The Sleep country is one of the largest mattress retailers in Canada featuring about 264 stores in

Canada, headquartered at Calgary. It operates its inventory through 16 strategically designated

distribution system located at various provinces of Canada to ensure on-delivery delivery service to
customers. Currently it operates under three different banners namely “Sleep country Canada”,
“Dormez-vous?” and “Endy” sells mattress over 8-name brands based on budget friendly to high end
mattress.

External analysis:
Demographic factors:

An average person doesn’t buy very many mattresses in his lifetime and a shell life of a well conditioned
mattress ranges in an average from seven to ten years. Canada has been a sweet spot for lot of
immigrants which directly increases the disposable income, along with the surge in
homeownership, which is on an average 69.6% across the globe. Rising demand for real estate to serve
the residential needs will lead to an increase in demand for home furnishing like mattress and other
sophisticated items, there by assuring a significant demand for the product. 1

Economic Factors:

The global mattress market reached a value of US$ 30.3 Billion in 2019. Furthermore, the key players are
focusing on the introduction of organic mattresses made by utilizing natural and environment-friendly
raw materials, such as wool, natural latex and organic cotton. However, due to the outbreak of the
coronavirus disease (COVID-19), and the consequent lockdowns and disruptions in the supply chain, the
overall sales of mattresses have declined for the short term. It is expected to increase once normalcy is
regained. Looking forward, the publisher expects the market value to reach US$ 44.0 Billion by 2025, at
a CAGR of 6.2% during 2020-20252.

Political Factors:

Due to recent investment growth in real estate coupled with government favourable polices towards
small business development, principle residence act that has resulted in increase rate of house
ownership in Canada which in turn supports the growth of household market. In addition to that during
last year there has been lots of legislation that focuses on housing development schemes like the
Chinese government's joint ownership housing scheme, and the U.K.'s affordable homeownership
scheme. However, COVID-19 has been a major setback for all the capital investment that was in
progress, however it believed that its will regain its pace gradually and steadily.

Socio cultural Factors:

The growing health concern of consumers has been propelling the demand for customized daily-use
products, such as mattresses. With the increasing disposable income, consumers are willing to pay extra
for health-enhancing products. The busy schedule of individuals is leading to mental exhaustion, thereby
making sound sleep a compulsion. It has been found that Canadians get less than seven hours of sleep
every day, and it is harming their health and the economy. Insufficient sleep has been associated with
low productivity, which costs the economy $15.80 billion (~CAD 21 billion) annually. Thus, sound sleep is
becoming important in the country, which is leading to the increasing demand for more-comfortable
mattresses3.

1
The global demand was retrieved from Industry insights in grand view research
https://www.grandviewresearch.com/industry-analysis/mattress-market
2
https://www.statista.com/outlook/17020200/108/mattresses/canada
3
https://www.psmarketresearch.com/press-release/canada-mattress-and-accessories-market
Technology Factors:

In our current robotic lifestyle people wanted to stay healthy and fit for which getting a good sleep in a
timely fashion is most essential. Since every person’s sleeping pattern is unique and different its
important that technology should enhance complacency and quality of sleep. For that reason, people
tend to drift from conventional mattress to smart beds and hybrid mattress. These are the types of
mattress that equipped with sensors, which record and analyse the user’s sleeping patterns and
statistics. The sleep info is recorded, stored, and delivered to the user’s smartphone. Example of such
innovation is Purple Innovation; LLC manufactured the World's First No-Pressure Mattress.

Physical Factors:

Due to recent increase in the online mattress competitors, however still majority of people prefer to visit
retail stores near by to identify the best mattress that suits their body type and sleeping patterns.
Considering all the advantages of online mattress shopping, one major drawback is that its difficult to
feel the mattress material and coziness it brings to bed also if the product is unsatisfactory it’s a big
hassle to re-pack to it original form for return. The recent COVID-19 affected customer visit drastically to
the retail stores due to healthy and safety concerns. Adding to the fact, now the retail stores must
implement strict sanitizing rules after every customer visit and proper monitoring to ensure customer
safety and satisfaction is not compromised.

Global factors:

As per National sleep foundation, 54% of Japanese people sleep alone when compared to only 14% of
Canadians thereby its evident that there will a predominant demand for large size mattress market.
Also, in last year or two there is a global drift towards demand of vegan products, which had not left the
mattress industry as well. Customer are more concern on due to personal preference, allergy reasons
and not using animal or harmful chemical products. These plant-based mattresses are more eco-friendly,
breathable and responsive than traditional memory foam. Which gives a wider spectrum of demand in
this product category in upcoming future.

Sustainable physical environment factors:

Climate changes became one of the hot and sensitive topics to be focussed in today’s situation.
Customers all around the world are most cautious and futuristic in accepting any projects that might
impact environment. Every year Canadians produce about 30 million tons of waste and close to 40% of
Canada’s total methane emissions come from landfill sites. Methane emissions from landfills produce a
greenhouse gas that is 20 times more potent than carbon dioxide 4. Mattress is one such product that
could be recycled into entirely into other useful raw materials like wood to mulch or biomass fuel,
innerspring to recycled steel and foam to carpet cushioning. Nowadays eco-friendly mattress is new
market space which is an added advantage to the environment.

New Entrants:

4
(Source: Recycling Council British Columbia)
E-commerce had widened the horizon of opportunity for new entrants. In Canada alone we’ve more
than 10 major players in Canadian Mattress market. With great distribution network coupled with strong
e-commerce platform like Amazon, they can sell mattress with less marginal profit and overhead costs,
which thereby proves Sleep country is in threat by low barrier for new entrants.

Bargain power of customers:

Before the revolution of e-commerce and digital platform, customer had to wait for a sale in order to
purchase a product under discount. Nowadays technology being accessible at a touch, customer can get
update on any latest sales and discounts instantly. More importantly they can compare the price &
features of the products offered among wide range of sellers and choose “best bang for the buck”. So, it
always important to price the product attractively to stay at top of its game.

Threat to a substitute product:

Every product has its substitute in the market, customer shall only need to ensure whether they get any
added feature or quality for the same price they pay. With technology in hand connecting from end to
other end is simple, so sleep country often must evaluate its products among their contenders to offer
the best product for the price range.

Bargaining power of suppliers. The suppliers are extremely power since the company does not
have long term contract with their suppliers. Thus, the ability of the company to attract and retain
popular brand greatly depends on their relationship with their suppliers. The company’s results
and ability to constantly seller popular brands will be adversely affected if suppliers cease doing
business with the company [10].

[10]“Annual Information Form for The Year Ended December 31, 2019 Of Sleep Country
Canada Holdings Inc 2020.

Rivalry among competitors.

The company is faced with competitors not just from the retail mattress industry but also
competitors from furniture retailers, departmental retailers and online stores. Major competitors
of the company are; Leon's, The Brick, Hudson's Bay, BMTC, IKEA, Amazon, Casper and
Costco. Despite all the competitors, Sleep Country still the leading retailer in specialty mattress
and sleep accessory in Canada. Furthermore, the company is facing competition from online
stores like; Amazon, Casper, Novosbed and many other online companies that ship their
products into Canada from USA.