Hudson Bay is a Canadian company that initially specialised in fur trading but now owns retail stores across Canada, the United States and some parts of Europe. Over the years, Hudson’s Bay Company has ventured into other forms of retail eventually diversifying to a full-scale commercial organisation (Bachrach, Wright, & Schermerhorn, 2018). It has also reinvented itself to focus more on customer satisfaction and enhancing a relationship with its stakeholders. However, it is still one of the largest companies in Canada with over 350 department stores and more than 45,000 employees (HBC, 2019).
HBC’s Mission and Relationship with its Stakeholders
Hudson’s Bay Company’s mission is focusing on driving the performance of high-quality stores as well as unlocking the value of real estate holdings (HBC, 2019). Through this, HBC is able to gain trust from customers, investors, and stakeholders (John, Daniel, & Barry, 2018). HBC has partnered with various investors not only in retail but also in real estates such as Simon Property Group, HBS Properties Joint Venture and RioCan Real Estate Investment Trust.
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There are very high expectations that stakeholders have on HBC and the company acknowledges these expectations and has on its part set very high standards for the company and this includes its associates, officers, and directors. HBC greatly emphasises on good and sound corporate governance and it does so through the set procedures, guidelines and code of conduct (HBC, 2019).
Hudson’s Bay Company has various stakeholders; among them includes institutions, that own about 27 per cent of the company; private companies, that claim about 5 per cent of HBC; insider ownership, that mostly manage the company and claim about 13 per cent of HBC; and finally, the general public,that owns about 24 per cent of HBC (Maloney, 2017).
As part of stakeholder’s expectations, HBC adheres to certain ethical requirements such as obeying the law, adhering to employment as well as environmental standards, auditing, and maintaining a good record of documents (Government of Canada, 2011). The company is also dedicated to giving back to the community through corporate social responsibility. They do this through their Breast Cancer Research Foundation, Athlete Bursary Program, Prostrate Cancer Awareness, Golf Tournaments, among others (Hudson's Bay Company, 2016).
Analysis of Hudson’s Bay Company’s Competition
Based on Michal Porter’s five forces that determine a company’s attractiveness, it is possible to analyse HBC’s position in the market – that it has in the recent past described as ‘brutal’ (Solarina, 2017). These forces include the current industry competition, new players in the market, substitute services or products, the bargaining power of suppliers and of the consumer (John, Daniel, & Barry, 2018).
Industry Competition
Hudson’s Bay Company has various competitors and among those who pose a serious threat are online stores such as the Amazon Company and Chinese online store, Ali Baba. Others who pose a moderate threat include Macy’s, Nordstrom, Neiman Marcus, Holt Renfrew, Dillard’s, JC Penny, Linen Chest, among others.
New Players in the Market
There are several new players in the market, who are more trendy and fashionable and appeal more to the younger generation. This type of threat, however, is moderate by virtue of the fact that HBC has been around for more than 300 years and has built quite a good reputation on the quality of their products and services as well as a good trust relationship with its clients.
Substitute Products or Services
Initially, HBC started off as a fur company but has over the centuries and decades evolved to more fashionable retailing. This move was inevitable since the fur business was declining and for the company to survive, they had to diversify. The company also ventures into real estate and has partnered with various investors. In addition to that, the company has also innovated online retailing products so as to match with the existing competition.
Bargaining Power of Suppliers
In the retail business, it is very essential to develop a good relationship with your suppliers. An added advantage that HBC has is that it has been in existence for a long time and it has a pool of suppliers for whatever they specialise in. Suppliers have the ability to determine prices and this can affect the business market.
Bargaining power of Consumer
This refers to the power that consumers have in price setting and this can be through the demand and supply chain. For HBC to be competitive enough, their products need to have a high demand by the consumer. Retailers like Amazon are a strong competitor because their products are in high demand globally. It is clear that HBC has a moderate to strong competition. To cope better, the retailer should consider innovating itself and going with the market trends such as online retailing. By changing tact, the retailer could survive the brutal retailing market.
Corporate and Business Strategies by HBC
The corporate and business strategies by Hudson’s Bay Company can be analysed using the Boston Consulting Group (BCG) Matrix, which is based on two factors: the market growth rate in that particular industry and the market share held by the company. These two factors further narrows down to four strategic types that sort business and products; they include dogs, stars, question marks and cash cows (Schermerhorn, Bachrach, & Wright, 2018).
Under this matrix and upon analysing HBC’s position and dominance in the market, the company is in between the stars and the question marks. Hudson’s Bay Company has a huge market share and is among the largest retailers in Canada, it also has a stable market and adequate growth rate. However, it is facing stiff competition from online retailers, who are now becoming dominant in the market. Because of this, HBC has a lot of decisions to make in order to survive the harsh business environment. A possible solution is innovation and adoption of technology in their marketing and sales strategies.
Overall, Hudson’s Bay Company has been around for over 300 years; it has seen the ups and downs in the retail market and has survived them all. Even with the present challenges, the retailer will pull through as long as they keep updated with the current trends, be innovative and implement strategies that will make them grown both in sales and market share.
References
Augustyn, A. (2019, January 15). Hudson's Bay Company . Retrieved from https://www.britannica.com/topic/Hudsons-Bay-Company
Bachrach, D., Wright, B., & Schermerhorn, J. (2018). Management Cases for Critical Thinking. In J. R. Schermerhorn, D. G. Bachrach, & B. Wright, Management (pp. 396-397). Ontario: John Wiley & Sons Canada Limited.
The government of Canada. (2011, August 10). Hudson's Bay Co. (HBC) A Case Study in Ethical Sourcing . Retrieved from https://www.ic.gc.ca/eic/site/csr-rse.nsf/eng/rs00168.html
HBC. (2019). Corporate Governance . Retrieved from http://investor.hbc.com/corporate-governance
HBC. (2019). Investor Relations . Retrieved from http://www.investor.hbc.com/
Hudson's Bay Company. (2016). Corporate Social Responsibility Report. Ontario: Hudson's Bay Company.
John, S., Daniel, B., & Barry, W. (2018). Essentials of Strategic Analysis. In S. John, D. Bachrach, & W. Barry, Management (pp. 181-184). Ontario: John Wiley & Sons Canada Limited.
Maloney, A. (2017, October 27). Who Are The Major Shareholders Of Hudson’s Bay Company (TSX: HBC)? Retrieved from http://www.simplywall.st/news/who-are-the-major-shareholders-of-hudsons-bay-company-tsxhbc/
Schermerhorn, J., Bachrach, D., & Wright, B. (2018). Corporate Level Strategy Formulation. In J. Schermerhorn, D. Bachrach, & B. Wright, Management (pp. 184-190). Ontario: John Wiley & Sons Canada Limited.
Solarina, H. (2017, June 9). Hudson's Bay unveils plan to compete in 'brutal' retail market . Retrieved from http://www.ca.reuters.com/article/businessNews/idCAKBN190219-OCABS
