Dick’s Sporting Goods Phase 1 Analysis

Executive Summary

Dick’s Sporting Goods is a competitive company that offers a wide range of products. They mainly sell athletic equipment, apparel, and shoes. They also sell other goods such as fitness equipment. Their biggest competitors are Hibbett Sports, Sports Authority, Foot Locker, and Bass Pro. The sporting goods industry is competitive with many options to buy from online stores, magazines, as well as the traditional storefront locations.

The sporting goods industry is highly fragmented with many companies sharing the market.7 However, there has been a trend over the past decade of consolidation among the various stores. The overall supplier power is extremely high for established brands, such as Nike, Under Armor, Adidas, and Reebok. Sporting goods stores usually have to carry at least one, if not all, of these brands to be considered top notch among consumers.7 Since Dick’s Sporting Goods is in a retail industry, there tends to be many threats of new entrants and few barriers of entry.

Dick’s is faced with the threat of decreasing revenue every time the economy takes a hit. Its customers start looking for bargains or stop shopping for sports equipment altogether.7 The last recession had a negative effect on revenue, but it also negatively affected the entire retail industry. To boost revenues, Dick’s is more aware of customers’ tastes and what sports are currently most popular. For example, golf has been decreasing significantly in popularity, while outdoor activities (hiking and camping) and extreme sports (skateboarding, snowboarding, and trick bicycling) have become increasingly popular.8

Dick’s Sporting Goods has achieved great success due to its strong core competencies, the store-within-a-store merchandising concept, and strong support services that enhances differentiation. They also have a first-class inventory management system, leading market position based on competitive pricing and enhanced profitability by selling higher...