Identify and explain the corporate and business level strategies Hudson's Bay Company is using currently.Using figure 10.6 and 10.7 as examples and sources.

to the firm's products and lose interest in those of its tual funds with l competitors. some businesses reduce costs is by hiring "precarious workers" Success with a differentiation strategy requires organiza- (see Management Is Real 10.4). 8 tional strengths in marketing, research and development, and You might be wondering if it's possible to combine cost creativity. An example in the apparel industry is Polo Ralph leadership with differentiation. Porter says, "No." He refers to Lauren, retailer of upscale classic fashions and accessories. In this combination as a stuck-in-the-middle strategy and believes Ralph Lauren's words, "Polo redefined how American style and it is rarely successful because differentiation increases costs. 90 ,000 Cost leadership Differentiation strategy strategy Broad Great Value Cola Coke, Pepsi Market Scope Focused cost Focused differentiation 7656 leadership strategy strategy D . M Narrow Cott Cola A&W Root Beer 274 Low Price Unique Product Source of Competitive Advantage FIGURE 10.7 Porter's competitive strategies framework with soft-drink industry examples.. Grow or Retrench the Question Marks. Businesses or prod- decision-making. The BCG Matrix recommends targeting ucts with low market shares in high-growth markets are only the most promising Question Marks for growth, while 8 "Question Marks" in the BCG Matrix. Although they may not retrenching those that are less promising. What's the most generate much profit at the moment, the upside potential promising Question Mark at Apple today? That's a good is there because of the growing markets. But nothing is question, and perhaps the answer is the Apple Watch. Will guaranteed. Question Marks make for difficult strategic it be the Star of the future, or a Dog 190 ,000 Question Marks Stars poor position; growing industry dominant position; growing industry High Growth or retrenchment Growth strategy strategy Market Growth Rate for Products/Services Dogs Cash Cows poor position; low-growth industry dominant position; low-growth industry 7656 D. M Low Retrenchment Stability or modest growth 27 strategy strategy Low High Market Share of Products/Services FIGURE 10.6 The BCG Matrix approach for portfolio planning in corporate-level strategy formulation.ness (March 20, 2013); Brian Proffitt, "Electronic Arts Continues to Weather More Storms," Readwrite.com (accessed March 19, 2013); lan Sherr, "Big Game Maker Feels Sting of Console Shift," Wall Street Journal (January 29, 2014), p. B4; Bryan Wiedey, "EA Sports Still Thrive ing in 2017, Despite Some High-Profile Failures," SportingNews.com (February 2, 2017). Case 10 Hudson's Bay Company | From Fur to Fendi After 300 years, Canada's oldest retailer knows a thing or two about change. Older than the country it serves, Hudson's Bay Company (HBC) has remained a landmark institution in Canada, navigating its way from rural outposts to over 480 locations and nearly 66,000 associates located in every province. Known best for its flagship department store Hudson's Bay (formerly The Bay), HBC also operates Saks Fifth Avenue, Saks Off Fifth, U.S. retail chain Lord & Taylor, and Germany's GALERIA Kaufhof. Nathan Denette/The Canadian Press hudson's Bay Company INCORPORATED 2ND MAY 1870 Despite its long and glorious past, all is not well at Canada's historic company. Leadership changes, increased competition, a fragmenting retail market, and plummeting sales have plagued HBC well into the new millennium. Will HBC be able to successfully weather the seas of change or will it sink into history? History Two centuries before confederation, a pair of European explorers discovered a wealth of fur in the interior of Canada accessible by an inland sea, Hudson Bay. In 1670, with permission from the King of England, trading began and HBC traded goods and furs in a few forts and posts around James Bay and Hudson Bay throughout theSaks Off Fifth stores in the Netherlands-the first Hudson's Bay stores outside of Canada. Based on its recent successes, HBC seems to be on the right track, but will it be enough to make it once again a premier Canadian shopping destination or is it too late to revive the historic depart- ment store? Case Analysis Questions 1. Discussion What does an analysis using Porter's five forces model reveal about the industry that HBC competes within and what are its strategic implications for the company? 2. Discussion Describe the competitive strategy used by HBC after its sale to Zucker and NRDC. What strategy is HBC adopting now? 3. Problem Solving What types of things should Richard Baker, as HBC's "strategic leader," be doing with respect to the company's em- ployees to ensure successful strategy implementation? 4. Further Research Are there other successful chains in the world that Hudson's Bay could learn from by examining their innovative strategic path? If so, which ones, and why? What online competitors should Hudson's Bay keep an eye on? Is the shopping model changing? Are they changing fast enough? Sources: Hudson's Bay Co. website, www.hbc.com/hbc/about/ default.asp, www.hbc.com/hbcheritage/history/overview.asp; "HBC to Expand to the Netherlands and Open 20 Bay and Saks Stores by 2017," CBC.ca (May 17, 2016); Leslie Picker, "Saks Owner Clinches Deal for Gilt Groupe," The New York Times (January 7, 2016); Marina Strauss, "New-Look Hudson's Bay Pushes Retail Growth Plan," The Globe and Mail (April 7, 2013); "Nordstrom Expands Canadian Footprint to Yorkdale Mall," CBC.ca (April 8, 2013); "Hudson's Bay Celebrates Its Past, Present and Future with Modern New Logo," company news release (March 6, 2013); Marina Strauss, "HBC Tries to Build on Olympic Momentum," The Globe and Mail (August 23, 2012); Kristin Laird, "The Bay, RBC Renew Olympic Sponsorship," Marketing (October 28, 2011); Marina Strauss and Jacquie McNish, "With Target, Canada's Retail Landscape Set for Massive Makeover," The Globe and Mail (August 24, 2012); David Moin, "Hudson's Bay Scores with Olympics," WWD (March 2, 2010), p. 19; Marina Strauss, "HBC's Wares Get Hot with the 'Coolness' Factor," The Globe and Mail (February 27, 2010), p. B.4; Rachel Giese, "The Bay's Cinderella Moment," Canadian Business (November 23, 2009), p. 42; David Moin, "Brooks on The Bay Watch," WWD (October 19, 2009), p. 5; David George-Cash, "Hudson's Bay Co. Owner Dies, Wife Takes Key Role," Canwest News (April 13, 2008); New Owner of The Bay Says No Major Layoffs Planned," Canada AM-CTV Television (January 27, 2006); Mark Anderson, Keith Howlett, Richard Talbot, and Lindsay Meredith, "Subject: Hudson's Bay Co.: Venerable Department Store and Discount Retailer, Problem: More Dynamic Competitors Are Eating Its Market. Question: Can CEO George Heller Beat Off the Big-box Innovators?," National Post Business (July 2002), p. 29.VentureBeat.com next century. Later, competition forced HBC to expand into Cana- : EA vs Activision," da's interior and a string of outposts grew up along river networks 211 Earnings Call that would eventually become the modern cities of Winnipeg, e Denton, "News: Calgary, and Edmonton. and Video Games By the end of the 19th century, changing tastes caused the fur andvideogames. trade to lose importance, while western settlements and the gold m Senior, "Origin rush introduced new clientele to HBC-ones who paid in cash, not Million Revenue fur. Trading posts gave way to sales shops with a greater selection ayak, "Electronic of goods, transforming HBC into a modern retail organization. Dur- rgets," The Globe ing this time, HBC also started selling homesteads to newly arrived s Electronic Arts settlers, eventually diversifying into a full-scale commercial prop- Canadian Busi- erty holding and development organization. Shipping and natural ts Continues to resources, particularly oil and gas, were important sidelines. March 19, 2013); hift," Wall Street Challenges Sports Still Thrive The company has continued to navigate its way through the wake of a ortingNews.com weakened economy, changing consumer tastes, and intense competi- tion. The popularity of big-box stores, such as Walmart, Old Navy, and Future Shop, changed consumer behaviour away from department store shopping, forcing The Bay to compete on selection of merchan- ur to Fendi dise and price. ws a Early in 2001, it tried to reinvent itself with a more fashionable ountry it image for The Bay and reduced the focus on steep discounts. The econ- mained omy, and frustrated customers, forced it to abandon the move and g its way return to its value-based focus. To try to remain competitive with other nearly low-cost retailers, HBC diversified, although unsuccessfully, through Known Designer Depot/Style Depot, which operated from 2004 to 2008. After n's Bay remaining a Canadian company for over 330 years, HBC was bought ifth in 2006 by U.S. financier Jerry Zucker. He sought to revive the firm by & Taylor, focusing on improving operations and customer satisfaction. In 2008, after Zucker's death, HBC was bought by U.S. private equity firm NRDC Equity Partners, which also owned the U.S. department store chain Lord & Taylor. NRDC's strategy was once again to revitalize HBC with better brands and better service. Under NRDC's leadership, The Bay quickly focused on re- attracting customers by dropping over 60 percent of its former brands and re-launching "The Room," a plush VIP suite at one of its Toronto locations, with high-end designers such as Armani, Ungaro, and Chanel. Despite the economic downturn in 2008 and while other organizations were laying off workers, The Bay was in the black. Another coup for HBC was becoming the official cloth- ing outfitter for the Canadian Olympic team. The $100-million deal made HBC the clothing provider for the 2006, 2008, 2010, and 2012 games. The HBC apparel for the 2010 Winter Olympics in Vancouver was extremely popular, and new customers and those who hadn't shopped at The Bay in years flocked back to snap up hoodies, coats, hats, and the iconic red mittens as fast as the merchandise could be put on the shelves. HBC's Olympic sponsorship was renewed through 2020. nada's historic a fragmenting Moving Forward C well into the As HBC continues its reinvention, CEO Richard Baker has spearheaded er the seas of a number of initiatives to make the retailer the country's top seller of women's shoes, along with introducing more British-based "cheap- chic" Topshop store-within-stores. In January 2016, HBC announced it would acquire online flash sales site the Gilt Groupe for $250 million ean explorers (U.S.). According to HBC spokesperson Jerry Storch, "The two most accessible by rapidly growing areas in retail today are Internet and off-price. We from the King think this is a marriage made in heaven." The company hoped the deal I furs in a few would contribute $500 million to HBC's fiscal year. Just a few months roughout the later, HBC announced that it would open up to 20 Hudson's Bay and