Lee Valley Business Analysis

As retail commerce increasingly moves online, the Canadian retail space has proven to be challenging for such giants as Sears and Target and yet some Canadian Companies have become successful, the question is how and can the success last? Founded in 1978 and having grown to an organization with 850 employees and 17 stores across Canada and with combined annual sales of 100 million, Lee Valley Tools has grown into a successful Canadian manufacturer and retailer of Gardening and Woodworking products. In an age of increased online purchases and the predicted “death of retail” Lee Valley has consistently succeeded in a very tough industry due to a combination of excellent corporate culture, customer service, as well as an ability to successfully

As previously mentioned Lee Valley tools is privately held, family owned, and has 850 employees total; spread out between 18 stores across Canada and a corporate head office in Ottawa as well as a large online order business. While overall a retailer, Lee Valley has a small manufacturing arm called Veritas Tools which produces high-quality woodworking products in Ottawa, as well as Algrove Publishing (located in Almonte Ontario) which publishes formerly out of print how-to guides and some smaller runs of newer books. Both the books and tools are available primarily through the Lee Valley tools retail locations and their online website. Being a combination of retail and manufacturing Lee Valley Tools has a functional organization in regards to sales and marketing, but divisional between its two manufacturing elements. Its core work process is retail, but significant revenue comes from Veritas which could be considered a small batch manufacturer (or a lean

If one were to use Porter’s competitive strategies Lee Valley Tools has chosen a strategy of focused differentiation. They have achieved differentiation in the greater retail space by focusing on woodworking and gardening tools, and the focus has been achieved by developing their own brand of high-end woodworking tools. This embrace of focused differentiation is demonstrated by the case of Canica design which was a division of Lee Valley Tools that focused on medical tools but was eventually spun off of the Lee Valley core organization in order to keep the core of the business focused on woodworking and gardening products. By using a strategy like focused differentiation Lee Valley Tools has been able to reduce their competitive environment from one of many very large competitors to a relatively small market consisting of them and Lie Nielsen. The manufacturing side of Lee Valley Tools can best be described using Miles and Snow’s Strategy typology. Using that model Lee Valley best fits the Prospector strategy as they innovate, take risks, seek risks, and seek out new opportunities. But unlike the Prospector strategy, growth is not a key goal of Lee Valley Tools, which allows it to internally focus which is the area which will now be