The North Facein

Canada

Presented by

Sambhrant J. Rana, Ayse Akdemir, Hae Jin Jang

“Never Stop Investing”

“Never Stop Exploring”

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

Country Analysis - Canada’s PESTEL Model

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”

Increase Online 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”

Thank you!Any Questions?