Loblaw Case Solution
DECLININGE OF THE COMPANY:
The most worrisome parts for the shareholders and the management of the organization are the declining operating margins and revenues of the company as return on the investment is critical for the satisfaction and motivation for the investors and the shareholders of the organization. However, the market share that the company possesses in the markets of the home country is quite significant and dominant than any of its competitors. The market share of the organization is quite higher than those of all the other top four organizations in the industry that compete with it and even if all of them are combined together, it is still relatively higher however, the revenues and the operating margins are not the true representation of the market share that the organization holds in the market as it has dropped to 1% roughly of the revenues and sales. This is due to the low price strategy of the management of the company that it pursues in the market.
The grocery industry of the country is a very attractive market as it amounts to roughly $72 billion industry and the competition in the market of the country is not very segregated at all however, the management of the organization still enjoys market dominance of the country irrespective of the margins it generates. The launching of the Walmart in the market is a different threat altogether for the management of the company as it is the most dominant retail entity in the world and likely the management of the organization will have tough time competing with it in the home market of the company.
The inefficient distribution system of the organization is also an issue for the management as it is affecting and influencing the performance of the business directly. The negative influence of the inefficient distribution system of the organization is affecting the revenues as the costs of the operations of the organization are on the increase due to the poor relationship of the suppliers and buyer son the timely delivery of the goods.Moreover, the products of the company are getting affected and frequent stock outs are also witnessed among the value chain of the organization.
HOW DOES THE GENERAL ENVIRONMENT IMPACT THE FIRM AND/OR INDUSTRY?
The general environment of the business is one of the most important and subject to the most comprehensive analysis and studies by the management of the organization irrespective of what the organization does and where it operates. The factors are also known to the managers and entrepreneurs in some cases as external factors or external environment as it is beyond their influence and span of control. The management of the organization cannot influence or control these factors.The case of Walmart is an exception however, it can adjust the business and its policies to reduce the issues and gain the benefits for the organization. These external factors arise in the shape of political, economic, competition and the changing trends and preferences of the target market of the company.
ENVIRONMENT OF THE FOOD INDUSTRY:
The environment of the food industry in which the organization operated also came under some direct external influence and the most critical among all were the customers’ trends and preferences along with the increasing customer knowledge about the products of the industry and the regulatory body of the government that regulates the quality standards of the food products in the home markets of the country.
There is an increasing realization of the population of the country regarding the health based products as the society has been increasingly becoming aware of the products that are cheaper in terms of health standards and posed serious health hazards for them.Due to this reason, it is impending upon the management of the organization to build its product offering as per this demand of the customer base of the country………………
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