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Canadian Tire Business Expansion into Canadian Market

Vishal Kamboj
Jaspreet Kaur

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CO 740311
CO 738467

ENG 1204

Date Submitted 23/05/2018

Figure 1: Canadian Tire Brand Logo (Betakit, n.d.)

Introduction

Canadian Tire Corporation is one of the major manifold organization in Canada. It provides a number of varieties to satisfy the needs of Canadians and operates various functions across Canada. The company operates 1,702 outlets from coast-to-coast. Canadian Tired experienced a period of significant growth and success by transforming its store network from the 1990’s. In order to keep its growth, it has taken a few measures. In this report we will measure the key factors for the growth of Canadian Tires:

• Growth into Apparel Industry with Mark’s Brand.
• Use of Advanced technology to keep customers loyal and attracted.
• Acquired Pro-Hockey Life to further expand its sports equipment line.

Strategy for Growth into Canadian Apparel Industry

The Canadian apparel industry is predicted to grow at an accelerated rate. According to Market Line Report (2016, August 5), apparel and non-apparel manufacturing industry in Canada defines total revenue of $10,256 million for the year of 2015, also showing a compound annual growth rate of 4% time between 2011 to 2015 with growth tend to be continued until 2020.
Mark is the retail division of Canadian Tire. It is one of Canada’s leading clothing and footwear retailers that offer men’s wear, women’s wear, and industrial wear. It clearly has an established presence in the private label front and as customers increasingly accept private label brands. Mark’s is better positioned to further improve its market share. Mark’s currently leads the industrial apparel market. It holds 24 percent of overall sales for men’s wear and also is growing in women’s wear up to 17 percent of its total sale (Strauss, 2018). The main fact about Mark’s is that around 80% of its sales are derived from its own labels brands like Denver Hayes, Dakota, Wind River and Ispiri.
The growing apparel market and Mark’s strong presence in the private label segment would help Canadian Tire to grow into the Canadian apparel market. In addition to apparel segment, Canadian Tire is using advanced technology to influence the buying behavior of their customers.

Advanced technology to influence the buying behavior of customers

Canadian tire renovated all its traditional outlets to newly well-renovated stores. Making them one of most modern network stores in Canada. Canadian tire introduced the first ever smart store and small market store in Canada.

The company increased the use of technology across all of its businesses, including the use of the mobile app, in-store displays, digital catalog and online marketing.
In June 2015 Canadian Tire started up a Showcase store in Edmonton which consists more over 100 digital screens, a large exterior high-resolution LED screen, and helpful product selectors in the living, playing, seasonal, and automotive sections.

figure 2: Canadian Tire Digital Showcase in Edmonton (Singh,2015)
Canadian tire recently launched its cloud nine digital innovation center in Winnipeg, Manitoba which provides 20 times more computing power and 10 times more network capacity than its existing technology base. The company also began a menu that allowing a customer to push the “buy” button and purchase items. This evolution to a new retail world with investing in e-commerce and digitalization which will help Canadian tire to meet the various wants and desires of customers.

figure 3: The new Canadian Tire Cloud Computing Centre in Winnipeg. (Santin and Cloutier, 2014)

These technology advancements would help the company to build loyal customers which will further enhance its revenues and profitability.

Acquired Pro-Hockey Sports to further expand its Equipment Line

Canadian Tire has FGL Sports Ltd. It is the biggest sporting’s goods retailer in Canada. It sells all sports-related products. FGL Sports has about a 20% share of the country’s $9-billion sporting goods business, and apparel and footwear account for 72% of its sales (Shaw, 2012). It has shown solid performance since the acquisition over a year ago.

The Star reports that Canadian Tire subsidiary FGL Sports Ltd. announced that they will buy Pro Hockey Life Sporting Goods Inc. for $85 million (Kopun,2013).

figure 4: Upper Deck Canadian Tire Team Canada Hockey. (Beckett, 2017)

This acquisition is a natural extension in sports and hockey and Pro Hockey Life will be an excellent addition for Canadian Tire’s company.
Pro Hockey Life will operate as a banner under FGL Sports, joining others such as Sports Check and Sports Experts.

Pro Hockey Life is a premier sports retailer with 23 Urban, high-end hockey stores operating in 5 provinces across Canada. It shows annual revenue around $95 million with a unique customer base, as well as a more extensive product assortment and depth of product offering than existing retail banners.

Conclusion

Being one of Canada’s most powerful retailers, Canadian Tire is taking the opportunity to expand its business into the Canadian apparel market. It has gained an upper hand into the apparel industry with its brand Mark’s. Secondly, Canadian Tire has also emphasized on bringing in advanced technology to enhance customer experience and keep them loyal to the brand. Canadian Tire also acquired pro hockey life a renowned brand to increase its range in sports equipment and simultaneously increase its sports equipment industry market share all over Canada. Entering into innovative segments as well as new industries Canadian Tire is emerging as one of the top organization in Canada.

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