mountain equipment co-op: the private label strategy
DESCRIPTION
This is the case soln of the situation faced by Mountain Equipment Co-op in Canada.TRANSCRIPT
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The Private-Label
Strategy
Presented by-
Kuhu Pathak
Abhijeet Thorat
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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
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Major players in Canada
Wal-Mart Canadian TireForzani(20% of Industry share)
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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
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• Lifetime membership $5
• 50% of SKUs occupied by MECs Branded items
• Business strategy- UNDERCUT
COPY
MANUFACTURE
PRICE-OUT
REPLACE
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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
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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
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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.
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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
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