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Spotlight: Canada Goose Strategy Considerations

Hayley WONG gives her view on Canada Goose and their strategic considerations... 🇨🇦

  • Hoi Ching Wong
  • 2 min read

The luxury winter-wear brand Canada Goose was founded in 1057 under the name Metro Sportwear Ltd, their HQ is in Toronto and today they are arguably one of the country’s best known apparel brands, largely down to partnerships with celebrities and their long standing brand heritage.

Let’s take a look at them in a little more detail…

PESTLE Analysis of Canada Goose

The main takeaways from the PESTLE are:

  • Increasing awareness on animal welfare. The company use Coyote fur and Goose Down as materials in some products, this has raised significant ethical discussion points by groups such as PETA.
  • E-commerce continues to rise as a channel for buyers, not historically something Canada Goose has been strong on.
  • Millennials focus is on both quality and the ethical nature of a brand
  • Social media continues to be important for younger buyers

In more detail…

Political

  • Canada Goose operate outside of Canada so the local stability of regions will impact them, for example the demonstrations in Hong Kong in 2019 resulted in lower trade
  • Activists for animal rights increase risk of disruption to stores
  • Ongoing trade deals between countries given the international footprint

Economic

  • Different currency exchange rates and value
  • Strength of local economies impacting luxury brand purchases

Social

  • Increased usage of online channels
  • Increased usage of social media
  • More emphasis on ethical brands

Technology

  • More advanced personalisation options within ecommerce platforms
  • Targeted advertising increasing channel spend
  • Expectation around customisation

Legal

  • Employee laws per country
  • Health and safety laws
  • Counterfeit protection laws given certain market imitators

Environmental

  • Much greater emphasis on environmental impact of companies
  • Green taxes
  • Desire to use brands who are deemed ethical

Read the Ultimate Guide to PESTLE Analysis.

Five Forces for Canada Goose

Industry Rivalry: High

  • They sell standardised products rather than differentiated products
  • Slow to respond to ecommerce market
  • Innovation low in this market

Threat from Suppliers: Medium

  • Canada Goose owns its factory in Chabanel which has long history on fashion industry
  • Materials are mostly from Canada and are easy to monitor
  • The materials they make coat are unique (Coyote fur) low production cost

Threat from Buyers: High

  • Low switching cost
  • Possibility of increased price sensitivity
  • Concern over ethical brand
  • Easy to influence

Threat from New Entry: Low

  • Relatively high start up costs
  • Difficult to scale
  • Smaller, local shops easier to enter via online
  • High revenue growth for Canada Goose in recent years so has good reserves to compete

Threat from Substitutes: Low

  • Ultimately clothing will be needed
  • Possibility of replacement by ethical alternatives
  • Could begin to move into this market in advance of alternative
  • Brand and reputation difficult to replicate

Complete your own Five Forces here.

SWOT Analysis for Canada Goose

Strengths

  • Popular brand for years
  • Use of celebrities
  • Good foundation production in Canada
  • Developed a diverse product portfolio
  • Global operation

Weaknesses

  • Narrow production line
  • Ecommerce platform not mature
  • High price point vs competition
  • Limited range of products
  • Not sustainable development

Opportunities

  • Changing the behaviour of customers
  • Partnering with other brands
  • Moving to be more ethical and sustainable
  • Innovation in product lines
  • Expand their technology platform to grow online sales

Threats

  • Activist disruption from groups like PETA
  • Customers leaving due to lack of ethical brand
  • Counterfeit cheaper goods in market
  • Price point being too high for customers
  • Innovation not supporting growth
  • Customers moving online

Read the Ultimate Guide to SWOT Analysis.

Summary

Canada Goose is an interesting company, one with a heritage of good quality, high price purchased in person that now finds itself operating in a largely digital, increasingly ethically driven world. They need to invest further in their technology strategy, ensure a product line fit for the increasingly ethically aware customer, and have processes to support the continued growth.

A lot to work on, but also a lot of opportunity to reinvent themselves… 🧥

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