Decision Making for Starting the Athlete’s Warehouse Submitted by

Decision Making for Starting the Athlete’s Warehouse
Submitted by: Junming Li
Cape Breton University
Course name goes here
Submitted to: Abdul Ali
Date: 2018/09/26
Table of Contents:
1. HYPERLINK l _Toc9591_WPSOffice_Level1 Executive summary:3
HYPERLINK l _Toc21204_WPSOffice_Level1 2. Problem statement:4
HYPERLINK l _Toc8791_WPSOffice_Level1 3. Data analysis:5
HYPERLINK l _Toc16750_WPSOffice_Level1 4. Key Decision Criteria(by using SWOT analysis)6
HYPERLINK l _Toc28526_WPSOffice_Level2 Strengths7
HYPERLINK l _Toc32740_WPSOffice_Level2 Weaknesses8
HYPERLINK l _Toc7540_WPSOffice_Level2 Opportunities9
HYPERLINK l _Toc14327_WPSOffice_Level2 Threats10
HYPERLINK l _Toc15862_WPSOffice_Level1 Analysis of alternatives:12
HYPERLINK l _Toc29415_WPSOffice_Level1 Recommendation:13
HYPERLINK l _Toc27817_WPSOffice_Level1 7. Action and implementation:14
HYPERLINK l _Toc11534_WPSOffice_Level1 8. Exhibit:15Executive summary:This article analyzes two brothers, Colin and E.D Power are confronting a choice of whether and where, to open an athletic-footwear and sports suits business. The objective market of the business has been focusing on serving relatively young individuals between the ages of 13 and 34, who involve in school physical exercises or professional athletic sporting. We will discuss how to utilize their advantages to help the new business, and avoid or eliminate obstacles from both internal and external environments, and finally we will attempt to provide feasible business strategies and action plans and implementations specifically aim at this case.

Problem statement:Colin and Ed Power are recently straggling on whether to establish a new sport clothing store in the city of Grand Falls, Newfoundland. The store will be named as Athlete’s Warehouse and their main and objective clients will be relatively teenagers and young individuals between the ages of 15 and 34 who consistently engage in athletic activities and exercises. The store will be focusing on selling great quality of athletic footwear, clothing and personal adornments. In addition, the two brother will provide good sporting knowledge and customer service to their purchasers. This case study revolves around Colin persuading Ed the clothing store will be successful eventually; nevertheless, Ed is not so certain about it, and he hesitates that he could risk his retirement pensions into the immature business speculation. One of the best way to approach and testify whether the enterprise is risky or dependable, is to brainstorm a SWOT analysis.
Data analysis:Key Decision Criteria(by using SWOT analysis)Strengths I. Colin and Ed’s physical education foundation
II. Specialized knowledge of quality athletic goods, footwear and sports suits
III. Business management experience
Weaknesses Previous failure experience
Lack of big branded suppliers
III. Lack of starting funds
Opportunities I. Huge potential clients base
II. Competitors do not expert in professional footwear
III. People are looking for trendy and good quality of sports clothing
Threats I. Competitors could copy Colin’s marketing models
II. Competitors could offer the same items to their inventory
III. The two brothers are busy
StrengthsColin and Ed’s Physical Education foundation
Colin has a Ph.D. in Physical Education and he is professional at teaching students; while Ed was also good at athleticism and won many prices.

II. Specialized knowledge of quality athletic goods, footwear and sports suits
The two siblings both had expertise in the products themselves, this enable Colin and Ed to buy what types of merchandises are in great demand at the current situation, in another point of view, helping costumers to choose what fit them effectively under their willingness, could also provide great opportunities to persuade these consumers to become returning guests.

III. Business management experience
Colin would have a great understanding of how to run the business in details: what clothing should be put on the exhibitive mannequins, what price should be fixed, and what other business elements that could potentially play important rules.

WeaknessesI. Previous failure experienceThe fact before us is that Colin and Ed had a failure experience of running the similar enterprise, yes they could definitely learn experience from it, but the business could still be failed if they ever miss a step.

Lack of big branded suppliersFor many costumers, the stores that provide branded products could draw their attentions, the professional athletes who purchase sports goods are more tend to be dressing out a famous brand sports wear when they do athletics. And it’s nearly impossible for the two brothers to be invested by big branded suppliers.

III. Lack of starting funds and motivationsWith a deficiency of beginning funding, this point is crucial for the Athlete’s Warehouse, since Ed has a hesitation of starting the business due to he scares of failure. By avoiding this obstacle, could be a significant chance to succeed their speculation; as a result, even making a little profit will hugely inspire their business confidence.
Opportunities?Huge potential clients base
Somewhere around 50,000 individuals come to Grand Falls to do their shopping, which provides an excellent potential market for the Athlete’s Warehouse. Colin predicts that there will be more then 3,000 customers could patronize their store.

II. Competitors do not expert in professional footwear
There is actually a niche market for Colin and Ed to open the specialized business without many competitors, it is true that other local stores sell similar products, but they do not offer specific services in details such as a long-term plan or a one-stop solution, so purchasers who fit into that niche market and hope to save some of their time will more likely choose Colin and Ed’s.

People are looking for trendy and good quality of sports clothing
The living standard for our modern society is advancing so speedy, people try to keep up with its progress, some by purchasing fashion and high quality clothing for themselves, now it is a good opportunities for the brothers to offer these products to the public.

ThreatsCompetitors could copy Colin’s marketing models
Due to Colin’s competitors have already been running their own business for a while, a more mature business could well handle the situation of both maintaining original marketing models and “borrowing” the ideas from Colin and Ed.
Competitors could offer the same items to their inventory
If copying ideas might be a little bit difficult, then copying Colin’s inventory could be much more easier, by simply producing the quite same equipment and clothing, the two brother could lost many potential costumers.

The two brothers are busy
Other commitments consuming their finite time, both Colin and Ed do not have enough time to manage the store full time, which causing a lack of labour. By only using employees could fix the gaps; yet, those employees are not as knowledgeable as they do, which violate their purpose of the business. Plus they have to pay to their employees.

ConclusionAny choice in either heading should be including an assessment of the SWOT analysis that their new business would confront. In general, this article should be surmised that the siblings could be successful; however they should really put efforts on it. The business won’t be a simple and easy task to achieve, yet it would almost certainly give stable wage of income to both Colin and Ed once the shop turns out to be more prevalent. Similarly as with any new business adventure, it is true that there are still a lot of hazards could appear, however, once Colin and Ed can really sacrifice their time, run the business more on their own instead of haring labour, the business will most likely to be sustained.

Analysis of alternatives:Opening online store
Providing rentable sports equipment
Choosing the highest net income plan
Abandon the business plan
Sign contracts with schools and sports relating business
Recommendation:By opening online store, Colin could use nearly zero starting capital to establish his business, which low invests on funding but might has high profit as a return.

By providing rentable sports equipment along with their main business, the scale of their inventory could even compete most of their competitors. Yet, the starting capital could be a hugely cost.

From the Exhibit, the highest net income comes from (EVM1), by choosing the location of Exploit’s Valley Mall, which could potentially enhance their net income (8,260 – 22,010).

All suggestions are based on several degrees of risks and speculations, if Ed’s retirement pension means a lot for himself, then what about abandon the plan and just enjoy his sunset livelihood.

Due to Colin had interacted with schools and businesses before, signing up contracts with campuses and sports relating businesses might be an excellent starting point for them to run the Athlete’s Warehouse, which economized the prime cost of filling inventory, and drawing many customers at the very first place.
Action and implementation:In light of the SWOT analysis and consider all the feasible conditions I have provided, the Power siblings can only manage a tight edge over their rivals; nevertheless, rivals can coordinate the administration level on the off chance that they put resources into more educated representatives and better quality footwear and apparel. In view of Colin’s former credit rating on sports business, the brothers would have the capacity to acquire sporting inventories from the manufacturers in advance, after costumers purchasing those inventories would the brothers pay the makers back. Signing up contracts with schools and businesses enabled them to abstain from paying in advance since they could encounter a shortage of funding.

To make his business successful, Colin must consider an integration of 4P’s of Marketing Mix: price, promotion, place, and product. He must also try and distance themselves from their competition. To do so the brothers must maintain the quality of their merchandise and customer service, reasonable prices, and improve their promotion strategies. For one thing, the price of his products must be within a reasonable range of his competition: Sports Experts. When the price is too low, consumers may consider he is offering low quality merchandise; when it is too high, clients might not be willing to consider purchasing from his store. Also, Colin must preserve the excellent service of he good at: sports knowledge.

Great Eastern BLDG. Exploit’s Valley Mall
(GEB) 5 Years Lease
(EVM1) 3 Years Lease
(EVM2) 1 Years Lease
Low High Low High Low High Low High
Sales 100,000 125,000 120,000 150,000 120,000 150,000 120,000 150,000
Cost of sales 50,000 62,500 60,000 75,000 60,000 75,000 60,000 75,000
Gross Margin 50,000 62,500 60,000 75,000 60,000 75,000 60,000 75,000
Rent 10,800 10,800 16,000 16,000 18,400 18,400 20,000 20,000
Labour 24,020 24,020 28,040 28,040 28,040 28,040 28,040 28,040
Advertisement 5,000 6,250 5,000 6,250 5,000 6,250 5,000 6,250
Telephone 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200
Insurance 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1000
Office;Bookkeeping 500 500 500 500 500 500 500 500
Total Expenses 92,520 106,270 111,740 127,990 114,140 130,390 115,740 131,990
Net Income 7,480 18,730 8,260 22,010 5,860 19,610 4,260 18,010
Working Hours 4,804 4,804 5,608 5,608 5,608 5,608 5,608 5,608