Canadian Tire

Canadian Tire

Canadian tire is focusing on narrow market niche, i.e. they are attracting young customers aging from 18-35 years old. On Acquiring Forzani group, Canadian tire will improve their market share and would boost their brand name. The reaction of competitors such as Target corp., Dicks sporting company is that they are trying to open stores in Canada especially Target is trying to give stiff competition by opening Canadian stores. They have already Acquired Zellers in Canada. Canadian tire by Acquiring Forzani group would get lot of customers who usually never bought any sporting goods before from Canadian Tire. This would make Dick Company in tough position as they are relatively an unknown brand in Canada. The only main Competition that Canadian tire will face is Target. However, taking everything into consideration I think that Canadian tire will be successful because they are widely known in Canada. That means they have high brand loyalty from their customers. Target is well known in USA , but to gain attention of customers in Canada Would be a challenge for them, whereas Canadian tire has upper hand as it is a Canadian company and very successful retail company, customers might hesitate to switch from Canadian tire to Target. Also according to their business model they expect return of 3- to 5-per-cent annual revenue growth in its core retail division over five years and a return on invested capital of 10 per cent in that period. They expect to get this by the acquisition of the Forzani group. As Canadian tire will introduce more products in sport wear, young customers will be excited to check out the products that it offers. As sport gears are not that cheap, but are widely sold all over the world including Canada, Canadian tire might achieve their target according to their business model. Hence, I think that Canadian tire would eventually become successful from this deal.