Sher-wood and Oligopoly Pricing

Being something of a hockey equipment nut (as Janice can attest I spend too much on my kids’ gear), top of the line hockey sticks and the pricing of them by the major manufacturers has always been something that has caught my attention, particularly when I get around to teaching oligopolies in my introductory economics course.

A standard assumption of oligopolies is that they don’t tend to compete on price but rather compete on the attributes of their product. This appears to be the approach taken by the main hockey stick manufacturers (Warrior, Bauer, Reebok, Easton, CCM) with their flagship models. Standard ways that these companies try to get their sticks to stand out from the crowd is to highlight their weight, balance, and the latest technology that has gone into the stick’s construction. Most would be surprised by the amount of patent pending technology that goes into the latest and greatest hockey stick. Warrior is a good example of this, with their website highlighting the technology that goes into their sticks and now even indicating this information on the bottom of each stick’s shaft  http://www.warrior.com/Covert-DT1-LT/DT1L,default,pd.html. As well, NHL player endorsements are always a great way to get kids to buy your stick. Just think of the number of kids using Reebok sticks because Sidney Crosby does, and of course Bauer (Kane, Toews, Stamkos), Warrior (Chara, Zetterberg, Yakupov), CCM (Nugent-Hopkins, Tavares) and Easton (Parise, Suter )  hope your kid’s favourite player uses their product.

Recently though these manufacturers have been subject to some price competition from an old name in hockey equipment circles, but one that had fallen off the map when it came to elite level hockey equipment, Sher-wood hockey.  While Sher-wood has been around for years, only in the past few have we seen them take aim at competing with the main hockey stick manufacturers at the elite hockey stick level (the sort that you would see used in college and NHL levels) with their Nexon N12, T100 series, and the newly released EK15. Looking at the pricing of top level sticks (senior and junior size) it seems the major brands are behaving like standard oligopolists in terms of not relying on price competition. Sher-wood again seems to be breaking from the mold and trying to compete not only on the standard attributes (they are making point of the fact their new EK15 is the lightest stick on the market at 385 grams) but importantly on price! I look forward to seeing if this strategy is an effective one!

RAC

Stick

Senior Price ($US)

Junior Price ($US)

Bauer Total One NXG

$259.99

$199.99

Bauer APX2

$259.99

$199.99

Bauer Nexus 1000

$249.99

$189.99

CCM RBZ Stage 2

$259.99

$199.99

Easton V9

$259.99

$199.99

Easton V9E

$259.99

$199.99

Reebok Ribcor

$259.99

$199.99

Warrior DT1 LT

$259.99

$199.99

Warrior AX1

$239.99

$189.99

Sherwood Nexon N12

$189.99

$89.99

Sherwood T100

$169.99

$139.99

Sherwood EK15

$199.99

$149.99

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