Case Analysis: Hudson Bay Company

This case analysis examines the challenges faced by Hudson Bay Company after suffering losses in the market. It analyzes the competitive forces in the Canadian retail market and conducts a SWOT analysis of the company. The analysis suggests focusing on improving the company's e-commerce infrastructure to address the losses.

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Running head: CASE ANALYSIS

CASE ANALYSIS
Contents
Abstract............................................................................................................................................2
Main Body.......................................................................................................................................2
Analysis.......................................................................................................................................2
Alternatives..................................................................................................................................4
Recommendation.........................................................................................................................6
References........................................................................................................................................7
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CASE ANALYSIS
Abstract
Hudson Bay Company is the oldest Canadian retail company which is experiencing considerable
amount of pressure from activist investor Land & Buildings Investment Management after
suffering huge losses in the market in the second quarter of 2017. As a result of the loss incurred
the company had unveiled its Transformation Plan which involves restructuring of the company
but as a result of continued clashes with LBIM, the transformation plan was also unable to
address the concerns of the shareholders and in the midst of such crisis, the CEO of the company
announced his resignation from the company and therefore the company is facing tremendous
challenges to bring back the company in to profitability. Upon analysis of the company it can be
recommended to the company that the company should mainly focus on improving its e-
commerce infrastructure in order to address the losses of the company.
Main Body
The role which will be played by me in the case is a strategic consultant who has been hired by
the company to solve the problem.
The main problem which has been identified in the case is that the company has faced huge
losses in the second quarter of 2017 and there is a crisis situation in the company as a result of
increasing pressure from activist investor Land & Buildings Investment Management and also
due to the inability of the transformation plan of the company in addressing the concerns of the
company.
Analysis
The five forces analysis of Canadian retail market is as follows:
Competitive Rivalry-The competitive rivalry is high in the Canadian retail market as there are a
number of competitors competing in the Canadian retail market such as Sears Canada and
Nordstrom Canada for gaining a considerable amount of market share in the market. Further
after the arrival of Amazon in the Canadian retail market the competition has grown stronger and
along with the emergence of the small retailers, the competitive scenario is very intense in the
Canadian retail sector.
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CASE ANALYSIS
Bargaining power of suppliers- As opined by Korval (2017) Hudson Bay company offers a wide
variety of products and services to their customers and therefore they do not rely on limited
suppliers for sourcing of their products and services and as a result they do not enjoy bargaining
power but however few high quality products of the company are sourced from limited suppliers
which provides the supplier the authority to alter the price of their products. Therefore the
bargaining power of suppliers at Hudson Bay Company is moderate in nature.
Bargaining power of customers-As stated by Wireless News (2018a) the bargaining power of
customers is moderate for Hudson Bay Company as there are a wide variety of options which are
available to the customers regarding purchasing their products. The Canadian customers prefers
retailers who provides high quality items at reasonable prices and as all of the competitors of
Hudson Bay Company offers products to the customers at reasonable prices, therefore the
bargaining power of customers is high. However there are certain unique high quality products
which the company offers to their customers and the bargaining power of customers remains low
for those products due to lack of adequate options and therefore the bargaining power of
customers can be considered as moderate.
Threat of substitution- According to Professional Services Close-Up (2015) the threat of
substitution is comparatively low in the Canadian retail market as all the players in the market
offers identical same product to the customers although at different prices. As all the competitors
offers a wide variety of products to the customers, therefore the threat of substitution is low in
the Canadian retail market.
Threat of new entrants-The threat of new entrants is comparatively low in the Canadian retail
market as the market is dominated by a large number of retailers who are competing in the
industry for market share. The threat of new entrants is also considered to be low in the Canadian
retail market as the cost of entering the market is very high. The threat of new entrants is also
low in the Canadian retail market and it requires a high amount of brand identity and brand
reputation in order to compete in the market.
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CASE ANALYSIS
The SWOT analysis of Hudson Bay Company is as follows:
Strengths- The main strength of the company lies in the fact that it offers a variety of products to
the customers such as clothing, accessories, home-décor, furniture etc. The other strength of the
company lies in the fact that the company has different brand name products. The other strength
of the company lies in the fact that the company is a reputed organization in the country with
stores located at various convenient locations. The other strength of the company lies in the
utilization of important dates and events by the company.
Weaknesses- The main weakness of the company lies in the poor e-commerce infrastructure of
the company which has led to the loss of brand reputation of the company. The other weakness
of the company includes the loss of reputation of the company as a result of huge losses suffered
by the company and the debts incurred by the company. The other weakness of the company is
the multiple ownership changes in the company which has disturbed the strategy implementation
and operations of the company.
Opportunities- The main opportunity for the company is to design a new logo for the company as
the customers are no more attracted towards the outdated logo of the company. As stated by
Webster (2019) the other opportunity for the company is to improve the e-commerce
infrastructure of the company in order to compete with other competitors in the market. The
other opportunity for the company is to use social media and online platform in order to connect
with their customers in a more effective manner as majority of Canadian customers seek
information over the internet before making a purchase decision.
Threats- According to Mergers & Acquisitions Business (2015) the main threat of the company
lies in the increased competition in the Canadian retail markets from competitors such as Sears
Canada, Nordstrom Canada, Amazon, Walmart etc. The other threat for the company is the
recession in the economy which impacts the purchasing power of the customers.
Alternatives
As stated in Wireless News (2018) the first alternative I could suggest to the company as a
strategic consultant in order to address the decline of the company and to recover from the losses
of the company is to focus on increasing the top line sales of the company in Europe across the
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CASE ANALYSIS
Galeria Kaufhof, Galeria Inno, Hudson’s Bay Netherlands and Saks Off Fifth store through top
management commitment which would help in recovering the losses of the company faced in its
European Division and help the company to become profitable in nature.
As opined by Carrick (2014) the second alternative which I could suggest as a strategic
consultant is to invest more in the non-performing stores of the company across Canada by
effective branding of the stores which would not only help in attracting domestic visitors but also
will help in attracting foreign visitors. The company should also focus on premium branding of
the stores of the company which are located in various popular high end locations and to offer
premium shopping experiences to the customers of those stores which would help in increasing
the traffic of the stores.
According to The Canadian Press (2017) the third alternative which I could suggest to Hudson
Bay as a strategic consultant is to implement separate competitive strategies for its separate
brands in order to appeal to all kinds of customers. The company should adopt a differentiation
strategy for the premium brands of the company in order to attract premium customers and by
offering premium customized experiences to the customers and the company should adopt a cost
leadership strategy for the budget brands of the company in order to appeal to customers who
seek high quality products at the lowest possible price.
As stated by Caniato et al. (2014) the fourth alternative which I could suggest as a strategic
consultantis to adopt a customer centric strategy in order to gain a greater sales traction for which
the improvement of the top line performance of the company is very essential. The company can
also procced by opening limited stores of the company in prospective locations and close the
non-functional stores of the company.
As opined by Kurnia, Choudrie, Mahbubur, &Alzougool(2015) the fifth alternative which I
could suggest as a strategic consultantis to improve the e-commerce infrastructure of the
company in order to drive the online sales of the company which can help in generating profit for
the company. Though the online sales of the company has increased, but still the e-commerce
infrastructure of the company is not up to the mark for competing against retailers such as
Amazon and Walmart and therefore the company should focus on improving their e-commerce
infrastructure and provide customized online shopping experiences to their customers.
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CASE ANALYSIS
Recommendation
The recommendation which can be suggested by me as a strategic consultant of Hudson Bay is to
improve the e-commerce infrastructure of the company in order to improve the position of the
company in the market. As Canadian customers are highly dependent on the internet for their
product purchase, therefore the company should attract the customers by virtue of their online
shopping experiences and e-commerce services. The competitors of the company such as
Amazon and Walmart have gained profitability and popularity by virtue of their e-commerce
infrastructure and therefore considering the competitive landscape of the Canadian Retail market,
it is recommended to the company to invest more in the development of the e-commerce
infrastructure of the company.
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CASE ANALYSIS
References
Caniato, Federico, Caridi, Maria, Moretto, Antonella, Sianesi, Andrea, & Spina, Gianluca.
(2014). Integrating international fashion retail into new product development. International
Journal of Production Economics, 147, 294.
Carrick, A. (2014). Retail on the rise: Retail construction growth is expected, but not without its
challenges. Construction Today, 12(3), 12.
Korval, N. (2017). Collective Bargaining Challenges Facing the Retail Sector. Employee
Relations Law Journal, 43(2), 72-75.
Kurnia, Choudrie, Mahbubur, &Alzougool. (2015). E-commerce technology adoption: A
Malaysian grocery SME retail sector study. Journal of Business Research, 68(9), 1906-
1918.
Mergers & Acquisitions Business(2015). Fast Fashion Retail Market: Trends and Opportunities
2015-2019 Featuring ZARA, H&M, Uniqlo and GAP. Mergers & Acquisitions
Business, 319.
Professional Services Close-Up(2015). Research and Markets Offers Report: 'Global Online
Optical Retail Market: Trends & Opportunities (2014-2019)'. Professional Services Close-
Up.
The Canadian Press(2017). Mastermind Toys expanding across Canada despite challenges of
retail sector. The Canadian Press, p. 19.
Webster, P. (2019). Canada to widen its newly opened retail cannabis market. The
Lancet, 393(10167), 116.
Wireless News (2018a).Infiniti Research Highlights Top Challenges in the Fashion Retail
Industry. Wireless News.
Wireless News(2018b). Infiniti Research Releases Report on the Retail Industry Trends and
Challenges. Wireless News.
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CASE ANALYSIS
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