The document provides an overview of the strategic management of The Loewen Group Inc, a large funeral home and cemetery operator in North America. It discusses the company's history, organization structure, business processes, competitors in the funeral industry, and obstacles faced. Key points include that Loewen grew substantially through acquisitions but then faced declining profits and bankruptcy due to high debt levels from aggressive acquisition strategies. A new CEO was appointed to help turn the company around.

1. Strategic Management
Yin ChhengSorn
The Loewen Group INC
Group 01:
Preap Veasna Kao Ly Hour
Sun Sokunthea Sao Sokha
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2. The Loewen Group INC
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3.  Literature Review
 Introduction
 Histories
 The ways to run Business
 Division Organization
 Business Process
 Business Obstacles
 Solutions
 Conclusion
 Suggestions
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4.  Strategy is a plan of action designed to
achieve the vision.
 Strategic planning is an organization's
process of defining its strategy, or direction,
and making decisions on allocating its
resources to pursue this strategy.
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5.  Management is the act of getting people
together to accomplish desired goals and
objectives using available resources
efficiently and effectively.
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6.  The Art and science of formulating,
implementing, and evaluating cross-functional
decisions that enable an organization to
achieve its objectives.
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7.  Funeral industry has been one of tradition,
representing a mixture of religion and
business.
 Most people a funeral has a religious
dimension. The body is placed into its eternal
resting-place and the soul is released into the
hereafter as defined by the religious beliefs of
the deceased.
 Traditional religious ceremonies have helped
add stability to the industry by faith’s final rite
can be administered .
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8.  1985 Loewen Group was found
in Vancouver, Canada by Raymond Loewen.
 1987 Loewen was purchase first funeral home in the United
State.
 Dec 2, 1999 Paul Houston was named president and CEO
 Currently the Loewen Group own or operate more than
1,100 funeral home and more than 400 cemeteries,
employing approximately 13,000 people across the U.S,
Canada, and United Kingdom.
 90% of total revenue is from U.S operation .
 While the company’s operations had grown substantially, its
profitability and stock price.
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9.  Organization Divisions
President and CEO
Funeral Service
Cemetery Division
Division
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10.  President and CEO:
Control all of the business process and make sure all of
the stock price of Loewen Group INC is higher.
 Funeral Service Division:
Direct the operation of the company are many funeral
homes across the U.S and Canada. A typical home
contains a funeral chapel, reposing room, rest rooms, and
a show room for casket and other items.
 Cemetery Division:
Assist the family in making a burial arrangements and
offers a complete lines of cemetery products, the opening
and closing of graves, and cremation services.
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11.  Funeral homes in U.S.
 Cemeteries
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12. Business Process:
 “ Gentlemen's Agreement” within the industry to
not compete on the basis of price or to even shop for
lower prices.
 XROADS, a website critical of the funeral industry,
has conducted research into the funeral industry,
especially its pricing strategy.
 XROADS argues that there are five to ten times as
many funeral home nationally as are needed.
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13.  In 1997, there were over 2 million deaths in the
United States with 22,000 funeral home are handle
the service.
 This means that the average funeral home handled
less than two funerals per week. While some
funeral home may do 1,000 or more funerals per
year, others will have fewer than 30 funerals
annually.
 XROADS argues that high volume homes could
charge half to one-third of the going rate and still
make a reasonable profit
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14. Competition:
 There are 2 potential Competitors in Funeral
Industry with Loewen INC Group.
1. Service Corporation International ( Service
Corp Int’l or SCI )
2. Stewart Enterprises
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15. 1. Service Corp. Int’l:
 SCI is the largest funeral service provider in the world.
SCI is considered the original consolidator in the funeral
industry.
 It operated 3,442 funeral homes, 433 cemeteries, and 191
cremation in 20 countries and on five continents in 1998.
 Funeral as counted for 63% of revenues in 1998 with a
gross profit margin of 21%. The cemetery division had a
36%gross profit margin for the same year.
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16.  During the mid-90s, SCI spent $1 billion buying
foreign funeral homes. It was able to gain the
number one or number two position in France,
the U.K and Australia.
 The company hopes to expand product and
service offerings to increase the operating margins
in many of its foreign markets.
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18. 2. Stewart Enterprises (NASDAQ-STEI)
 Stewart Enterprises is based in New Orleans. It is the
third large provider of death care planning and delivery
services.
 It has 575 funeral homes and 143 cemeteries operating in
29 states, Puerto Rico, Mexico, Australia, New Zealand,
Canada, Portugal, the Netherlands, France, Belgium, and
Argentina.
 The firm operates largely in the Mid west and West Coast
although international activity is expected to increase.
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19.  The company believes the prearranged funerals
represent a backlog of future business for its
products and services, building current and future
market share.
 Funeral operations accounted for 58% of 1998
revenues with most of the remainder coming from
cemetery operations.
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21. The Loewen Group
 The Loewen Group (NYSE-LWN) is the second largest funeral
home and cemetery operator in North America. The British
Columbia-based firm receives about 90% of its revenue from its U.S
operations.
 It is the least active of the Big Three funeral services companies in
operation outside of the U.S and Canada.
 The company is active in the provision of funeral services,
products, and cemetery operations, as are its major competitors.
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22.  Funeral services and products have accounted
for 56, 54, and 60% of revenues in 1998, 1997, and
1996, respectively.
 Cemetery operations as a percent of revenue
have counted for 36, 38, and 31% of revenues for
the same time period. The balance of revenues is
from the company’s insurance operations.
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24.  Acquisition strategy:
 Loewen acquired $1.4 billion of 351 funeral homes
and 300 cemeteries of other companies during 1996.
 In 1997 had spent $546 million to acquire 138 funeral
homes and 171 cemeteries.
 and $500 million in 1998.
 Centralize administrative function: by closing some
offices and moving those operations to Burnaby
headquarters.
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25.  In early of 1999, the Loewen’s stock price went from $35.75 to
$5.125 per share.
 On June 1, 1999, the company filed for Chapter 11 bankruptcy
protection in the U.S. and creditor protection in Canada.
 On August 10, 1999, the company was notified by New York
Stock Exchange that its stock had failed to attain a minimum
share price of $1 over a 30-day trading period.
 Finally to save the company, Paul Houston was selected by
BOD to replace Lungren as President and CEO.
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26.  Preplanning: Preplanning allows survivors to avoid the
stress and uncertainty of fulfilling the wishes of the
deceased after their death. It was allows families to
discuss their many options and expectations of the
potential customer.
 Clustering the funeral homes and cemeteries service
together for increasing demands
 Acquisition strategy is not suggested.
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