Case analysis

ATHLETE'S WAREHOUSE CASE ANALYSIS 1

ATHLETE'S WAREHOUSE CASE ANALYSIS 10

Athlete's Warehouse Case Analysis

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Environmental and industry analysis

The environmental analysis is applied as a tool used to identify the internal and external elements that affect industry performance. In this case, the environment analysis entails assessing the threats and opportunities that the factors would present. The environmental analysis ranges from the political, economic, social, technological, and legal factors.

Political factors

The athletics shoe business is much affected by the political landscape. Elements such as a stable political climate in the market, expansive free trade policies, the government improved infrastructure. The stable political environment in the market brings forth opportunities for the footwear business to grow in the area. The free trade policies facilitate better market penetration in a wide region. In addition, the government infrastructure does offer support to the industry, such as athletics stadiums in the areas where the business is might have been located.

The athletic shoe business experience opportunities are improving its market presence and expansion in sports footwear and equipment.

Economic factors

The footwear industry's performance may be determined by the economic factors such as the economic stability where the developed markets in the states of the U.S are viewed to be stable, therefore providing the sports shoe industry with the right opportunity to thrive in the stable growth. Consequently, the industry has an opportunity to develop by an increase in the operations in the high growth developing states.

However, the growth of the developing market threatens the footwear industry as it increases the cost of labor in the supply chain of the industry as well as the production facilities. The external economic factors show that the industry has to work on expanding the market strategies as it seeks new ways to capture growth in the developing areas or states.

Sociocultural factors

The social issues affect the attractiveness of the athletics shoe business. The analysis shows the effects of the social conditions on the industry macro-environment. Such social factors include the increased personal wealth in the developing state as the business would tap the clients in high numbers. Besides, the business would have an opportunity to develop safer products as well as embarking on new strategies that would be useful to address the needs of the business.

Technological factors

The athletics shoe business experiences changes with the technologies that are available for the processes of the business. Some of the technological conditions that would lead to a significant change in the macro environment of the business include advancing technological obsolescence, which is a threat and an opportunity. The threat occurs when the industry puts pressure on the business, therefore increasing the product development efforts. However, the factor provides an opportunity for the business to integrate the developing technologies in the athletics shoe business.

The industry has integrated mobile technologies such as apps and other online tools. This creates an environment where the customers can interact with the business as they use the apps. Moreover, the increasing number of investment firms that use technological advanced sports shoes is a threat to the business as the industry's competing businesses have embraced the use of technology.

Legal factors

The legal terms have a great influence on the sports shoe business. The legal terms analysis shows effects on the industry in the following ways; the improved employment laws in the states seem to threaten the availability of the labor as the costs rise in the location or the environment where such business exists in numbers. The employment law has an advantage to the industry as it sets the standards for employment and labor.

Besides, the business of sports shoes improves the image of its brand by providing customer satisfaction in the process of marketing its shoes. The industry keeps a constant improvement as it tends to produce much healthier sensitive sports shoes.

Ecological factors

The ecological issues affect the sports shoe business either in the micro or macro-environment in the following manner; the law in the expanding environment acts as an opportunity for the sports shoe business to improve its sustainability and environmental programs available in the industry. Through the programs, the sports shoe business is able to address the change in climate affecting the supply chain. Furthermore, the increased sustainability strategies in the sports shoe business improve the sustainability standing.

Target market analysis

The market analysis seeks to show how the industry in footwear performs in the target markets as well as the opportunities and threats that the business faces in its target markets. In context with the case study, the demand for athletics products such as sports shoes.

Target markets

The business is well welcomed at the Greenville location with the high demand coming from the high schools that Colin had been heading as a physical education teacher. Having the athletic warehouse would be a problem solver to many young people in Texas who yearn to have the sports shoe available. The high-performance athletic gear is much targeted to professional athletes. The quality of the products at the store will be in an attempt to develop athletic potential. The operations of the business will be suited at Greenville.

In Texas, things looked economically right and even the neighboring towns, thus giving hope and confidence for the sports shoe market. Colin had committed his time and resources to offer management to where the athletics warehouse to ensure that customers would be supplied with the quality of the products they needed. For the athletics footwear, the two brothers Colin and Ed, set to target the young people age between 13 and 34. Additionally, Greenville act as a shopping hub of such items; therefore, the two brothers would not have only seen the customers from Greenville but also from the surrounding cities such as Gander.

It is estimated that more than 50000 people stay in the city or visit to do their shopping, which is a reflection of a potential market. Besides, the population would provide Colin and Ed with a rich of potential customers. The wide age range would provide a better market since the high density of people in the target age range would positively affect the number of anticipated potential customers.

Competitor analysis

Though many conditions worked in favor of the brothers for the proposed business in athletic footwear, they faced some threats. The main threats included the competence who had stores of the same kind. The athletes' warehouse didn't have direct competition due to its specialization, which is featured by overlapping two markets: athletic footwear and athletic clothing.

The two sets of items go hand in hand; therefore, a user of one item may also use the other one. The warehouse had many shops that provided a good deal, gear making it face competition from a few stalls that only dealt with some of the warehouse's goods. The athletes' warehouse has to be in competition with three other sporting company shops. The competing stores provided a mixed form of items; a shoe and clothing store.

The competitor's weakness to Colin and Ed is the lower quality and lower-priced lines that were similar to what the two brothers had proposed. This gave a competitive advantage to the two brothers since they knew the best quality of products they would offer to their clients. The competitors to the athletes' warehouse included; sports experts, sports top, B & B sports.

Sports expert

The store was located upstairs in a similar building that the athletes' warehouse was located. It acted as a nationally-franchised store though as a branch. It offered all types of sporting products, both soft and hard goods. One of the weaknesses is that the store's sales staff could not offer expert assistance to the customers for the products they offered to them.

Sportstop

The shop is located in a different location with that of the athletes' warehouse occupying about 1000square feet of the space. It poses strength in providing variety of goods like the ones proposed by athletes' warehouses. However, the store lacks sales staff capable of offering the desired expert assistance to the customers who purchase the running shoes. Additionally, the shop was wrongly located, thus incapable of providing enough competition.

B & B sports

The shop enjoys the advantage of having been in active operation for more than ten years, therefore being conversant with the market and the trends of seasons. It also has the advantage of being the only sports shop in the city. It occupies more than two thousand square feet, thus providing enough space to hold all products in sports, both soft and hard goods. However, the shops do not have many varieties of athletic shoes and clothes.

In general, Colin and Ed enjoyed an opportunity to lack similar specialized businesses in the location that they were therefore becoming sole dealers of the sports shoe. Furthermore, their competitors failed to provide knowledgeable advice to their customers, therefore enjoying the advantage.

Locational analysis

The athletes’ warehouse was located in Greenville town in Texas streets in an enclosed mall that was near other malls on the high traffic streets. The city area contained much business, including grocery stores that had been started by residents in the early years and still thrived serving many members of the generation. Moreover, the Greenville town had a town hall, federal government offices, banks, a supply store, and other small operations.

The mall at which the athletes’ warehouse was located had more than 25 stores, with dominion and Woolworth's support stores. There are several other retail operations, such as McDonald's. Drawing on Colin's experiences and other information from the statistics body, he estimated to earn between $100,000 and $150,000, which was dependent on the strategic positioning and location of the warehouse.

Following his discoveries that the target age range was 13-34, which represented over 35% of the population, the warehouse's location would help to realize the full potential of the warehouse. In her calculations, he estimated the location of the business to contain more than 15,000 prospects.

Depending on the pedestrian traffic estimates and experience, Colin estimated that more than 3000 prospects would be future customers at the athletes' warehouse. Besides, he estimated that every customer in the nearly located warehouse would spend between $40 and $50 for every visit into the warehouse by the clients. The first-year sales projection by Colin at an athlete warehouse would be between $120,000 to $150,000.

The witness shop that was a competitor to Colin's business was located at the town square mall though the brothers aborted the idea to expand their business in the town square mall as they believed the location did not fit to attract the desired customers to them. Following their view of the available locations, Colin and Ed were left with two choices that would be possible. The lease cost per square foot was $33 for a duration of 5years.

The initial cost of starting a business

The two brothers estimated the need to have $10,000 at hand to carry out renovations and display rack; furthermore, they needed $20,000, which they could use for inventory. The major costs would be in labor and lending a warehouse. Regardless of the location and calling made an observation that the store needed to be operated at all times with commitment. However, he needed to follow up on his high school job. In addition, the two brothers had to include not less than 5% on the total sales to make advertisements; telephone costs would take $165 in one month. Other costs would be incurred through insurance, bookkeeping, and hiring other stuff. However, Ed believed not to fully use his money in fear of losing his retirement money.

Conclusion

Generally, the two brothers could be successful only if they would work together and commit their resources and time to the business. The task of establishing the athletes' warehouse is not easy, but the income would be stable for the two brothers as the store would be popular. However, some risks are involved with any new business though Colin and Ed had the knowledge of the sports footwear that gave them an added advantage.

Reference

Howse, B. (1992). Athlete's Warehouse (A). Retrieved May 06, 2017, from

https://my.uopeople.edu/pluginfile.php/128595/mod_resource/content/1/Unit%205%20

Case%20Study%20-%20Athlete%20Warehous

Reich, A. E., Wilson, A., Haddix, H., Bock, J., & Perella, M. (2018). Fashion Case Study Trend Niche.