Business Concept of Modells Sporting Goods - Case Study Example

Business concept of Modell’s Sporting Goods About Modells Sporting Goods Modells SportingGoods is a family-owned business formed in 1889. It is a retailer of sporting goods, fan gear, active apparel, and athletic footwear. The business is committed to providing a convenient and a convincing shopping experience for sportspersons and other people. Modells business stands for quality, selection, value, and better customer service backed by Associates who are willing to assure customer satisfaction. Commitment to excellence is the foundation where Modells Sporting Goods was formed. The business has stores in New York, Pennsylvania, Connecticut, New Jersey, Rhode Island, New Hampshire, Delaware, Massachusetts, Maryland, Virginia, and the District of Columbia (Modell’s Sporting Goods, 2013). A competing business strategy-Vision Sporting Goods Many companies are in competition with Modell’s Sporting Goods. The following are strategies of a business that can compete with Modell’s Sporting Goods. Exclusive Brand Offerings: the business will offer its customers high-quality goods at competitive prices, which are marketed under exclusive brands. The business will invest in procurement and development staff that sources performance-based goods that are targeted to the enthusiast of sporting for sale under brands. The company’s private label products will present value to its customers at every price point and offer it with high gross. Competitive Pricing: The business will position itself to be aggressive on price, but the business will not endeavor to be a price leader. The business will maintain a strategy of matching its competitors advertised prices. In the case, a customer discovers that a competitor has a lower price of an item; the business will lower its price. In addition, under the "Right Price Promise," just in case within 30 days of buying an item from the company, the buyer finds a lower price by a competitor, the company will refund the difference. The business will seek to offer value to customers and uphold a reputation as the main provider of value. Broad collection of Brand Name products: the business will deal with a variety of popular brands including Columbia, Nike, North Face, Callaway, Under Armor, Adidas, and private label products sold under names that include Walter Hagen and Ativa, which are found in its stores. The breadth of its product selections in every group of sporting goods provides customers a variety of price points. Genuine Sporting Goods Retailer: The business history will be a retailer of authentic athletic products, footwear and apparel, which implies that it will offer athletic merchandise that is of high quality and intended to improve customers’ performance. The business will believe that its customers seek authentic, real product offerings, and the merchandising approach places the business with an edge in the market. Expertise and Service: the business will enhance the shopping experience of customers by providing customer service professionals who are trained and knowledgeable. “Store-Within-A-Store” that is interactive: the business’ stores will contain five specialty stores. The business will seek to create a unique look and feel for every specialty department to enhance the interest of the customer in the goods offered. The store will have the following specialty shops: The Pro Shop, the Footwear Center, the Cycle Shop, the Sportsman’s Lodge and Total Sports, a sports area that displays athletic apparel and sports equipment associated with seasonal sports, such as baseball and football. The choice of buying or starting a new business When one considers whether to open a business, a choice one will encounter, whether to buy an already existing business or start a new one. When one buys an established business, one may have a thriving model to follow, even though this is not an assurance of success. For this business, I prefer starting a new business to buying an existing one. Starting a new business presents certain benefits that may lack in other methods. Choosing Location A business location guarantees if a business will be successful or a failure. With a new business, a businessperson has the luxury of scouting various locations until one finds the place perfect for business. Some of the factors to mull over include the existence of competition, the level of traffic in a given area, accessibility to business premises, room for expansion of the business and the safety of the area. Clean Slate When one starts a new business, one starts with new things as far as the business name, employees and inventory. A clean slate allows a business person to build a business in his/her own image without dealing with a businesss former issue or poor reputation. The business owner will also staff the business with employees of choice. Your Own Way Some business models can restrict the way one operates a business. When one purchases a franchise, for instance, a business person is supposed to follow a rigid business form that allows little opportunity for ones own methods. When one starts a new business, the owner will have an absolute operational freedom, which is important for innovative thinkers who possess creative ideas. Lower Cost Market entry methods such as buying an existing business or a franchise, may require a business to spend thousands of dollars for the acquisition. When you start a new business, you have the option of establishing a small premise depending on the available capital. Implementing Unique Idea When starting a business, the business owner can put his/her distinctive business ideas into operation without restriction of franchise rules and the pre-conceived impressions of earlier customers of that business. For instance, if one has ideas for effective ways to wash cars, one can position him/herself as the innovator of the car wash in the business area, differentiating from the competition. Form of ownership Since this will be a new business, the owner will start as a sole proprietor. A Sole Proprietorship is a business structure owned and operated by one owner. The business does not entail many complex filing requirements common with other business structures such as companies and co-operatives. Sole proprietorships permit owners to report income and expenses on individual tax returns.  The form of business is attractive to small investors since they are easy to start and run. The owner of the business is entitled to every profit that the business collects. However, the sole proprietorship is risky since there is a lack of separation between the business and the owner. The owner of the business remains liable for losses or debts that the business incurs. They business owner can be held legally responsible for any violations committed by the employees of the business.  Advantages of Sole Proprietorship There following are some of the reasons to start a business using the structure of sole-proprietorship: (Bartschi, 2001). I. Ease of formation: Starting this business is much less complex than starting a corporation, and also cheaper. The proprietorship business can have a name after the owner or any fictitious to improve the marketing of the business. II. Decision-making: the owner of the business makes the business decisions. The owner of the business can transfer the ownership of the business at any time he/she deems necessary. III.  Tax benefits: The business owner is not compelled to file a divide business tax report. The owner lists business figures and information within individual tax return. It helps to save additional costs on tax filing and accounting. The business is taxed at personal income rates, and not corporate tax rates IV. Employment: the business allows for hiring of employees. It leads to many benefits associated with the creation of jobs. The spouses of business owners can also work in the business without having declared an employee of the business. Disadvantages of Sole Proprietorship Formation of sole proprietorship involves some risks to the owner of the business since they are not separated from the business. Disadvantages of this structure include (Bartschi, 2001). I. Liability: The business owner is held responsible for debts, losses, or violations emanating from the business. If a business needs to pay debts, the owner’s personal funds will be used. II. Taxes: the owner has to pay self-employment taxes. In addition, some tax benefits cannot be deductible, such as employee’ health insurance premiums. III. Lack of “continuity”: in case the business owner dies or become incapacitated, the business will cease operating. IV. Raising capital difficulty: Because the owner normally provides the primary funds, it may be difficult to create capital. The business structure does not issue stock like other corporations. Business plan 1. Executive summary The role of this business plan is to get £700,000 business loans from a bank to purchase the assets of the business called Vision Sporting Goods. The business will be a sole-proprietorship owned by Steve James. Steve James will be the proprietor of the business; he will be assisted by his family members and other employees. Steve James has a Bachelor Degree in Business Management. Vision Sporting Goods will sell sporting goods equipment for the whole family, mainly focused on softball and baseball equipment, accessories, and apparel from major manufacturers. 1.1 Objectives Establish links with local non-profit organizations to assist underprivileged children develop self-esteem and confidence programs of youth sports. Manage and run a business with the emphasis on integrity, truth, fun, quality relationships, and giving back to the society. 1.2 Mission To be the supplier of choice for sports equipment and accessories based on product price, expertise, level of service and quality, by developing a good relationship with customers. 2. Company summary The business will sell quality sporting goods for the whole family, mainly focused and specialized in softball and basketball equipment, accessories and apparel. The business hopes to open as soon as it gets the capital. The business hopes to employ 22 employees to help in various departments such as sales and marketing and accounts. The business retail store will open from Monday to Saturday from 8:30 am to 5:00 pm and closed on Sundays. Steve James will own the company. 3. Products and services The business will sell the most popular brand sporting goods, accessories and apparels. Consumers will get educated on proper size, fit, style, and design needed for their use. In the initial stages, the sporting products will be for baseball, volleyball, softball, football, and basketball with a focus softball and baseball. These products will be purchased from manufacturers such as Easton, Slugger, Wilson, Mizuno, Jugs, Adams, and other popular companies. 4. Market analysis summary The sporting products market is a multi-billion dollar sector, with retail sales of goods at £60 billion in 2009. Sales were expected to grow by 2% in the subsequent year. The personal expenditure on sporting goods is expected to grow at a yearly rate of 4.8%. Retail sales of sporting goods are sensitive to the economy’s health since most sports are for leisure activity. Spending on goods for sports correlates with consumer confidence and personal disposable income. The sporting products have many segments that can be grouped by sport, product, geography, participation, organization, behavior and standard demographics. Demographics has a big part in sales of sporting goods, because the growth of population and age group impact sport participation. 5. Strategy and implementation summary The initial focus will on the Softball and Baseball participant segment since this is Vision’s core competency and because the participants’ number is large. The business will leverage current Vision’s relationships in the segment and move to increase sales through specific marketing campaign. Vision will then target other segments in order to make attempts to increase sales of products during softball sales months. It is a big opportunity to increase growth for the business evidenced by the number of participants present in the other segments. The ever changing tastes in sports reflect the composition of the Americans population. 6. Management summary Owner Steve James will be the manager of the business. James has a 20-year experience in management having been a Managing Director of various public organizations. The company will have 22 employees, including 5 members of the James family. 7. Financial plan A loan of £700,000 will be obtained from a bank. The owner will provide about £140,000 of capital. About a third of the capital will help to set up stores and obtaining of assets. Half of the capital will be used to buy stock will the rest of the capital be used to meet expenses such as wages. References Bartschi, M. (2001). Foundations of business organizations for paralegals. Albany, NY: West/Thomson Learning. Modell’s Sporting Goods. (2013). About Us. Retrieved on May 5, 2014 from http://www.modells.com. Read More