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The North Face - Overview- Established in 1966 in San Francisco- Now subsidiary of Vanity Fair Corporation- Retailer of high-performance outdoor apparel- 55 Retail and 20 outlets in US- 4 retail and 2 outlets in Canada- Increase in sales growth in every year
especially in E-commerce- Today, targeting broader market - introduction of A5 series
Canada- PESTEL MODELPolitical Economical
- 3 levels of governments with different responsibilities
1. Federal government 2. Provincial and territorial governments, 3. Municipal governments
- Democratic government under basis of“peace, order, and good government”
- Set priorities to promote commercial relationship around the world
- Encourage foreign investment and innovation
- One of the wealthiest countries in the world- 14th largest economy (PPP USD)- Consistent increase in inflow of FDI (45% of Nations GDP) - FDI 2011 was at $62 Billion- International trade takes large proportion (Main trading partner US) $1 Billion Daily-High GDP per capita- Drives consumer spending -Skilled/ Productive workforce -Service Sector is Largest followed by Manufacturing Sector (Automobile/Airline)-Member of OECD and G7-Constant increase in E-Commerce
ECONOMY
· 2009: U.S. 73% exports 63% imports
· Reliance on Natural Resources
· The average tariff rate is a low 0.8% continues to negotiate free trade agreements.
· Credit is readily available on market terms.
· The banking sector remains stable: well developed securities markets.
GDP
● Population 35.1M
● GDP (PPP) of $1.592
trillion (2014)
● 2% growth rate with a
1.4% compounded 5
year annual growth
Canada- PESTEL MODELSocial Technological
- Potential in economical and population growth(growth rate 0.8%), low GINI Index 33.7%.
- Effort to reduce global trade barrier- Greater globalization- Outperformed other Group of Seven (G-7)- Since 2006 created 1.6 million new jobs- Many big companies planted their own
factories - eventually increase in employment rate, economy, and globalization movement
- Strong immigration rate (1986-2006, went 4 million to 6 million)
- Service Sector- Manufacturing Sector- Energy Sector
Canada- PESTEL MODELEnvironmental Legal
- Huge investment in R&D, Greenfield projects, sustainable economy and solving climate crisis
- Reduce Greenhouse gas emission- Green-land and recycling projects- Renewable Energy
- Dramatic tax reform- Cut corporate tax rate from 36% to 26%- The lowest tax rates attracts many foreign
company to start the business- Tax revenue still increased regardless of
drastic cut in corporate tax rate- Opens a greater opportunity for companies
around the world
Economic Freedom: Doing Business · Economic freedom score is 79.1 (making its economy the 6th freest in the 2015 Index) Overall score 1.1
points lower than last year
· A slight increase in the level of perceived corruption impacting the overall freedom score
· Still remains one of the world’s most stable business climates and an attractive investment destination.
· World’s second best property rights and is open to global commerce with a strong and competitive
financial sector that is supported by efficient lending practices
· Potential Problem: Status of Quebec (independent) would lose a sizable portion of GDP.
· Another problem: Brain drain to U.S. (lower taxes and higher wages in the United States) Canada's
dependence on trade partners
Company Analysis - The North Face - SWOTStrength Weakness
- Brand reputation- Product quality- Product design in high performance and
comfort- Innovative products- CSR : recycle, reward, renew
- Ineffective communication strategies in its technological innovation to justify its pricing
- Poor marketing strategies in new product line
Opportunity Threat
- Increase community involvement- Sponsoring/ participating major sports
events- Expand the brand world wide- Increase online presence
- Highly concentrated market- Highly competitive in marketing- Major key players in the industry: many
competitors
“Need fresh marketing strategies for fresh product line!”
● New marketing strategies for A5 Line
● Specialty Market to Broader Market
● Clear differentiation in pricing strategy
Original Line A5 Series
Recommendation 1 : Develop Marketing Strategy
● Gradual sales increase along with GDP increase● Only 4 retail and 2 outlets● Follow the global trend in increasing Internet Sales
Recommendation 2“More retail stores, but more for E-commerce presence”
● 27% of the fabric - conform to the Bluesign (environmentally friendly and safe production) sustainability stand for textile production
● By 2015, the North Face is aiming to achieve 65%
Recommendation 3 - Promote your CSR!“Canadian government likes to go GREEN”
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