Reference no: EM133392757

Now known as the successful Louis Garneau Group (LGG), this Quebec-based company sprang from humble beginnings: Louis Garneau's father's garage served both as head office and production site. In 1983, after 13 years as a cyclist and Canadian champion, Louis Garneau was ready to embark on a second career. But he was not ready to leave the cycling world behind. Instead, Garneau channelled his frustration with the cycling gear then available on the market into building his own sports apparel company, which now boasts over $50 million in annual
sales. Garneau used his experience to design and manufacture top-line cycling shorts for Canada's elite and recreational cyclists, and in 1989 he was able to move out of his father's garage and into his first manufacturing plant.

LGG employs more than 400 staff and has more than 2,500 clients in North America and more than 20 distributors worldwide. The plant in St. Augustine de Desmaures near Quebec City sprawls over 85,000 square feet. Another manufacturing facility is located in Vermont.

Distribution is accomplished using a specialized sales team with extensive local promotional support in each country of export, and sponsorship of elite international teams. LGG expanded from cycling shorts to a fully coordinated line of accessories for cyclists and triathletes, including clothing, helmets and shoes; children's clothing and bathing suits; cross-country skiing and active wear; a line of downhill suits; and, most recently, snowshoes. The firm is now among the top manufacturers of high-quality bicycle helmets in the world, and
dominates the Canadian market.

The expansion was based upon a strategy of emerging technology and design for a highgrowth market. By the mid-1990s the firm was eager to expand outside the North American market. Demographic research confirmed that the cycling market was hot in many other countries; however, the company faced some roadblocks. Overseas customers often wanted 30 days with the product before payment, a demand impossible for the small company to fulfill. In addition, communication technology was not always up to par, and the legalities surrounding collection on defaulted loans seemed impossible to overcome. The firm contacted Export Development Corp. to determine how it could help. With Accounts Receivable Insurance provided by EDC, the firm was able to reduce its risks associated with exporting. The firm now exports to more than 30 companies, on every continent.

The vision of the founder is reflected in the quality of every product produced. As testament, Garneau's apparel has been worn by members of the Canadian and American Olympic cycling teams and by world champion triathletes. The company continues to pursue innovation with the introduction of new products. The Prologue Helmet was introduced in 2002, and enabled cyclists and triathletes to gain seconds without sacrificing safety during races. In 2009, the company debuted a line of snowshoes to the North American market, and in 2010, the company was the winner of the Editor's Choice Award for Best Women's Short under $100 by Bicycling Magazine.

Questions

1. How important do you think the promotion through events was to the successful expansion of Garneau products? How else could the product be promoted?

2. What problems did the company encounter introducing the product to the international market?

3. What features of the product line should be emphasized in promotion and advertising?

4. Discuss the distribution channels used by Garneau and why they are effective in the international marketplace.

Prepare a Business Case Memo;

Content of the Memo should include:

a) a summary of the case;

b) listing of the relevant facts or statistics;

c) each individual question and their answers;

d) listing of all sources used;