MOUNTAIN EQUIPMENT CO-OP: THE PRIVATE-LABEL STRATEGY

2329 words 10 pages
CASE 1:
________________________________
MOUNTAIN EQUIPMENT CO-OP: THE
PRIVATE-LABEL STRATEGY____________

Critical Issues
In order to fulfill the company’s core purpose and philosophies while still maintaining a viable business operation, Mountain Equipment Co-op (MEC) must address:






How to provide their customers with a unique and desirable product line that no other store can match so that they can own a distinct competitive advantage and do not have to directly compete with other sporting goods retailers.
How to promote the benefits of the company’s co-op structure and its emphasis on creating positive changes in Canada so that they do not lose the advantage of having the customer perception that they are a
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2
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http://en.wikipedia.org/wiki/Mountain_Equipment_Co-op#Environmental_.26_social_initiatives
Exhibit 2 – SWOT Analysis

Recommendation and Action Plan
To address the critical issues that exist within the company, it is recommended that all of the above options are looked at. The easiest option to implement would be to invest more of their surplus in causes that align with their core values as well as make sure that their shareholders are informed of these causes. After shareholder’s concerns are somewhat mitigated, the company can then focus its attention on expanding both its product lines and the number of markets it sells its retail products in.

Exhibit 1 – Porter’s 5 Forces Industry Analysis
Potential Entrants: Low
-Startup sporting goods shops

Industry: Canadian In-store Retail
Sporting Goods

Suppliers: Mid
-Arc'teryx
-Black Diamond
-Patagonia
-Prana
-Other brands the MEC carries on its shelves
-Suppliers of raw materials for MEC's manufactured goods -There are multiple options for suppliers of goods and raw materials
-MEC has the options of selling its own goods in place of outside suppliers
-Some supplier power results from unique products that
MEC doesn’t manufacture

-There are low barriers of entry for niche shops but very high barriers of entry to compete in the large scale instore retail sporting goods market due to high capital costs. Current Competition: High
-Forzani

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