Hibbett Sporting Goods Competitive Overview

H i b b e t t S p o r t i n g G o o d s I n c . C o m p e t i t i v e A s s e s s m e n t | 1

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Table of Contents

Executive Summary ......................................................................................................................... 2

Key Findings & Strategic Implications ............................................................................................. 4

Key Intelligence Topics .................................................................................................................... 6

Company Overview ......................................................................................................................... 8

Environmental Analysis - STEEP .................................................................................................... 12

Competitive Review ...................................................................................................................... 22

Financial Analysis .......................................................................................................................... 50

Patent Analysis .............................................................................................................................. 68

Strategies ...................................................................................................................................... 79


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Executive Summary

Utilizing a variety of analytical tools and strategies, this competitive profile project

intends to determine the current trends, competitive position and likely future strategies of

Hibbett Sporting Goods. The company is a small market sports retail store that operates in the

southeast and Midwest region of the United States. A Key Intelligence Topics (KIT) section

outlines the tasking presented to the Mercyhurst University Competitive Intelligence Team for

Hibbett Sporting Goods, and background information regarding the current assignment.

Throughout the profile, we conducted analysis of internal, competitive, and overall

environmental factors that have an effect on Hibbett Sporting Goods ability to compete in the

market in the future. A Company Overview expressed findings related to Hibbett Sporting

Goods strengths, weaknesses and strategies that the company already possesses. STEEP

analysis (Social, Technological, Economic, Ecological, Political / Legal) revealed information

about macro-level influences in the economic environment on Hibbett Sporting Goods.

We then put together a Competitive Analysis Profile of competitors Dicks Sporting

Goods and Big 5 Sporting Goods using Patent Analysis and Financial Analysis to compare to

Hibbett’s own financial performance and ownership of patents in the retail industry. We then

conducted SWOT analysis, Porter’s 9 Forces analysis and a Growth Vector Matrix to further

provide strategies for Hibbett Sporting Goods based on the strengths and weaknesses and

room for growth in the industry to better compete in the changing retail market.

Key findings found as a result of the project showed that Hibbett Sporting Goods has

been successful in their current market in the past. But in order to remain competitive in the

changing economic environment, Hibbett Sporting Goods needs to make changes to their

current strategies and take advantage of the new strategies available in the Key Findings and

Implications section provided. New strategies such as becoming more present in the online

community because of the rising trends of social media usage of all generations, is a major


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change that Hibbett needs to become aware of in order to maintain and attract its target

consumer base. Also Hibbett, who currently does not own any patents in the retail industry, is

at a loss to competitor Dicks Sporting Goods because of the ownership and diversity of

products and services the patents allow for. With the analysis of Hibbett Sporting Goods and

the companies competitors, the Mercyhurst University Competitive Intelligence team have

provided multiple strategies that are likely to increase the success and profitability of the

company in the future.


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Key Findings & Strategic Implications

Key Finding

Sources

Implications for Hibbett Sporting Goods

PRIORITY: A HIGHEST IMPACT

1. Presence in the smaller consumer

market, better for sales

performance.

Business

Intelligence Profile

Continue to exist in this market to become the

strongest retailer in the market before upgrading

to the larger market.

2. Social Media trends are

becoming very important to the

retail industry.

STEEP Analysis

SWOT Analysis

Hibbett needs to be present in the online

community to adapt with growing trends of

consumers.

3. Ongoing recession in the United

States can affect consumers

willing to purchase new

products.

STEEP Analysis Understand the financial difficulties consumers

have today and create sales or promotions to

still be able to attract the consumer.

4. Technology such as new patents

in the market give companies

competitive advantages or the

other retailers in the industry.

Patent Analysis

STEEP Analysis

Although there are a very limited number of

patents for a “re-seller” store like Hibbett, it is

important to own the most patents possible to be

able to diversify the company from other

competitors.

PRIORITY B: MEDIUM IMPACT

5. Hibbett’s financial ratios

compete right on with the retail

industry averages.

Financial Analysis Continue to manage assets as they have been

with more attention on inventory management

to increase the inventory turnover speed.

6. Online sales have become a

leading trend in the overall

economic market

STEEP Analysis

SWOT Analysis

Hibbett needs to become more functional in the

online community by creating a sales website

that actually process and take consumers orders.

7. There is a strong number of

substitutes for Hibbett in the

location such as Dicks Sporting

Goods and Wal-Mart.

Competitor

Analysis

Hibbett Sporting Goods needs to diversify itself

from competitors by offering special services

and deals such as bundling products or a rental

program for products.

The following list is broken into three categories based on priority:

A= High Impact to Company and Strategy Development

B= Medium Impact to Company, Potential Effect on Strategy

C= Low Impact, Informative

The numbered findings are for reference only and findings are not in any particular order


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8. Regionalization is a key strategy

for Hibbett Sporting Goods

consumer market.

Business


Competitive


Hibbett already does a good job of being present

in the community through giveaways and high

school sponsorships and should continue to do

so in more depth. Rallies and Charitable

donations and drive in the community would be

good for public presence.

PRIORITY C: LOW IMPACT

9. Emergence of healthier diets and

“get-fit” trends.

STEEP Analysis Create promotions to relate with changing

trends such as marketing actual workouts with

the products that are being sold.

10. Recent Presidential election may

affect laws and even consumer

spending.

STEEP Analysis Understand the political standings of current

leaders and how the overall economy plans to

change with the new election.

11. Only a very few number of

patents in the “re-seller” retail

industry.

Patent Analysis Obtain the patents that will make Hibbett stand

out from the competitors and diversify its

service.


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Key Intelligence Topics

Tasking

The decision maker at Hibbett Sporting goods has assigned the Competitive Intelligence team (CI

Team) from Mercyhurst University to collect information, analyze information, and strategically provide

a conclusion for the decision maker to go with. The decision maker has recently experienced a

successful growth pattern and has charged the competitive intelligence team with the task of

maintaining this pattern. Also the decision maker has made the point very clear that they would like to

avoid all surprises that may occur and find any business aspect that they are possibly not paying enough

attention to. The CI Team will be reviewing the competitions trends, the affect the external

environment has on the company, and market activity for the future using open source information.

Requirements

In order to provide the necessary information to the decision maker the CI Team will be

collecting the following data:

Competitor trends and strategies

Successful product ideas/lines that the company may be over looking

Market activity to develop an understanding for the future

Using this information, the CI Team will be answering the following questions:

1. Who is the most dangerous competition?

2. How are the competitors marketing their products?

3. What product lines are competitors offering that our company is not?

4. How will changes in external environment affect our company today?

5. Who is the most prosperous target market?

6. What strategy could we use to give us advantages?

7. How do we compare financially to other companies in our market?

Methodology

In order to answer these questions, the CI Team will be using the following tools and models to

analyze and collect the information:

Collection of data using open source information

Competitor profiling to identify the competition and its trends


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Understand the competitors trends and strategies to utilize in our advantage

External Environment analysis to understand how changes will affect our company

SWOT Analysis to understand the different aspects of t\our company

Financial Analysis to better understand where money is being allocated and how we compare to

other companies

Nine Forces

Challenges

Possible challenges that the CI Team could run into may include the following:

Time limit could be too short for thorough analysis

Inexperience may lead to redoing sections, wasting time and energy

Information may be difficult to find and/or understand

Resources

Throughout this assignment many different resources will be used and taken advantage of such

as the following:

A. Use of Internet as a source of open source information

B. Use of analytical software and models

C. Looking over analytical reports on competitors and our own company

Open Source

While completing this assignment the CI Team will have access to the following sources of public

information:

1. Internet

2. Lexis Nexis

3. Library

4. SEC, Annual Reports

Administration

The Final product will be prepared by the end of the term and will include a written document

along with analytical models and findings, as well as a power point presentation.


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Company Overview

Executive Summary

Hibbett Sporting goods is a small retail distributor located in the South West and

Midwest that specializes in athletic goods and athletic apparel. Hibbett has found itself to be

successful by targeting the smaller retail markets because of its own size expansion

opportunities it provides. Also, Hibbett has learned to become successful because they

understand and offer the specific products that relate to their target demographic. Finally,

Hibbett’s overall management team is a highly experienced and seasoned team that has been

working for the company for a number of years. Although the company has many strengths,

there are also weaknesses that should be addressed. First off, one weakness the company

possesses is that it is only located in the South and Southwest. Also, the company is very reliant

on the success of collegiate and professional teams for the sales of apparel and merchandise.

Should there be a lockout or a down year for a team, sales could suffer dramatically. Along

with this idea, the company is also very dependent on the vendors keeping up with trends and

creating products that are desirable to consumers. Finally, large competitors such as Dick’s

Sporting Goods are beginning to move into the smaller market competition, creating problems

for Hibbett who mostly targets to these demographics. Hibbett’s target market is small

neighborhood communities.


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Strengths of Hibbett Sporting Goods

Company targets smaller retail markets because of the significant strategic

advantages, cost savings, less competitive environment, and overall expansion

opportunities. The strategy of Hibbett Sporting Goods is quite unique, as the company

operates in small to mid-sized markets, specifically the Southeast, Southwest, Mid-

Atlantic, and lower Midwest regions of the United States. More specifically, the

company “targets markets with populations of 30,000 to 100,000 people” to assure that

Hibbett is not competing with other sporting goods retailers in larger markets.1

Targeting these low to mid-sized markets also allows “the company to expand with

relatively low operating costs and minimal competition.”2 Through this form of strategic

market targeting, Hibbett shows both financial and operational expansion in 2012.

The Company offers a selection of specialized products that cater to the demographics

and interests of each individual community. Though larger stores such as Dick’s

Sporting Goods and Big 5 Sporting Goods Corporation operate slightly larger sized

stores, Hibbett focuses much of its efforts on the preferred sporting good retail items

and/or products. By utilizing these competitive advantages, Hibbett is able to compete

with the larger retail chains by providing better customer service even though they lack

the greater number of available products.3 They are able to “provide information and

certain products to customers that they may not get at other stores selling sporting

goods."4

Hibbett’s Management team has significant experience in the industry and has been

together for quite a long time. The current corporate structure of Hibbett Sporting

Goods shows noticeable retail industry experience. Under the collective efforts of these

individuals, Hibbett has shown an expressed increase in its gross profit margin and

overall store operations efficiency output. For example, during the 2011 fiscal year, “the

company opened 45 stores, closed 14, and expanded 14.”5 These figures demonstrate

that Hibbett’s corporate executives are effectively understanding each stores

productively, and correctly addressing any possible concerns or issues.

Weaknesses of Hibbett Sporting Goods

Stores are located in the southeast and southwest region. Being a regional retailer

means that the company as a whole will be affected by any regional downturn such as

the economy, gas or fuel price increases, climate patterns. These factors will have an


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immediate impact on the company’s overall wellbeing because it will result in the loss of

consumer activity in the area.6

Performance by college or professional athletic teams and lockouts. Teams that do not

perform well will cause a lack of sales for the company and would lead to a surplus of

inventory. Should there be a lockout such as the NHL is in the company can expect to

lose sales on items for this market. 7

Complete reliance on the vendors. Hibbett is a reseller of products and relies heavily

on the relationship that they have with the vendors such as Nike, Adidas, Reebok, etc.

Also Hibbett is reliant on the vendors to continue to create and distribute products that

the consumers will still find appealing and desirable.

Big name competition expanding into market. Sporting retailer giant, Dicks Sporting

Goods is expanding into the smaller market that Hibbett has made itself comfortable in.

This is major threat to the company because Dicks is a nationwide retailer that is seen as

the “more desirable” store. 8


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Value Chain Analysis

Figure 1- Value Chain Analysis Hibbett Sporting Goods

Primary Activities

o Service: Is the place in which the best performance footwear, clothing, and

equipment can be purchased. Hibbett is continually improving and providing the

best for any athlete or sport to improve their game9.

o Sales and Marketing: Hibbett provides an online site to make purchases as well

as advertise in magazines. The major sales are in the southeast of the United

States.10

Secondary Activities

o Infrastructure: Hibbett is located in the Southeast to Midwest United States with

over 800 stores in 26 states11. Hibbett has smaller stores providing a more direct

access to the sporting equipment. The smaller stores provide a much more

personal touch and allow the customers to ask questions that the employees

know the answers to.

o Procurement: Hibbett sells top name brands such as Nike, Sperry, Adidas, Life is

Good, Puma, Mission, Mizuno, Saucony, Fossil, Chaco, Under Armour, K-Swiss,

and Sketchers etc.12. Hibbett provides all the top fan gear, and equipment that

all these name brands have to offer.


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E-Commerce Cycle of Online Service

Source: http://tinyurl.com/co7g9f2

Environmental Analysis - STEEP

Executive Summary

A macro environmental analysis of the ongoing issues, actions, and factors affecting

Hibbett Sports, Inc. through the STEEP methodology identifies potential benefits and

impediments affecting the company’s current performance. Ongoing social trends indicate the

importance of mobile devices, increase in social media, and acceptance of social commerce as

social impacts. Technological trends include further advancement in mobile integration,

development of Near Field Communication as a purchasing option, and customization of

products. Economic trends forecast business innovation during these hard times, new market

horizons, and reduction of store sizes to address economic strains. Ecological trends indicate an

expansion of “green developments,” increase in organic food consumption, and growth in

recycling programs. Political and Legal trends forecast the importance of the 2012 Presidential

Election cannot be understated, the governments inefficiency to promote accurate economic

reform policies is damaging, and the limited resources of the government is troublesome.

Trends distinguished through STEEP analysis illustrate a macro environment that is quite limited

and unsuitable for a small market sized company such as Hibbett Sporting Goods. With a small

consumer basis, regionalized development, and marginal financial success, Hibbett is highly

unlikely to be influenced and gain any significant competitive advantages.

Social

Mobile devices are becoming an important social icon

and are likely to illustrate rapid growth and

development over the next few years.

o There are over 3 billion people with a mobile

device today and that number continues to climb

drastically.13 For most, the implications or uses of

mobile devices are virtually limitless, these

devices are capable of performing mobile

banking, recording video, accessing email, and


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accessing the internet. According to a recent study, about one third of all people

accessing the internet in 2012 were doing it through a mobile device.14

o One of the prime target demographics of mobile devices is adolescents, more

specifically, individuals in the age range of 12-18 years of age. According to a

recent survey conducted by Nielsen, “teens feel that cell phones have become a

vital part of their identities, and ultimately gauge one another’s popularity status

based solely on the phone that he or she uses.”15 In this specific age

demographic, teens value the type of phone they have almost as much as the

clothes they wear, according to the survey.

This will likely result in consumers purchasing mobile devices based

mostly on the presumed social status symbol it will provide for them

If consumers seek out mobile devices in this format, the industry will

likely increase immensely in the next few years.

Overall social media usage among all generations has increased dramatically, and is

likely to continue its overall growth.

o In essence, social media can be used as a very cost-effective marketing strategy

to reach a wide number of customers worldwide. More and more companies are

beginning to market through social media to target a greater number of

potential customers, and prevent possible suppression or lapsed recollection by

the entire marketplace. According to 2010 social media figures, “generation Y,

outnumbered baby boomers, and 96% of these individuals were already on

social networks.”16 Social media is definitively a growing trend, and shows

consistent prosperous results in years to come.

o Throughout the early years of the twenty-first century, the concept of a shared

sense of community has been largely based on social media outlets for sources

of connection and togetherness. Social media sites such as Facebook, MySpace,

LinkedIn, Twitter, and others are reconfiguring the manner in which people

relate with one another.17 This form of networking is considerably important to

retailers such as Hibbett Sporting Goods, as it provides consumer evaluations,

product reviews, and overall insight into what the company should continue or

discontinue doing.

This will likely result in consumers using these social networking sites to

evaluate business retailers such as Hibbett Sporting Goods

Companies are likely to begin using various marketing techniques and

strategies to target their consumers on these social networking forums as

well.


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Mobile Coupon Usage

http://www.tatango.com

Social Commerce and “E-Commerce” is becoming a major attraction for online

shoppers and is likely to have a dramatic influence in the retailing industry.

o Basic E-Commerce sites are beginning to incorporate functional methodologies

to make purchases and communicate with others. Many companies, especially in

the retail industry, are using the recommendations from these individuals that

purchase their products to address any potential issues or problems with their

products.18 For example, Hibbett Sporting Goods has recently developed an

online presence and exhibits strong consumer relationships in this sense to

address concerns that consumers have expressed.

o The ability to effectively attract online shoppers in the retail industry is almost

becoming a necessity for businesses to remain viable within the industry.

Traditional retail operations is no longer based solely on attracting consumers

directly to the store location, but rather with “the advent of the Internet, and

other innovative ways of doing business on a retail level these techniques have

become commonplace in among major retail outfits.”19

This will likely result in an influx of overall online retail spending and

shopping over the course of the next few years

The need for stores in the retail industry to expand and grow with more

and more store locations will likely become an unnecessary action by

businesses in the next several years

Implications: With the growing trend of technology, more importantly mobile devices, the need

for Hibbett Sporting Goods to develop successful marketing techniques and strategies to target

this specific consumer demographic is a necessary function the company must exhibit in the

coming years. In addition, with the rapid growth of online shopping in the retail industry

Hibbett must be capable of offering successful product mixes, discounts and advertisements,

and competitive prices to remain a viable competitor within the retail market.

Technology

Mobile integration of coupons likely to have profound impact in

the retail industry in the upcoming years.

o This form of technological innovation allows customers to

have access to coupons to their favorite stores on the


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NFC payment method is rapidly

developing. Source:

http://tinyurl.com/8e5we75

Nikeid Customization Site

http://blog.ponoko.com/2008/04/25/mass-

customization-the-the-big-end-of-town/

move. This will entail that the consumer will always have access to sales and

deals throughout the day as long as they have their phones with them.20

o The benefits of this technology also help to market and promote retailing stores

as well as their sales and deals that are ongoing. This process can be performed

through various phone applications, as well as through social media sites.

o Using mobile marketing is also a cost effective strategy compared to the

traditional direct mailing process.

It is likely that Near Field Communication (NFC) is

becoming a purchasing option that many

companies utilize.

o In recent years, companies such as Google

and other various application developers are

taking full advantage of Near Field

Communication (NFC). In essence, these

companies have been using this technology

to integrate an individual’s debit and credit

cards onto their phone.21 A phone will be

used the same way that a debit or credit

card is used, which is much more convenient.

o This will ultimately allow consumers to easily purchase items. In addition, it also

provides retailers with the opportunity to successfully offer special sales for

those individuals that use their phones in this manner.

This potentially has the likelihood of limiting the need for financial credit

and debit cards based on convenience and overall accessibility

This would also potentially limit the overall capacity of banking

institutions in a large manner.

Increase ability for customization of products is likely to

influence consumer purchasing trends and actions.

o In today’s competitive environment, companies are

allowing consumers the capability of completely

customizing their products. For many sold products,

consumers can select various shades of color,

expressed graphics, and other selective additive

capabilities.

o This new way to customize products gives


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Illustration of dramatic rise in online shopping, particularly with mobile devices.

Source: http://tinyurl.com/9f7o8vn

consumers a great way to express themselves. A clear illustration of this concept

is demonstrated with Nike as they allow their customers to customize bags,

shirts, shoes, and various apparel in both their stores and online.

Implications:

Through the rapid development of newer technological capabilities, resources, and functions

Hibbett Sporting Goods has the potential to incorporate many of these newly developed

aspects in their business. However, being that Hibbett Sporting Goods is a small-market sized

company in the industry it is highly unlikely that the company will incorporate any of the above-

mentioned technological advancements that currently exist in the business world.

Economic

Despite the economic hard times,

retail businesses are likely to find new

ways to attract customers and help

them save overall.

o In recent years, the creation of

mobile and web platforms to

allow customers to download

coupons and discounts provide

notification of company news

and actions, and view

promotional events that the

company may be offering is an

essential quality needed during

these economic hardships.22

More and more companies are

emphasizing these points to enable profitable gains and successful competitive

actions within the industry.

o With the number of internet users and a growing easier access to online hosts,

the number of online shoppers is a growing trend worldwide and many of the

major retailers will likely continue to target these individuals to profit from their

business.

o Differentiation is vital, and retailers look to differentiate themselves past the

basic of just focusing on prices. Retailers will focus more on services to the

http://tinyurl.com/9f7o8vn


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customer, such as merchandise quality, consumer support, and marketing

strategies and tactics. This shows retailers adaptability and that they realize

consumers are in tough times as well, and the business must be able to

specifically target them to draw their future business.23

Capability of broadening horizons and searching for new markets to appeal to new

customers is highly likely to generate growth and development.

o With a growing number of consumers tightly spending the little bit of money

they have during this recession, many companies and organizations are

generating their focus to other markets. In recent years, the retail industry has

been challenged in America, the EU, and other developing nations based mostly

on the ongoing fallout from the recent financial crisis.24

o Certain parts of the international market have benefited quite successfully over

the course of the recent recession in America and other areas of the world. The

most exciting stories of retail industry growth are emerging in countries such as

China, India, and Brazil.25 For many of the world’s leading retail industries and

chains, the companies are rushing to open new stores and locate themselves

near new malls that have developed at an astounding rate.26

This will likely result in a continued increased presence of retail chains

and industries internationally

This will likely diminish the overall capacity of retailers in the United

States, Canada, and the EU as these emerging markets promote greater

successful opportunities

Reducing the overall size and capacity of stores likely to improve the capabilities and

functions of the business as a whole.

o A rapidly growing concept or idea expressed by many large businesses is the

notion of “going smaller.”27 With the drastic changes in how consumers buy

items/products and the overwhelming cost of real estate, many stores have

opted to scale back their operations and only focus on their major store facilities,

or the ones that prompt for the most financial growth and development.

o The smaller store format also enables these businesses to fit into smaller

locations therefore allowing them to go into many urban settings, which

ultimately makes it accessible to a greater number of potential consumers.

o The smaller store format also allows for an increased ability for interaction

between the consumer and employee, which ultimately will likely boost

customer service and satisfaction within the company.


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This will likely decrease the number of real estate purchases by many

retail organizations and groups

This will likely diminish the need for more employees within these retail

businesses, resulting in an increase in unemployment

Retailers are likely to enter into more urbanized settings allowing for

major growth and development

Implications:

As smaller sized retailers such as Hibbett Sporting Goods are battling tough economic times, the

company must exhibit clear and concise decisions that enable them to remain financially

successful. The company must forecast the likely outcomes of potential store locations, new

product lines, distribution methods, and other business functions to diminish unwarranted

spending or financial blunders. In essence, the company must focus heavily on areas in which it

can cut its overall financial margins (i.e. reducing overall size of stores and searching for newer

markets) to remain competitive with other retailers such as Dick’s Sporting Goods, Big Five

Sporting Goods, and other notable sporting goods retailers.

Ecological

Turning from sustainability as a cost and risk reduction measure to an opportunity

likely to promote future business growth.

o The retailers leading the industry’s sustainability charge recognize that the

benefits extend well beyond achieving business efficiencies. Sustainability

programs are increasingly seen as a source of innovation, a way of differentiating

a company that appeals to employees and consumers, and a platform for new

product and market development.28

o Going Green initiatives allow companies to differentiate themselves from other

companies or brands. Also, this allows them to market themselves as “Green”

and sell products at a higher price margin.

o In a recent poll by Time Magazine, 50 percent of Americans valued

environmental protection over economic growth. This shows that Americans are

willing to purchase environmentally friendly

products despite their potentially higher costs

involved.29

An increased sale in organic foods is likely to translate

in an increase in healthier lifestyle choices such as


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Organic food consumption is a growing trend in America. Source:

http://tinyurl.com/95kmsje

exercising and dieting.

o The desire for a healthier lifestyle is a consistently growing trend in America, as

individuals seek to live longer and more health

conscience. According to a recent Time

Magazine poll, 60 percent of Americans have

at some point purchased organic foods over the last year.30 More and more

individuals are attempting to forego fast food and other unhealthy eating

options and seek alternative food options such as organic food.

o According to the comparison between 2011 and 2012, there was a 20 percent

rise in the sale of organic foods.31 Most of these items included organic cereal,

rice and grains, condiments and dressings, as well as various other prepared

foods.

o With this growing trend of individuals seeking a healthier lifestyle, this also may

result in these same individuals becoming more active and exercising to lead this

type of lifestyle as well.

This will likely result in more individuals joining gyms, buying sports

related products, and potentially could influence the sporting goods

retailers’ bottom line

This is unlikely to occur in the next year alone, but rather over the course

of the next few years with the potential push from both the government

and these selective retailing stores in their marketing strategies

Companies that are conscience about their recycling programs are likely to see

additional public approval.

o Over the course of the past few years, companies have recognized that it is

prudent that consumers recycle their used products. Many of these companies

are looking into the recycling of these products as a potential source for

generating newer products.32

o Companies choosing to use recycled materials are also able to use this as PR

marketing campaign, by claiming that they are sustainable. This will drive up

consumer interest as well as offering a chance for the company to earn

additional financial growth.

o Though the ability for companies to recycle tends to be slightly more expensive

than not recycling, many companies feel as though the perceptual gains by

consumers are worth the additional financial stress.

This will likely result in many companies and organizations emphasizing

recycling programs and advocating environmental awareness


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2012 Presidential candidates at their first debate. Source:

http://tinyurl.com/cpfvj87

Implications:

Because of the ecological ramifications associated with a company that does not advocate

environmental awareness, it is likely Hibbett Sporting Goods will incorporate certain recycling

procedures to generate public approval. In addition, the transition from many individuals eating

healthier organic foods is highly likely to influence potential overall sales within Hibbett

because these individuals will likely associate eating well with eventually exercising as they wish

to be well-rounded healthy individuals. Due to the new healthy lifestyle, consumers will look to

purchase exercising goods from Hibbett.

Political & Legal

The 2012 Presidential Election is highly

likely to influence the manner in which

many retailers operate and function in the

economy.

o In every presidential election,

especially the 2012 election, the issue

of the economic status of the country

is a pivotal issue that is discussed.

According to recent Gallup polls, both

President Barak Obama and Republican candidate Mitt Romney show

considerable desire to fix the struggling economy and potentially increase

consumer spending in the retail sector.33

o President Obama states that he will address the National Retail Federation’s

(NRF) continued pressure of increasing jobs, encourage consumer spending, and

attempt to promote possible growth and development. According to NRF,

“America’s retailers want to continue growing our economy, but to do that we

need Washington to embrace common-sense economic policy.”34

o Republican candidate, Mitt Romney, also believes in major economic reform

policies, which may be incorporated if he wins the 2012 Presidential Election.

Ongoing federal policies highly likely to challenge and discourage potential business

opportunities in America.

o Many policies and procedures coming out of Washington are making small

businesses fearful for their futures, according to several politicians.35 For the

most part, these businesses are fearful over potential increases in taxes, limited


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consumer spending, and an overall contraction of business growth that is

currently occurring in the United States.

o The ability for businesses to operate to their greatest capacities is limited as

many governmental regulations and policies virtually limit overall growth and

development in a decisive way.

o With the Democrats in control of the Executive Branch and the Republicans with

the majority of control in the Legislative Branch, any potential economic growth

is limited based on differing viewpoints.

It is likely that these ongoing governmental policies imposed on

businesses will continue to sustain limited or no growth

As many governmental policies take time, if there is a potential transition

in the Executive Branch to the Republican Party, it is likely to take a long

time for new policies to be invoked.

With limited resources, the ability to effectively serve the United States economy is

likely to be a difficult and enduring process for the government.

o Based on a recent survey conducted with 6,000 businesses across America, many

businesses wish for the government to address the current tax issue that exists

with many businesses.36 The underlying issue for these businesses is that they

desire a sense of uniformity that exists between state and local taxes.

o Much of the government’s current resources are limited, and the ability to

potentially address these issues is going to take considerable time and allocation

of resources by the government.

It is unlikely the government will be able to address the major concerns

of both large and small sized businesses in the next two years

Implications:

As Hibbett Sporting Goods is considered a small-sized market business, the ability for the

company to gain economic prosperity in the industry is difficult. With no recognized political

ties or affiliations demonstrated with the company’s managerial team, it is unlikely that the

2012 Presidential Election will play any significant impact in the company’s operations.

However, the issue of tax breaks is a major concern for Hibbett, as many of their stores are

located in some of the highest tax bracket locations for businesses.


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Competitive Review

Executive Summary

Dick’s Sporting Goods is genuinely satisfied with its current situation in the market; however,

the company still seeks to expand and promote both corporate and financial growth over the

next few years. The company is addressing both of these issues by expanding to new store

locations (primarily on the West Coast) and focusing more on its inventory management and

product mix. Dick’s Sporting Goods primary strengths include its broad assortment of brand

name merchandise at multiple price points and high quality customer service provided. Certain

weaknesses or challenges of the company include its inability to offer specialized product

niches that smaller stores are capable of offering, and its perception of being the leader in the

sports retailing business, which may result in the company becoming complacent. Also having

to deal with the issues of sports seasonality can lead to slumps in sales when the bigger popular

sports are not in season.


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Future Goals

• Accelerate the pace of opening new store markets and locations

• Develop new store functions such as "Ship from store" and in-store pickup

• Accelerate financial growth

Current Strategy

• Heighten consumer interest in products

• Great expertise/service to gain support

• Offer broad assortment of products at various price points

• Offer the highest quality customer service

Assumptions

• Believes itself to be the innovative leader within the sports retail industry

• Expects both financial growth and overall company expansion growth during 2012

• Sees newly aquired aquisitions as very profitable and beneficial to company

• Expects to be a more dominant presence on the West Coast in the upcoming years

Capabilities

• Strength: Large store locations with a wide variety of product

• Strength: User friendly online website

• Strength: Expanding stores nationwide

• Weakness: Smaller stores may offer better selection on certain niches

• Weakness: Seasonal nature of business

Competitor Response

Genuinely satisfied, but looking to continue overall growth

Likely to develop new store functions, accelerate growth

Vulnerabilities: Seasonal nature of business, potential complacency

Porter’s 4 Forces Model (Dick’s Sporting Goods)

Figure 2 - Porter's 4 Forces Model Dick's Sporting Goods


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Discussion

Analysis

Dicks sporting Goods has been very successful in their particular market of the

retail industry. The company is still looking to expand their overall growth by creating new

stores at a faster pace and even develop new store functions such as a product rental

programs for consumers. These strengths of the company lead to Dicks being a power house

competitor and overall retailer in the industry. However Dicks Sporting Goods can run into

problems because of the seasonality of the “sports retail” market leading to a slump in sales

in off seasons for major sports.

Future Goals

Dick’s Sporting Goods future goals are to continue to increase the number of store

locations nationwide until they are able to double the current number of stores they have.

In addition, the company hopes to accelerate financial growth by focusing much more on

its product mix and inventory management.37 Finally, Dick’s is looking at modifying

certain in store functions such as shipping from stores and in store pickup to satisfy recent

consumer demands.

Assumptions

Dick’s views itself as the leader within the sporting goods retailing industry, and only

expects the company to continue its ongoing success. By offering a broad assortment of

products at various prices, high quality customer service, and newly developed in store

functions the company foresees continued leadership within the industry and overall

growth.38 Finally, the company sees its recent acquisitions of Golf Galaxy, LLC, Chick’s

Sporting Goods, and Galyan’s Trading Company as a means of future financial growth.39

Strategies

Dick’s strategies include offering a broad assortment of products at various prices,

providing premiere customer service, and heightening consumer interest in products

through several different means.40 The ultimate focus in each of the specified strategies is

to “gain a competitive advantage through effective business measures.” Altogether, the use

of each of these strategies has effectively made Dick’s Sporting Goods the leader within

the industry.


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Capabilities

The strengths that make up Dick’s Sporting Goods are primarily based upon their vast

number of store locations and large quantity/quality of product lines.41 In essence, Dick’s

maintains and operates almost three hundred more stores and thousands of more products

then the nearest competitor. However, this same competitive advantage also can be seen

negatively, as smaller stores may be more capable of offering certain product niches that

Dick’s simply cannot specialize in. Furthermore, the company has also acknowledged the

aspect of certain times of the year being more profitable than other times, such as the fourth

quarter or winter season of the fiscal year.42

Strengths of Dick’s Sporting Goods

Broad assortment of brand name

merchandise at multiple price points.

Dick’s Sporting Goods carries a wide

variety, more than any other sports retailer,

of well-known athletic brands within its

stores.43 These brands include Nike, Adidas,

The North Face, Columbia, Callaway Golf

Merchandise, Under Armour, as well as

private brand names on an exclusive basis. The wide range of product selections for each

athletic category allows for the company to address the needs of the consumer, from the

beginner to the ultimate sport enthusiast.44 The ultimate desire for the company is to develop

the reputation of having variation of every desired item by its customer basis.

Exceptional online business support, which shows signs of continued growth and

development for its customer basis. One of Dick’s Sporting Goods more recognizable strengths

within the company is its online business website. As many other notable online retailers

(Amazon, EBay, etc.), have exhibited recent intentions of offering sporting good items/products

online as well, Dick’s online presence also continues to illustrate signs of financial growth.45 In

addition, with the continued technological developments occurring annually the need to assist

customers online has shown to be a necessary aspect for all large retailers.


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Private company labels/products helping boost overall margins. In order to remain a leader

within the sporting goods retailing industry and aid in boosting margins, Dick’s Sporting Goods

carries its own private-label brands alongside its name brand products.46 These private label

products (including Ativa) “sell at margins approximately 5-6 percentage points higher than

typical branded goods.”47 The incorporation of these private-label products immensely aid the

gross profit margins of the company, and effectively generate a greater corporate presence

within.

Weaknesses of Dick’s Sporting Goods

Smaller stores may offer better niches or specialized products/services that Dick’s cannot

match. Being that Dick’s Sporting Goods is the largest sporting goods retailer in the industry,

the ability for the company to effectively serve all of its customer’s desires is unlikely. In smaller

retailing stores (such as Hibbett Sporting Goods, Big Five Sporting Goods, etc.), these

companies are capable of offering certain niches that attract certain consumers, and ultimately

enable them to receive repeat business.48 To combat this weakness, Dick’s attempts to offer a

broad assortment of product and provide high quality service.

Instances of complacency may inhibit successful actions within the competitive environment.

At the moment, Dick’s Sporting Goods is the most dominant presence within the retail sporting

goods environment. Their financial portfolio shows continued growth and development, they

are expanding their corporate presence throughout the United States, and maintain high

satisfaction ratings from consumers.49 However, with all their current success the possibility for

the company to become complacent is a growing concern from within their senior management

team. These individuals fear that the company’s recent success within the industry will

ultimately distort their views for future business actions and activities.

Smaller selection of generic products/services that are more affordable for the customer. One

of the main principles demonstrated by Dick’s Sporting Goods is offering high quality, high-cost

products that are mostly used by serious sports enthusiasts. The inability to offer lesser-valued

products that other smaller sporting goods retailers (Big Five Sporting Goods, Hibbett Sporting

Goods, etc.) are capable of offering limits the company’s overall success. In addition, during this

struggling economy many individuals are unable to purchase such high priced items, and

ultimately decide to select the lesser valued product instead.50


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Background

In 1948, teenage boy named Dick Stack had been employed at a small Army and Navy store in

Binghamton, New York. Dick was an enthusiastic outdoorsman and thought about offering a

business plan to his employer. This plan was to sell fishing gear in the shop. After being turned

down by his employer he returned home and told his grandma of his recent failure. His

grandma then gave him $300 of her own money and told him to follow his dreams. He took

that $300 and opened his own bait and tackle shop. By the late 1950s, to respond to his loyal

customers he expanded his product lines to include many of the things that are found in

present day stores. Now, Dick’s Sporting Goods now has over 450 stores, offer the highest

quality products in sports, outdoors, and apparel. Dick’s also owns and operates Golf Galaxy,

which is a retailer for golf specialty items.51

Timeline

1948•Dick Stack starts his own bait-and-tackle shop in Binghamton

1958•The small shop becomes a full-fledged sporting goods store, known as Dick's Clothing and Sporting Goods

1984

•After Dick Stack retires, his son Edward becomes CEO and president; plans expansion of sporting goods superstore concept.

1992•Dick's begins expansion outside Binghamton area.

1994•Dick's relocates to Pittsburgh; the company operates 22 stores in four states.

1996•Over 50 stores are in operation, generating an estimated $10 million in sales per store.

1999

•Chain Store Age Executive names Edward Stack Retail Entrepreneur of the Year; company name is changed to Dick's Sporting Goods.

2001•Sales exceed $1 billion with more than 130 stores.

2002•Dick's Sporting Goods becomes a public company.


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Dick’s Sporting Goods Management Team

Officer 2011 Compensation Experience

Edward W. Stack

Age: 57

Executive Chairman and CEO

Total

Compensation:$11,114,002

Salary: $961,538

Executive Chairman and CEO since 1984

President since 2006

Been with Dicks since 1977 and held a

variety of positions including store manager

and merchandise manager

Executive Director since 1984

Serves on the Board of Directors of the

National Federation

Joseph H. Schmidt

Age: 52

President and Chief Operating

Officer

Total Compensation:

$3,818,570

Salary: $728,269

Chief Operating Officer and President since

2009

Executive V.P. since 2008

Was previously the Senior V.P. of Store

Operations since 2005 and served as V.P. of

Store Operations since2001

Served multiple positions from 1981-1990

Timothy E. Kullman

Age: 56

Chief Financial Officer, Executive

V.P. of Finance & Administration

and Trasurer

Total Compensation:

$2,061,244

Salary: $ 563,327

Executive V.P., Finance & Administration and

Chief Finance Officer since 2008

Served as V.P. and Chief Financial Officer of

PetSmart from 2002-2007

During his 5 years he oversaw great financial

growth

Executive V.P. and Chief Financial Officer for

Hagameyer North America Holdings Inc from

2001-2002

Served as Senior V.P., Chief Financial Officer

and Treasurer for Delchamps Inc. 1994-1997

John G. Duken

Age:51

Executive V.P. of Global

Merchandising

Shares Owned: 102,633

Market Value: $5,270,000

Executive V.P. of Global Merchandising since

February 2012.

Holds BS in finance from the University of

Southern California

Lauren R. Hobart

Age: 43

Chief Marketing Officer and Senior

V.P.

Total Compensation:

$2,656,351

Salary: 416,827

Senior V.P. and Chief Marketing since joining

Dicks in February 2011

Worked at PepsiCo as Chief Marketing

Officer, and several years in strategic

planning

Before PepsiCo she worked for JP Morgan

Chase and Wells Fargo


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Analysis

Dick’s Sporting Goods as a Board of Executives that range in various fields throughout

the retail industry. The board consists of well-educated and experienced men and women all of

which are middle aged with several years of experience whether with Dick’s or other well-

known retailers. These executives combine their knowledge to be one of the strongest retailers

of sporting goods and apparel. They all have been working together for some time with the

exception of John Duken who just joined Dick’s in February 2012.

Products and Services

Executive Summary

Dick’s Sporting Goods stores across the nation feature a variety of “stores-within-a-

store.” These six stores are: Golf Pro Shop, The Lodge, Fitness, Team Sports, Footwear, and

Athletic Apparel. Also, Golf Galaxy™, a subsidiary of Dicks Sporting Goods, features an even

broader product line of golf equipment. The concept of having stores within-a-store allow

Dick’s Sporting Goods to be a major retailer with the expertise of a private boutique. Dick’s

Sporting Goods doesn’t only pride themselves on their top brands and exclusive products, but

also their competitive pricing and an established eCommerce site that offers interactive

capabilities with their brick-and-mortar locations. In 2011, Dick’s Sporting Goods relied on the

sales of their “hardlines”, this includes sporting goods, fitness equipment, outdoor gear, and

golf equipment (figure 3). It is highly likely that in the next 24 months Dick’s Sporting Goods will

continued to push the sales of their hardlines.

Figure 3 - Dick's Sporting Goods Merchandising


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Golf Pro Shop

The Golf Pro Shop at Dick’s Sporting Goods

features equipment, apparel, footwear, and

accessories from the top national brands. These

brands include: Taylor Made, Callaway Golf, Titleist

Golf, Adams Golf, Footjoy, and Nike. Dick’s Sporting

Goods also offers specialty services including custom fitting, club

repair, and re-gripping. On-hand working in their Golf Pro Shops Dick’s Sporting Goods boasts

more than 450 PGA and LPGA pros on hand to help out their customers and offer their own

advice.52

The Lodge

The Lodge at Dick’s Sporting Goods is targeted

towards the outdoors enthusiast with products for hunting,

camping, and fishing. The assortment of products includes

both “tried-and-true” products as well as products harnessing

the latest technology. Featured brands names in The Lodge

include: Coleman, Remington, Shimano, and Old Town. The

Lodge also offers many in store services including: rifle-scope

mounting, bore sighting, fishing line spooling and arrow cutting. Hands-on displays located

within The Lodge allow customers to get a first-hand look at what their purchasing and test the

product before they buy.53

Fitness

The Fitness area in a Dick’s Sporting Goods

store offers big box products, like exercise machines

and weight sets, as well as fitness accessories like

footwear, apparel, and supplements. Brand names

include: LIVESTRONG, Precor, Nautilus, SKLZ, and

Everlast. Included in the fitness section is Dick’s

Sporting Goods very own bicycle shop that sells,

repairs, and tunes bicycles. Bike shop brands include

Diamondback, Yakima, Pearl Izumi, Giro, and Bell. 54


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Team Sports

The Team Sports section of Dick’s Sporting Goods offers products for the following

sports: Baseball, Softball, Soccer, Ice Hockey, Field Hockey, Basketball, Football, Lacrosse,

Volleyball, and Wrestling. The brand names that are carried in this section are the industry

leading brands, including: Nike, adidas, Under Armour, Mizuno, Wilson, Easton, Rawling, STX,

and Warrior. Sales associates in this section of the store are avid players and coaches that have

experience using the products. Dick’s Sporting Goods is also the recognized retailer of Little

League Baseball. Dick’s Sporting Goods offers team discounts as well as donations.55

Footwear

Dick’s Sporting Goods offers a “shared-service ”

concept in their Footwear sections. This means that

customers can help themselves to the products on display,

with employees walking around to service them if needed.

The footwear section is dedicated to footwear for any

sport, as well as shoe accessories, performance socks, and

insoles. Leading footwear manufacturers include: Nike,

Adidas, Asics, Brooks, Mizuno, Saucony, and Reebok. The

footwear section is also host to outdoor footwear from brands: Timberland, KEEN, Reef, and

their own Field & Stream line.5657

Athletic Apparel

Dick’s Athletic Apparel store carries an extensive

collection of sports apparel for men, women, and children.

Dick’s focuses on high-technology fabrics that are specific

for athlete’s needs. The merchandise in the section features

leading manufacturer’s brands: Nike, Under Armour,

Reebok, and Adidas. Also included in the athletic apparel

section is an outerwear section which features jackets and

pants for hunting, camping, skiing, and snowboarding.

Brand names include Columbia and The North Face.58


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Golf Galaxy

Golf Galaxy is a subsidiary of Dick’s Sporting Goods dedicated to the sport of golf. 59 Golf

Galaxy provides a world class selection of golf equipment, more expansive than that of the Golf

Pro Shop in Dick’s Sporting Goods. Golf Galaxy features equipment, apparel, footwear,

accessories, and custom services. The golf industry’s premiere manufacturers are featured in

the store, brand names include: Taylor Made, PING, Titleist, Callaway Golf, Adams Golf,

Cleveland, Nike Golf, and Footjoy. Golf Galaxy is also home to their own private brands: Walter

Hagen, Nickent, Slazenger, and Puma. Golf Galaxy also offers a host of services, they include:

club repair, club fitting, golf course simulators, putting greens, and indoor driving bays. The

staff at Golf Galaxy is comprised of PGA and LPGA professionals.60

Marketing Activities and Trends

Executive Summary

It is highly likely that in the next 24 months Dick’s Sporting Goods will continue to use

more lifestyle advertising in supplement to their usual event advertising. With the addition of

Anomaly as their marketing agency, Dick’s Sporting Goods is likely to spend more money on

marketing as well as change the way people see the company. Dick’s Sporting Goods is making

the change to be more than just somewhere people go to shop, but as a brand.

Discussion

In the past, Dick’s Sporting Goods has relied on in-house marketing teams and various

production companies to get the word out about their stores. Usually this meant newspaper

clippings and annual events.61 Though successful, Dick’s Sporting Goods has recently decided to

increase their presents in the sports retail

industry and shift from being somewhere people

shop, to a brand name. 62 This is the first time

Dick’s Sporting Goods will be launching an

overarching brand campaign that will impact the

entire year, instead of just a particular season.

Figure 4 - Dick's Sporting Goods New Marketing

Campaign


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The new ad campaigns being run by Dick’s Sporting Goods

feature in-sports footage, as well as all the hard work that leads up to

it. They focus on the lifestyle of the athlete and all the dedication

that they put into the sport, and try to incorporate that into the

Dick’s brand name. As seen in figure 4, the ads are much more

dramatic and personal, whereas in figure 5 the ads are used to

promote sales events in the store.

The recent choice to invest in the Anomaly Agency as their

marketing agency is allowing Dick’s Sporting Goods to advertise and

market their stores on a much larger level. This recent decision

follows the appointment of Lauren Hobart, a veteran marketing guru for PepsiCo for 14 years,

and now the head of marketing for Dick’s Sporting Goods.63

Dick’s Sporting Goods will continue to advertise in newspapers, direct mail, and

seasonal on local television and radio. But in addition, this new marketing strategy will allow

Dick’s Sporting Goods to market on a national level.

In addition marketing and advertising, Dick’s Sporting Goods also features a “ScoreCard

Rewards Card”, in which their customers can earn points and eventually earn gift certificates.

ScoreCard members are also receive exclusive offers as well as deals relative to their sports

preferences and past history of purchases.64

Operation-Capacities

Executive Summary

Dick’s Sporting Goods has a large amount of stores nationwide as well as four large

distribution centers. With more than 1,200 vendors, Dick’s Sporting Goods is able to purchase

goods and distribute them to each of their stores in an extremely efficient manner thanks to

new advanced technological systems. In addition to their current stores, Dick’s Sporting Goods

is planning on doubling their size in the future to over 900 stores nationwide. It is highly likely

that Dick’s Sporting Goods will continue to invest money in new stores and distribution centers

in the next 24 months.

Figure 5 - Dick's Sporting

Goods Old Marketing

Campaign


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Discussion

Dick’s Sporting Goods features 480

stores in 40 states, as well as 81 Golf Galaxy

stores. As seen in figure 6, this number is

increasing rapidly every year. In 2011 alone

Dick’s Sporting Goods opened 36 stores,

that’s an 8.1 percent growth rate (figure 7).

Dick’s Sporting Goods plans on growing at an

even higher rate in 2012.65 Dick’s Sporting

Goods is ultimately planning on opening over 400 more stores, almost doubling their size.66 In

addition to opening new stores, Dick’s Sporting Goods is also remodeling their older stores. In

2011 alone, Dick’s Sporting Goods remodeled 14 of their stores, and in 2010, 12 of their stores

(figure 8).67

Dick’s Sporting Goods has four distribution centers nationwide. A 725,000 square foot

distribution center in Plainfield, Indiana, a 657,000 square foot distribution center in Atlanta,

Georgia, a 601,000 square foot distribution center in Smithton, Pennsylvania, and lastly, a

624,000 square foot distribution center in Goodyear, Arizona.68 Products are purchased from

approximately 1,200 vendors and then sent to these distribution centers. From there, the

products are allocated and it is determined how much of which product will go to each store.69

Figure 6 - Dick's Sporting Goods Locations Figure 7 - Dick's Sporting Goods Store

Growth

Figure 8 - Dick's Sporting Goods Store Information


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In order to maximize margins Dick’s Sporting Goods has placed a large emphasis on

inventory management. Recent advanced technological tools are now allowing Dick’s Sporting

Goods to develop systems that optimize prices, merchandise sizing, and package optimization.

This will allow Dick’s Sporting Goods to more closely correlate inventory allocations decisions to

the specific needs of each store.70

Dick’s Sporting Goods Strategies

• Corporate emphasis of maintaining an upscale focus

A great deal of Dick’s Sporting Goods corporate success is directly linked to the company’s

ability to illustrate an emphasis on higher-performance products designed for serious athletes

or enthusiasts. Although, the company also offers products at various ability and price levels as

well to assist certain consumer demands. With the company’s focus on higher quality and

higher-priced products, Dick’s maintains a competitive advantage over its other sporting goods

and general merchandise retailers. Through this method of premium pricing, Dick’s is able to

gain favorable perceptions among buyers, which inevitably causes greater corporate success.

• Increase brand presence through various marketing concepts and schemes

The notion of establishing a strong brand presence throughout the United States is a pivotal

component of Dick’s Sporting Goods overall competitive business strategy. A clear example of

this expressed concept was during 2011, when Dick’s attempted to gain a stronger brand

presence in Ohio. During this marketing campaign, Dick’s distributed thousands of discount

offers (at approximately 22 events), received mention by over 50 media outlets, and gave over

$10,000 in various promotions and sweepstakes. Altogether, the company was able to

significantly increase its brand presence in Ohio, and has continued to effectively implement

such strategies in other locations as well.

• New growth initiatives to expand the company’s overall outlook

Over the course of the last several years, Dick’s Sporting Goods has exhibited rapid expansion

and technological developments to better serve its cliental. For the fiscal 2012 year, “Dick’s

operated 500 stores in 44 states,” and recent forecasts show that the long-term prospects of

the company are to continue its rapid expansion. Overall, the company aims at opening an

additional 400 stores, which would target a total store count of 900. In terms of technological

developments, the company aims at offering top-notch customer experiences by introducing a

new mobile application for IPhones and Android Smartphones. The application provides the


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customer with the nearest store location, ongoing sales events and discounts, as well as the

ease of buying goods directly from the mobile application. Both of these measures indicate

that the immediate future of Dick’s Sporting Goods is quite promising, and will ultimately

enhance its customer service.

• Newly acquired acquisitions demonstrate future growth and development in

certain prosperous sporting retail markets

In recent years, the acquisitions of the intellectual property rights to the Top-Flight brand from

Callaway Golf Company, Chick’s Sporting Goods, and Golf Galaxy, LLC have shown positive

growth in terms of financial statements and reports. In addition, these various business

acquisitions have also opened Dick’s Sporting Goods up to newer and more promising

marketplaces, which many sources believe will yield future profits as well. Altogether, it is with

these specific mergers and acquisitions that Dick’s Sporting Goods hopes to gain a substantial

control over the sporting goods retail industry.

Financial Summary: Dick’s Sporting Goods

Dicks Sporting Goods had been able to increase their revenues from $4.5B to $5.2B in

the past four years due to their market strategy and competitive capability. Also Dicks Sporting

goods have been able to increase its overall Net Profit steadily every year.71

Figure 9 - Dick's Sporting Goods Stock Prices


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Acquisitions

2004 Dicks Sporting Goods acquires Galyans Trading Company along with stocks and

locations72

In 2007 Dicks Sporting Goods acquired Los Angeles based “Chicks Sporting Goods”

2011 Upper Management talk about acquiring an E-Commerce Company, but did not name

targets

Net Income Overview

2011

$263,906

2010

$182,077

2009

$135,359

2008

$(39,865)

2007

$150,566

Dicks Sporting Goods has had a strong net income the past five years, creating a larger return

on investment for the shareholders of the company.

Dick’s Sporting Goods Current/Recent Key Events

Dick’s Sporting Goods reports home-run first quarter in 2012

The recent financial figures of Dick’s Sporting Goods reported that the overall earnings

of the company topped both Wall Street’s view and the fiscal year forecast of the

company.73 The company stated, “it earned $57.2 million, or 45 cents a share in 2012,

compared with a year-earlier it earned $37.5 million, or 30 cents a share in 2011.”74 This

strong first quarter in 2012 also illustrates future financial growth as well.

Newly developed DICK’s Sporting Goods Mobile Application

To further enhance the mobile and in-store experience for customers, Dick’s announced

the development of their Sporting Goods Mobile Application on 20 September 2012.75

Users will now have access to store locations, the benefits of the Score Card Reward

Program, and make purchases from the store over their mobile devices. This recent

development has prompted for a new relation between consumers and the company as

a whole.


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Building distribution site for western half of the United States

Dick’s began construction of a distribution center, during 2011, in Goodyear, AZ that will

be completed by January 2013. The site will serve as the regional outpost for all

necessary shipping and receiving, distribution, and storage products. Most importantly,

this site grants Dick’s Sporting Goods greater access to the western half of the United

States, as the company did not have a strong anchoring in this part of the country.76

Timeline Analysis of Dick’s Sporting Goods Recent Events

Acquisitions & Expansion

1997• Dick's Sporting Goods begins operating and opening stores in Florida and

California

2004• Dick's aquires 48 locations from Galyan's Trading Company, which was another

sporting goods store

2007• Dick's aquires Golf Galaxy, LLC and its 65 golf superstores

• Dick's aquires Chick's Sporting Goods, a California based company

2010• Company plans expansion into California, Oregon, and Washington with a total

of six new store locations

2011• First Dick's Sporting Goods opens in Oklahoma

2012• Dick's plans to build its first store in New Mexico during the summer


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Executive Summary Big Five Sporting Goods is moderately satisfied with its current situation in the market, but the

company is seeking to improve its recent financial decline and instability that has occurred over

the past three years. It is addressing these issues by expanding the number of retail stores the

company has through a controlled growth strategy, meaning that they will very slowly expand

into areas picked strategically to give the highest chance of success for the company, which is

primarily occurring on the West Coast of the United States. The primary strengths of Big Five

Sporting Goods are its capability of developing a niche within communities of stores and its

effective marketing techniques that target their consumer demographics. Certain weaknesses

or challenges of the company include its relatively small store capacities and overall size of the

corporation as a whole, as well as its absence of online support to its consumer basis for socially

connecting through Facebook and/or Twitter or even a shopping network. Altogether, the

company is still a small market competitor within the industry environment, and requires more

growth and development before it is taken more seriously as a “strong” competitor.


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Future Goals

• Improve financial decline and instability that occured over the past three years

• Expand retail stores using a strategy consisting of controlled growth

• Attempt to maximize investor relations

Current Strategy

• Expanding stores on the West Coast

• Refined merchandising strategy to increase net sales

• Offer broad assortment of products, so customer may be able to compare shop

• Manage inventory levels accordingly

Assumptions

• Believes itself to be a very personable sports retailer

• Expects marginal growth over the coming years, but understanding of economy

• Sees recent expansion as potential for future growth and development

• Assumes itself as providing substantially better customer service than competitors

Capabilities

• Strength: Capability of developing a niche within communities of stores

• Strength: Effective marketing techniques to target their consumer demographics

• Strength: Expanding store size/locations

• Weakness: Lack of online support, limited customer basis

Competitor Response

Moderately satisfied, but looking to continue overall growth

Likely to expand slightly using controlled growth strategy

Vulnerabilities: Lack of online support to address customers

Porter’s 4 Forces Model (Big 5 Sporting Goods)

Discussion

Analysis

Big 5 Sporting Goods has done well in the retail industry and the company plans to expand

their stores and products using a controlled growth strategy, meaning that they will expand

slowly in areas that they feel they will have the best opportunity for success. However Big 5

will run into issues with consumers because of its lack of online support and shopping access

in the changing market.

Figure 10 - Porter's 4 Forces Model Big 5 Sporting Goods


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Future Goals

Big Five Sporting Goods future goals are to expand their retail store coverage by

effectively implementing a controlled growth strategy.77 In addition, the company hopes to

develop market relations with certain organizations, groups, and other businesses to

improve the company’s status within the sports retail industry. Finally, the company is

attempting to recover from its financial instability and decline that occurred over the past

few years.78

Assumptions

The company views itself as one of the more legitimate and personable sports retailers in

the United States. During the last several years, Big Five Sporting Goods had significant

financial negativities, however they view their recent developments and expansions as a

sign of potential growth and development. Ultimately, the company understands the current

economic situation and that it may take some time before the financial figures of the

company will show a positive growth.79

Strategies

Big Five Sporting Goods strategies include refining its merchandising strategy to increase

net sales, manage inventory levels accordingly, and offer a broad assortment of products to

allow consumers to compare shop.80 Recently, the company has sought expansion in the

North West, South West, and West Coast of North America. These recent developments

have enabled the company to accomplish certain aspects regarding several of their

emphasized corporate strategies.

Capabilities

The strengths that make up Big Five Sporting Goods are primarily based upon the

capability of the company to develop a niche, ability to effectively target their consumer

demographics, and recent ability to expand in store sizes/locations.81 The company is

perceived as a community-oriented sports retailer, that effectively adjusts its business

model to meet the ongoing demands of both the market and consumers as a whole.

However, Big Five Sporting Goods emphasis on being a small-market sporting goods

retailer somewhat limits the businesses activities and actions within the competitive

environment.82


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Strengths of Big Five Sporting Goods

Capability of developing a niche within communities of store locations. The numerous Big Five

Sporting Good locations and accessible store format encourages frequent customer visits to

each respective store location.83 Each instance that a customer enters a Big Five Sporting Goods

store location they receive excellent customer service, as the stores are much smaller than

bigger sporting retailers (such as Dick’s) and the Big Five staff is capable of addressing each

specific customer that enters their stores. Altogether, this makes the customers shopping

experience more enjoyable and they are likely to encourage others to come to Big Five and will

repeat business themselves.

Effective marketing techniques

that target the company’s

specific demographics. Big Five

Sporting Goods marketing and

advertising techniques are highly

effective with their consumer

basis. The company primarily

uses print advertisements that

have an average weekly distribution of over 18 million newspapers.84 Some of the full-line

retailers are unable to match the inserts or mailers received by Big Five customers, which

makes the company more recognized within given communities. Altogether, the consistency

and reach of the company’s print advertising programs drives sales and creates high customer

awareness of the name “Big Five Sporting Goods.”85

Strong vender relationships that provide a wide assortment of various products. Over the past

five decades, Big Five Sporting Goods has developed very strong

relationships with various venders throughout the United States.

Currently, the company purchases merchandise from roughly 800

vendors including apparel, footwear, outdoor equipment, and

other products.86 Only one other company maintains gr eater

relationships with other vendors and that is Dick’s Sporting Goods.

The company truly benefits from the long-term relationships that

senior management has worked diligently in building.


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Weaknesses of Big Five Sporting Goods

Limited number of overall stores and customer basis. When evaluating Big Five Sporting

Goods, it is important to emphasize that the company is strictly located on the West Coast in

lower populated communities. It only operates in this manner, because it wishes to avoid major

competitors such as Dick’s Sporting Goods and Wal-Mart. Because the company is quite limited

in this capacity, the number of stores and its customer basis is considerably smaller than other

major sporting goods retailers that exist within the marketplace.87

Lack of an online presence demonstrates a small market presence within the competitive

environment. One of the major weaknesses demonstrated by Big Five Sporting Goods is its

incapability of fulfilling online orders to serve its customers. While most of the company’s

business is from repeat customers that do not wish to acquire their items online, the absence of

an online presence for the company is a major component of them remaining in a small market

setting.88 The growing trend of online retailing is a necessary factor for all businesses, and those

that do not wish to incorporate this idea will be the companies that struggle and possibly cease

to exist.

Recent financial struggles have inevitably caused the company debt that must be addressed.

Over the course of the last three years, Big Five Sporting Goods has seen an influx in its overall

debt due to the economic recession, a struggling product mix and inventory management

system, as well as recent managerial failures exhibited by senior officials89 While the company

is addressing each of these issues, the ability to fix these problems will take a great deal of time.

However, recent financial reports indicate that the company is showing a modest financial

growth over the last few months.


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Background

Big 5 Sporting Goods was founded in 1955. It was founded by Maurie and Harry Liff and

the present chairman Robert W. Miller. The first five stores had been in spread out through

Southern California and the stores had been named “Big 5 Stores”. The founders had not been

concerned with whether the name was strong or not. In its early years, Big 5 was known to sell

military surplus items such as tents and air mattresses. The company was known for

manufacturing itself and sold assorted household items and even tools. With the help of print

advertisements, their only form of advertisement, they grew greatly and sold large numbers of

products. But when sports emerged as a major trend in 1963, Big 5 management saw it fit to

specialize in it. That same year, Big 5 Stores soon became Big 5 Sporting Goods.90

Timeline

1955•United Merchandising is formed using the trade name "Big 5 Stores."

1963•Operating name is changed to "Big 5 Sporting Goods" as the chain specializes in sporting goods.

1971•Thrifty Corp. acquires the chain.

1986•Thrifty is acquired by Pacific Enterprises.

1992•Big 5 is acquired in management-led buyout financed by Leonard Green & Partners.

1997•The company is recapitalized, with majority ownership passing to employees.

2002•Big 5 goes public.


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Big 5 Sporting Goods Management Team

Officer 2011

Compensation Experience

Steven G. Miller

Age: 60

CEO, President, and Chairman

of the Board

Total

Compensation:

$811,828

Salary: $485,000

Bonus: $140,000

CEO since 2000

President and Chairman since 1992

Executive V.P. 1992-2000

Administration 1988-1992

Barry D. Emerson

Age: 54

Chief Financial Officer, Principal

Accounting Officer , Senior V.P.

and Treasurer

Total

Compensation:

$491,103

Salary: $333,000

Bonus: $ 92,500

Chief Financial Officer, Senior V.P. and

Treasurer since 2005

V.P., Treasurer, and Chief Financial

Officer of U.S. Auto Parts since July 5,

2005

V.P., Treasurer, and Chief Financial

Officer of Elite Information Group Inc.

from 1999-2004

Boyd O. Clark

Age: 54

Senior Vice President of Buying

Total

Compensation:

$408,136

Salary: $231,808

Bonus: $76,000

Senior V.P. of Buying since 2011

35 years of Retail Experience

Served in the Buying Department since

1992

Prior to Big 5, he was a buyer and

Divisional Merchandise Manager at

another regional retailer

Richard A. Johnson

Age: 66

Executive Vice President

Total

Compensation:

$416,351

Salary: $250,000

Bonus: $100,000

Executive V.P. since 2007

Senior V.P. of Store Operations 1992-

2007

Been with Big 5 for 36 years

V.P. of Store Operations from 1982-

1992

Shane O. Starr

Age: 54

Senior Vice President of

Operations

Total

Compensation:

$60,481

Senior V.P. of Operations since 2007

Been with Big 5 for 28 years

Served as V.P. of Operations since 1999


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Analysis

The Big 5 Sporting Goods management consists of five executive officers who along with the

board make all of the executive decisions regarding the company and its future. Most of the men on

serving as high management are middle aged and have served with the company for a long time. All of

which have significant experience in the retail industry.

Products

Sporting Goods

Big 5 Sporting goods stores offer a wide variety of recreational sporting goods to the

customer. Big 5 Sporting Goods offers a wide variety of goods from soft goods to hard goods.

Their product mix includes athletic sportswear and fan gear, as well as equipment for outdoor

activities and team sports. These products range from known brands like Nike and Under

Armour to smaller private labels that Big 5 Sporting Goods itself owns.

Brands

Big 5 offers a wide variety of top brands in the sporting goods industry. They include :

Adidas, Crocs,Head, K-Swiss, Razor, Spalding, Asics, Crosman, Heelys, Lifetime, Reebok, Speedo,

Bearpaw Easton Hillerich & Bradsby Mizuno, Remington, Timex, Browning, Everlast, Icon

(Proform), New Balance, Rollerblade, TitleistBushnell, Fila, Impex, Nike, Russell Athletic, Under

Armour, Coleman, Footjoy, JanSport, Prince, Saucony, Wilson, Converse, Franklin, K2, Rawlings,

Shimano, Zebco91

Private Labels

There use of selling private labels represents 3% of our net sales. It allows Big 5 to offer

the customer with a wider range of goods and at a variety of prices. These products are sold

under Big 5’s trademarks they own or if they are licensed to them by third parties. The use of

private labels lets Big 5 be able to target smaller markets with products with good value at a

cheaper price. 92


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Marketing Activities and Trends

Executive Summary

Big 5 marketing activities look to focus on reaching their target market. Their market is

smaller neighborhoods. Big 5 Sporting Goods uses marketing strategies such as weekly ads in

newspapers, emails, and social media to connect with their customers. Big 5 Sporting Goods is

able to connect with their customers directly.

Discussion

Big 5 sporting goods targets a smaller niche, they focus in

on the smaller neighborhoods. Big 5 Sporting Goods uses weekly

print advertisements to help reach a greater number of

households. This strategy has been in use since 1955. The print

advertisements are primarily a four page color print that shows

off promotions in their sporting goods. The ads are distributed

through over 18 million newspaper inserts.93

Big 5 Sporting Goods uses an in-house advertising staff to

produce their paper ads. In doing so, they have the flexibility to

choose their own designs for their advertisement. Also with

having an in house advertisement they are capable to react

quickly to merchandise trends and work with management to

maximize the effectiveness of the paper ads. 94

Big 5 also use social media to connect with their

customers. They have an E-team that focuses on social media sites such as Facebook and

Twitter. With twitter Big 5 Sporting Goods will sometimes use the media site to promote

various deals. They also contact their customers through email subscriptions. 95


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Operations and Capacity

Executive Summary

Big 5 Sporting Goods Corporate offices are located in California. In a result of this Big 5

Sporting Goods stores are located in the western part of the country. Not only are their stores

in the west, they also own distribution centers as well. Big 5 Sporting Goods has been recently

growing with adding new stores each year.

Discussion

Currently Big 5 Sporting Goods has 406 stores in the western part of the US. In the past

five years Big 5 has opened up 73 new stores. They mainly are located in California in which

38% of their stores are located. Their stores are on average 11,000 square feet. This helps Big 5

to target smaller neighborhoods. Big 5 Sporting Goods has continued to expand since 2007 and

have continued to do since. 96

Big 5 Sporting Goods does not

manufacture the goods they sell. They

have to maintain a good relationship

with the vendors. They purchase from

over 800 vendors, and have had good

relationships with vendors for 57 years.

They also have a fully integrated

management information system. This

helps Big 5 sporting goods to get a

report of sales, support merchandise

management, inventory receiving and

distribution, as well as business

intelligence retail analytics tools. 97

Their distribution center is located in Riverside, California. The facility is 953,000 square

feet. From this warehouse Big 5 uses leased tractors to distribute to all of their stores at least

once a week. Oregon is also home to a small distribution hub. This 12,000 square foot facility

enables trailers of products to ship to the Pacific Northwest. This helped to shorten the trip and

make the distribution more efficient. 98

Figure 11 - Big 5 Sporting Goods Locations


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Financial Summary: Big 5 Sporting Goods

Over the past five years Big Five Sporting Goods has seen Net Revenue shrink from $20.6

million to $11.7 million due to their target market and overall competitive ability in the

market.99

Net Income Overview

2011

$11,673

2010

$20,562

2009

$21,811

2008

$13,904

2007

$28,091

Big Five Sporting Goods is declining in both share price and net income, resulting in a smaller

return on investment for the shareholders of the company; decreasing the competitive ability

for the company.

Current Events/Key Aspects: Big 5 Sporting Goods

May 16, 2012 Adidas (the world’s second largest sports

retailer) sued Gig Five Sporting Goods for selling “Knock off” that

were made to look like the company of Adidas.100

April 2011, Big Five Sporting Goods is sued for “False

Advertisement”, said to have been advertising tennis,

racquet ball equipment for a certain price and changing

stores or register. The Company settled this lawsuit after paying $4M.101

Figure 12 - Big 5 Sporting Goods Stock Prices


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Financial Analysis

Financial Analysis of Hibbett Sporting Goods 2009-2011

Executive Summary

Hibbett Sporting Goods appears to be in a stable financial condition. The financial ratios

indicate that the company has made changes recently to better manage internal issues such as

debt management and return on assets and shares. However the company still continues to

struggle with the liquidity of assets. The ratios are very low compared to the satisfactory 1:1

ratios of the market. Better inventory and asset management is needed for the company to

become more favorable for profits. Compared to the industry Hibbett has a favorable Profit

Margin with almost a +5% over the industry average. Hibbett also has a better Return on Assets

with nearly 9% over the industry average.

Hibbett Financial Ratio's 2009 Change 2010 Change 2011

Asset Turnover 2.4 -0.26 2.14 -0.02 2.12

Avg. Inventory Investment 40 3 43 -3 40

Accounts Recievable 5% -2% 3% 0 3%

Debt to Equity 10% 1% 11% -2% 9%

Debt to Assets 6% 1% 7% -1% 6%

Current Ratio 2.36:1 0.41 2.76:1 0.1 2.86:1

Acid-Test Ratio .33:1 0.32 .65:1 0.21 .86:1

Return on Assets 13% -1% 12% 3% 15%

Return on Equity 22% -3% 19% 4% 23%

Profit Margin 5% 0 5% 2% 7%

Earnings Per Share $0.96 $0.06 $1.02 $0.09 $1.11

P/E $18.93 -$1.76 $17.17 $3.53 $20.70


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Activity and Efficiency

Asset Turnover Ratio

This formula determines how well the business is utilizing its assets to generate new sales

revenue. It is better to have a higher ratio between the numbers. This means that the company

has less money tied up in assets.

Hibbett Sporting Goods ratio in 2011 was

2.12, which is much worse than in 2009 at 2.4 and

still not as good as 2010 at 2.14. These ratios

show that over the past three years the company

has become less efficient in asset turnover. This

means that Hibbett hasn’t been able to generate

new sales revenue has quickly in the past three

years. Although the drop in the ratio is minimal it

is because of some money tied up in assets.

Average Inventory Investment Period

This number indicates the number of days it

takes to convert a dollar of cash outflow to a dollar of

sales. It is better to have a smaller number with this

formula. A longer inventory investment period

requires a higher investment in inventory, which

translates to less available cash.

In 2011 Hibbett had a ratio of 40 which is

an improvement from 2010 which was 43 and is

the same as 2009. Overall Hibbett remains

pretty constant with its inventory investment

periods.

Accounts Receivable

This number indicates sales for which

payment has not yet been collected by a company. A

lower ratio is desired in this formula because it shows

that companies are being paid for their work and

money is no longer tied up in accounts receivable.

35

40

45

2009 2010 2011

Average Inventory Turnover (In Days)

AverageInventoryTurnover (InDays)

0.00%

2.00%

4.00%

6.00%

2009 2010 2011

Accounts Recievable

AccountsRecievable

1.8

2

2.2

2.4

2009 2010 2011


AssetTurnoverRatio


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In 2011 Hibbett had a ratio of 3%, remaining consistent with 2010 and maintaining

much improvement from 2009’s 5%. Overall Hibbett does well with its accounts receivables.

This means that Hibbett is paid more quickly and has more money coming in quicker from

companies. As a retail store they don’t offer credit therefore the number is lower.

Implications

These ratios conclude that Hibbett Sporting Goods is having issues with their asset

turnover time and have less revenue coming in and has more money tied up in assets, but

however has made good improvements to managing its inventory and accounts receivable and

make sure that money is paid to them more quickly resulting in a quicker turn around.

Leverage and Solvency

Debt to Equity

This ratio measures funds provided by creditors versus the funds provided by owners. A lower

ratio is preferred in this area. A rising Debt to Equity indicates increases in debt.

Hibbett has made huge improvements in the last three years, ending 2011 with a ratio

of 9% whereas it was 11% in 2010 and 10% in 2009.

Debt to Assets

This ratio measures the

percentage of assets financed by

creditors compared to those

financed by the owners. A lower

ratio is preferred (no more than

fifty percent).

Hibbett has remained

pretty consistent in managing

its debt to assets, pulling in a

ratio of 6% in 2011, beating

2010’s 7%, while matching

2009’s 6%.

Implications

Hibbett Sporting Goods has been very successful in managing its debt to assets and

equity in the past three years and looks as if it should remain this way. Hibbett has seen a

0%

2%

4%

6%

8%

10%

12%

20092010

2011

Leverage

Debt to Equity

Debt to Assets


53 | P a g e

decrease in assets financed by the owners has well as a decrease in debt. This shows that the

management of money is improving.

Liquidity

Current Ratio

The current ratio is the

liquidity ratio, which measures the

ability to pay off short-term

obligations. For current ratio it is

better to have a higher ratio. An

industry standard is to seek a 1.5:1

ratio. If the current assets of a

company are more than twice the

current liabilities, then that company

is generally considered to have good

short-term financial strength.

Minimum acceptable ratio is 1:1, but

this can be seen as having potential risks.

Hibbett recorded a remarkable 2.86:1 ratio in 2011 and has not fall below 2:1 in the past

three years. Demonstrating a major strength for the company and any of its partners and/or

vendors.

Acid-Test Ratio

The Acid-Test ratio is considered to be the best measurement for liquidity of a company. This

ratio focuses primarily on highly liquid assets. The formula takes into account the company’s ability to

meet its obligations. A higher ratio is preferred with this formula. A 1:1 ratio is considered to be

satisfactory.

In 2011 Hibbett showed a .86:1 ratio for liquidity, falling under the satisfactory 1:1.

However this is a great improvement compared to 2010’s .65:1 and 2009’s terrible ratio of

.33:1.

Implications

Hibbett’s ratio for current assets is incredible compared to the ideal ratio in the market

showing the company has enough current assets to meet the payments. However Hibbett’s

Acid-Test ratio falls well below the ideal ratio for the industry; suggesting that the company

does not liquidate its assets quickly enough as the top competitors in the industry.

0

1

2

3

20092010

2011

Liquidity

Current Ratio

Acid Test


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Profitability

Return on Assets

This formula measures how well a business is using its assets to produce more income. A higher

ratio is preferred. “ROA gives an idea as to how efficient management is at using its assets to generate

earnings”.

In 2011 Hibbett

Sporting Goods had a ratio of

15%, showing growth since

2010 with a low 12% and

2009 with a 13% ratio.

Hibbett has been able to

remain constant in their

return on assets with an

increase in the past year.

Return on Equity

This ratio is used to

determine what return the

company is providing to its shareholders. A higher ratio is preferred.

Hibbett had a ratio of 23% in 2011 the highest in the past three years, comparing to 22%

in 2009 and 19% in 2010. Hibbett has made a big jump from 2010 to 2011 and looks as if it will

continue to remain in this area.

Profit Margin

This ratio is used to determine how much overall profit the company is making during a given

timeframe. A higher ratio is preferred. If the ratio declines, this could be due to cost increases.

Hibbett had been sitting consistently with a 5% ratio for 2009 and 2010, but was able to

make a positive jump to 7% in 2011. This positive increase suggests a change in the way the

company is being managed in order to bring in more profit.

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

20092010

2011

Profitability

Return on Assets

Return on Equity

Profit Margin


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Implications

Hibbett Sporting Goods has been able to make positive increases in the past three years

to have 2011 be the best year for the company. Hibbett appears to be stable as a company in

the profitability section of financials and have room to continue to improve. The increases in

income as made the company very profitable as well as keep the prices from climbing too high.

The Company looks to continue its prosperity in the future.

Capital Market/ Shareholders Returns

Earnings Per Share

This ratio indicates the portion of a

company's profit allocated to each outstanding

share of stock. Excellent indicator of a company's

profitability. Higher Ratios are preferred .

Hibbett had a low return of $0.96 ratio

in 2009 and has been able to change this ratio

to a favorable $1.11 in 2011. Suggesting that

the company has had success and is able to

continue to be profitable in the near future

and expect this ratio to climb.

P/E Ratio

This ratio indicates the market price of $1 of earnings.

Hibbett recorded its highest P/E ratio of $20.11 in 2011 showing the market price of the

dollar to be the highest it’s been in the past three years.

Implications

Hibbett Sporting goods showed to be very beneficial to the shareholders from 2009-

2011 because they were able to bring their ratios higher than in the start; Resulting in a higher

payback for shareholder, keeping them satisfied. This indicates that the company is very

profitable and is a good sign for shareholders. It appears that the company will continue this

profitability into the future.

$0

$5

$10

$15

$20

$25

20092010

2011

Shareholders Return

EPS

P/E


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Financial Analysis for Dick’s Sporting Goods

Executive Summary

Dick’s Sporting Goods is a strong financial company. The company has been increasing each

year in all aspects. Dick’s asset turnover has been decreasing each year and their average

inventory period has seen a relatively drastic decrease has well. They have been reducing their

debt since 2009. Their debt has been decreasing most likely due to expansion and offering

more apparel and customizations to consumers. Liquidity has been slowly growing since 2009

and is strong. Dick’s has been very profitable since 2009 and continues to grow with increasing

earnings per share.

Dick's Sporting Goods Financial Ratios 2009 Change 2010 Change 2011

Asset Turnover 2.1 -0.3 1.9 -0.1 1.8

Average Inventory Period 104 -4 100 -6 94

Accounts Receivable 1.40% -0.60% 0.80% -0.08% 0.72%

Debt to Equity 50.94% -17.11% 33.83% -5.57% 28.26%

Debt to Assets 23% -7% 16% -1% 15%

Current Ratios 1.7:1 -0.2 1.5:1 0.3 1.8:1

Quick Ratio .22:1 0.12 .34:1 0.34 .68:1

Return on Assets -2% 8% 6% 1% 7%

Return on Equity -4.50% 16.50% 12% 1% 13%

Profit Margin Ratio -0.90% 3.90% 3% 0% 3.00%

Earnings Per Share -$0.36 $1.51 $1.15 $0.35 $1.50

P/E Ratio 0.31 0.89 1.20 0.37 1.57


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Inventory Investment Period

This number indicates the number of days it takes to convert a dollar of cash outflow to a dollar of sales.

It is better to have a smaller number with this formula. A longer inventory investment period requires a

higher investment in inventory, which translates to less available cash.

Dick’s has seen a decrease in its average

inventory investment period by 10 days

between the years of 2009 which was 104

and 100 in 2010. This indicates that company

is making the conversion of inventory to cash

much faster.


This formula determines how well the business is

utilizing its assets to generate new sales revenue.

It is better to have a higher ratio between the

numbers. This means that the company has less money tied up in assets.

Dick’s ratio has decreased from 2.1 in 2009 to 1.8 in 2011. They have had more money tied up

in assets. Dick’s hasn’t been has efficient since 2009

Accounts Receivable Ratio

This number indicates sales for which

payment has not yet been collected by a

company. A lower ratio is desired in this

formula because it shows that companies

are being paid for their work and money is

no longer tied up in accounts receivable.

Dick’s s seen a decrease in accounts

receivable from 1.40% in 2009 to 0.72%

in 2011. They have been improving on

the time in which money is paid. Overall, this is a fairly large decrease in percentage resulting in

quicker payments and less money tied up in receivables (Figure 3).

85

90

95

100

105

2009 2010 2011


AverageInventoryTurnover (InDays)

0.00%

0.50%

1.00%

1.50%

2009 2010 2011

Accounts Recievable

AccountsRecievable


58 | P a g e

Implications: Dick’s activity and efficiency ratios show that the company is doing well and

managing the status quo. Its accounts receivable indicate that they are being paid more quickly

for their work allowing for a quicker turn around and more available cash. Dick’s financial

situation is stable and will continue to grow. The reduction in investment period has been a

great improvement for Dick’s and it looks to continue to fall.


Debt to Assets

This ratio measures the percentage of assets financed by creditors compared to those financed by the

owners. A lower ratio is preferred (no more than fifty percent).

Dick’s debt to assets has decrease from 23% in 2009 to 15% in 2011, which is a 8% decrease.

This indicates that there are less

assets being financed by creditors.

Debt to Equity

This ratio measures funds provided by

creditors versus the funds provided by

owners. A lower ratio is preferred in this

area. A rising Debt to Equity indicates

increases in debt.

Dick’s debt to equity ratio has

decreased substantially from 50.94%

in 2009 to 28.26% in 2011, which is

22.68% reduction. This indicates a large reduction in funds that are provided by creditors.

Implications: Dick’s has seen a decrease in drastic debt since 2009. The decrease in debt is their

ability to receive payments and its debt looks to continually fall.

0%

20%

40%

60%

20092010

2011

Leverage

Debt to Equity

Debt to Assets


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Liquidity

Current Ratio

The current ratio is the liquidity ratio, which measures the ability to pay off short-term obligations. For

current ratio it is better to have a higher ratio. An industry standard is to seek a 1.5:1 ratio. If the current

assets of a company are more than twice the current liabilities, then that company is generally

considered to have good short-term financial strength. Minimum acceptable ratio is 1:1, but this can be

seen as having potential risks.

Dick’s current ratio saw a decrease from 1.7:1 in 2009 to 1.5:1 in 2010. However it rose again to

1.8:1 in 2011, the highest it’s been in

three years

Quick (Acid-Test) Ratio

The quick ratio is considered to be the

best measurement for liquidity of a

company. This ratio focuses primarily on

highly liquid assets. The formula takes

into account the company’s ability to

meet its obligations. A higher ratio is

preferred with this formula. A 1:1 ratio is

considered to be satisfactory.

Dick’s quick ratio has seen a drastic increase from .22:1 in 2009 to .68:1 in 2011. There has been

a quicker turn around for assets and they are much more reliable since 2009 .

Implications: Both the current ratio and acid test have relatively high numbers which means

they pay off whatever current debt they have quicker with the faster turnaround in inventory.

The quick ratio for the industry is .62%102.

0

0.5

1

1.5

2

20092010

2011

Liquidity

Current Ratio

Acid Test


60 | P a g e

Profitability

Return on Assets

This formula measures how well a business is using its assets to produce more income. A higher ratio is

preferred. “ROA gives an idea as to how efficient management is at using its assets to generate

earnings.”

Dick’s saw a negative

return on assets of -4.50%

in 2009 and then an 8%

jump to 6% in 2010. It then

rose to 7% in 2011. After

2009, it appears that the

management at Dick’s is

using assets well to

generate earnings. In the

years up to 2009 there

were large investments in

expansion and marketing

the company.

Return on Equity

This ratio is used to determine what return the company is providing to its shareholders. A higher ratio is

preferred.

Much like the return on assets, the return on equity was negative in 2009 and rose over 16% to

reach 12% in 2010. It climbed again in 2011 to 13%. The amount returned to shareholders had

been increasing each year.

Profit Margin Ratio

This ratio is used to determine how much overall profit the company is making during a given timeframe.

A higher ratio is preferred. If the ratio declines, this could be due to cost increases.

Similarly to the return on assets and return on equity, Dick’s had seen a negative return in 2009,

an increase to 3% in 2010 and then a .70% increase to 3.70% in 2011. Dick’s management has

appeared to have turned the company around after its negative return in 2009 and increased

its profitability.

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

20092010

2011

Profitability

Return on Assets

Return on Equity

Profit Margin


61 | P a g e

Implications: Dick’s has seen an increase in profitability since 2009 and continues to profit off

of decreasing cost of goods which is a result from new vendors as well as and their ability to

increase profits each year. With their return on assets and return on equity rising, the company

will continue to do well.

Capital Market and Shareholder’s Return

Earnings Per Share

This ratio indicates the portion of a company's

profit allocated to each outstanding share of

stock. Excellent indicator of a company's

profitability. Higher Ratios are preferred.

In 2009, Dick’s saw a negative earnings per

share at $-.36, then a drastic increase to

$1.15 in 2010 and continued to rise to

$1.50 in 2011. The earnings per share will

continue to rise as the company continues

to do well.

P/E Ratio

This ratio indicates the market price of $1 of earnings.

Dick’s had a negative P/E ratio of $-.31 in 2009 and it increased to $1.20 in 2010. It continued to

rise to $1.57 in 2011. These numbers show that Dick’s are increasing their earnings and they are

projected to increase .

Implications

Due to the increasing earnings per share it is probable that people will sell or hold their stock

since the stock continues to rise. The P/E ratio rose from 2009 to 2011 and looks to rise more

in the future. This has risen due to a 2.9% rise in Dick's Sporting’s store sales, 4.4% increase in

Golf Galaxy store sales and a 34.6% growth in e-commerce business.103

($0.50)

$0.00

$0.50

$1.00

$1.50

$2.00

20092010

2011

Shareholder's Return

EPS

P/E


62 | P a g e

Financial Ratio Analysis for Big 5 Sporting Goods

Executive Summary

Big 5 Sporting Goods has shown a lack of ability to increase their profit over the last three

years. There has been a decrease in asset turnover however the average inventory period has

increase substantially over the past three years. Accounts receivable has been hovering around

the same it has been and the debt equity has seen drastic decreases and increases. Debt to

Assets has seen the same as their equity with the current ratio increasing minimally from 2010

to 2011. The Quick Ratio has seen no change with the Return on Assets, Return on Equity, Profit

Margin and Earnings Per Share all having decreased.

Big 5 Sporting Goods Financial Ratios 2009 Change 2010 Change 2011

Asset Turnover 2.45 -0.16 2.29 0 2.29

Average Inventory Period 139.06 13.7 152.76 3.07 155.83

Accounts Receivable 1.50% 0.18% 1.67% -0.22% 1.45%

Debt to Equity 43.40% -10.31% 33.09% 9.45% 42.54%

Debt to Assets 15.63% -2.92% 12.71% 4.19% 16.91%

Current Ratio 1.82 -0.01 1.81 0.3 2.11

Quick Ratio 0.13 0 0.13 0 0.13

Return on Assets 5.96% -0.72% 5.24% -2.28% 2.96%

Return on Equity 16.54% -2.90% 13.64% -6.19% 7.45%

Profit Margin Ratio 2.44% -0.14% 2.29% -1.00% 1.29%

Earnings Per Share 1.01 -0.07 0.94 -0.41 0.53

P/E Ratio 7.91 0.07 7.98 0.41 8.39


63 | P a g e

1.30%

1.40%

1.50%

1.60%

1.70%

2011 2010 2009

Accounts Receivable

AccountsReceivable


Inventory Investment Period

This number indicates the number of days it

takes to convert a dollar of cash outflow to a

dollar of sales. It is better to have a smaller

number with this formula. A longer inventory

investment period requires a higher

investment in inventory, which translates to

less available cash.

Big 5 Sporting Goods has increased its

average inventory investment period by

17 days, from 139 days in 2009, to 156

days in 2011. Big 5 Sporting Goods is taking longer to turn inventory into cash .


This formula determines how well the business is utilizing its assets to generate new sales revenue. It is

better to have a higher ratio between the numbers. This means that the company has less money tied up

in assets.

Big 5 Sporting Goods’ asset turnover ratio of 2.29 in 2011 is the exact same as in 2010, and .16

better than in 2009. Overall, Big 5 sporting goods has been less efficient at utilizing its assets to

generate new sales .

Accounts Receivable Ratio

This number indicates sales for which payment

has not yet been collected by a company. A

lower ratio is desired in this formula because it

shows that companies are being paid for their

work and money is no longer tied up in

accounts receivable.

Big 5 Sporting Goods’ accounts receivable

ratio jumped from 1.50% in 2009 to 1.67%

in 2010. From 2010 to 2011 accounts

receivables made its way back down to 1.45%. Overall, these changes are minimal and should

not affect the company .

8590

95

100

105

2009 2010 2011


Average InventoryTurnover (In Days)


64 | P a g e

0%

10%

20%

30%

40%

50%

2011 2010 2009


Debt to Equity

Debt to Assets

Implications

Big 5 Sporting Goods activity and efficiency ratios indicate that the company is doing a poor job

of turning their inventory into sales. Inability to sell their inventory could result in too much

money being caught-up in inventory, and limiting their cash on hand. If Big 5 Sporting Goods

can’t become more efficient in their inventory investment and asset turnover, they could face

financial problems as well lost opportunities for growth.


Debt to Assets

This ratio measures the percentage of assets financed by creditors compared to those financed by the

owners. A lower ratio is preferred (no more than fifty percent).

Big 5 Sporting Goods’ debt to asset

ratio has decreased from 15.63% in

2009 to 12.71% in 2010. From 2010

to 2011 that percent rose by 4.20% .

Debt to Equity

This ratio measures funds provided by

creditors versus the funds provided by

owners. A lower ratio is preferred in this

area. A rising Debt to Equity indicates

increases in debt.

Big 5 Sporting Goods’ debt to equity ratio decreased from 43.40% in 2009 to 33.09% in 2010.

Debt to equity rose by 9.45% from 2010 to 2011.

Implications

Big 5 Sporting Goods’ debt to equity and debt to assets ratios showed slight decreased in 2010

but are right back to where they started in 2011. Their debt to assets are below 50 percent,

indicating that they aren’t in any serious trouble. Debt to equity is higher than debt to assets

showing that increases in debt are evident. Furthermore, both debt to equity and debt to

assets are below that of both Dick’s Sporting Goods and Hibbett.104


65 | P a g e

0.00

0.50

1.00

1.50

2.00

2.50

2011 20102009

Liquidity

Current Ratio

Acid-test Ratio

Liquidity

Current Ratio

The current ratio is the liquidity ratio,

which measures the ability to pay off

short-term obligations. For current ratio

it is better to have a higher ratio. An

industry standard is to seek a 1.5:1

ratio. If the current assets of a company

are more than twice the current

liabilities, then that company is

generally considered to have good

short-term financial strength. Minimum

acceptable ratio is 1:1, but this can be

seen as having potential risks.

Big 5 Sporting Goods’ current ratio was consistent at 1.8:1 from 2009 to 2010, but then

increased to 2.1:1 in 2011. Big 5 was able to pay off short term obligations much faster with the

incoming money they made

Acid-Test (Quick) Ratio

The acid-test ratio is considered to be the best measurement for liquidity of a company. This ratio -

focuses primarily on highly liquid assets. The formula takes into account the company’s ability to meet its

obligations. A higher ratio is preferred with this formula. A 1:1 ratio is considered to be satisfactory.

Big 5 Sporting Goods’ acid-test ratio has remained constant at 0.13 from 2009-2011 (Figure 5).

This number is very low because much of their assets are tied up in inventory and therefore

their inventory turnaround is very high.

Implications

Big 5 Sporting Goods’ current ratio of 2.1:1 is above satisfactory, but only places in the median,

below Hibbett Sporting Goods and above Dick’s Sporting Goods.105 The quick ratio industry

average is 0.62:1.106 Big 5 Sporting Goods’ quick ratio of 0.13 places them well below the

industry average indicating their difficulty to pay off short term debt. Big 5 Sporting Goods

shows that it has the ability to pay off short-term investments but is struggling to convert their

highly liquid assets to liquid cash.


66 | P a g e

0%

5%

10%

15%

20%

2011 2010 2009

Profitability

Return on Assets

Return on Equity

Profit MarginRatio

Profitability

Return on Assets

This formula measures how well a business is using its assets to produce more income. A higher ratio is

preferred. “ROA gives an idea as to how efficient management is at using its assets to generate

earnings.”

Big 5 Sporting Goods’ return on assets decreased from 5.96% in 2009 to 5.24% in 2010, then

large jump to 2.96% in 2011. Big 5 Sporting Goods has shown a decreasing ability in using their

assets to produce income.

Return on Equity

This ratio is used to determine what return the

company is providing to its shareholders. A

higher ratio is preferred.

Big 5 Sporting Goods faced a 2.9%

decreased in return on equity from 2009

to 2010. From 2010 to 2011 that number

decreased again 6.19%. This decrease in

return on equity shows that Big 5 Sporting

Goods is decreasing the return they’re

providing to their shareholders.

Profit Margin Ratio

This ratio is used to determine how much overall profit the company is making during a given timeframe.

A higher ratio is preferred. If the ratio declines, this could be due to cost increases.

The profit margin ratio for Big 5 Sporting Goods has steadily decreased from 2.44% in 2009, to

2.29% in 2010, and then to 1.29% in 2011. This decrease in profit margin ratio signals that Big 5

Sporting Goods’ is making less profit year after year since 2009.

Implications

Since 2009 Big 5 Sporting Goods has shown a decrease in profitability. This is likely due to an

increase in Cost of Goods Sold (COGS), an increase in operating expenses, as well as an overall

increase in debt. Big 5 Sporting Goods is still profitable but if they don’t reduce their debt as

well as operating expenses, further decreases could occur.


67 | P a g e

7.008.009.00P

0.00

0.50

1.00

1.50

2011 2010 2009

Earnings per share

Earnings pershare

7.50

8.00

8.50

2011 2010 2009

P/E Ratio

P/E Ratio

Capital Market and Shareholder’s Return

Earnings Per Share

This ratio indicates the portion of a company's

profit allocated to each outstanding share of

stock. Excellent indicator of a company's

profitability. Higher Ratios are preferred.

Big 5 Sporting Goods’ earnings per share

numbers have decreased from $1.01 in

2009 to $0.94 in 2010. Further decrease

to $0.53 was shown in 2011. This

numbers are consistent with the decrease in profitability that Big 5 Sporting Goods has shown.

P/E Ratio

This ratio indicates the market price of $1 of

earnings.

Big 5 Sporting Goods’ P/E ratio has

increased from $7.91 in 2009 to $7.98 in

2010, and then to $8.39 in 2011. These

numbers show that the projected earnings

for Big 5 Sporting Goods is increasing .

Implications

Due to the decrease in earnings per share, and only a slight increase in the P/E ratio, it is

unlikely that shareholder’s will sell Big 5 Sporting Goods stock. Due to the slight increase in P/E

ratio, there is a possibility that stock may be purchased.


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Golf Driver Head With Exchangeable Rear Sections Source: http://tinyurl.com/d2huzl8

Patent Analysis

Executive Summary

Hibbett Sporting Goods is a moderate sized leader in the sports retailing industry; however,

within their product portfolio, the company does not have any technological patents to support

their status in the industry. In comparison, other leaders in the industry such as Dick’s Sporting

Goods have several patents that relate to their product(s) offered; however, these expressed

patents are strictly limited to their products and are not new technological patents in the

industry as a whole. When observing the industry, the newly developed technological patents

that have been created over the past few years have had a profound impact on the retailing

market as a whole. If Hibbett Sporting Goods wants to remain highly competitive in the market,

it would be considerably beneficial for the company to initiate patent research and

development within their company and attempt to purchase the rights to patents. If Hibbett

remains stagnant during this time, it is likely the other retailers in the industry will gain a

significant competitive advantage by utilizing technology patents such as automated retail

machines, online sports rental methods, or on shelf tracking systems to track product supplies.

However, if Hibbett possibly purchases or leases some of these described patents, the company

will likely gain a significant competitive advantage in the retail industry.

Dick’s Sporting Goods Patents

Golf Driver Head With Exchangeable Rear Sections107

o US Patent Number: 7959522 o Issuance Date: June 14, 2011 o Original Assignee: Dick’s Sporting

Goods, Inc. o Inventors: Richard Ray North, III,

Ben S. Lavallee

o Number of References: 5 o Patent Use: The patent is a

complete golf driver kit. It allows for

exchangeable connectable parts to hit a golf ball different distances.

http://tinyurl.com/d2huzl8


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Soccer Training System Source:

http://tinyurl.com/ba7493y

o Abstract: A golf driver kit includes a front portion and a plurality of rear portions

exchangeably connectable to the front portion and being of different respective

shapes for imparting different flight characteristics to a struck golf ball. The front

portion includes a front face plate and a hosel for receiving a shaft, plus a

rearwardly projecting base on which the rear portion is seated. The rear portion

is removably attached to the front portion by screws.

Implications

The Golf Driver Head With Exchangeable Rear Sections was filed on August 12, 2008. The

object of this patent is to provide a complete golf driver kit with interchangeable parts that

enable different flight characteristics to a struck golf ball. With the recent acquisition by Dick’s

Sporting Goods of Callaway Golf, the expansion of Dick’s golf products/services is likely to

illustrate considerable financial growth over the next few years. If Hibbett Sporting Goods

wants to remain a viable competitor with Dick’s, the company should consider a revamped

outlook with their golf products. A patented product such as this object demonstrates

considerable innovation and ingenuity, and Hibbett must show this sort of strategy with their

product lines as well to remain competitive.

Soccer Training System108

o US Patent Number: 6846253 o Issuance Date: January 25, 2005 o Original Assignee: Dick’s Sporting Goods, Inc. o Inventor: Damian A. Szwalek o Number of References: 8 o Patent Use: The patent is a specific soccer training

system with three specific modes. It allows for

independent training development. o Abstract: A soccer training system that has three

modes and includes a frame, a net, a target panel,

and a rebound panel. The frame with the net

secured thereto provides a soccer goal mode; the

frame with the target panel positioned across its

front provides a soccer target mode; and the

frame with the rebound panel positioned across its front provides a soccer

http://tinyurl.com/ba7493y


70 | P a g e

Sports Equipment Storage Racks

Source: http://tinyurl.com/8vvkclz

rebounder mode. The target panel has cutouts and/or apertures to pass a soccer

ball. The rebound panel redirects a kicked ball back toward the kicker. The

rebound panel can also be inclined to alter the return angle of the ball.

Preferably, elastic corded hooks attach the target panel or the rebound panel to

the front of the frame.

Implications

The Soccer Training System was filed on March 12, 2003. The object of this patent is to provide

a soccer training system that has three modes and includes a frame, a net, a target panel, and a

rebound panel. With the ability of Dick’s Sporting Goods to offer more than just apparel and

footwear products in their stores, their targeted consumer demographics expands exponetially.

If Hibbett Sporting Goods wants to remain competitive with the retail leader Dick’s, the

company should attempt to expand its product lines, including offering more technologically

advanced products. By offering more unique sports equipment items such as this patent, the

company will be able to attract greater cliental to their business.

New Technology Patents Relative to Sports Retailing Industry

Sports Equipment Storage Rack109

o US Patent Number: 6053340 o Issuance Date: April 25, 2008 o Original Assignee: John L. Cameron o Inventor: John L. Cameron o Number of References: 17 o Patent Use: The patent is a sports equipment storage

rack designed for universal actions. The equipment

will be safe and secure within these storage areas. o Abstract: A rack for organizing, protecting, and storing

various sports equipment has a backboard, a

receptacle for holding a beverage container, at least

one equipment hook, a bat holder hook, at least one

flexible member such as a securing strap, an optional

hanging hole, and a decorative area. The backboard

supports the other components and contains points of

attachment for the securing strap. The receptacle stores a beverage container in

http://tinyurl.com/8vvkclz


71 | P a g e

Automated Transaction Machine

Source: http://tinyurl.com/9mtmkep

an upright position. The equipment hook allows for hanging sports or related

equipment such as baseball gloves or baseball hats. The bat holder hook allows

for holding a baseball bat or other equipment such as a jacket or other items of

clothing. The flexible member such as a securing strap secures the rack to a

fixture such as a chain link fence, wall or other support.

Implications

The Sports Equipment Storage Rack was filed on November 27, 2005 by John L Cameron. The

object of this patent is to provide a sensible means for organizing, protecting, and storing

various sports equipment. It is a universally used patent in the sports retailing industry as

Hibbett Sporting Goods, Dick’s Sporting Goods, and Big Five Sporting Goods all use some sort of

variation of this patent. If Hibbett Sporting Goods wishes to gain a competitive advantage in the

industry, it will continue to utilize this object within its stores and possibly look for innovative

advancements or customizations of the object. The ability to develop newer means of storing

sports equipment for Hibbett Sporting Goods will ensure the company’s future development

and growth within the sports retailing industry.

Automated Transaction Machine110

o US Patent Number: 8118222

o Issuance Date: February 21, 2012

o Original Assignee: Transaction Holdings Ltd.

o Inventor: David M. Barcelou

o Number of References: 5

o Patent Use: The patent is an automated retail

terminal that is similar to an ATM or Internet

kiosk. It is used with a credit card or smart card.

o Abstract: An automated retail terminal in

which a plurality of goods and/or services are provided in an integrated system.

The integrated system generally avoids duplicating hardware or functions in the

course of delivering the goods or services offered, so for example in a

combination ATM and Internet kiosk the same credit card or smart card reader is

used for both the ATM and the Internet kiosk functions, the same control screen

activates the ATM functions and the Internet functions, and etc.

http://tinyurl.com/9mtmkep


72 | P a g e

Electronic Commerce Transactions Within A Marketing System

Source: http://tinyurl.com/9mjo4he

Implications

The Automated Transaction Machine was filed on November 22, 2010. The object of this

patent is to provide an automated retail terminal source that provides an assortment of goods

and/or services in an integrated system. It is a newly developed technology in the retail market;

however, the potential implications of this patent are virtually limitless, as companies will be

able to incorporate some of their smaller sized products/services in this automated transaction

machine without the need for human interaction. If Hibbett Sporting Goods wishes to maintain

their current position in the sporting goods retailing market, the company will likely need to

incorporate newer technological innovations such as this patent. The ability to automatically

serve consumers without human interaction is the future of the retailing industry, and the

businesses that implement this concept into their company will benefit in the long run. It would

be beneficial for Hibbett to purchase or lease this patent, which would thereby allow them to

own the product and/or market. In addition, the company could be in a position to lease out

the patent for royalties from other companies.

Electronic Commerce Transactions Within A Marketing System111

o US Patent Number: 8239272 o Issuance Date: August 7, 2012 o Original Assignee: Amway Corporation o Inventors: David M. Bamborough, James G. Blodgett, William R. Dangl o Number of References: 7 o Patent Use: The patent is a system and method for providing complete

electronic commerce for a company’s marketing products online. o Abstract: The present invention is directed to a system and method for providing

complete electronic commerce (“E-Commerce”) transactions and solutions for a

marketing company's products via the World Wide Web, including facilities for

signing up new customers and recruiting, training and supporting new

Independent Business

t an interactive online

p In another aspect, the

p invention relates to the

combination of a marketing

b with a membership buying

opportunity using both

e commerce and face-to-face

transactions. The present invention is also directed to a system and method for

http://tinyurl.com/9mjo4he


73 | P a g e

Internet-Based Sports Equipment Rental Method

Source: http://tinyurl.com/9s8k444

combining a marketing business with a membership buying opportunity, so that

Independent Business Owners participating in the marketing plan can introduce

customers to a membership buying opportunity and earn bonuses or

commissions based on the purchases by those members.

Implications

The Electronic Commerce Transaction Within A Marketing System was filed on June 23, 2010.

The object of this patent is to provide complete electronic commerce (“E-Commerce”)

transactions and solutions for a marketing company’s products via the World Wide Web. The

rapid growth of electronic commerce over the past few years illustrates the necessity of

interactive commerce for companies over the traditional face-to-face transaction. If Hibbett

Sporting Goods wishes to maintain their current status in the industry, they need to strengthen

their online commerce presence. Almost all of the purchases made by customers shopping at

Hibbett Sporting Goods are made in person, and electronic commerce is an underutilized

element for Hibbett. The ability to serve both electronic and interpersonal commerce is a

necessary action that companies will need to address in the future. It would be beneficial for

Hibbett to purchase or lease this patent, which would thereby allow them to own the product

and/or market. In addition, the company could be in a position to lease out the patent in

exchange for royalties from other competitors.

Internet-Based Sports Equipment Rental Method112

o US Patent Number: 6885998

o Issuance Date: April 26, 2005

o Original Assignee: Jeffrey A. Smith

o Inventor: Mark J. Arduino

o Number of References: 4

o Patent Use: The patent is a conceptual

idea of renting sports equipment online for

predetermined times, dates, and locations.

o Abstract: Disclosed is an Internet-based

sports equipment rental system and

method that enables individuals to rent

sports equipment and other items, such as

golf clubs, from a renting company's Web

site. The system and method includes

automated rental processing and tracking

software that runs on the renting company's Web site to allow individuals to

http://tinyurl.com/9s8k444


74 | P a g e

Interactive Shopping System With Mobile Apparatus Source: http://tinyurl.com/cbj8dsz

rent sports equipment conveniently over the Internet for use at predetermined

locations at predetermined future times.

Implications

The Internet-Based Sports Equipment Rental Method was filed on March 25, 2000. The object

of this patent is to provide consumers with the ability to rent sports equipment and other items

online and ultimately allow individuals to rent them at predetermined locations and future

times. With the ongoing economic recession occurring throughout the United States, the

concept of renting, leasing, or maintaining temporary ownership is becoming a growing trend.

If Hibbett Sporting Goods wishes to gain a competitive advantage in the industry, the company

has the opportunity of offering some form of rental service to its consumers. The ability to

implicate such a strategy in the sports retailing goods industry will grant Hibbett Sporting Goods

the opportunity to become a large market sized company in the marketplace and give them a

significant competitive advantage over its competitors.

Interactive Shopping System With Mobile Apparatus113 o US Patent Number: 6434530 o Issuance Date: August 13, 2004 o Original Assignee: Retail Multimedia Corporation o Inventors: Martin A. Sloane, Tod Bogan o Number of References: 22 o Patent Use: The patent is an

interactive system adapted for

online shopping venues. It is

implemented through the use of a

mobile device. o Abstract: An interactive system

adapted for use in a shopping

venue, comprises: an interactive

and intelligent source of

information, for example

supplemental information related to articles available for selection by shoppers

in a shopping venue, and not otherwise available to the shoppers during

shopping; and, a plurality of interactive, mobile apparatus which shoppers can

http://tinyurl.com/cbj8dsz


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On-Shelf Tracking System Source:

http://tinyurl.com/b6qbbqz

move throughout the shopping venue and use for transmitting queries to the

interactive source of information and use for receiving information transmitted

from the interactive source of information, whereby shoppers can receive

information useful for evaluating the articles when making article selection

decisions, and at least some of the received information can be formulated to

influence the article selection decisions. At least some of the information

transmitted to the shoppers can be responsive to the queries.

Implications

The Interactive Shopping System With Mobile Apparatus was filed on January 20, 2001. The

object of this patent is to provide consumers with an interactive system for use in a shopping

venue with their mobile devices. With the rapid development of technological concepts in the

retail industry, especially with mobile devices, the need for companies to be well aware of

these growing technologies is a required element for the company if they wish to remain

competitive. If Hibbett Sporting Goods wishes to gain a competitive advantage in the industry,

the company should lease this patent to enable the company the option of offer marketing

advertisements and selling their products through consumer’s mobile devices. The social value

expressed with mobile phones continues to grow and expand, and the ability for Hibbett

Sporting Goods to utilize this strategy will grant them a significant competitive advantage in the

industry.

On-Shelf Tracking System114 o US Patent Number: 3249320 o Issuance Date: September 20, 2012 o Original Assignee: N/A o Inventor: Patrick Campbell o Number of References: 4 o Patent Use: The patent is an on shelf

tracking system that tracks for both

consumer theft and inventory amounts. o Abstract: A system to be installed on a

merchandising unit having one or more inventory zones, one or more units of

product, one or more product sensors, a mounting structure, and an

electromagnetic signal processor. The one or more product sensors, each at least

associated operatively with one of the one or more inventory zones, converts a

sensed quantity of the one or more units of product into a respective analog

electromagnetic signal. The mounting structure secures the one or more product

http://tinyurl.com/b6qbbqz


76 | P a g e

Articles of Apparel Providing Enhanced Body

Position Feedback Source:

http://tinyurl.com/d9dwjpu

sensors to the merchandising unit. The electromagnetic signal processor in

communication with the one or more product sensors can sample output from

the one or more product sensors.

Implications

The On-Shelf Tracking System was filed on August 29, 2010. The object of this patent is to

provide a product sensor that is designed to ensure the security and output of a specific

merchandising unit. With the threat of potential theft that all retailers face, the ability to

ensure the number of inventory of a specific product is a valuable asset for all companies. In

addition, this patent also allows management to know the total number of sales of a particular

product. If Hibbett Sporting Goods wishes to ensure the safety and security of their products,

the company should purchase/lease the patent or attempt to establish some sort of on-shelf

tracking system like this patent. This concept is the new wave of the future, and companies that

are unable to address it will be obsolete.

Articles Of Apparel Providing Enhanced

Body Position Feedback115

o US Patent Number: 2148585 o Issuance Date: August 1, 2011 o Original Assignee: Nike International Ltd. o Inventors: Todd Kenneth Craig, Steven

Wright o Number of References: 7 o Patent Use: The patent is a highly developed

form of sporting goods apparel that

enhances body position feedback. o Abstract: Articles of apparel include: (a) a garment structure having one or more

fabric elements structured and arranged to provide a close fit to at least one

predetermined portion of a body (e.g., area(s) of the body for which enhanced

position sensing and/or feedback are desired, such as the lower back, the arch of

the foot, etc.); and (b) a body position feedback system engaged with or

integrally formed as part of the garment structure. The body position feedback

system may apply higher tensile or constricting (compressive) forces to selected

portions of the wearer's body, which can help stimulate or interact with nerves

http://tinyurl.com/d9dwjpu


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Social Networking And E-Commerce Integration Source: http://tinyurl.com/b98txaa

and deep tissue receptors located in various portions of the body. The increased

forces at selected locations of the body give the wearer sensory feedback

regarding the position or orientation of these parts of the body and can improve

or accelerate development of 'muscle memory.'

Implications

The Articles of Apparel Providing Enhanced Body Position Feedback was filed on May 15, 2008.

The object of this patent is to provide a piece of athletic apparel that is a close fit to at least one

predetermined portion of the body (e.g. arms, legs, torso, etc.). With the current constructs of

athletic apparel, the ability to offer a product that is capable of providing sensory feedback is a

significant advancement in the manufacturing of the clothing. If Hibbett Sporting Goods were

capable of providing such a product, the company would be a technological innovator in the

industry. Many of the consumers that shop at Dick’s Sporting Goods or Big Five Sporting Goods,

would likely switch to Hibbett for this specific product. It would be beneficial for Hibbett to

partner with the Nike and possibly lease this patent for exclusivity. In addition, Hibbett should

also consider establish a long term strategy to work with Nike on other possible patents as well.

Social Networking And E-Commerce Integration116

o US Patent Number: 1682167 o Issuance Date: June 3, 2011 o Original Assignee: Greg M.

Lemelson o Inventor: Greg M. Lemelson o Number of References: 5 o Patent Use: The patent is a

method of relating electronic

commerce shoppers with social

media users. o Abstract: The present invention

relates to methods, systems and

databases for sharing user

inputted data obtained from two

different environments. In

particular, the present invention relates to methods of obtaining user inputted

data (e.g., metadata or links) from a social networking environment, and

providing the data to other users in an e-commerce environment, and vice versa.

Data from both environments can be stored in a database accessible by either

http://tinyurl.com/b98txaa


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environment. In another embodiment, a user can access the data via a search

performed or provided to the user in real-time.

Implications

The Social Networking And E-Commerce Integration patent was filed on February 13, 2007. The

object of this patent is to allow for sharing user inputted data obtained from two different

environments. In this case, the two environments are metadata or links from a social

networking environment and the e-commerce environment. As both of these trends are

showing significant growth, the ability to coordinate them under a single integrated system will

be very beneficial to any businesses that incorporate them into their corporate strategy. If

Hibbett Sporting Goods developed this coordinated system with these two environments, the

company would establish a whole new cliental segment. Those that participate in electronic

commerce and utilize social networking would be able to receive Hibbett Sporting Goods news,

ongoing sales and advertisements, and price listings. The possibilities of this patent are virtually

limitless, and Hibbett should take full advantage of them. In addition, Hibbett should definetly

consider purchasing this patent because at the moment there is no original assignee associated

with the patent.


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Strategies

SWOT Analysis

Executive Summary

Over the past six decades that Hibbett Sporting Goods has been a retailer in the sporting

goods industry, many strengths and weaknesses have accumulated within the organization that

effect the means in which the company targets its customer basis. While Hibbett Sporting

Goods is generating a great deal of financial and regional success in its base of operations in the

Southeast, its regionalized setting, large market competitors, and complete reliance on vendors

for its product(s) have amounted to the company only becoming a small-sized market business

within the industry. In order for Hibbett to develop itself into a large market presence in the

industry, the company must be willing to utilize newly developed technologies to its advantage,

promote a growing desire to utilize online commerce as a means of purchasing, and expand the

company to the western portion of the United States as all opportunistic notions. In addition to

applying the company’s overall strengths, weaknesses, and opportunities, Hibbett must address

looming threats it faces such as new competition and decrease in consumer spending.


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Hibbett Sporting Goods SWOT

Analysis & Strategies

Strengths:

Small-market strategic advantages

Specialized product selection catering to community

Managerial experience

Weaknesses:

Complete reliance on vendors for products

Strong competition

Regionalized company setting in industry

Opportunities:

Rapid growth rate of online commerce

Growth/Expansion

Development of new technological innovation in retail industry

Strengths/Opportunities Strategies:

Embrace local communities to expand and fill voids left by major retailers.

Utilize specialized product selection through an online presence.

Through the expertise of the managers, acquire a new piece of technology in the retail industry.

Weakness/Opportunities Strategies:

Utilize online commerce as an ability to become less regionalized and grow.

Enter into long-term agreement with vendors to ensure growth.

Market new technologies acquired that competitors will not have.

Threats:

New competitors

Decrease in consumer spending

Competitors have a larger market presence

Strengths/Threat Strategies:

Offer discounts of specialized products to increase consumer spending

Offer community oriented sales/events that larger competitors are unable to accomplish

Through the expertise of managers, develop new competitor threat assessments.

Weakness/Threats Strategies:

Open stores nationwide to compete with competitors with a large market presence

Attempt to decrease the product costs from vendors to increase consumer spending

Develop viral advertising campaigns to increase national brand awareness


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Target market for Hibbett Sports is in small to mid-sized markets that major retailers such as Wal-Mart and Dick’s are absent towards.

Strengths/Opportunities Hibbett Sporting Goods is in a prime

position to take advantage of many existing opportunities by utilizing the company’s strengths. Hibbett maintains many small market strategic advantages that their customer basis values and is conscience about when shopping in their stores. It is essential that Hibbett avoid taking on large market retailers such as Dick’s in

urban areas because of their vast product lines, competitive prices, and overwhelming popularity. Instead, Hibbett should embrace the local and midsized communities to fill a void that Wal-Mart and Dick’s are not able to fulfill.117 There is also a growing popularity in offering retail options through an online presence.118 Hibbett is making progressive steps towards offering purchasing options on their website, and if the company is capable of performing these measures it is likely they will utilize their specialized products to sustain growth and development through online orders. The rapid development of new technological innovation in the retail industry is having a profound impact on the way consumers shop, order, and pay for things.119 At the moment, Hibbett maintains no registered patents within their company, and the growing opportunistic advantages of patents for certain companies are remarkable. Through the expertise and experience of the managerial team of Hibbett, the company should attempt to acquire a type of patent that gives them a competitive advantage in the industry over its competitors.

Weaknesses/Opportunities Hibbett Sporting Goods operates its sporting goods stores in small to mid-sized markets

throughout the Southeast, Southwest, and lower Midwest regions of the United States.120 Its reliance on these regions is one of the company’s main focal points in their competitive strategy model; however, this limits their overall influence in the industry as a whole. With the rapid development of online commerce occurring in the industry, Hibbett can utilize online commerce as a means of growth and expansion within the market. Like many other sporting goods retailers in the industry, Hibbett is completely reliant on their vendors (such as Nike, Adidas, Under Armour, etc.) to supply their products within their stores.121 With the notable reliance by Hibbett towards these vendors, Hibbett can ensure its status within the retail industry by entering into long term agreements with these vendors to remain a viable competitor within in the industry as a whole. Rapid technological developments in retail means that retailers must ensure their company’s status by identifying and implementing certain technological developments that would aid the company itself and offer something that a competitor may not have.122 In this case, if Hibbett is capable of marketing a newly acquired technology that the company purchased, the company could gain a significant competitive advantage over its major competitors in the industry such as Dick’s Sporting Goods and Big Five Sporting Goods.


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Growing development of social media in retail

Strengths/Threats

With the recession showing some signs of abating within the United States, the overall impact of it is still felt in many business industries, particularly in the retail industry.123 A major influence for many businesses is the overall decrease in consumer spending. To counteract these figures for Hibbett, the company should offer various discounts and advertisements to boost consumer spending figures. Probably the best method to implement such discounts and advertisements would be through social media, and Hibbett recently joined Facebook over the past year. Online advertising is an inexpensive way to attract new customers and increase

consumer spending. Placing advertisements on a social media website such as Facebook would allow Hibbett to expand their market much further and boost consumer spending overall. In the third quarter of 2009 alone, Facebook exposed users to 297 billion ads, 23 percent of all the advertisements on the World Wide Web.124 In addition to being most viewed, Facebook advertisements are one-third the price of other online advertising such as on Google searches.125

The ability of Hibbett Sporting Goods to develop small-market strategic advantages and tactics that other major sporting goods retailers are unable to address is one of the pivotal competitive advantages the company has to offer. In comparison, one of Dick’s Sporting Goods essential practiced strategies is primarily operating in urbanized areas that enable them to attain a greater number of potential customers in their stores.126 Unlike Dick’s, Hibbett focuses a great deal of their efforts on community oriented sales and events that attract their repeat cliental back to their stores. In addition, this practice also shows individuals living in urbanized areas or those that are more familiar with Dick’s Sporting Goods the capabilities of Hibbett. Altogether,

The above map illustrates the locations of Hibbett Sporting Goods

stores, which are primarily based in the Southeast region of the US.


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The reduction of Nike’s prices

would enable Hibbett to discount

their product line prices as well.

this focused strategy emphasizes the overall conduct of Hibbett Sporting Goods in the retail industry, as it is a company that operates with the primary focus of satisfying the consumer and the community.

Although the market demonstrates considerable economic struggles for retailing companies, a major threat many corporate leaders or managers of companies face are new competitors in the marketplace. According to 2011 figures, the future of retail is quite promising, as there was a 28% increase in the number of new retailing businesses from the previous year.127 The focus of many companies needs to be on addressing some of these new competitors before they emerge as a large market presence in the industry. In regards to Hibbett, companies such as Big Five Sporting Goods and other sporting goods retailers that have only been in the industry for a short time must be addressed. It is the responsibility and strategic value for the managerial officials working at Hibbett Sporting Goods to develop such strategies to ensure Hibbett’s overall success in the industry.

Weaknesses/Threats With large market sporting goods retailers expanding both their product portfolios and

number of nationwide stores, the need for a small market sized company such as Hibbett Sporting Goods to develop a greater presence in the marketplace is essential for the company’s overall success. According to Dicks Sporting Goods annual report from 2011, the company opened an additional 44 stores bringing its total number of stores up to 525.128 The demand for a greater number of Hibbett Sporting Goods is essential in order for the company to remain competitive, and these locations need to be beyond the current region in which Hibbett normally operates. The company needs to strategically break out of its current hub in the Southeast and develop additional stores on the West Coast, Northwest, and Southwest of the United States to become a nationwide recognized business. Investing in decreasing the costs relating to vendor fees for Hibbett Sporting Goods products would benefit the company by promoting an increase in consumer spending. The diminished costs Hibbett would have to provide the vendors (such as Nike, Adidas, and Under Armour) would enable the company to offer many of their products at discounted prices. At the moment, consumer spending rates continually show signs of increasing, which ultimately forces businesses to keep their prices at a high level because of the potential lost business from these individuals.129 If Hibbett Sporting

Goods is capable of reducing the purchasing costs of these vendor product lines, the company will see consumer satisfaction at higher levels, increase of market share and market growth, as well as gain a significant competitive advantage in the retail industry of sporting goods.


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While maintaining a diligent focus on Hibbett’s primary competitors and vendors is a necessary action that the company must perform, Hibbett needs to focus more on broadening their customer base rather than being satisfied with their current customers. Currently, Hibbett’s advertising on all media outlets is non-existant. On YouTube, Hibbett has only several video uploads with a total of only a few thousand views; Dick’s has millions of total viewers on their page because of their overwhelming popularity and notable figures they bring in the commmercials.130 Within these commercials, Dick’s highlights the premier stature of the company, its historic roots, and the well known individuals that use Dick Sporting Goods products. Many of these well known individuals are athletes that dominate their sports such as Ray Rice, Justin Verlander, and Lebron James, and ultimately it is through their testimonials that the Dick’s Sporting Goods brand name presence is considered by most to be the leader within the industry. If Hibbett Sporting Goods wants to remain competitive, the company needs to address its marketing scheme. The company needs to focus less on community oriented market targeting and more on focusing on a national level marketing concept that will enable Hibbett to become a large market retailer like Dick’s and other notable businesses.


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Porters 9 Forces Model

Executive Summary

Five industry level forces and four macro-environmental forces were taken into account

when determining the threat levels for Hibbett Sports. Hibbett Sports is likely to face high

threats from industry rivals, the social macro-environment, and from suppliers. Hibbett Sports’

industry rivals offer a variety of the same products at competitive pricing, putting pressure on

Hibbett to be the most competitive. Hibbett Sports’ industry rivals also offer online shopping

allowing them to expand their customer base to the entire United States. Social factors, mainly

social media, is one of the leading marketing tools for companies currently. Hibbett Sports

must take advantage of social media and further expand their social media marketing in order

to reduce social threats. Finally, the threat from suppliers is a direct result of extremely high

switching costs. Hibbett Sports is forced to pay whichever price the manufacturer sets, this

could be detrimental during periods of economic distress.


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Social

Smart phones allow

customers to access

information on the go

Social media is the

leading way to reach

customers

Increased use of

eCommerce and online

shopping

Buyers

Low

differentiation

Large number of

competitors

Suppliers

High concentration

High switching

costs

Unique suppliers

Porter’s 9 Forces Model

Technological

Mobile coupons

Near Field

Communication (NFC)

Increased ability to

customize clothing,

shoes, jerseys etc…

Political Legal

Presidential election

likely to influence how

business will choose to

operate

Federal policies

discourage business

opportunities

Limited government

resources

Economical

Mobile and web

platforms offer increase

in sales

Market development

Reduced store sizes

improve capabilities

Industry Rivals

Industry composed of

many firms of equal size

and competitive position

Competitors offer online

shopping

New Entrants

Economies of scale

High capital required

Broad product line

Substitutes

Competitive market,

similar products

Low switching costs

Legend:

= High Threat

= Medium Threat

= Low Threat


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Industry Rivals

Industry composed of

many firms of equal size

and competitive position

Competitors offer online

shopping

Social

Smart phones allow

customers to access

information on the go

Social media is the

leading way to reach

customers

Increased use of

eCommerce and online

shopping

Discussion

The highest threat that Hibbett Sports faces is

industry rivals. Competitors Dick’s Sporting Goods and

Big 5 Sporting Goods offer similar products at

competitive prices. Customers have the ability to shop

around and compare prices. If Hibbett Sports’ prices

aren’t the lowest there is a chance at a loss of business.

Furthermore, Dick’s Sporting Goods offers an expansive

eCommerce website that allows consumers from all

over the world to purchase products131. In addition to

Dick’s current eCommerce website, they are looking to further develop their online shopping

capabilities by incorporating a more user friendly website as well as an option for online

purchase and in-store pickup132. From 2010 to 2011, Dick’s reported a 36 percent increase in

sales just through eCommerce sales alone133. If Hibbett would build an eCommerece website

and then continue to support and promote eCommerce channel shopping, than they will likely

see similar growths in sales numbers. Industry rivals will always be present, but taking

advantage of opportunities such as online shopping will enable Hibbett Sports to be highly

competitive.

The next highest threat is the social environment.

Companies in the sports retail industry are looking more

into social media everyday. With 63 percent of adults

using social media daily, it is more important than ever to

take advantage of low cost social media marketing134.

Furthermore, 90 percent of small business marketers are

using social media, and of those 90 percent, 93 percent

rate social media tools as important135. Hibbett is

currently using social media outlets Facebook and Twitter,

and is currently seeking to hire social media jobs136. Social

commerce is also a huge market that Hibbett Sports has

yet to develop into. Social commerce sales should total

$9.2 billion by the end of 2012, and are expected to rise to $14.25 billion by the end of 2013137.

Lastly, 50.4 percent of Americans are reported using smartphones in 2012138. Smartphone

users are able to access websites and social media outlets easier and more often than they

were five years ago. This ease of use is likely to result in more online purchase and increased

social media usage.


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Suppliers

High concentration

High switching costs

Unique suppliers

The third highest threat facing Hibbett Sports is

suppliers. Hibbett Sports relies on B2B transactions from

the companies whose products they are selling. The

result of this is extremely high switching costs. Hibbett

Sports chooses to sell the top brands in the industry. The

only way to reduce switching costs would be to carry

cheaper, lower quality brands. The cost of switching to

lower quality brands would be a large decrease in sales.

Because Hibbett is relient on the companies whose products they are selling, they are unable to

determine the costs in which they purchase the products. Instead, the costs are completely

dependent on the manufacturer. Hibbett Sports prides themselves on their long-standing

relationships with their vendors, but even they admit that a loss in key vendor support would

be detrimental to their business, financial condition, and results of operations139. This poses as

a risk for Hibbett because if they are unable to purchase the top name brands they will have to

settle for less qualified companies at the cost of reduced sales.

Growth Vector Matrix

Executive Summary

Considering the Growth Vector Analysis Matrix above, Hibbett Sporting Goods have

only a small group of options to consider going forward in order to continue to remain the

"Vendor of Choice"140 for those in the region and motivate sales growth across all product lines

and improve market exposure and go beyond the current thoughts of what is the addressable

market. Hibbett Sporting Goods must apply most of its attention and its corporate energy into

the areas of new products; for example only, non-sport casual wear and diversification into

non-traditional markets; online. With the changes to social trends of fashion and new

technology in textiles and manufacturing, it is paramount that Hibbett remain diligent to this

new trend and technology and be the first to deliver this improved product to the retail market.

This diversification plays a major roll within this competitive landscape in order that Hibbett

Sporting Goods remain able to posture their product in the most effective manner as "Best in

Class"141. Product bundling should be considered to exploit the variety of sport and non-sport

offerings to the public. Hibbett already does a great job of being an active player in a small

target market and absolutely should continue to do so to keep consumers feeling personal and

close to the company. Hibbett Sporting Goods must continue to remain focused on customer

care by way of requiring all Hibbett Sporting Goods representatives having any direct contact

with the customer base, undergo a rigorous and continuous inter-personal training thereby

extending the Hibbett Sporting Goods Mission Statement onto the customer; "We are local and

personally committed to you"142.


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Legend: = High Importance = Medium Importance

Market/ Products

Current Products Athletic Apparel

Athletic Equipment

Footwear

New Products Create the ability for

consumers to customize their products.

Allow consumers to make purchases with their mobile devices with options such as Near Field Communication.

Adopt new brand names that create products to keep up with rising popular trends.

Current Market

Small regional

High School >

Market Penetration Sponsorships of High

schools and local community charities.

Small market target allows for a more personal feel for the customers to relate.

Product Development Invest in mobile technology

software for consumers to receive coupons and discounts on mobile devices as well as make purchases.

Invest in patents for “Organic” or “Recycled” materials to be used in packaging or products sold.

New Market

Internet/ Social Media

College <

Market Development Creation of a better

functioning website to allow for online ordering from the store.

Stronger advertise to become more recognizable to a larger market.

Diversification Stand out in the consumers’

minds by offering better customer service such as extended warranties or insurance on products.

Stay present and even go further in the community through sponsorships and charity giveaways and rallies.


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Discussion

New Market New Products: Diversification

Hibbett needs to stand out from the competition to the consumers not only in their

current region but to the new markets such as the online community. Hibbett should stand out

from the competition by offering better services and warranty opportunities to attract and

keep consumer loyalty. Also the idea of product bundling should be a major part of the

business model because with this kind of offerings consumers will be able to get products

together for any event or occasion as one sale unit.

New Market Current Products: Market Development

As time goes continues to move forward and social and shopping trends continue to

advance into the online communities, Hibbett needs to be able to respond and keep up with

trends. Hibbett needs to create a usable shopping website that is able to process orders online

rather than just show what products they carry. As consumers become more inclined to shop

via the internet Hibbett will begin to fall behind to their competitors that have the online

shopping database.

Current Markets Current Products: Market Penetration

Hibbett currently is very successful by standing out in the community through

sponsorships of high schools and events throughout the year. This strategy needs to remain a

high priority because relating to their consumer base sets Hibbett apart from larger

competitors such as Dick’s Sporting Goods.


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http://usatoday30.usatoday.com/money/story/2012-06-01/consumer-spending-april-report/55326804/1

http://simon.com/mall/longview-mall/stores/hibbett-sporting-goods

Hibbett Sporting Goods Competitive Overview

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