Hudson’s Bay Company (HBC) is one of the oldest and largest retailers in Canada. The company spans over 300 years and has gone through multiple changes over the years. The changes can involve transitioning from one owner to another or shifting from selling certain items to another. The company has managed to be highly successful by managing these changes well. However, the changes in the market, such as increased competition and fragmentation of the retail industry, can impact the performance of the business. This paper analyzes the HBC company strategy through the analysis of its mission statement, a SWOT analysis, Porter’s Five Forces Model, and the corporate and business level strategies.
HBC’s Mission and Its Stakeholders
The mission of HBC is to serve its customers in the best way possible. The company tries to serve them by building a relationship and earning their trust. The company strives to provide the highest and best service by adhering to strict standards in the product and sales of its products. To realize such a commitment to customers, the company should treat its employees well so that they can provide the best type of customer service. The relationship between the company’s mission and its stakeholders is that achieving the mission incorporates the collaboration of all stakeholders. The mission is geared towards providing customers the best service possible. It must then treat its employees with great importance.
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The primary stakeholders of HBC are its customers. Their main demand is to get quality products at the most affordable rates. HBC can realize this by introducing offers and promotions when selling its products. The company also ensures that it maintains strict standards with the production of its products. Such standards will only be possible when the company maintains a strong relationship with its suppliers. The success of HBC is thus highly dependent on its relationship with stakeholders.
SWOT Analysis
Strengths
One of the main strengths of HBC is in the diversification of its products. The company has a variety of products from high-end brands showing that it has high-quality materials. Another strength is that the company has a strong brand and reputation. The company has shown that it can adapt to generational changes by introducing new technology successfully.
Weakness
One of the major weaknesses of the company is that it has undergone and can undergo multiple ownership changes. Such ownership changes could mean that the company changes its policy (Van & Smith, 2020). HBC also has a high operational cost, making its products expensive. For instance, the company made innovations in 2001 and did not focus on discounts, making customers angry and reducing their loyalty.
Opportunities
Online shopping is a new trend in the modern world. The company should shift to selling its products online to reduce its operational costs and expand its sales to different parts of the world (Gong et al., 2020). The company has also managed to outdo its competitors that have been unsuccessful in their operations and gone bankrupt. HBC has an opportunity to open in multiple locations.
Threats
The current economic situation is a threat for the company due to a poor economy that causes a low disposable income. There is an increased media scrutiny on the company, especially after it experienced a net loss of $201 million dollars. The report scared many investors away and showed that the company is on the verge of bankruptcy. The company continues to experience significant competition from international online retailers such as Amazon and Walmart.
Porter’s Five Forces Model
Threats from Competition – Strong
The competition in the industry is quite strong. There are multiple competing companies like Target and Old Navy that have opened multiple stores throughout Canada. The increase in the use of online shopping has also created a new type of competition.
Threat of Substitute products – Strong
One of the key substitute products is online shopping that provides a better shopping experience. The different modes of payment and advantages that come with home delivery services make the threat high.
Threat of New Entrants – Weak
The threat of new entrants can be considered weak as it is difficult to establish a retail store with the size and magnitude of HBC. A business must have an adequate capital investment to establish a large retail store.
Bargaining power of buyers – Weak
The bargaining power of buyers is very high due to the availability of many substitute products. Customers can find cheaper products, different kinds of brands, and can easily shift their brand loyalty.
Bargaining power of suppliers – Weak
The bargaining power of suppliers is weak as HBC can get different suppliers for their products quite easily. Losing a few suppliers may not impact the company’s business operations.
Corporate and Business-Level Strategies
HBC currently makes use of a differentiation strategy. A differentiation strategy involves selling products that are unique and different (Schermerhorn Jr, 2017). The company strives to sell high-quality and well-branded products. The company has also strived to use a corporate level strategy growth strategy by adapting to changes to the market. The company has introduced several new fashion products and diversified its product offerings. The result has been that it has attracted new customers. HBC has also expanded its stores throughout Canada and acquired different companies. Such a strategy has been responsible for the growth and expansion of the company to different parts of Canada.
Conclusion
The analysis of HBC showed that it has a strong position in the market. The company should continually improve its strategy so as to continue satisfying its stakeholders. One of the main opportunities for the company is online shopping. The company put a focus on online shopping to reduce its operational costs and attract a larger number of customers.
References
Gong, D., Liu, S., Liu, J., & Ren, L. (2020). Who benefits from online financing? A sharing economy E-tailing platform perspective. International Journal of Production Economics , 222 , 107490. https://doi.org/10.1016/j.ijpe.2019.09.011
Schermerhorn Jr, J. R. (2017). Management . John Wiley & Sons, Inc.
Van L. W., & Smith, A. D. (2020). Using versus excusing: The Hudson’s Bay Company’s long-term engagement with its (problematic) past. Journal of Business Ethics , 166 (2), 215-231. https://doi.org/10.1007/s10551-019-04320-7
