Marten Art Gallery Harvard Case Solution & Analysis

Marten Art Gallery


Simply put, Marten Art Gallery is a fine art and craft retailer that was established in 1988,it is a Canadian based family owned business by Judy Stephenson and Dennis Pal. Its delivers the residents of Bayfield and the surrounding area fine art from international and local artists. The products are sold in the physical store in Bayfield. The gallery is a rare find in Ontario, it has excellent quality fine and art craft. Furthermore, it is recognized by Days out Ontario for the best retail art gallery with the best variety offering a broad spectrum of the paintings of different styles, mediums and prices rarely found in one gallery.

The issue

In the fine art gallery, the significant variation and changes, the economy and the increased competition in the market have affected the ability of the Martin Art Gallery to get profits and operate. Regardless of the strong reputation of the company in market, the clientele buying behavior is changing. The owner of the company had to take a closer look over the alternatives ranging from the adding another shop to sell the company. The responsive marketing strategy of competitor has created some urgency for Marten Arts Gallery to revise its options.



It is to notify that the financial performance and stability of the company has impaired by the recent changes in the recent changes in fine art industry and economy. The owner of the company has concerted its persistent efforts to regain the profitability in first half of year 2009, due to which he had to determine the feasibility of the options. Also, the company has aimed to return to the previous profitability level even in unfavorable and adverse economic times. The mission is to deliver the exceptional quality products by international and local artists to the Bayfield residents, surrounding community and art lovers.


Marten Art Gallery had to make sound decision relative to the family artistic interest. Furthermore, the company has integrates the photography interest into the service.

Internal Analysis


SWOT is helpful tool that is used to comprehend the weaknesses and strengths and distinguish both opportunities and threats the company confronts. Not only this, the company would be able to get a comprehensive knowledge into potential and discriminating issues affecting accomplishments of business goals.

Strengths & Options

The company has strong market presence and enough expertise and knowledge as to how to smoothly run the business operations. The company is popular in Bayfield area and located in the most famous tourist hub that draw the population from Canada and United States. The owner is dedicated and motivated in bringing the desirable profit margins with the unique set of skills to effectively manage the different business aspects. The operating expenses have successfully reduced by Pal by achieving 25% reduction in business operation cost.

Weaknesses & Threats

The sales and profits have reduced, the income statement shows that the high interest expenses affecting the profit line of the company. Also, the liquidity position of the company shows that the company is over leveraged with the significant long term and short term loans, this in turn affect the ability of the company to obtain the additional debt financing to implement growth plans and support long term investment in future to pursue its efforts to promote the gallery.

There is a risk indicator to suggest the possible bankruptcy and potential non-payment of interest. Though there exists some collateral to possible secure further financing in truth the biggest asset is Pal. This would not be a desirable state for lenders.  This would also impact his ability to sell the gallery.

External Analysis

PEST Analysis

This framework is used for the strategic planning and to understand the long term and short term external influences on the operations of business. The profound understanding of the external environment would help the company in minimizing the threats and maximizing the opportunities.

Political factors

The appreciation of the US dollar against Canadian dollar, the Canadian products’ cost has significantly increased for the customers in America.  This in turn has impacted a number of tourist who travel from the United States, and with the increased restrictions on travelling as a result of Western Hemisphere Travel Initiative (WHTI) has daunted tourists from traveling United States and Canada.  According to new regulations set in 2009, the company is required to obtain a trucking permit to deliver art to its customers in US.

Economic factors

The bottom line of the company has adversely affected by the economic recession. Though, the art and craft market is mature, the overall industry has dramatically influenced by the economic recession. The company location is in the small town that is famous amongst tourists. Adding new art stores in area would create the art culture hub which would attract more avid art lovers to the town.

Social factors

It is to notify that the 20% clientele of company are art followers, who likely contribute up to 80% of the total revenue. Rest of the customers are tourists that have the potential to become followers. It is important for the company to focuses on increasing its reach and exposure through various social media channels. Pal should focus increasing the customer services and delivering brand loyalty by investing in training session provided to staff. He should create a brand loyalty program, email subscriptions (to drive traffic to his website), to inform new followers of events, featured artists, etc.  A strong relationship with artists is key to company’s Repu-brand, and will aid in distinguishing company from other galleries. Thus it would be wise to invest in a robust e-commerce setup in order to achieve the corporate goals.

Technology factors

E-commerce has revolutionized the way companies do the business.  It has reduced the dependency on local demographic and has created an opportunity for company to expand its clientele nationally and internationally, thereby increasing its targeted segment in a cost effective manner. The company’s website is impressive as compared to industry standards; however, the e-commerce component is needed to stay relevant in the market.....

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