1. Dick’s Sporting Goods
Case Analysis

2. Executive Summary
Typically when you are given a case, there is a particular opportunity or problem identified in the case or in the discussion questions that will become the focus of your analysis – let’s assume here that Dick’s is thinking about getting into the gym business and establishing a national chain of full-service gyms
Then you would briefly discuss the following:
Major issue facing Dick’s Sporting Goods
whether they should enter the gym business
Summary of Dick’s current strategy and financial position
Sell sporting goods apparel and equipment at higher than average margins; financially stable at the moment, good growth over the past few years
Recommendations
NO!

3. Business Model Full-line sporting goods retailer
Focus on high-priced, brand name products
Higher margins
Excellent customer service
First-class inventory management system

4. General Environmental Forces
Political/economic – in current economy, consumers are looking for low prices; this is not Dick’s focus; new President seems to be a fitness fanatic – could encourage others to get interested
Sociocultural – the US has become increasingly concerned about its health and ways to improve it, this could prove beneficial to Dick’s
Each of these forces would help Dick’s from both a supplier of apparel and equipment as well as a gym

5. General Environmental Forces
Demographic – an aging population that is much more health conscious than previous generations; the rise in obesity should encourage consumers to look for ways to combat it
Legal forces – there is discussion of a bill that would allow taxpayers to deduct the costs associated with preventive health measures, such as exercise; there is also a campaign to promote physical activity guidelines
Again, each of these forces could help their existing business as well as the proposed business venture

6. Specific Environmental Forces
Suppliers – there are many suppliers of fitness apparel and equipment, but it is dominated by a handful (Nike, Adidas, Titleist, Reebok, etc.), these suppliers may have limited bargaining power over Dick’s
Customers – Dick’s likely appeals to middle and upper class customers; however such customers are more willing today to shop for bargains, and they do have many choices, as shown below

7. Specific Environmental Forces
Competitors – for sporting goods: Sports Authority (privately held), Cabelas, Hibbett Sports, Big Five, Wal-mart, and Foot Locker are among its key competitors; in addition, there are specialty sporting goods stores (NikeTown, Adidas stores, Reebok stores, etc.) – while Dick’s may be among the most profitable, it is important to realize that consumers do have many choices; Dick’s will not likely try to get in a price war to compete, but rather differentiate itself through its product selection and customer service
For gyms: Gold’s, Planet Fitness, Bally’s, Curves, YMCAs

8. SWOT Strengths brand recognition Higher profit margins
Customer service
Inventory management
Knows the sporting goods business!

9. SWOT Weaknesses Seasonal nature of business (4th quarter is crucial)
No experience running a gym

10. SWOT
Opportunities
Dick’s strong financial position enables it to survive and grow during a tough economy
An aging population interested in health
The obesity crisis
A President committed to fitness
Congressional Activity related to health and fitness
Some national gyms are experiencing financial and customer retention problems

11. SWOT Threats The economy Shift in consumer spending habits
Competitors (Wal-mart)
Starting up such a big venture could divert their resources and attention away from their core capabilities

12. Financial Analysis
Strong growth in Sales and income over the past three years (Yahoo Finance)
Strong cash position
Higher than industry average profit margins (Yahoo Finance)

13. Gym Industry Analysis Include some stats on the key players and trends
Gold’s
Planet Fitness
City Sports Clubs
Bally’s
Fitness Together!!! (YEA!!!)

14. Recommendations Do not enter into the gym market Quite competitive
Could dilute their high-end brand image
Not a core competency