Canadian Tire Corporation Limited

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General Description

Canadian Tire Conglomerate is a limited company with its headquarters in Toronto, Ontario Canada. It was founded by two brothers, Billes and John in the year 1922. They started the business with an initial capital of 1,800 dollars. They used the money to buy a company called Hamilton Tire and Garage Limited. Five years after buying Hamilton Tire, they named the newly acquired company Canadian Tire in 1934.

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Current Performance

Canadian Tire conglomerate is worth billions of dollars, because it is listed in Forbes Magazine global 2000 top companies. Its share price in the Toronto Stock Exchange fluctuates between 60-75 Canadian dollars. It recorded a 36 percent increase in earnings. Dividends rose from 0.275 to 0.30 Canadian dollars. Sales increased by 16 percent to 2.92 billion Canadian dollars in the year 2011. It has a market capitalization of 5.18 billion dollars (Forbes, 2011). The conglomerate continues to grow as an export and import business in Canada, under its current Chief Executive Officer, Stephen Wetmore. In 2011, its consolidated returns totaled 10.4 billion dollars. Canadian Tire, employs 7,000 individuals directly, and 68,000 indirectly (Canadian Tire Corporation, 2011).

Products and Services

The corporation operates an inter-linked network of business ventures raging from apparels, petroleum products, and hard goods. The company is also engaged in automobile and financial services. The financial services are provided through a chartered bank. The conglomerate’s retailing businesses include retailers like Mark’s Work Wearhouse, PartSource and FGL. It operates more than 1700 multipurpose retail outlets. Canadian Tire sells branded merchandise such as the SuperCycle bicycles, Motomaster and BluePlanet range of products (Canadian Tire Corporation, 2011).

Competitive Expertise and Pricing

Canadian Tire competitive advantage comes from its innovative services, and products such as the revolutionary Canadian Tire “money” loyalty package that was launched in the year 1958. The company’s competitive advantage also comes from its pioneering advertising, which is realized through a business concept known as cross-merchandising. The company has maintained relatively low prices due to its economies of scale derived from its geographic coverage, size and product diversity. The company is one of Canada’s successes stories in the retail business. As a result, the management of the conglomerate has capitalized on this aspect, to build a loyal customer base.

Customer Service

The Canadian Tire ‘money’ is a unique customer service tool that distinguishes the retail business from other merchants in Canada. This tool is availed to customers in the form of coupons. These coupons are used to entice non-credit buyers. Shoppers, who use the company’s Options MasterCard for their purchases, in addition, get about 2 percent Canadian Tire ‘money’, on their MasterCards in electronic form. The Canadian Tire “money” loyalty package was launched in the year 1958

Target Markets

Canadian Tire corporation target market is the working class Canadian population. This is because of the range of product the company sells. For instance, automobile services target those who own cars, the financial services target the working class, and so are the hard goods. The apparels division of the conglomerate target families because it sells casual clothing. These four target populations are one and the same.

Marketing & Communications

Canadian Tire has continued to grow due to its marketing and communication strategies. One of Canadian Tire’s advertisement gimmicks that have influenced the consumer behavior of Canadians is the Christmas advertisement, which features an argument between Father Christmas and a cartoon character by the name Scrooge. The advertisement focuses on the low prices and redeemable deals that customers get for shopping at Canadian Tire stores. The catchphrase for this promotion is, “Give like Santa, save like Scrooge” (Kearney & Ray, 1999 p. 30). The company commemorated its 75th anniversary with a promotional postage imprint featuring one of its famous branded merchandises BikeStory.

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Transport & Distribution

Canadian Tire deals with export and imports. Therefore, its transport and distribution channels entail maritime and land transportation. These two means of transport facilitate the distribution of commodities, to the corporation’s several stores scattered across Canada. Since it is a networked conglomerate, distribution channels for merchandises are an important aspect of the company, and they have been attributed to the conglomerate’s price competitiveness. Canadian Tire pioneered the use of transloading (transfer of merchandises from maritime to road distribution containers) in Canada. This procedure provides the company with both ecological and operations paybacks (Government of Canada, 2012).

Transloading reduces the handling of goods, journeys between different distributions hubs, the quantity of containers needed, in addition to the shipping distance. It in addition, reduces the quantity of maritime containers moving great distances nationally, facilitating for a faster return of maritime containers back to the harbor and minimizing every maritime container’s rotation time. Transloading considerably minimizes the number of rail time needed to transport/distribute cargo across Canada (Government of Canada, 2012).

Canadian Tire SWOT Analysis

Strengths

  • It has very loyal customers.
  • Offer a variety of merchandise and services that fulfill life’s daily requirements, comprising of general commodities such as apparels, petroleum and monetary services.
  • Offers a variety of auto parts and specialized auto parts installers
  • Offers online shopping
  • The company’s bank offers superior marketing flexibility for customers who use its credit card.

Weakness

  • Price increases
  • Poor customer service
  • Failed to concede the shifting demographics of the Canadian population, such as, migrations and a diverse culture
  • Failure to expand fast outside Canada

Opportunities

  • Canadian Tire conglomerate has an outstanding opportunity to take advantage of its position as a domestic Canadian retailer.
  • The prospect to branch-out the corporation opening additional retail outlets across Canada and purchase franchise in vend stores or fuel agency

Threats

  • Home Depot is a threat to Canadian Tire because it sells nearly similar assortment of goods with first-rate customer service.
  • A number of consumers have protested about the low value of some the commodities. This might be act as a threat, because customers do not belief the media as greatly as they do belief rumors. If consumers are unhappy, they will tarnish the Canadian Tire reputation.

General Conclusions & Overall Assessment

The conglomerate Canadian Tire in recent times has experienced a period of momentous growth as well as accomplishments, having renovated its retail stores network. In the last five years, its shares have appreciated at the Toronto Stocks Exchange, as marked by increased dividend payouts to its shareholders. Sales volumes have continued to increase despite the turbulent economic times, witnessed through the global economic recession. However, the company has faced a number of setbacks with its merchandises, as witnessed by the numerous recalls of its products like, Likewise Disinfecting Wipes and Easy Fold Stepstool. This company provides an excellent investment opportunity.

References

Canadian Tire Corporation, L. (2011). Investors. Web.

Forbes. (2011). Canadian Tire. Web.

Government of Canada. (2012). Canadian Tire Corporation. Web.

Kearney, M., & Ray, R. (1999). The Great Canadian Book of Lists. Toronto: Hounslow Press.

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BusinessEssay. (2022, January 12). Canadian Tire Corporation Limited. Retrieved from https://business-essay.com/canadian-tire-corporation-limited/

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BusinessEssay. (2022) 'Canadian Tire Corporation Limited'. 12 January.

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BusinessEssay. 2022. "Canadian Tire Corporation Limited." January 12, 2022. https://business-essay.com/canadian-tire-corporation-limited/.

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BusinessEssay. "Canadian Tire Corporation Limited." January 12, 2022. https://business-essay.com/canadian-tire-corporation-limited/.