Hudson’s Bay Case Study
I am the Chief Executive Officer at Hudson’s Bay retail Company (HBC). And one of my core responsibilities to advise the board on the best way forward and formulate policies that guide the course of action of all the staff members. In summary, my role is to ensure all the decisions and strategies lead to high performance and long term sustainability. In the 1990s, HBC implemented the acquisition strategy by purchasing Woodward Stores in Western Canada and Kmart Canada later in 1998 (Whitehead & Campbell, 2018). Then in 1999, HBC opened Three-bed, Bath, and more outlets in the Greater Toronto area, a diversification strategy in the Canadian retail market (Whitehead & Campbell, 2018). From the 1990s to 2015, HBC has been performing competitively due to extensive commerce presence and acquisitions. However, HBC faced a massive drawback in 2017 when there was a $221 million loss in the first quarter (Whitehead & Campbell, 2018). And this occurred because HBC could not keep up with the high-quality shipping services that rival companies like Amazon were providing.
HBC is facing stiff competition from global giants like Amazon because they have high-quality shipping services standards that surpass their consumers’ expectations. As a result, HBC has been facing diminishing consumer acceptance. The shared value assessment contextualizes the inability of HBC to provide high standard shipping services, thus leading to a vulnerability which jeopardizes the company’s prospects of achieving economic success through product and market preconception. In other words, the theory of shared value provides a framework that creates value by meeting the social needs of consumers through their products and services. Therefore to ensure a sufficient shared amount, the firm must redefine productivity in the value chain, enable local cluster developments, and re-conceive products and markets (Porter and Kramer, 2011).
Apart from the shared value evaluation method, the stakeholder theory analysis tool is based on the initiative of an organization to primarily create value for all the stakeholders, that is, customers, suppliers, employees, and investors. From the early 1990s to 2015, Hudson’s Bay retail Company had been creating value for the stakeholders, and this was evident in the competitive performance. However, the entry of new players like Amazon threatened the value creation of HBC. Amazon ensures that customer relations are a priority. What is more, they employ technology to foster service efficiency. On the contrary, Hudson’s Bay retail Company has been creating low value to its stakeholders, and most importantly, the consumers. The stakeholder theory ensures that there is a constant mutual benefit for all the participants (Harrison, Felps, & Jones, 2019), thus fostering productivity.
Despite the massive losses in Hudson’s Bay retail Company, various solutions can foster the company’s competitiveness. The first solution is upgrading the shipping services to high-quality standards that satisfy consumers’ needs. Another solution that Hudson’s Bay Retail Company can implement is reducing the costs of their services and products and improving quality. In the long run, the firm will minimize profitability on each unit while maximizing the overall market share. Another possible solution is establishing a merger with retail giants like Amazon. Amazon has a well-established network all over the globe. Therefore, merging with such a large enterprise will mean that the market presence of Hudson’s Bay retail Company will improve effectively, thus boosting competitiveness.
The best alternative that can help Hudson’s Bay retail Company rise back to global dominance is the upgrade of the shipping services to match the current technological levels. To be more price, the first step in developing an online service that makes it easy for consumers to order products and trace them in real-time until they get delivered successfully. Still, on the shipping service, Hudson’s Bay retail Company should adopt transportation systems that ensure services and products are delivered on time with limited resources. Since global retail giants like Amazon maximize customer relations and service delivery, it is only right for Hudson’s Bay retail Company to prioritize consumers’ to foster competitiveness.
References
Harrison, J.S., Felps, W., &Jones, T.M. (2019). Instrumental Stakeholder Theory Makes Ethically Based Relationship Building Palatable to Managers Focused on the Bottom Line. Academy of Management Review, 44: 698-700.
Porter, M.E. & Kramer, M. (2011). Creating Shared Value. How to reinvent capitalism—and unleash a wave of innovation and growth. Harvard Business Review, 89(1-2):62-77.
Whitehead, K. & Campbell, S. (2018). HUDSON’S BAY COMPANY: RESTRUCTURING IN A RETAIL DECLINE. Business School Foundation, Ivey Publishing.