The External Environment
First and foremost, a major competitor of Dick’s Sporting Goods is Sports Authority. Sports Authority is an industry leader providing a wide variety of brand-name sporting goods, relatively similar to Dick’s. The store’s headquarters is located in Englewood, Colorado. According to Yahoo Finance, “The company operates over 450 stores in 45 U.S. states very similar to Dick’s 500 stores in 44 U.S. states. As of 2011, employment consisted of 14,250 associates.”
Funding Universe described the history of Sports Authority in their article, The Sports Authority, Inc. History. The article projects a timeline about the history of Sports Authority and their relationship with Kmart. In summary of the article, Sports Authority opened its first store in 1987 in Fort Lauderdale, Florida. Kmart acquired the company in 1990 and through their financial support; Sports Authority was able to expand. After a year of Kmart’s financial aid, revenue rose to $240 million bringing the company its first profitable year. By 1993, Sports Authority had enough financial strength that they no longer needed to depend on Kmart. It was essential for Sports Authority to separate itself from Kmart because the company was suffering from new competition, Walmart. By 2006, Sports Authority agreed to be purchased by private equity investment firm, Leonard Green & Partners. The most recent growth within the company came in 2010. The company launched a new store brand “S.A. Elite” similar to Sports Authority, but carries more high-end sports apparel and accessories Sports Authority is a private company therefore access to financial information is hard at retrieve. Numbers retrieved are questionable since their financial information is private. Similar to Dick’s, their target market is focused on customers who are involved or interested in athletics. Although athletes are the prime target market, many purchases are made from parents, athletic directors, and coaches. The segments include: individual participants, parents, league representatives, team coaches, school athletic coaches and directors, and sports performance businesses. Their products consist of apparel, sports equipment, footwear, and exercise equipment. Sports Authority sells different brands of sporting goods from multiple vendors. The company also sells products under its own private labels. Some of these private labels include Alpine Design (seasonal clothing and outdoor goods), Sims (seasonal clothing and snowboards), Aspire (women's sportswear), SA Gear (men's sportswear and fitness equipment), and Bodyfit by Sports Authority (fitness accessories). Most of the products are made by other manufacturers and branded with the Sports Authority private labels. The most popular shoe brands include Nike, Under Armour, Asics, Adidas, and New Balance. Prices and products are very similar between both companies. Since DKS is so similar to Sports Authority, marketing capabilities are essential to differentiate each of the companies. Distribution and promotion are important attributes that separate each company from each other. In terms of distribution, Sports Authority has similar access to brands as Dick’s. Both companies have multiple stores and an online website. Promotional strategies differentiate both the companies through the way they connect with the consumer. For example, Dick’s website offers Nike Men's Air Max+ 2012 Running shoes priced at $169.99. Sports Authority originally priced the shoe online at $170, but is currently offering them for $138.98. Whoever has the greater promotional method will result in the competitive advantage. A price-sensitive consumer, who wants these specific shoes, will research who has the lower price. In this case, Sports Authority would win because their shoes are priced $30 cheaper. Also regarding this specific shoe, Dick’s offers 5 different colors of the shoe online, whereas...
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