Identification of the problem
The National Hockey League Enterprises Canada (NHLEC) is planning to create a store that will sell its branded merchandise exclusively and avoid relying on large retail stores. However, opening a retail store would run against the organization’s strategy. NHLEC is present in both Canada and the United States. Therefore, implementing this strategy would be highly challenging. The organization’s strategy involves selling merchandise through established retailers such as Walmart.
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The disadvantage of this strategy is that it obscured NHLEC’s market presence and created inconsistency in the representation of the organization’s brand. This resulted in scattered merchandise, an inconsistent representation of the brand to consumers, and poor brand equity. The chosen strategy should be acceptable to NHLEC’s management team and other stakeholders.
Analysis and evaluation
The NHLEC is a branch of the National Hockey League Enterprises (NHLE) that is headquartered in Ontario, Canada. Its operations are small and under the control of NHLE, that is headquartered in New York. The major reason why the company was changing its operations was the desire to pursue new opportunities and claim its niche in the apparels market. The main challenge was the management of the organization. Managerial decisions were made in New York even though the organization had headquarters in Canada.
Glen Wakefield intends to implement his strategy in Canada and not in New York. Wakefield reached that decision after the realization that his company’s brand was misrepresented among consumers due to the fragmentation of NHLEC’s retail strategy. Therefore, it was not getting the recognition of the management needed. On the other hand, the company’s leadership wanted to present their enterprise as an independent brand in the market. The aim of independent branding was to increase NHLEC’s revenues.
The organization’s main retailers such as Walmart were the main cause of the brand’s inconsistency and invisibility in the market. NHLEC could have tried to convince its retailers to implement alternative methods of displaying its merchandise. The apparel industry had undergone several changes that are important to consider before choosing the best strategy to implement.
The organization had three potential strategies available to them. First, the management could create a retail store and oversee its operations. Second, they could hire a management firm to run the store. Third, they could acquire space in a department store and thus be responsible for part of the store’s operations.
The NHLEC is an established brand that has its own customers. Therefore, getting customers would be easy. The management is highly experienced and taking all precautions to ensure that the operations do not sabotage the success of the company. The brand has several options with regard to the implementation of its strategy because of its presence in both Canada and the U.S. Finally, the brand has a ready market for its merchandise.
The company does not have enough money to implement the new strategy. In addition, its size is a hindrance because of logistical challenges. The company’s current retailers have been reliable partners and therefore, it is difficult to replace them. Current trends in the apparel industry and demographic changes are hindrances to effective implementation of the strategy.
The new strategy will make the brand more visible in the market and thus increase revenues. On the other hand, demographic changes favor the implementation of the new strategy because of the high demand for apparel among the young and old generations. Implementation of the strategy will serve as an avenue for implementation of similar strategies in the future that could be important for the brand’s growth and development.
The cost of implementing the strategy is quite high and the project’s failure could affect the financial stability of the company. The current state of the economy could affect revenues because of decreased demand for apparels. In addition, large retailers such as Sears and Walmart have taken large market segments with their low-priced merchandise.
The three alternatives available include opening an independent retail store, hiring a management firm to operate the store, and leasing space from a retail store and sharing the responsibilities of operating the store. Hiring a management firm would involve relinquishing all control to the firm and collecting a 15% licensing fee of the firm’s revenues. NHLEC can also launch a media campaign to boost the presence of its brand and renegotiate with its current retailers in order to change the distribution terms of its merchandise.
The manager is right in deciding to introduce NHLEC in the market as an independent brand. However, he should enlist the support of other stakeholders. The retail strategy should be implemented both in Canada and New York to increase the chances of success and the brand’s market presence. Also, the manager should not be bothered too much on measures to cut revenue to ensure the successful implementation of the strategy. The aforementioned alternatives are not right for the company.
The best strategy should give NHLEC control of the brand’s terms of distribution, lower the costs of investing in employees and infrastructure, and lead to the creation of a profitable outlet. The best strategy would involve leasing floor space in an established department store. This option has fewer costs and lower financial investments and is more profitable than the other alternatives.