Mountain Equipment Co-op
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MEC is a Canadian outdoor equipment retailer that holds only 1.2% of the Canadian market. While it focuses on sustainability and fair wages, the sports equipment market is highly competitive and manufacturing costs are much lower in Asia. To cut costs, MEC is considering expanding its private label brands by manufacturing more products overseas and potentially pricing competitors' brands higher when selling similar private label products. However, this could damage MEC's brand image if not done carefully. The recommendations are for MEC to focus on its strengths of ethics, quality, and competitive prices while developing its private labels and social media presence.
Mountain Equipment Co-op
- 1. The Private-Label Strategy Presented by- Kuhu Pathak Abhijeet Thorat
- 2. 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
- 3. Major players in Canada Wal-Mart Canadian Tire Forzani(20% of Industry share)
- 4. 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
- 5. • Lifetime membership $5 • 50% of SKUs occupied by MECs Branded items • Business strategy- UNDER CUT COPY MANUFACTURE PRICE- OUT REPLACE
- 6. 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
- 7. 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
- 8. Country Of Origin Canada 30% Other 70% PRODUCT ORIGIN Canada Other Most of the products are getting manufactured in Asia because of low cost, labour, manufacturing cost etc.
- 9. 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