2.
Case
Synopsis
The case is about a sport retail company which later
started their own manufacturing and eventually their
own R&D.
The company was founded with the commitment to
do good for society through philanthropy.
They offered huge product varieties at competitive
prices but later the manufacturing was more or less
shifted to Asian countries which was not acceptable
to the customers as the jobs were outsourced and
the quality of product w
3. Case
Facts
• Founded
in
August
1971
a
group
of
Canadian
climbers
founded
Mountain
Equipment
Co-‐op
(MEC).
• David
Labistour,
chief
execuVve
officer
(CEO).
• A
well-‐known
Vancouver-‐based
retailer
of
outdoor
gear.
• Branded
jackets,
bags
and
other
accessories
next
to
well-‐
known
brand-‐name
products.
• They
simply
copied
other
brands’
designs,
producing
a
similar
product
at
a
lower
price.
• $7.5
billion
a
year
market
(Exhibit
2)
• A
lifeVme
membership
in
MEC
cost
$5
and
allowed
the
member
to
make
purchases
and
vote
on
how
MEC
was
governed.
• In
years
of
surplus
earnings,
it
retained
3
per
cent
for
its
capital
budget
and
1
per
cent
for
an
environment
fund.
• From
a
single
store
in
Vancouver,
MEC
had
grown
to
a
network
of
15
stores
across
Canada.
4. Case
Facts
• MEC
examined
its
enVre
value
chain
to
remove
material
waste
and
harmful
substances,
reduce
its
use
of
energy
and
improve
the
working
condiVons
in
its
factories.
MEC’s.
• MEC
had
three
long
term
goals
Ø
First,
its
core
reason
for
existence
was
to
increase
parVcipaVon
in
self-‐propelled
wilderness-‐oriented
recreaVon
in
Canada.
Ø Second,
it
supported
the
creaVon
and
stewardship
of
a
comprehensive
network
of
parks,
wilderness
and
outdoor
recreaVon
opportuniVes
in
Canada.
Ø Third,
it
fostered
change
toward
environmental,
social
and
economic
sustainability
in
the
marketplace.
• Online
portal
www.mec.ac
• A
typical
store
carried
20,000
stock-‐keeping
units
(SKUs).
• MEC
had
14
person
design
team
included
three
apparel
designers,
three
hard
goods
designers,
six
technical
developers,
one
fabric
expert
and
one
designer.
5. Inference
Exhibit 2-
• Forzani is a constant
strong competitor
whose market share
is increasing every
year
• Independent stores
lost their market
share to Walmart in
2006-08
• MEC is successful in
increasing market
share
6. Inference
Exhibit 6- Only 30.24%
was manufactured in
Canada while the rest of
the manufacturing were
Asia.
7. Problem
Iden5fied
1.
QuesVoning
by
shareholders
about
the
philosophy-‐the
company
is
a
democraVcally
owned
firm?
2. Cannot
achieve
CompeVVve
pricing
if
they
try
to
manufacture
in
Canada?
3. Geeng
negaVve
reacVons
on
the
outsourcing
of
manufacturing?
4. Originality
of
products
were
quesVoned?
8. Recommenda5on
1. The
shareholders
should
be
retained
as
the
company’s
shareholders
are
mostly
the
customers
as
well,
by
communicaVng
the
message
that
they
are
sVll
commifed
to
their
philosophy
of
green
Canada
and
should
display
their
previous
efforts
in
the
same
in
the
shops
and
all
other
plahorms
where
the
brand
is
visible.
9. Recommenda5on
2.
CompeVVve
pricing
can
be
achieved
if
they
re-‐innovate
the
products
and
make
use
of
the
faciliVes
in
Canada
which
are
not
working
in
full
volume
capacity.
The
products
then
introduced
will
be
Canada
manufactured
as
well
as
new
range
which
will
not
be
comparable
to
any
of
the
previous
products
so
that
the
market
will
be
open
to
higher
prices
too.
3.
Reviving
the
Canada
faciliVes
and
use
of
capital-‐intensive
machines
more
instead
of
labor-‐intensive
which
will
solve
the
labor
cost
problem
although
the
restructuring
will
need
good
amount
of
capital
but
it
is
one-‐Vme.
4.
The
products
before
geeng
introduced
in
the
market
should
be
well
compared
with
others
so
that
any
matching
designs
could
be
eliminated
