Business leaders are often concerned with many aspects of their business. One of the models that most leaders look at is called the Five Forces Model of Enviromental Threats. These five forces are: (1) the threat of entry, (2) the threat of rivalry, (3) the threat of substitutes, (4) the threat of powerful supplier, and (5) the threat of powerful buyers. Dick Sporting Goods has many regional competitors, but as a whole they don't have a major competitor outside of Sports Authority who have stores throughout the country. But, when you look at this model a few of these threats really stand out. The threat of substitutes and the threat of powerful suppliers are the two greatest threats for Dick Sporting Goods. Amazon, the online retail giant plays this role better than anyone else. They offer another option for today's consumers who spend a lot of their time shopping online. Not only does Amazon offer a substitute to the typical box store, they have signficant buying power which makes them a powerful supplier of goods that can be offerred to consumers at cheaper prices than they can find "in-stores." The consumer can "window" shop at Dick's but potentially find the same product for a little less money at Amazon.com.
So, what can Dick's do to offset this threat? One of their strategies has been to drive goodwill in their local communities. I've blogged about this before, but it really is a key strategy to create customer loyality that entices their customer's to support their partner in the community.
Dick's also went on the attack with their own online strategy. They recently announced an ecommerce intiative where they are bringing their online platform inhouse. In 2014, their internet sales were up 28%, 31% just in the 4th quarter. It appears Dick's has analyzed these same threats and are going on the attack!
I've attached a link that dives deeper into this strategy.
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