Canada Goose Inc. is a Canadian company that manufactures a wide range of high quality outwear for extreme weather conditions. In 1957, the company was founded under the name Metro Sportwear Ltd. by a Polish immigrant named Sam Tick. At the beginning, Metro manufactured functional outwear and created its first down-filled parkas in the early 1970s. David Reiss, who was Tick’s son-in-law, joined the company in 1972, and purchased the company in the early 1980s. Since 1985, all parkas production was registered under the name Snow Goose. In the early 1990s, Metro entered the European market and registered all products sold there under the name Canada Goose. David Reiss’s son, Dani Reiss joined the company in 1997, and eventually became president and CEO in 2001.
Up until 2001, the company relied heavily on the quality of its products, expanded its sales in Europe and maintained a sustainable business activity. Dani Reiss could have adopted the existing business model as he was the 3rd generation president to run the company and might be reluctant or not eager enough to change things. Instead, Dani Reiss recognized that a high potential market exists for premium, fashionable and functional outwear. At that stage he made two key decisions- that all products be registered under the name Canada Goose, and that all production continues being “Made in Canada”.
At the same time, the growing global competition and the gradual removal of trade barriers in combination with a strong Canadian dollar have resulted in higher prices of exports and lower prices of imports. Canada Goose understood that it could not compete on price. In order to compete on a hyper-competitive environment, Dani Reiss focused on increasing the value-added of his products, and build the Canada Goose strategy in accordance with that of the Swiss watch industry. As he has stated: 2
“to me a Canada Goose jacket is like a Swiss watch- you can’t make a Swiss watch in China. You can’t make a Canada Goose jacket in China either”.
This essay aims to provide an analysis of how Canada Goose has grown, what are the challenges it faces, and how it can expand further. The company’s strategy and the associated analysis focus on keeping manufacturing operations in Canada, growing its sales in new markets through retailers, opening own-stores in targeted locations, and coping effectively with challenges associated to the supply chain, distance, communication, counterfeiting, organizational structure, and marketing strategy.
Based on the available resources three frameworks will be used to analyze the company’s choices, how the business continuity was assured, and associated challenges: •The Motivation – Ownership advantages – Location – Internalization (MOLI) framework will be used to explain why Canada Goose made the choice to expand its business activities •The Culture – Administrative – Geographic – Economic (CAGE) framework will help us understand the challenges Canada Goose faces •The Hierarchy-Incentives-Culture (corporate) - Culture (national) (HICC) framework will provide us with info on how the management runs the business
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....