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 competitors and industry leaders such as Reebok-CCM, Bauer and Warrior began outsourcing majority of their stick production both on and off shore in the early millennium years. Sher-wood followed suit in 2006, contracting production of its lower end and custom-made wooden sticks to producers in Estonia and China, and outsourcing production of its flagship wooden stick (the PMP 5030) to a local service provider in Victoriaville, Quebec (Zhang & Beamish, 2011, p.23). Some composite models were outsourced to China, with the exception of Sher-Wood’s high-priced high-end composite sticks, which have continued to be produced onsite in Sherbrooke. The problem is that there is a low return on investment for the Sherbrooke manufacturing plant since the product has been losing market share as retail prices have continued to fall. Specifically, sales volumes for this particular stick dropped almost 50 per cent in the year 2009-10. (Zhang & Beamish, 2011, p. 24)

Major Issues:
There are a number of issues that have contributed to this situation.
Firstly, the ice hockey market is dominated by three companies, who between them have over 80% of