SWOT Analysis on Athlete’s Warehouse PDF

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SWOT Analysis on Athlete’s Warehouse

University of the People BUS1101: Principle Business Management Dr. Amalio Monzon December 14, 2020

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SWOT Analysis on Athlete’s Warehouse

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During this past unit, we have learned more about the strategies that every company needs to use in

order to ensure success; one of the most important strategy tools of all is SWOT Analysis. SWOT is an acronym that refers to the Strengths, Weaknesses, Opportunities, Threats of a company. This concept consists of collecting both internal (strengths and weaknesses) and external (opportunities and threats) conditions to create a valuable plan. Tools like this help us analyze and review organizations whether they are already established or yet to begin their journey, just like the case study we had the pleasure to review this week; I am talking about the Athlete’s Warehouse case. Colin and Ed are two brothers that both share a passion for sport and sports gear. Colin Power, the younger brother, is a 30 years old man who spent his whole life dedicating to sport and supplying gear to members of the school he worked at. He was first a Physical Education teacher at St. Michael’s High School in Grand Falls, then the Executive Director of the Grand Falls YMCA, and then again coach for the track team, but during all of these years and through all of these jobs, Colin continued to sell sporting goods. Ed, on the other hand, is 46 years old with an incredible athletic past, in fact, he played for the Newfoundland Senior Hockey league and a great runner in the over 40 category and after that, he began his journey as an employee for a paper company. In 1984 the brothers decided to open a 300 square feet store called Athlete’s Warehouse and the next year they opened a fitness center called The Fitness Factory. As the years went by, the Power brothers realized that the store’s income was disappointing, probably because of the bad location and, on top of that Colin could not take care of the store anymore as a manager because of his busy schedules. When the store was closed down, the two brothers were faced with a doubt: Colin insisted to establish another sporting goods store in a more central location in Grand Falls; Ed, on the other hand, wanted to sell the $12,000 worth of inventory and use the money to save up for his retirement. They faced many challenges from expensive prices, lack of work and

3 competition with big, experienced and well-oiled operating rivals when the power brothers set up their company. They recognized that the most active age group is between 15 and 34, in which that age range became their target demographic and consumers, based on their business management expertise and becoming active themselves. Using SWOT analysis, I am going to try and bring more clarity to the situation and analyze the internal and external factors. The internal strengths I identified are the experience in the athletic industry, the contacts they created in the community and the fact that they have already owned a gym and a store. In his all career, Colin has been a Physical Education teacher, with a Ph.D. in P.E., a coach, a gym owner and an executive director and Ed has been a champion in both hockey and over 40 marathon. Their combined experience brings many points to the table compared to the competition, besides that, their experience can benefit the customer service and the supplying. On top of that, being in the industry for a long time has brought them to know and to make connections in that environment. Plus, them owning a gym is a great marketing move for the store, because the costumer of the gym can supply themselves with mercy from the store. The weaknesses I identified from the case study report a lack of capital. In fact, the capital that the two brothers are willing to invest with is the money that Ed needs to retire and will eventually need. So, the capital problem brings also a time problem since the shop is condemned to close at some point in the next 10 years. On top of that, many major suppliers need COD, this requires an already established capital that lacks in the brothers’ case. Also, I’d like to point that they already failed in launching a similar store, and all of the problems they had there were caused by the lack of capital and management, factors that may induce a new failure in the new store. Talking about the external factors, the opportunities at that right moment in time are plenty for the two brothers in Grand Falls. The market right now presents low inflations which gives the brothers the opportunity to as for a loan with lower interests and, on top of that, the customers are more willing to buy. Another great point in their favor is that Grand Falls has become one of the towns with the highest income in

4 the province, this economic prosperity will ensure that the costumers are more encouraged to spend their money because of their wealth. The downside is the threats that involve external factors like the competition and the industry location. As we learned from the case study the area is filled with competitors, in the area appointed as the new location for the store, we count two major competitors. One of them is a huge franchise store that provides a range of items that can draw customers to the same location as the gym, the other store offers the same kind of products they own. This issue creates rivalry for location, management capabilities and price. The solution to this problem is to differentiate themselves from the other competitors in order to create something unique that the customers are drawn to buy from. With that being said, I believe that the brothers both have decent reasoning on why they either want to open a store or retire. They have both pros and cons they need to evaluate and personal management to organize in order to not do the same mistakes they did in the past.

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References: Howse, B. (1992). Athlete’s warehouse. Atlantic Entrepreneurial Institute. Retrieved from https:// my.uopeople.edu/pluginfile.php/1015602/mod_workshop/instructauthors/ Unit%205%20Case%20Study%20--%20Athlete%20Warehouse.pdf?time=1581718667311...