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Canadian Tire

Autor:   •  January 24, 2013  •  Essay  •  349 Words (2 Pages)  •  1,346 Views

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Originally known as an automobile service garage and auto parts depot in Toronto, Canadian Tire now provides products and services for everyday life to Canadians nation-wide. With nearly 487 retail outlets employing over 68,000 people, the company states that, "85% of the Canadians live within a 15-minute drive of their local Canadian Tire store."

In 1922, two brothers, John William Billes and Alfred Jackson Billes took their combined savings of $1,800 and invested it in The Hamilton Tire and Garage Ltd. in Toronto. A year later, the Biles brothers opened its first large store under the name of Canadian Tire Corporation. Offering high-quality products at affordable, many Canadians flocked to Canadian Tire to get their hands on the deals. The success in sales later led the company into publishing catalogues. By 1934, the company opened an associate store in Hamilton, Ontario which served as a catalyst for the development of a massive chain of Canadian Tire stores.

In the early 1980s, Canadian Tire wanted to extend its operations into the United States, and operated under the name, Whites and used its old formula of offering products at a low price. However, Canadian Tire soon faced a nightmare as the company lost as much as $300 million within 3 years after its expansion into the United States.

Many critical factors caused the company's failure in the United States. In the early 1980s, the United States faced a severe recession due to the establishment of a contractionary monetary policy which reflected negatively on the American economy. Other factors to consider is the fact that Canadian Tire poorly chose to open up its stores in underdeveloped areas. Furthermore, one of the disadvantages in the beginning of a global expansion includes the loss of control. As a result of these factors, the American stores didn't experience much growth and stores had to continuously slash prices on already low priced products. With low

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