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Canada Goose Essay

Canada Goose was seeking new market opportunities; hence it began to sell its products to European retailers in the early 1990s. Later on, Dani Reiss recognized the existence of a high potential market for premium outwear. The company’s sales revenues increased from 3 million in 1991 to 17.5 million in 2008. Up to 2001, the revenue growth was mainly related to the increasing domestic demand and in the early 2000s, the company began to expand globally. 2 Over the past decade Canada Goose expanded its distribution of products through retailers in many countries across the globe. In just a decade, the company’s annual revenue has grown by 3,000%, and sales were expected to top $100 million in the fall of 2012 as the company builds market share in Europe, the U.S. and Asia.

Nowadays, the global apparel manufacturing industry generates about $490 billion in revenue. In addition, higher global demand is expected to lead to a modest growth in the apparel export market. 7 Therefore, there are still market opportunities for Canada Goose to expand its market share.

Ownership Advantage

Although there is a fierce competition on the outwear industry Canada Goose has competed successfully because it possesses some distinctive ownership advantages. Dani

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Reiss is a great asset for the company. When he became CEO and President in 2001, he put in place the fundamental pillars to ignite the Canada Goose performance. The decisions he made to keep all production operations in Canada -highlighting that all products are “made in Canada,”– to invest in the “Canada Goose” brand name only, to begin sales in new markets abroad led to this outstanding performance. The 2011 Ernst & Young awards (Ontario Entrepreneur of the Year award and Business-to-consumer products and services category award winner and National/ Overall Winner) clearly rewarded his efforts, which led Canada Goose to achieve outstanding performance over the past years and to have a well-recognized brand name. Dani Reiss’s vision and capabilities coupled with the experience he gained over the last decade can boost the company’s performance even higher.

Canada Goose has built a good reputation of manufacturing premium, fashionable and functional outwear for extreme weather conditions. In addition to that, the domestic customers associated the reliability and the success of the product with the pride of being Canadian, while the international customers associated the product with idealized images of Canadian wilderness. 2 An evidence of the pride Canadians take is that the Department of Finance provided Canadian Goose jackets to the participants when it hosted the G-20 Finance Ministers Meeting in October 2000, the Western Hemisphere Finance Ministers meeting in April 2001, and the G-7 Finance Ministers and Governors meeting in February 2010. Therefore, product quality and brand name are also considered to be ownership advantages.

Although the overall direction is decided by Dani Reiss and his senior management team, the company realized that it must have an “ear to the ground” to enhance the communication with its overseas retailers and gather more info on market conditions and customers expectations. Therefore, in 2010 it opened its European headquarters in Stockholm, Sweden. 1 Taking into account its growth plans, the company should decide the opening of more regional headquarters in strategic locations. It should also review its organizational structure needs to ensure that job descriptions and reporting lines are clearly defined and necessary any vacant posts have been filled.

There are still many counterfeit cases, mainly related to online transactions, hence Canada Goose allocates resources, and increases its anti-counterfeit expenditures (a six-figure budget line) to dealing with this issue. Canada Goose’s works with the Canadian Anti-Fraud Centre on allocating vendors websites selling fake products as well as their links to bank accounts. Blocking these accounts by law would stop counterfeiters from collecting money; hence they could not sell anything more. This approach could possibly resolve the problem; however more lobbying is required with the Canadian government in order to move the policy maker towards this direction.

Canada Goose has branched off into ultra-lightweight products suited for cool rather than extreme cold weather, and now competes even more with its major competitors, which are Moncler, Eddie Bauer, Columbia, and North Face. However, the new challenge for Canada Goose is to remain a strong undiluted brand and keep the connection it has with its clients.

Nowadays only one third of Canada’s Goose revenue is being generated in Canada; 2 with the rest coming from international markets. Regarding his marketing strategy, Dani Reiss has stated:

“One of the powers of our brand is that we make the best and warmest jackets on earth, so the product is its own advertising, and the logo is so recognizable. We do a little bit of print media but not a lot. We do a lot of sponsorship and direct to the customer stuff. It’s lot of word-of- mouth and we support it my sponsorships and partnerships” However, Canada Goose faces a fierce competition in all markets and this marketing strategy may fall “short” as major competitors invest in having their own presence abroad, using print media more, designing websites that are functional and more interactive.

Canada Goose sells premium, expensive products and targets upper-middle and upper class consumers, hence it should carry out a market analysis for each new market to ensure that its marketing strategy satisfies its customers’ desires, needs and expectations. One size does not fit all; hence approaches should be decided on a case by case basis. Canada Goose should also redesign its official website and make it more attractive and handy offering the option of online shopping.

Location

The company committed itself to international expansion, but also recognized that it has little experience of international business environments. At the beginning, the decision made to distribute all its products through retailers enabled Canada Goose to manage properly the uncertainty related to new markets. Although Canada Goose’s main competitors distribute their products through retailers and their own-operated stores, Canada Goose should keep on expanding in new markets (such as Russia and China) through retailers. At this stage, the opening of own operated stores would require effort, massive investments, time-consuming procedures in countries that are far away from Canada. The Canada Goose senior management team is still small in numbers and would be struggling to achieve this target. Therefore it is wise to spend effort in areas where results will be measurable and will boost the company’s performance.

Canada Goose should operate own-stores in high-profile areas only and use them as a marketing tool in order to promote its brand, maintain its established position and eventually to increase its market-share. This is going to be a first-time experience for the company; hence the opening of a store in Canada first would help the company to gain exposure, identify gaps and apply solutions. Canada Goose should launch this idea in locations where it already distributes products through retailers.

Retailers will still be selling the great majority of goods and will benefit from the opening of Canada Goose’s stores in selected popular destination cities and ski resorts across the globe as this will promote the brand value. With all manufacturing operations in Canada, it is critical to establish a fast, reliable, and efficient supply chain, which keeps the associated costs of working capital and operations reasonably low. A holistic approach coupled with innovative technologies should be adopted on this matter; otherwise the business sustainability may be questioned.

Canada Goose has grown its sales through retailers in Asia (Hong-Kong, Japan, and South Korea), and a next step should be the entry in the Chinese market. The company’s management should consider the importance of these markets and their distance from Canada, and decide the opening of regional headquarters in Asia.

Internalization

By keeping all production domestic, Canada Goose maintains an effective quality control over its production and reinforces its brand reputation for authenticity, best quality, and functionality. In addition, the culture of a family-owned company that wants to pay well its staff has led to low staff turnover, which means that employees stay with the company for a long time; hence expertise is built that enhances high productivity.

Manufacturing operations in Canada put pressure on the company’s operating cost; hence a steady supply of products, at lower cost must be ensured. Skillful staff, fit for purpose innovative processes, launch of more automations in production lines, and lower cost of labor and raw materials are key factors for the company’s growth and sustainability. An implementation plan can be executed only when objectives, corporate strategy, sales forecasting and organizational structure have been decided.

In order to increase production, the company should detect manufacturing plants that it could potentially operate. A medium-size plant should be chosen in order to play the role of a “trial high-efficiency project” plant, which means that innovative processes and more automation in production should be implemented. Once all issues are resolved and the plant is up and running, the successful concept should apply to any plant, and gradually to the existing ones. The company should take into account the shortage of skillful labor noted at the local market, 6 and anticipated retirement of key players, 17 and proceed with the recruitment of staff that will be trained by experienced employees. Doing that, the company builds a new core team of skillful labor that will be able to operate effectively existing and new plants.

Canada Goose is one of the very few apparel manufacturers, if not the only one, in North America (U.S. included), which keeps its entire production and procurement domestic. 7 Dani Reiss should highlight the remarkable growth his company has achieved and the future growth plans and engage his suppliers arguing that a successful “Canada Goose” story will be beneficial for all involved parties; hence they should offer him better credit terms and discounts. Dani Reiss waves the Canadian flag; hence all involved parties should review their operations, and streamline their processes to increase their productivity.

Dani Reiss believes that his company must hire the right people in order to be successful. The number of employees has increased from 40 to 1,000, and the company has achieved an outstanding performance, which indicates that Dani Reiss has successfully retained like-minded minds. In addition, the average hourly wages in apparel manufacturing industry grew at an annual compound rate of 7% between 2009 and 2012; however they are much lower than the national average due to limited employment opportunities. 7 Taking into account the engagement culture that has been built in this family-owned company, I would advise the Canada Goose management to discuss with his employees the option of freezing salaries increases for a period of 3 years. In return, the company should offer its employees job guarantee for the same period of time and the launch of an award scheme based on company’s and individuals’ performance. This could be considered as a “win-win” situation, in which the company asks for its employees’ support to expand its business activity and in return is offering job security and a performance-based award system.

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