- Mountain Equipment Co-op (MEC) is a Canadian retailer of outdoor gear founded in 1971 by climbers committed to philanthropy. - MEC began producing its own private-label gear by copying designs of other brands at lower prices. However, manufacturing shifted overseas, hurting quality and jobs in Canada. - Stakeholders now question MEC's philosophy as a democratically-owned firm and its ability to achieve competitive pricing through Canadian manufacturing given rising costs. Outsourcing also generates negative reactions.

1. MOUNTAIN EQUIPMENT CO-OP:
THE PRIVATE-LABEL STRATEGY
SUBMITTED BY:-
PAYAL PATEL
SAI KIRAN MIMANI

2. Case Synopsis
The case is about a sport retail company which later
started their own manufacturing and eventually their
own R&D.
The company was founded with the commitment to
do good for society through philanthropy.
They offered huge product varieties at competitive
prices but later the manufacturing was more or less
shifted to Asian countries which was not acceptable
to the customers as the jobs were outsourced and
the quality of product was also not that good which
Canadian manufacturing unit were able to produce.

3. Case Facts
• Founded in August 1971 a group of Canadian climbers
founded Mountain Equipment Co-op (MEC).
• David Labistour, chief executive officer (CEO).
• A well-known Vancouver-based retailer of outdoor gear.
• Branded jackets, bags and other accessories next to well-
known brand-name products.
• They simply copied other brands’ designs, producing a
similar product at a lower price.
• $7.5 billion a year market (Exhibit 2)
• A lifetime membership in MEC cost $5 and allowed the
member to make purchases and vote on how MEC was
governed.
• In years of surplus earnings, it retained 3 per cent for its
capital budget and 1 per cent for an environment fund.
• From a single store in Vancouver, MEC had grown to a
network of 15 stores across Canada.

4. Case Facts
• MEC examined its entire value chain to remove material
waste and harmful substances, reduce its use of energy
and improve the working conditions in its factories.
MEC’s.
• MEC had three long term goals
 First, its core reason for existence was to increase
participation in self-propelled wilderness-oriented
recreation in Canada.
 Second, it supported the creation and stewardship of a
comprehensive network of parks, wilderness and outdoor
recreation opportunities in Canada.
 Third, it fostered change toward environmental, social
and economic sustainability in the marketplace.
• Online portal www.mec.ac
• A typical store carried 20,000 stock-keeping units (SKUs).
• MEC had 14 person design team included three apparel designers, three
hard goods designers, six technical developers, one fabric expert and
one designer.

5. Inference
Exhibit 2-
• Forzani is a constant
strong competitor
whose market share
is increasing every
year
• Independent stores
lost their market
share to Walmart in
2006-08
• MEC is successful in
increasing market
share

6. Inference
Exhibit 6- Only 30.24%
was manufactured in
Canada while the rest
of the manufacturing
were Asia.

7. Problem Identified
1. Questioning by shareholders about the
philosophy-the company is a democratically
owned firm?
2. Cannot achieve Competitive pricing if they try
to manufacture in Canada?
3. Getting negative reactions on the outsourcing
of manufacturing?
4. Originality of products were questioned?

8. Recommendation
1. The shareholders should be retained as the company’s
shareholders are mostly the customers as well, by
communicating the message that they are still
committed to their philosophy of green Canada and
should display their previous efforts in the same in the
shops and all other platforms where the brand is visible.

9. Recommendation
2. Competitive pricing can be achieved if they re-innovate the products and
make use of the facilities in Canada which are not working in full volume
capacity. The products then introduced will be Canada manufactured as
well as new range which will not be comparable to any of the previous
products so that the market will be open to higher prices too.
3. Reviving the Canada facilities and use of capital-intensive machines
more instead of labor-intensive which will solve the labor cost problem
although the restructuring will need good amount of capital but it is one-
time.
4. The products before getting introduced in the market should be well
compared with others so that any matching designs could be eliminated

10. MERCI BEAUCOUP