GLOBAL SOURCING & BUSINESS DEVELOPMENT

ASSIGNMENT

SHER-WOOD HOCKEY STICKS CASE ANALYSIS

SUBMITTED BY -

MATHEW FEBIN CHARLES

MBA B

B-2539
 SHERWOOD HOCKEY STICK CASE ANALYSIS

 INTRODUCTION

The case study mainly emphasizes on Sherwood Hockey Company which is based from Canada.
The case begins with an introduction with the history of ice hockey, which states that the game
can be traced back to 4000 years and the modern rules of the game was introduced by Canadians
in the late 19tH century. The game of ice hockey is extremely popular in Canada and afterwards
the game got more popular in USA and also in European countries. In 1917 in Montreal, The
NHL was started and more companies started producing the equipment required for the game.
Equipment’s are there to protect the players from injury from head and legs. The Ice hockey
equipment classified as 5 types-

 Goalie equipment
 Head and face equipment which includes helmet, face and neck guard, pads, pants
and gloves etc.
 Sticks
 Stakes
 Protective equipment

 HOCKEY COMPETITORS INDUSTRIES

The main competitors of the industry consisted of Sherwood, Louisville, Bauer, reebok CCM,
Easton, Kolo , Nike, Warrior and over 80% of the market was shared between Bauer, Reebok
and Easton and the market hockey equipment industry in 2010 was worth 555 million dollars
and the skates and sticks contributed 62% of the sales. The main problems faced in the industry
was Competitors has lion’s share of the market, decline in sales in recent years and decreasing
profit margin for niche product.
Easton hockey focused on innovation and introduced modern technology into the sport, Bauer
performance sports focused on leadership positioning and growing its market share through
innovation. The company produce product at competitive prices using alternative materials they
produce, Reebok CCM Hockey targeted different consumer segments that targets image
conscious consumers and Warrior CCM focused on a set of philosophies and strength, technical
superiority and grassroots marketing.

 SOURCING STRATEGIES USED BY THE HOCKEY INDUSTRY

 ON SHORING- It refers to relocating the manufacturing and business processes

to another lower cost location within the home country of the company.

 NEAR SHORING- It refers to relocating the manufacturing and business

processes to a nearby country to the country of the company.

 OFF SHORING- It refers to relocating the manufacturing and business process to

another country in which geographical location is irrelevant, i.e. a country far
away from the home country of the company.

 STRATEGIES USED BY HOCKEY MANUFACTURING

COMPANIES

 Easton Bell Hockey- Off shoring and near shoring (cross functional technology)

 Reebok-CCM Hockey- Off shoring and On shoring (Physicality and focused of

performance and quality)
  Warrior Hockey- Off shoring and Near shoring (focused on grassroots and technical
superiority)

 Bauer Hockey- Off shoring (alternative materials, supply chain and focused on
emerging segments )

 Sherwood Hockey- In shoring (high end composite sticks) and Out shoring
(Ukraine and China-all their products except high end, one piece composite sticks
and goalie form sticks)

 SHERWOOD HOCKEY SWOT ANALYSIS

 STRENGTH- Quality is a trademark that enhances something by making it more

exceptional, special and favorable when analyzed. It characterizes the qualities
and circumstances of an association which makes it more successful and effective
when contrast and its rivals.
It tends to be a suitability, an asset, picture, market initiative, connection with
purchaser or provider or any different bit of leeway comparative with its rivals
that satisfy the requirements of the market by furnishing the association with a
similar preferred position.

 WEAKNESS- Global Sourcing Weakness of Sherwood hockey sticks allude to

the circumstance wherein the current capacities and the assets the organization
 holds are more fragile or not adequate contrasted with others associations in the
market.

 OPPORTUNITIES- Global Sourcing Opportunity of Sherwood Hockey Sticks is

a preferred position and the main thrust for an association. It is a factor that
contribute decidedly towards the development of the association.

 THREATS- Risks and dangers are the elements that keep the association from
the completion of a movement.

It is a horrible circumstance that exist in nature making it hard for the association
to accomplish its characterized objectives. It is a circumstance that emerges
because of the progressions that occurred in the quick or removed condition,
keeping the association from keeping up its reality and prevalence in the
developing rivalry and are disadvantageous for the association.

 OPTIONS FOR SHERWOOD

 Fully outsource
 Part Onshore and part offshore
 Re shoring
 OUTSOURCING PROS AND CONS (China and European countries)

 PROS
- Usually much cheaper compared to insourcing, like repetitive small jobs
- Decrease in production turnover
- Increase business network and partnership with the contractors
- Can have access to the contractor’s engineering and innovation.

 CONS

- Lag in time between finished product and in hand shipment, which is

much longer.
- Currency risks
- Control and Intellectual property risks
- Political risks and change in testing process
- The contractor may be a competitor in the near future
- Expensive shipping costs. Possible language and understanding barriers
- Poor treatment of labors
- Poor image of the product in the home country(Canada)
- Disconnected from production and research and development

 RE SHORING PROS AND CONS

 PROS-
- Intellectual property security
- No or few shipping and travelling costs
- Improves product development process
- No barriers in culture, language and time zones as business is re shored
- Strong team collaboration
  CONS-

- Lack of skilled labor

- Heavy regulations like tax rates, laws and corporate taxes
- Hiring labor and in house operations costs more when compared to Asian
countries due to limited number of required skilled labors
- In Canada, there is high labor costs incurred
- Less profit margin

 ALTERNATIVES
The company Sherwood has a lot many choices to seek after to guarantee cost
degradation. Right off the bat, the organization ought to consider utilizing the assembling
types of gear in neighboring nations that cost more than in China yet closer to home. For
example, Sherwood ought to consider using offices in Mexico since Mexico gives
assurance to licensed innovation, yet in addition offers international alliances. Lean
assembling is beneficial since it would help improve profitability and help beat

momentary cost favorable position of unfamiliar makers.

This option is, notwithstanding, disadvantageous since it is costly regarding cost. Also,
Sherwood ought to consider embracing lean assembling. Lean assembling is beneficial
since it would help improve profitability and help defeat momentary cost preferred
position of unfamiliar producers. In any case, lean assembling is disadvantageous as in it
would require extra interest in offices and innovative work, which is exorbitant.
 RECCOMENDATION
The best decision is to move entirely from the Canada and out shore the entire
manufacture of the Sherwood hockey products. As labor costs, high restrictions and taxes
are there, it will reduce the profit margins. And more over, almost all the competitors are
using offshore strategy now. If complete manufacturing including high composite sticks
are moved, it will have a lot of benefits to the company like less labor costs, high skilled
labor, utilization of innovation and also R&D from the supplier. The company will get
higher profit margins when off shoring is done and only concerns are currency issues,
increasing labor charges and shipping costs. If re shoring is done, the company will have
more expenses compared to Asian countries, which will eat up profit margin.