Introduction
The success of a firm strongly depends on its strategic goals, planning, and execution of these plans. It is crucial to ensure that all parts of the company, from top executives to ordinary workers, follow the chosen strategy (Thompson et al. 22). The North West Company (NWC) is a primary example of a well-sustained business organization whose operations are driven by its objectives. Its recent operations call for the analysis of the firm’s strategic planning. This paper briefly examines the North West Company’s history and its current situation, highlights how its vision, mission, and values help it to achieve the set goals, and what strategic objectives it aims for.
Company Overview and Background Information
The name of this company can be found in the history books, as it is over 350-year-old. The NWC is a well-known firm that takes its roots from the fur-trading firm with a similar name (The North West Company 37). The company was created by “frontier merchants,” and their ideas can be seen in the current direction of the company (The North West Company 37). The target customer base of the NWC is low-income households, to whom the firm provides access to many vital products and services, including food and non-food goods. The stores are located in many rural and urban neighborhoods in the northern part of North America (Bartell). Bartell states that “North West operates 212 stores under the trade names Northern, NorthMart, Giant Tiger, Alaska Commercial Company, Cost-U-Less, and RiteWay Food Markets and has annual sales of approximately CDN $ 2.0 billion.” The company continues to have a significant positive impact on many people’s lives.
Despite its impressive history, the firm has made significant shifts in its assets that occurred in the previous year. NWC’s recent attempts to optimize its financial gains led to the sale of a portion of NWC’s stores that were deemed unaligned with its vision (Bartell). As a result of this move, the company’s sales in the first quarter of 2021 have decreased by 7% (Bartell). However, the company was quick to recognize the future potential of the pharmaceutical market and closed a deal with HumanisRx in an attempt to boost the quality of its healthcare services (HumanisRx). It is vital to analyze why these changes were made from the position of the company’s leaders, whose intentions can be traced in the company’s stated strategy.
Vision, Mission, and Values Statements Analysis and Recommendations
As has been noted, the company’s long history correlates with its ability to make rapid changes and adapt to the new environment. Throughout the years, the strategic vision and mission of the NWC have been influenced by the needs of the vast community it served. These changes are, in fact, natural, yet there is the need to provide an explanation of the long-term goals of the company, as well-articulated visions boost both stakeholders’ confidence and employees’ motivation (Thompson et al. 21). The NWC clearly explains its core driving factors, yet there might be the need to correct them for further clarity.
The vision of the company defines its future intentions, and the NWC provides a long-term statement regarding its objectives. The NWC’s executive manager writes that its vision is “to help our customers live better by doing our job well, with their interests as our first priority” (4). Thompson et al. argue that the strategic vision must not be “vague and unrevealing, saying very little about the company’s future direction” (21). It can be argued the NWC’s vision statement is somewhat lacking in terms of the company’s specifics. Although it is inspiring for employees, it remains focused on the present. The NWC can specify that it aims to ensure that the under-resourced communities will be less restrained in expenditures to the point when they can be compared with middle-class households.
The mission of the company can be viewed as similar, although more focused. The NWC writes that its mission is “to be a trusted provider of goods and services within harder-to-access, developing communities” (4). While the company’s retail shops cover a wide variety of products, there are gaps in the definition of its stores’ directions. The mission’s current definition can be defined as tethered to the present, as the NWC can already be deemed to be a trusted retailer. Moreover, this mission statement does not expand on the idea of the betterment of the communities it aims to assist. This fact can be better outlined in the strategic vision that the company upholds. For example, the company can add the explanation that it wants to help these communities to improve their quality of life.
The decisions of the NWC are based on a set of values that stem from a long history of being on the retail market. The firm values its customers, their trust, understands the importance of innovation, passion for work, and the need to keep the organization sustainable while holding itself accountable for its actions (The North West Company 4). As a company with a significant amount of experience, the NWC maintains a balance between organization- and customer-centric values, although it is possible to improve these values by outlining their relationship. The community and the firm can be connected by adding a value that ensures better communication between these two sides.
From the further analysis of the management discussion posted by the NWC, it is clear that the company genuinely keeps its operations aligned with its mission and holds the values in mind when making decisions. The NWC correctly identifies what assistance is needed for the communities it vows to help, which is shown in the increased amount of donations linked to the COVID-19 crisis (The North West Company 6). The firm’s continuous support towards the communities it serves goes beyond the scope of its operations yet remains within its values.
The principles of the company are apparent in many of its decisions, despite their outcomes. The NWC shows its experience in the retail business by successfully manipulating its assets in a way that maximizes their contribution to both the firm and the communities it serves. For example, while the company reveals how the deal with HumanisRx will benefit the profitability of its drug stores, the focus of this agreement is the assistance to patients who have issues with drug therapy (HumanisRx). The sale of Giant Tiger has a similar implication, as the stores were too niche to provide sufficient help to the communities they served, in addition to being a burden to the NWC (Powell). The firm continues to operate under the guidance of its values that direct and link its vision and mission together.
Strategic Objectives and Their Analysis
While the company has multiple divisions focused on varied tasks and markets within the retail industry, there are two distinct strategic objectives that the company as whole pursuits. The North West Company defines them to be the increase in “growth and dividend yield,” which is the focus of the firm’s direct investments (4). Thompson et al. state that “objectives must be specific, quantifiable or measurable, and challenging and must contain a deadline for achievement” (26). While the NWC sets well-defined objectives, which are easily measurable, they are continuous in their nature.
Due to its size, the company’s ability to influence the quality of life of its customers is immense. Another objective that is vital for the NWC is the flexibility of its supply chain. The impact of COVID-19 has revealed numerous flaws in the supply chains of many companies across the globe. For the NWC, this incident has brought to light the possibility of severe shortages of essential products (The North West Company 4). The lockdown has forced the company to delay numerous programs, such as the one that aimed to increase its competitiveness by transferring the benefits from price investments onto its customers (The North West Company 4). This flexibility, while being a more short-term objective, is a crucial target for the company that operates in the retail industry.
Both financial and strategic objectives are stated from the position of a company with a significant competitive advantage. The firm outlines not only the drivers for increased profit but the possibilities to convert these benefits onto its customers. The flexibility of the supply chain is a short-term goal that nears its achievement (The North West Company 23). Although growth and dividend yield are long-term objectives, the company shows its ability to maintain its focus on wide-stretched goals.
To examine how these objectives are being pursued, the most recent news from the NWC will be analyzed. Specifically, 34 of its Giant Tiger stores were sold to their respective parent company, partly due to the intention to lower the operating costs of the NWC (Powell). Simultaneously, the deal was made with a Canadian pharmaceutical company to boost the growth of healthcare-oriented services and products provided by the NWC (HumanisRx). The vision of the company’s current and future role as a significant contributor to society drives these changes.
Judging from these actions, it might appear that the NWC experiences a decrease in revenue. However, the company has revealed that its sales and cash dividends per share have increased throughout the past few years (The North West Company 35). The NWC’s executives have made many significant strategic moves to adjust the company’s position in the market. Despite these potentially risky operations, the firm experiences constant growth, signifying that the risks taken were well-calculated, and they helped the NWC to bring it closer to its objectives.
There are many factors that affect the parameters that are chosen by the NWC as the main objectives for improvement. Despite having a short-term crisis, the company’s expected results for the next year remain high, as growth will continue through the existing plans that were delayed due to the virus outbreak (The North West Company 4). The NWC correctly recognizes the factors, such as logistics, lower product costs, and new technology, that need to be improved for this to happen (The North West Company 5). The initiatives that were developed by the company’s executives show their intention to foster community development.
It can be argued that the strategic objectives are not aligned with the company’s vision and mission well. However, upon closer examination, it becomes evident that the company focuses the strategic objectives on its expansion to ensure that it has the ability to reach where its stores are needed. Through the increase in profitability, the NWC will be able to transfer these benefits to its customers, improving their lives by providing them with more affordable goods. The growth of dividends will attract new investors, whose help will allow the NWC to expand its operations to other locations.
Conclusion
The NWC has a clear focus on the strategic goals that have been set for the company and recognizes the need to optimize its current operations via any means available. The firm’s plans on expansion were slowed down by COVID-19, although its efficient reaction has minimized the impact of the lockdown. As the company prioritizes growth, it might seem unreasonable for it to cut down a significant portion of its stores. However, the following shift towards healthcare products has revealed a deep understanding of the situation by the NWC’s top executives. The company’s vision, mission, and value statements are well-aligned and well-articulated, with some minor exceptions concerning the broad scope of the company’s products and services. Its strategic objectives take into consideration the needs of all stakeholders and ensure that the course of the company remains focused on its success in the retail market within Canada. Judging from its strategic vision, the firm has the potential to become a worldwide retailer in the coming decades.
Works Cited
Bartell, Patricia. “The North West Company Inc. Announces First Quarter Earnings and a Quarterly Dividend.” News Block, Web.
HumanisRx. “HumanisRx Signs Agreement with The North West Company to Provide Proactive Medication Optimization.” Cision Canada, Web.
The North West Company. “2020 Management’s Discussion & Analysis.” Web.
Powell, Chris. “North West Company Selling 34 Giant Tiger Stores.” Canadian Grocer, Web.
Thompson, Arthur A., et al. Crafting & Executing Strategy: The Quest for Competitive Advantage, Concepts and Cases. 21st ed., McGraw-Hill Education, 2018.