National Hockey League Enterprises Canada Brand Store

Identification of the Problem

  • The National Hockey League Enterprises Canada (NHLEC) is interested in developing a store that will sell its merchandise exclusively
  • There are three possible approaches when furthering this agenda, but only the most effective solution is required to satisfy the needs of the NHLEC
  • Implementing this managerial strategy is a logistical challenge for the NHLEC because the organization has a presence across the United States and Canada
  • The organization’s current strategy of utilizing large scale retailers such as Wal-Mart means that the organization is obscuring its market presence by hiding behind recognizable chain stores
  • The chosen mode of operation should have the potential to appeal to both the organization’s leadership as well as other stakeholders

Analysis and Evaluation

  • The NHLEC has a total of 27 teams that are divided into two conferences with each of the two having three divisions
  • The big size of the NHLEC is an important consideration when implementing the new retail strategy
  • The NHLEC has not experienced any major shifts in functionality, and the decision to change its mode of operation is based solely on the desire to pursue new opportunities
  • The managerial headquarters of the NHLEC are in New York, but the manager seeks to start implementing his strategy in Canada
  • The NHLEC manager was concerned that his company’s brand was being drowned by the fragmented nature of the National Hockey League (NHL)
  • Furthermore, the NHLEC wanted to establish a viable market presence as an independent brand
  • The main goal of venturing into independent retailing is to increase the sales of the NHLEC’s merchandise
  • The large retailers that the NHLEC relies on to distribute its merchandise are the main hindrances to NHLEC’s expansion strategies
  • Another strategy is to convince large-scale retailers that there is a better way of displaying NHLEC’s merchandise
  • The NHLEC also needs to consider the current trends in the apparel industry while continuing with the implementation of the new strategy
  • There are three viable strategies that the NHLEC is considering; the first strategy involves taking control of a store’s location and ownership in Canada
  • The second strategy involves hiring a management firm and collecting a licensing fee of fifteen percent of the gross revenue
  • The third strategy involves hiring space in a reputable department store and earning a considerable amount of revenue from the resulting share of profits
  • The manager’s proposal seeks to limit instances of risky investments, maintain the outlook of the league’s brand, and establish a profitable retail option

SWOT Analysis

Strengths

The NHLEC is already a reputable brand that has the ability to capitalize on its own image

  • The manager realizes the delicate nature of the venturing into independent retailing, and he is taking all the necessary precautions
  • The brand has various viable locations of implementing the new strategy in either Canada or the United States
  • The company has a ready market for the products it wishes to start retailing

Weaknesses

The company has limited funds to cater for the implementation of the new retail strategy

  • The NHLEC organization is big in size, and there are complex logistics when implementing the new retail strategy
  • The current mode of operation is difficult to change because it involves large and reputable retail stores that have acted as NHLEC’s valuable partners
  • The apparel industry is in a slump, and this jeopardizes NHLEC’s successful strategy implementation

Opportunities

There is a possibility of increased sales and brand visibility for the NHLEC

  • The independent marketing strategy could have positive ripple effects and lead to the overall growth of the NHLEC
  • If it is implemented, the manager’s strategy will act as a trailblazer for future ambitious strategies such as this one
  • The company is favored by the current North American demographic alignments

Threats

The cost of funding an independent and branded retail store is quite high

  • The company is seeking to expand in a recession environment, where apparel sales have dropped significantly
  • It is difficult to take the retail market share away from the current leaders such as Wal-Mart and Sears
  • Research indicates that the current consumer spending habits do not favor the apparel industry where high-value products are being sought for little money

Alternatives

The manager lists three possible alternatives for implementing the retail strategy; opening an independent retail store, utilizing the services of a management firm, and leasing retail space from a renown retail store

  • Alternatively, the organization can implement other less costly strategies such as launching a media campaign
  • Another alternative is renegotiating the existing terms of merchandise distribution with all the current retailers
  • NHLEC can also implement two or all of the manager’s proposals to minimize the risk of failure

Recommendations

  • The manager is on the right path, but he needs the support of other stakeholders for him to realize his goal of attaining smooth retail channels
  • NHLEC should implement the retail strategy from two fronts; the United States and Canada
  • The manager should not focus too much on revenue cutting measures when he is implementing this strategy.