2002, Professor Jerome M. Katrichis
click above to view Barnes & Noble Example
Sports Authority Example
Please use your back button to return to the outline.
Various opportunities exist for Sports Authority in markets that they are currently not participating in or areas where growth is expected. These areas for growth are detailed below.
1. Increase in Minority and Mature Populations
Due to the effect of high birth rates during the Baby Boom (1946 – 1964), there has been an increasing number of mature adults in the consumer mix. Adults ages 40 and older have become a very significant market segment for the sporting goods industry. Minority populations have also increased significantly in the U.S. over the past eight years. Sports Authority will be required to evaluate the market demands of these segments and react to customers’ needs. The company will be required to diversify advertising vehicles and media to reach these increased market segments.
2. Industry Growth
The External Situation Analysis states that the sporting goods industry as a whole is expected to increase 3.6% in 2001, which equates to $1.6 billion in sales. This increase will be additional sales volumes that the various retailers in the industry will compete for.
3. Geographic Expansion
Currently, 70% of Sports Authority’s stores are on the East Coast. Sales potential exists in the Midwest and West Coast regions where other competitors such as Dick’s Sporting Goods have already begun acquiring market share. Significant sales potential also exists in the international markets. Sports Authority must fully evaluate each region when choosing locations for new stores to ensure profitability. This is extremely important due to the high costs associated with opening a new store.
4. Team Sports
Organized team sports equipment and apparel are areas that Sports Authority has minimal market share. Currently, most schools and organized sporting programs purchase directly from manufacturers due to volume discounts. Sports Authority must devise a plan for market entry. There is a substantial sales potential on local and regional levels. Sports Authority will need to speed up catalog initiatives to target schools, recreational leagues, and organized team sports.
As Internet usage becomes widespread across the nation, website retail sales are growing across all industries, which will take market share from the brick and mortar stores. The Sports Authority must continue to monitor the effectiveness of their website to ensure its competitiveness and user friendliness. Some of the company’s on-line success will likely cannibalize on its existing brick and mortar sales. The Sports Authority will need to evaluate the best way to target competitor’s business through on-line mediums.