2002, Professor Jerome M. Katrichis
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Sports Authority Example
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Sports Authority is the largest full line sporting goods retailer in the United States.† Net sales reached $1.5 billion in the 2000 fiscal year, while directly operating 198 stores in 32 states across the United States, with a minimum of 40,000 square feet per store.† Another 28 Sports Authority stores are operated in Japan under a license agreement with MegaSports Co.† The Sports Authority also operates a retail Internet site, www.thesportsauthority.com, as a shopping alternative.† Their website has been voted the second best retail Internet site by an international study, surpassed only by Amazon.com.†
As of February 3, 2001, the corporation employed approximately 5,600 full-time and 5,400 part-time employees, according to the Year 2000 Company Annual Report. Of these 11,000 employees, 92% are employed in the retail stores, while the remainder work in Sports Authorityís corporate, regional, and district offices and their regional distribution centers.† The corporationís assets totaled $662 million, which primarily consisted of 18 owned stores and inventory.† Net earnings were $25.4 million in 2000.†
Sports Authority leads the sporting goods industry with sales of $1.5 billion.† All other competitors in the industry have significantly lower sales volumes.† Each of the corporationís competitors had less than $900 million in annual sales for 2000.† The financial results demonstrate that Sports Authority is a large corporation when compared with all other business organizations including competitors within the sporting goods industry.† This fact will act as a barrier to entry into the sporting goods industry for newcomers wishing to compete on the same large-scale level as Sports Authority.† It would be extremely difficult for newcomers to achieve sales volumes similar to Sports Authorityís due to Sports Authorityís size and leverage in the industry.† The corporationís size should not prohibit smaller newcomers such as specialty stores from entering the market and becoming profitable.† There are no restrictions regarding strategic options for the Sports Authority.