YETI Holdings Inc. Mission Statement: Analytical Essay

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YETI Holdings Inc. Mission Statement: Analytical Essay

History

YETI Holdings Inc. was started by Roy J. Seiders and Ryan R. Seiders in 2006. They are two likeminded siblings who loved the outdoors, including Hunting, fishing, and going to outdoor trade shows. YETI was created when the two brothers had become fed up with the current outdoor coolers on the market. Because of this they decided to create a cooler that would outperform and outlast all the competitors.

Profile

YETI is based out of Austin, Texas and represents a high end premier outdoor brand. YETI Holdings Inc. includes designing, marketing, and distribution of outdoor and recreation products (Our Story 1). The company’s products include coolers, drinkware, travel bags, backpacks, multipurpose buckets, outdoor chairs, blankets, dog bowls, apparel, and accessories (YETI Holdings 1). Today YETI Holdings Inc. has become public and trades at right around $40 dollars per stock. The company has a current enterprise value of $3.41B dollars and a market cap value of $3.18B dollars. YETI earns an average profit margin of 8.27% on all items sold. YETI saw a 22 percent increase in annual sales in 2018, topping out at $778.8 million (YETI 1). In 2019 YETI continued to increase its sales at the company saw a 15% increase in annual net sales compared to 2018. YETI’s increase in sales can be related to its 31% increase in direct-to-consumer net sales in 2019, as well as a new partnership with the wholesaler, Lowes (Hawkins 1).

Philosophy

YETI Holdings Inc.’s founders’ philosophy is to “Build the cooler we’d use every day if it existed. One that was built for the serious outdoor enthusiast rather than for the mass-discount retailers. One that could take abuse we knew we’d put it through out in the field and on the water. One that simply wouldn’t break” (Our Story 1).

Vision and Mission Statements

Vision Statement

YETI’s vision statement is “To represent the yardstick by which all other outdoor products are measured” (YETI Holdings 1). This means that YETI is desiring to be produce the best products on the market in the outdoor space. Their vision statement provides direction for people inside them and is the tool that leads each decision made that impacts the firm. For YETI Holdings Inc. I believe it explains how YETI has gotten to where they are today, as well as where they want to be in the future. YETI is known for their high-performance insulation technology, quality, and dependability. YETI is also known for its extremely high prices compared to its competitors. YETI coolers on average sell for ten times the cost of similar coolers sold by Igloo and Coleman. For this reason, YETI’s vision says nothing about being cost effective in the outdoor market which is the reason for their high prices. The vision sticks to quality and having the performance of their products. This vision has worked for them and helped create the reputation they have. For this reason, YETI has been able to successfully follow their vision.

Mission Statement

YETI’s mission is to “ensure that each YETI product delivers exceptional performance and durability in any environment, whether in the remote wilderness, at the beach, or anywhere else life takes our customers” (SEC 1). Meaning that YETI wants to create coolers and products that are made for every occasion, can last forever, and performs the best. Mission statements are extremely important for a company because it outlines the purpose of the company for its employees as well as the public. Like a company’s vision statement, its mission statement is also used as a navigation tool for the future of the company. YETI’s mission statement also applies to quality and functionality of the company’s products. Their mission statement focuses only on coolers though. Since 2006 YETI has become a company that has expanded vastly from just coolers. From drinkware, to bags, pet supplies, chairs, blankets, apparel and other outdoor accessories they have become a company with a highly diverse portfolio of products in the outdoor space. For this reason, I believe that their mission needs to be updated to fit the current situation of the company. If their mission today was still just to focus on coolers then they would have focused all of their energy on their coolers, not expanding into a dozen of other outdoor categories. With that being said I believe that YETI does follow their mission statement. They do create coolers that many people would use every day and their brand has become associated with the top quality and performance of any cooler on the market. It would benefit them to incorporate their other lines of products into their mission statement, or even broaden their mission so that it can be better used to navigate all decisions for the company.

External Environment Analysis

YETI PESTEL Analysis (Opportunities/Threats)

Political Factors

Yeti Holdings Inc. has many political factors that to consider and look at that could hurt their ability to maintain profits in the future. It is important that YETI Holdings Inc. look at not only the United States’ political situations but all of the countries that YETI is conducting business and how one country’s political situation can/will have a ripple effect on other countries. Through YETI’s partnership with eShopworld, they provide an international shopping experience for customers in 13 different countries around the world, including United Kingdom, Ireland, Mexico, Central America, the Caribbean, and Europe (YETI, 1). A specific example of political factors that could affect their profitability is the political stability of the countries that they are in business with. Also, the leaders of the countries they are providing their services too and how likely they are to be removed from office, conduct corruption, start wars, their beliefs and stance on certain laws (especially with regards to hunting, fishing, camping, and preservation). YETI must also look at the current hunting, fishing, and camping laws in the countries now, as well as contract laws which impact how YETI will be able to conduct business in that country. Another political factor that could affect YETI is the trade barriers and tariffs between certain countries, which can affect the total cost that YETI will incur on sales in that country. Along with trade barriers, YETI must look at the taxation policies that can also add or decrease total cost of running the business. Finally, YETI’s cost of business could heighten or lower based on minimum wage laws in the United States.

Economic Factors

YETI’s profitability will also heavily rely on the economic situation in the United States and the other 12 countries that they are conducting business in. YETI will most likely be affected by the GDP decline or growth in the United States and around the world. A countries GDP affects how much, and how fast money is being circulated in a country, how many goods are its citizens buying. Because of this GDP will almost always congruently affect sales for a company. Another economic factor affecting YETI is the stock market. If the stock market is positive then they will be able to sell more stock and at a higher price, increasing the overall capital that YETI will be able to use in product development and put to future sales. YETI will also be affected by the unemployment rate in the United States. If the unemployment rate becomes high, less people will be able to have access money to purchase their products, especially given that they are a luxury brand and set at a luxury price. Also, if the unemployment rate gets too low, they will have a harder time filling the jobs they need in order to produce their products and complete orders.

Social Factors

Cultural belief and what society is valuing will affect how consumers view YETI Holdings Inc. YETI’s target market which is a middle-aged man with a moderate to high level of education that has a high level of discretionary income and lives a lifestyle that allows him time to enjoy a hobby such as fishing (YETI, 1). The percentage of these kinds of people that fit this mold will be affected by how the United States develops culturally. If this type of lifestyle becomes outdated, then it will directly impact the size of their target market. Also, YETI will be affected by the class makeup in the United States, the percentages of people living in lower class, middle class, and upper class will determine what percentage of the population will be looking to buy their products.

Technological Factors

YETI will mostly be affected by newfound ways of producing and manufacturing coolers as well as newfound materials that can insulate better. YETI will lose a percentage of their market if the public begins to recognize another competitor’s coolers are outcompeting YETI’s. YETI has been able to hold 90% of the luxury cooler market, but that doesn’t mean they don’t have to keep innovating to continually outperform in the outdoor space.

Environmental Factors

Climate change will be something that YETI Holdings Inc. will have to worry about in the near and long-term future. As YETI is targeting a large part of the outdoor fishing, and hunting market, seasons and temperature can impact the amount of people camping, the amount of fish in the river, and number of huntable animals. As the number of hunters, fishers, and campers will affect their target consumer base, it will also have an effect on their sales. For this reason, YETI’s sales will be impacted by environmental factors like pollution levels and the amount of land that is still being set aside for camping, fishing, and hunting.

Legal Factors

YETI will be affected by hunting and regulation laws that exist in the countries that it is conducting business. YETI’s profitability will also be affected by laws enforced to create better working environments for employees. If YETI has to change its operations to meet new working condition guidelines set by law, it could increase the total cost of production as well as affect the company’s ability to complete orders.

Porter’s Five forces

Threat of New Entrants

YETI currently holds a 90% market share (Portable,1) in the luxury cooler space. Because YETI has established its brand, and its base market over the years, it is able to obtain high margins on their products and receive discounts on the production side. This makes it very hard for a new competitor without a product that is vastly better than YETI’s to compete effectively in the industry. Because of the minimized pressure of the creation of new companies in the luxury cooler space, current companies will likely see sales reflecting the markets growth, making this industry attractive.

Bargaining Power of Suppliers

Many suppliers can create and produce luxury coolers and the other items YETI and many of its competitors have in their product portfolio. In relation to the number of suppliers capable meeting the needs of companies in the luxury cooler space, there is a relatively low amount of companies in the industry. This makes it so suppliers are forced to fight for business by offering lower prices, minimizing their bargaining power. Competition on the side supplier’s side in the luxury cooler industry is weak, making this industry attractive.