Discuss About The Exploring Strategy Cases Pearson Education.
The sports industry is constantly expanding and at a rapid pace. Australia is highly passionate about sports be it cricket, golf or soccer. People are highly interested in getting into sports which has eventually helped to expand the sports industry to a large extent. It is important to note that the football fever in Australia is pretty high which has driven many young kids and adults to take up soccer as their sports. The increase of interties among people for Soccer has clearly showed the expansion of the sports industry especially in the sales of soccer equipments and attire that has increased the sales and revenue of this kind of products. The Football Federation of Australia has reported that the percentage of people engaged in soccer has increased to a large extent which is a good indication and hence it could be said that there is a strong chance that the sales of sports gear will increase especially for soccer (Shilbury, 2012). The concept of Soccer in Australia is quite old and hence the popularity of soccer in Australia has increased and hence the idea is to launch a new soccer gear brand which would sell products related to soccer like Jerseys, Gloves, soccer boots and Shin guards et cetera under the name of “Sports Select”.
Sports Select will be a new business venture which would mainly focus on selling sports products especially related to soccer and will be effective to provide the consumers with the best possible products and services. Every organisation should have effective mission and vision which would help the organisation to make long and short term planning and drive the organisation to success (Mullin, Hardy and Sutton, 2014). As the venture is a new venture it is only focusing on spreading brand awareness which would help to increase sales and revenue that is extremely important for the organisation to sustain in the market for a longer period of time. Australian Sports industry is quite competitive and hence it is important that “Sports Select” as an organisation is able to manage their business venture properly. The mission and vision statement of the organisation needs to be effectively managed which would help the organisation to strategise the business plan to a large extent. The mission and vision of Sports Select is discussed below:
The Mission statement of the organisation would be “To reach consumers through quality, convenience and affordability”. This is an extremely effective mission statement for the organisation because it helps the organisation to clearly spread its idea of operation in the market. The organisation focuses on reaching the consumers through quality services, with effective convenience and affordability. It cannot be denied that consumers look forward to quality products and services but at an affordable rate and this would be USP of the brand. Sports Select is likely to emerge as the best brand within a short period of time with this.
The Vision of the organisation is to become the best seller of soccer gears within a short period of time. The vision statement largely relates to the mission statement of the organisation because it helps the organisation to focus on improving the strategies applied to achieve the vision effectively. The vision of the organisation clearly shows that it wants to become one of the best within a short period of time which could only be done with the help of effective business strategy and competitive goods and services.
The objectives developed by the organisation Sports Select are SMART and hence achievable to a large extent. The objectives are discussed below:
Sports industry of Australia is highly competitive and there are various products and services which are actually there in the industry. Some of the organisations only focus on sports drinks like Gatorade and some of them only focus on sports gears like Eye wears head gears et cetera. Finally there is a segment that sells basic products like jerseys and boots et cetera which are essential to play the game. The main focus of Sports Select as an organisation would be to sell products like soccer boots, shin guards, customised jerseys et cetera. These stuffs are highly in demand and hence it will be extremely effective for the organisation to make sure that the quality of these products is effective enough to create demand in the market. Hence the main product offering that Sports Select will focus on is to promote essential sportswear for soccer (Verbeke, 2013).
The market analysis is a highly integrated tool that helps the organisations to analyse the market and the competition and what the industry has to offer to the organisations operating in the market. The marketing analysis involves external environment of the industry and competitive analysis which would help the organisation Sports Select to understand the market effectively. The industry analysis involves the tools like PESTLE and Porter’s five forces analysis which are effective in understanding the external environment of the Sports industry.
The PESTLE Analysis is an extremely effective tool for industry analysis. The discussion of PESTLE is given below:
Political: Australia has a stable political environment and hence it is extremely suitable for businesses to grow in the market. It is important to note that politically the Government is sound and want to stretch their hands towards the organisations which would help the organisations to operate in the market in the best possible manner. The efficient political framework of the country adds to the value for the companies. The working class union and support for the organisations also largely help the organisations to create a strong working environment which is effective for the organisations as well as the employees. Since sports are highly embraced by the people the Government also promotes certain grants to enhance the sports industry effectively (Trenberth, 2013).
Economic: The Australian economy is one of the most grown up economy in the world. After the global financial crisis the country was largely affected but recovered quickly. Even though the recession had had its impact the country was able to recover well. Presently the country is at the boom stage where people are ready to spend money on what they want and hence it is a good time for any company to promote business in Australia. The very low unemployment rate has contributed to the overall growth and development of the country which is extremely important for the country as well as for the new organisation Sports Select. The corporate tax system is high in the country which would definitely impact the profit and sales of the company during the initial period of time (Johnson, 2016).
Social: Socially every organisation is responsible for the growth and development of the society. Every organisation is obligated to contribute towards the growth and development. Australia is a growing nation and hence the standard of living is high which clearly shows that the organisation will have ample opportunities to sell its products to different people. The aspect of employment is one of the major things that need to be considered in this case because the unemployment rate is pretty low and the organisation should focus on eliminating this issue completely (Hoejmose, Brammer and Millington, 2013).
Technological: Technologically the business environment in Australia is highly developed. Especially in the sports industry integration of technology is done to a good effect. It is important to note that online portals and self checkout systems at the stores are used which helps to eliminate hassles and time consumption to a large extent. Hence it is important for Sports Select to integrate technology right from the beginning to get excellent response from the consumers.
Legal: Every organisation has to follow legal frameworks so that they don’t fall into any legal problems. Similarly it is extremely important for Sports Select to abide by employment legislation and common law to make sure there are no legal implications for the new organisation (Spender, 2014).
Environmental: The Government of Australia is very particular about the environment and hence every organisation has to abide by environmental aspects to operate in the market. Firstly for Sports Select it is important to be completely organic so that it doesn’t impact the environment. Apart from that the use of plastics and paper impacts the environment and so it has to be kept under check. Overall reducing carbon footprint and creating environmental awareness should also be in the scheme of things (Shank and Lyberger, 2014).
Fig 1: Porter’s Five Forces
Intensity of Competition: The intensity of competition in the Sports Industry is high in Australia but it is important to note that there are various different segments in sports and since the organisation Sports Select is only focusing on Soccer products like jerseys, boots, socks, et cetera and hence this clearly reduces the competition to a large extent. It is important to note that the competition gets filtered as the product range is narrowed down and hence Sports Select will enjoy moderate competition in the market.
Supplier’s bargaining power: The sports industry is huge in Australia and hence there is significant number of suppliers operating in the market which clearly shows that the suppliers have ample choice to make in the market. The sports goods selling organisations tend to stick to particular suppliers whereas the suppliers tend to analyse the market to a large extent effectively. Hence in the present case it could be said that the suppliers bargaining power is high (Bühler and Nufer, 2015).
Threat of substitute products: There is significant percentage of people playing soccer in the country and hence they will have to buy jerseys, soccer boots, guards, gloves et cetera. Since the organisation Sports Select is a new venture consumers wouldn’t find better option as compared to this organisation hence the threat of substitute products for Sports Select is low which helps the company to act effectively and properly.
Bargaining power of consumers: Consumers is why the organisations come up with products. There are number of organisations in Australia providing similar kinds of services but Sports Select is specially providing products on soccer which is a huge plus for the organisation. It is extremely important to note that consumers who look for specialised services based on soccer will have complete options coming to this organisation. Even though they will find some other stores providing the same services still they would have moderate option of finding stores completely dedicated to soccer items. Hence, it could be said that the bargaining power of consumers is moderate in nature (DeGaris, 2015).
Threat of new entrants: The sports industry is a competitive industry and expensive as well which is why the new entrants wouldn’t focus on coming into the sports industry and this makes the threat of new entrants low in the market.
Analysing competition is extremely important for the organisation Sports Select because this will help the organisation to understand the kind of competitive pressure it will face in the market. Competition analysis is implemented with the help of marketing survey and analysis of similarity of services between the new venture and the existing venture. The market survey is extremely effective because it helps the organisation to understand the other organisations that are operating in the market and how they are approaching the market. The competitor analysis based on similarity of the products and services and their overall information will help to understand how they are doing in the market (Buhler and Nufer, 2012).
It is extremely important for the organisation to have a primary target market which would help to ensure the organisation is moving in the right direction. The primary target market for the organisation is mainly chosen based on the demographics and lifestyle interest of people around the area of Sydney. The chosen age group is from 9 to 30 which help the organisation to expand its products range at regular interval providing all sorts of soccer related items to the consumers. Hence overall it could be said that the primary target group is from9 to 30 who are interested in soccer (Spender, 2014).
The marketing mix is a key aspect of marketing strategy which is mainly comprised of four different attributes namely product, price, place and promotion. The marketing mix for Sports Select is discussed below:
Product: The core product of the company will be the tangible items like boots, jerseys, gloves et cetera. The actual product will be the service that these products give the consumers. The augmented products are the design and style and quality that the consumers get using these products.
Price: The price is kept focusing on the overall target market. Initially the organisation has planned to go with affordable penetrative pricing which would help to get into the market in the best possible manner. Once the organisation has effectively penetrated the market it will move on to price skimming (Woerner and Wixom, 2015).
Place: The organisation Sports Select is launching both physically and virtually. It is important to note that it will open its first store in Sydney and at the same time launch its online application to provide home service as well.
Promotion: The promotion will be done with the help of mass media marketing. Advertisement through hoardings and banners, TV ad and Radio advertisement will also be utilised. Finally personalised service and discount promotion will also be done to attract consumers (DeGaris, 2015).
The expected cash flow for the present business is shown below;
|
Particulars |
Amount (in AUD) |
|
Operating activities |
|
|
Sale of jersey, pads, socks boots and gloves |
20000 |
|
Salary of employees |
(500) |
|
Cost of goods |
(350) |
|
Payment of interest and tax |
(110) |
|
Total cash from operating activities |
19040 |
|
Investing activities |
|
|
Purchase of raw materials |
(600) |
|
Total cash from investing activities |
18440 |
|
Financing activities |
|
|
Loan |
360 |
|
Net cash from operations |
18800 |
The critical risks are important to be considered before making the plan go live. For instance having effective understanding of the marketing strategy will be important because this will help to ensure success. Market risks are common and hence the organisation will have to have a flexible and agile marketing plan to move with the trend. For instance recession or inflation again will impact on the sales and revenue of the organisation. unforeseen events are also common (Johnson, 2016).
References
Buhler, A. and Nufer, G., 2012. Relationship marketing in sports. Routledge.
Bühler, A. and Nufer, G., 2015. Marketing in sports.
DeGaris, L., 2015. Sports Marketing: a practical approach. Routledge.
Hoejmose, S., Brammer, S. and Millington, A., 2013. An empirical examination of the relationship between business strategy and socially responsible supply chain management. International Journal of Operations & Production Management, 33(5), pp.589-621.
Johnson, G., 2016. Exploring strategy: text and cases. Pearson Education.
Mullin, B.J., Hardy, S. and Sutton, W., 2014. Sport Marketing 4th Edition. Human Kinetics.
Schrader, C., Freimann, J. and Seuring, S., 2012. Business strategy at the base of the pyramid. Business Strategy and the environment, 21(5), pp.281-298.
Schwarz, E.C. and Hunter, J.D., 2012. Advanced theory and practice in sport marketing. Routledge.
Shank, M.D. and Lyberger, M.R., 2014. Sports marketing: A strategic perspective. Routledge.
Shilbury, D., 2012. Competition: The heart and soul of sport management. Journal of sport management, 26(1), pp.1-10.
Spender, J.C., 2014. Business strategy: Managing uncertainty, opportunity, and enterprise. OUP Oxford.
Trenberth, L., 2013. The sport business industry. In Managing Sport Business (pp. 29-42). Routledge.
Verbeke, A., 2013. International business strategy. Cambridge University Press.
Woerner, S.L. and Wixom, B.H., 2015. Big data: extending the business strategy toolbox. Journal of Information Technology, 30(1), pp.60-62.
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