The corporate history of Canadian Tire Corporation - Case Study Example

? Canadian Tire: Case Study (Add (Add (Add Introduction Throughout this semester, I have been collecting CanadianTire’s historical information and analyzing the challenges the organization has faced over the years of its market growth. The gathered information provides a clear view regarding the various growth phases of Canadian Tire Corporation and how the company has responded to market adversities. A detailed study of the company’s history by focusing on certain specific events in the chronological order is necessary to fully understand how the company’s growth is affected by the interaction of individual decisions, policy changes, and market trends. This paper also tries to interpret how effectively the company has overcome various business challenges throughout its history and why it has been dominating the Canadian market since its foundation. The history of Canadian Tire is dated back to 1922 when two brothers; namely James William Billes and Alfred Jackson Billes, purchased the Hamilton Tire and Garage Ltd. for their combined savings of $1,800. Just one year after this purchase, Billes brothers sold Hamilton Tire and Garage Ltd. Historical information shows that Billes brothers had moved several times before they settled into Yonge and Gould under the name Canadian Tire Corporation. Although they started their venture as a small business, they gradually expanded over the years and became one of the 60 largest publicly traded companies in Canada. This paper takes a glance at the Canadian Tire’s successes as well as failures throughout its corporate history while examining its historical timeline. Background The Canadian Tire Corporation is headquartered at Toronto in Canada. Canadian Tire’s extensive range of products and services reached each and every house in Canada over the last two decades and the company made every Canadian life easier. The firm operates an interconnected business network including petroleum and apparel products, financial services, hard goods, and automotive services. The corporation’s retail operations include Canadian Tire, Canadian Tire Petroleum, Mark’s Work Wearhouse, PartSource, and FGL. The firm is well known for its creative advertising and acquisitions and partnerships. The organization’s corporate history indicates that nearly 85% of the Canadian population lived within a 15 minute drive of their local Canadian Tire store by the end of the 20th century. The company has been introducing timely business changes and new customer service facilities since 1922 and this innovativeness assisted the company to complete 89 years of successful Canadian market operations. Canadian Tire Corporation is a family oriented business organization and the firm serves its customers with flexible business hours and a range of other benefits. Recently, the company has introduced MasterCard facilities and other banking facilities in order to assist customers to make their purchases more convenient. In addition, the company offers extensive retail offerings including automotive, sports and leisure, and home products under one roof, and hence the Canadian Tire management provides better shopping experiences to its customers. The Canadian Tire possesses a large group of dedicated and efficient employees from different parts of the country and this workforce aids the company to make sure that its products and services are accessible to everyone. Canadian Tire’s corporate information shows that it gives extensive employment opportunities in every region of the country and provides the Canadian society with a range of welfare programs. Therefore, the organization benefits the nation as a whole by offering cheap and quality products to Canadian population and by contributing to the economy’s overall GDP growth. However, like any other leading organization, the Canadian Tire Corporation has some pitfalls and disadvantages for its customers, employees, and society. The company has been often criticized for its service issues. Majority of the customers complain that Canadian Tire actually charges higher prices for their products than the price tags say. This deceitful practice of the company makes its customers irritated. Understocking of products is another disadvantage of the company and this issue often dissatisfies customers. It happens mainly because of the company’s poor distribution center capacity. In addition, some customers say that they have experienced problems with the firm’s product warranty offerings. Employees too are dissatisfied with some strategic aspects of the company. For instance, the payment offered to customer service representatives does not seem to be substantial. It is obvious that customer service is a mentally demanding job as representatives need to deal with angry customers on a daily basis. Even though such issues can cause potential damage to the reputation of the Canadian Tire Corporation, the company remained unaffected simply due to its innovative product as well as service offerings. As a national player with over 1000 retail stores of various types across the country, the organization faces troublesome difficulties in controlling energy consumption and greenhouse gas emissions. However, the company has successfully met these challenges by setting environmental sustainability as its one of the core elements of overall business strategy. As a result of the widespread nature of its business operations, the efficacy of Canadian Tire’s sustainability efforts is reported under three key areas; “products and packaging, product transportation, and buildings and operations” (Sustainability commitment update, 2011). Although various issues have affected the operational efficiency of Canadian Tire over time, the company still dominates the Canadian market despite the difficulties raised by those issues. In other words, the various issues emerged throughout the development of the Canadian Tire Corporation did not seriously affect the company’s growth. History of Canadian Tire Subsequent to their settlement into Yonge and Gould, Billes brothers opened their first official store at Hamilton in Ontario in 1934. After three years, the company moved to the new Main store located at 837 Yonge Street after making extensive additions to the Grand Central Market (Canadian Tire: History, 2012). This location still remains as one of the associate stores in the business chain of the company. The Canadian Tire published its first catalogue consisting of a detailed price list on one side and the Ontario handy roadmap on the back. This facility led to the development of the Mail Order Department in the organization. As a publicly traded company listed on the Toronto Stock Exchange, investors began to increasingly choose Canadian Tire shares and this situation greatly assisted the firm to easily raise funds for further expansion. During the first half of the 1990s, the company experienced significant consumer demand and market growth. Also, the firm’s business model was redesigned during the same period. “In its last five year strategic plan, it attained top-quartile total revenues to shareholders among all publicly traded North American retailers, with a total return of 286%” (Canadian tire in Abbotsford Bc, 2012). While analyzing the corporate history of Canadian Tire, it seems that the firm has periodically opened its new stores in order to extend its products and services to each and every area of the Canadian life. Throughout its history of 89 years, the company has made a series of partnerships and acquisitions as a part of its market expansion. The introduction of Canadian Tire Bank was an innovative concept and a milestone in the corporate history of the company. Furthermore, the company gave great emphasis on social welfare programs and this strategy has improved the standards of Canadian life to a considerable extent. To illustrate, the firm established Canadian Tire Foundation for Families in 1999 so as to lend a hand to families which are badly in need of living necessities like food and shelter. In addition, the company opened the Canadian Tire Hockey School in 2010 to develop young hockey players in the country in order to stimulate the country’s sports and games sector. A set of major events in the history of Canadian Tire Corporation is given below. From the company history, it is evident that individual decisions have greatly affected the growth of the country. In 1937, A.J. Billes introduced ‘clerks on roller-skates’ system, and this innovation greatly added to the brand image of Canadian Tire. Throughout the corporate history of the Canadian Tire Corporation, it seems that Billes brothers’ timely strategic decision have significantly influenced the unimaginable market growth of the organization. In addition, interaction of policy changes and market trends has also changed the way the company has been operating. Reports indicate that the organization has converted its majority of traditional stores into new format stores and built new stores since 2003. This strategy provided the company with a new look and made Canadian Tire the most modern network in Canada. Although land and buildings are owned by Canadian Tire itself; all other materials inside the building; from fixtures to merchandise, belong to the dealers. This business strategy assists dealers to exercise complete control over their particular retail stores and thereby properly manage those subsidiaries. Ultimately, such a decentralized business strategy adds value to the overall operational efficiency of the Canadian Tire. The store computerization process greatly benefited the company through greater integrity and flexibility over its supply chain operations. In order to integrate its business to modern market trends, Canadian Tire launched its corporate website in 2001. This move has greatly helped the company to take advantage of the growing online market opportunities and to reduce operating costs to a considerable extent. Many of the Canadian Tire executives are of the view that the introduction of online shopping facility significantly aided the company to improve its operational efficiency as well as corporate performance (Personal Interview). Through the merger with Midland Shoppers Credit Limited, the Canadian Tire could greatly improve the efficacy of its finance related operations. Likewise, the acquisition of Mark’s Work Wearhouse- one of the leading Canadian clothing retailers- can be considered as another major achievement of the Canadian Tire in its corporate history. Through this acquisition, the company could notably expand its customer base. In addition, the purchase of Forzani Group- a Canadian sports equipments retailer- was also an appreciable achievement of the organization. While scrutinizing the history of Canadian Tire, it seems that the company’s goals have changed in some aspects since Billes brothers established their business. For instance, the organization had not focused on environmental sustainability at the time of its establishment. However, later on Canadian Tire management realized that the firm’s products and services would be rejected by the market if it did not prioritize environmental safety. Hence, the company has recently designed a number of green projects. While analyzing the retail experience of the Canadian Tire in the past few years, it seems that 2008 global financial crisis notably affected the company. However, the firm’s recent financial statements indicate that it has successfully survived the impacts of the global crisis (Canadian Tire: 2010 Annual Report, 2010). Similarly, two big acquisitions during the last decade; including Mark’s Work Wearhouse and Forzani Group, greatly restructured the way the Canadian Tire provides retail experience to its customers. Hence, those acquisitions have made a huge impact on the firm’s development. As we discussed earlier, the Canadian Tire has several other business segments such as Canadian Tire Petroleum which is Canada’s largest independent gasoline retailer having 266 bars across the country. In addition, the company’s PartSource launched in 1999 is one of the country’s fastest growing automotive parts. Hudson’s Bay Company, Wal-Mart Canada, and Sears Canada are the major competitors of the Canadian Tire Corporation (Funding Universe, n.d). Wal-Mart’s low pricing strategy greatly threatens Canadian Tire. However, the company focuses on its service quality and innovativeness to confront with market competition. Conclusion The above sessions discussed the corporate history of Canadian Tire Corporation as well as a set of important events in its history and identified how the company became Canada’s one of the leading retailers. It is clearly identified that Canadian Tire’s innovativeness and efficiency in decision making process assisted it to progressively develop in the Canadian market. The company’s corporate history indicates that partnerships and acquisitions are the major growth strategies of the firm. The Canadian Tire management is always excited to introduce innovative changes in order to keep its business up- to-date with changing customer needs. The company operates a number of subsidiaries across the country and its business network has currently reached almost every region of the country. Although the company has been successful since its establishment, currently it faces a series of market threats mainly due to intense market competition. References Canadian Tire: History. (2012). Blurb Wire. Retrieved from http://www.blurbwire.com/topics/Canadian_Tire::sub::History (2012). Canadian tire in Abbotsford Bc goes green and helps stop oil pollution. World News. Retrieved from http://wn.com/Canadian_Tire_in_Abbotsford_BC_goes_Green_and_helps_stop_oil_pollution Canadian Tire: 2010 Annual Report. (2010). Consolidated balance sheets 2009 & 2010. Retrieved from http://corp.canadiantire.ca/EN/Investors/FinancialReports/Annual%20Reports%20Library/CTC_AR_2010.pdf Funding Universe. (n.d). Canadian Tire Corporation, Limited. Retrieved from http://www.fundinguniverse.com/company-histories/Canadian-Tire-Corporation-Limited-company-History.html (2011). Sustainability commitment update: Canadian Tire Corporation. Share Green. Retrieved from http://sharegreen.ca/node/162 Read More