Case Analysis - Sher-Wood Hockey Sticks Essay

1150 Words Jan 25th, 2015 5 Pages
Case brief and overview:
Sher-Wood (formerly Sherwood-Drolet) has been a well-known Canadian hockey equipment manufacturer since 1949 (Zhang & Beamish, 2011, p. 23), predominantly specialising in wooden sticks for players from the National Hockey League down to players at the junior level. Sher-Wood also produces composite sticks, albeit at a much lower volume.

Whilst hockey stick production has traditionally been based in North America, over the last decade there has been a significant shift towards global sourcing in the industry (Zhang & Beamish, 2011, p.21). This has been driven by a desire to access low-cost factors of production, secure cheaper material resources, and ultimately gain a competitive advantage.

Sher-Wood’s
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In comparison, Sher-Wood offers specific products for a niche market. Despite this, Sher-Wood offers 27 models of player and goalie sticks – a considerably large amount for a company with a global market share of approximately 2% (Zhang & Beamish, 2011, p. 20).
Secondly, composite sticks have been the dominant stick used among NHL players over the past decade (Zhang & Beamish, 2011, p.18), and as such have grown rapidly in popularity amongst children and amateur players (Zhang & Beamish, 2011, p.19). Despite the fact that Sher-Wood anticipates the composite stick business to grow in volume and profitability, there is a sufficient imbalance between market demand and Sher-Wood’s product output, since wooden sticks still account for approximately half of their hockey stick models. (Zhang & Beamish, 2011, p. 24)

Further to this, Sher-Wood’s brand image and reputation are diminishing. This was affected by the loss of NHL star Jason Spezza to rival Reebok in 2008 in objection to the company’s outsourcing to China (Zhang & Beamish, 2011, p. 23). Currently only 2.3% of NHL players use Sherwood sticks (Exhibit 1, Zhang & Beamish, 2011, p. 20). This is a concern for Sher-Wood, especially since “hockey sticks endorsed by professional hockey players enjoyed a strong position in the hocket stick market.” (Zhang & Beamish, 2011, p. 19) Related to this issue is the fact that the market is showing signs of maturity, and…