Canadian Tire Corporation and Global Expansion

Essay by starleneUniversity, Bachelor'sA+, February 2004

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Canadian Tire Corporation.


Global Expansion


Problem / Issue

The Canadian Tire Corporation (CTC) lost nearly 300 million dollars on a geographic expansion strategy that failed. Poor market research, compounded by the resultant management decisions of an overoptimistic CEO led to the termination of his employment and CTC to a substantial loss. A new CEO has been appointed to incubate new strategies to build on their previous successes and to put the company back on track.

Company Background

Canadian Tire Corporation, founded in 1922 by John and Alfred Billies, began as the Hamilton Tire and Rubber Co. Ltd. located in Toronto, Ontario. Their success unfolded by offering car repairs, selling batteries, and producing homemade anti-freeze. By 1927 the brothers had expanded to three stores in the Toronto area. With a unique approach to marketing, they produced price lists that included a map of Ontario and distributed them outside of the Toronto region and into New York State.

The success of this action spawned the beginning of catalog distribution in 1928.

In 1934 the first associate store opened. They had been targeting entrepreneurs who knew local markets and communities well and people who would be responsible for internal operations and sensitive to market needs. The associate company would own the merchandise purchased from the parent company.

CTC was extremely innovative throughout the years with displays and gimmicks such as Canadian Tire premium coupons (funny money), clerks on roller skates, and one stop automobile servicing. Diversity helped to meet market demands and profit sharing to employees honored their efforts and promoted pride and loyalty to the company.

In 1966 AJ Billies stepped down as CEO and appointed Dean Muncaster to replace him. Muncaster created even more success for CTC until he made poor global expansion decisions.