Mountain Equipment Co-op
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Transcript of Mountain Equipment Co-op
The Private-Label
Strategy
Presented by-
Kuhu Pathak
Abhijeet Thorat
Case Synopsis• Current scenario of the sports equipment market in Canada vis-à-vis MEC’s
strategies
• Mountain Equipment Co-op (MEC) is a well-known Canadian retailer of gear for-
Mountaineering
Rock climbing
Ski touring
Hiking
Major players in Canada
Wal-Mart Canadian TireForzani(20% of Industry share)
MECs facts-
MEC HOLDS ONLY 1.2 % OF THE MARKET
15 stores across Canada
Online & physical revenue - $248mn
1,387 employees
Retail wage of $10 to $11 per hour.
3 major USPs-
• Focus on wilderness-oriented recreational activities
• Co-operative corporate structure
• Economic, Social, Environmental Sustainability
• Lifetime membership $5
• 50% of SKUs occupied by MECs Branded items
• Business strategy- UNDERCUT
COPY
MANUFACTURE
PRICE-OUT
REPLACE
Lowering of Brand Image
* Shortage of willing employees in Canada
* Cheaper labor available in Asian countries
$19 CAD vs. $0.6 CAD per hour
Moving manufacturing away from Canada
Pricing competitors’ brands higher in category of own private labels (thermarest)
Developing
private
brands
• Extended lead times in
Canadian factories
• Less responsiveness to
market demands
Canadian Market Share By Competitors
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
Forzani Total Canadian Tire Walmart MEC Independent Stores Others
MARKET PLAYERS
Mec is competing in highly fragmented market
It enjoys only 1 .2% of the total market share
Countr y Of Origin
Canada30%
Other70%
PRODUCT ORIGIN
Canada
Other
Most of the products are getting manufactured in Asia because of low cost,
labour, manufacturing cost etc.
Recommendations
Deliver its own product line
Focus its Core strengths (company philosophies)-
• Ethics
• Quality Goods
• Competitive prices
Refrain from practices like selling competitor’s brands at higher prices
Focus and develop Social-media