this action full scale. Until Wal-Mart
introduced their Supercenters into the Canadian markets, Loblaw should
have focused on their current competition in the grocery market. Wal-
Mart Supercenters were not successful in every market they had entered
into (Germany.) With the buzz that Wal-Mart would enter the Canadian
market appeared to make the Loblaw executive team to panic instead of
evaluate. Lederer should have used more time to use tools (market
research) in larger Canadian markets to test consumers' willingness to
utilize the SuperCenter model opposed to Loblaw's current grocer
model. Change and action should take place only if Wal-Mart's store
model would truly disrupt the grocery and general merchandise market
in Canada.

[christi...@yahoo.com]

At the time, John Lederer and his executive team felt they were doing
the right thing by trying to compete with Wal-Mart before they became
a real threat; however, they lacked research and an execution plan.
When they moved their distribution center, they figured that majority
of the employees would move as well. 50% of the purchasing department
failed to move with the company. This hurt their supplier
partnership. Lederer should have focused on improving his Canadian
market share by focusing on his core competency and seen if Wal-Mart
would be able to succeed in the Canadian market; furthermore, Lederer
and his team would be reactive to Wal-Mart and need to have strategy
ready. Lederer would need to follow Wal-Mart entry into Canadian
closely and be able to react with a strategy quickly if it disrupted
the market.

Christina Hayes

[Gini Stieger-Lawson]

In May 2004, Loblaw received 50% of revenue from discount retail and
anticipated an increase to 75% over the next couple of years. Lederer
announced that the company intended to be the low price leader in all
of their markets. In this case, it appears that Loblaw is changing
their focus to meet what they knew about Wal-mart from the US
industry. The company did not appear to consider that the Canadian
market might require a different sales approach than the US market.
Loblaw also did not utilize the information they already had through
years of experience in the Canadian market.
Loblaw used it's own fleet for deliveries. Loblaw's core competency
is not logistics, this decision proved problematic. Merchandise sat
in warehouses and did not arrive at the stores until the season was
over or even worse, food products were past their shelf life.
The company was growing faster than they could keep up. In
anticipation of Wal-Mart's entry into the market, Loblaw added
products too fast and cut costs. Rather than scaring off the new
entrant, the company actually invited them in with poor customer
service both on the purchasing and consumer side.

On Nov 18, 4:39 pm, robharris <rob.harris....@gmail.com> wrote:

[Priscilla Scotland]

Agreed. Loblaw needed to evaluate and correct the outstanding issues
with logistics and transportation of goods before they announced and
launched an initiative to be a low cost leader. It seems to me that
Loblaw is really good at jumping the gun and not critiquing their own
weaknesses prior to acting.
Priscilla.Scotland

[snk...@yahoo.com]

Shannon Rathel
I think it is hard to seperate Lederer's strategic decisions from his
executive decisions regarding the advent of Walmart. He made a good
choice to prepare for Walmart as a new entrant by developing a
discount format in The Real Canadian Superstores, but almost every
decision he made after that was pretty terrible and was strategic in
nature. He did not assess Loblaw's competitive advantages as compared
to Walmart. Instead, he forced The Real Canadian Superstore's
strategic position to mirror Walmart's US position. I do not think
more time would have helped Lederer. Lederer may have been an
excellent motivator or communicator, but he was not a good decision
maker and that is what Loblaw needed at the time.

On Nov 18, 4:39 pm, robharris <rob.harris....@gmail.com> wrote:

[erzim...@yahoo.com]

Walmart entered Canada food retailing in 2006. This is when alot of
the changes in management were occurring at Loblaw. In my opinion
they didn't necessarily need more time, they were already too late.
Like with the Bengals this year, you can put together a new star team
but don't expect to sweep Pittsburgh and Baltimore right off the bat.
Finding a bright mix of managers that would work well together was a
good executive decision. Strategically at the time it had flaws - for
example when the case suggests that a "tangled management structure"
may have contributed to instability. Since then, it appears they have
ironed things out as the firm is out of that rough patch shown by the
financials of that year. Sales are firm and earnings are on the
increase.

> > decisions. Did Lederer need more time?- Hide quoted text -
>
> - Show quoted text -

[Patrick Casey]

I think one thing to keep in mind is that when it is mentioned that
they need to take time to review it does not necessarily need to be
like years. the Real Canadian Superstores seem to be getting ready
for a toe to toe battle with Walmart, without truly understanding what
they are competing against. It seemed that Loblaw stores had a
reputation for having fresh quality foods, and as soon as they tried
to change the supply chain to match Walmart's they all of the sudden
has rotten food on the shelves. They do not need to spend tremendous
amounts of time to think through their actions, but they do definitely
need to review, or simulate before implementing.

Patrick Casey

On Nov 22, 10:28 am, "erzimme...@yahoo.com" <erzimme...@yahoo.com>
wrote:

[Curtis Lucas]

I think the one big strategic plan that is being overlooked is the
decision to have universal pricing. This does not work in many
idustries for the sheer fact that the cost of business in one locale
will be highrer in another. this is one of the poorest decisions they
could have made that we have not discussed yet. i do agree that the
other major mistake was deciating from what Loblaw did well prior to
Wal-marts entery into the market. The need to change is ever-
present. This is called evolution ask the peppered moth, it takes
time to change. The moth changed as its enviroment did. If it had
changed pre-emptively it would not have survived. Just a thought.

> > > - Show quoted text -- Hide quoted text -

[Jonathan Nutter]

Thought without action is wasted, Action without thought is
dangerous. - Dead Chinese guy. however this quote does illistrate
what Loblaw went through. First they did hasty actions based on poor
information. Then when they finally thought through what they should
do they were down the wrong road and having trouble coming back to the
right action. The executive action to go with universal pricing was a
blunder. The strategic action to follow their clients downmarket is
what made Wal-mart their competitor.