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