SWOT Matrix

CLC-SWOT Matrix, BCG Matrix, and IE Matrix

Fabienne Schmidt, Matthew Orr, Michael Lucarelli, Rimbu Titus, Sunya Rogers

Colangelo College of Business, Grand Canyon University

MGT-660: Strategic Management

Dr. McDonald

June 22, 2022

Part I – SWOT Matrix

Dick’s Sporting Goods is America’s largest sporting goods retailer and is mentioned on the Fortune 500 list. It is based in Pennsylvania and was started by Richard Dick Stack in 1948. The current CEO is Lauren Hobart, since 2021. The company is listed on the NYSE and is considered a profitable company by investors.

In the following an advanced SWOT analysis is shown.

Strengths

The brand has good market recognition as a national sporting goods company. It has a strong brand portfolio.

The prices are premiums to ensure good profit margins for the company.

The inventory management system of the company is one of the best in the market.

The customer service is well funded and researched to ensure brand loyalty.

The current President appears to promote a fit lifestyle and can act as a brand ambassador.

Weaknesses

The customers belong to the middle and upper middle classes, and as such, have shown a preference for seeking bargains and sales, which are more easily offered by its competitors like Nike, Adidas, Reebok, etc.

There is a seasonal nature to outdoor sports, as the winter months are often very lean.

There is scope for more investment in technology and e-commerce.

The investment in research and development (R&D) of goods is significantly lower compared to competitors.

The attrition rate is high, which means that trained employees leave the workforce, leading to losses for the company.

Opportunities

Expand its customer base.

The rise of chronic and lifestyle-related illnesses, for which exercise is an important part of the intervention, creates opportunities for the company to expand its business.

The company has managed to maintain strong sales and profit margins despite the pandemic.

The government’s initiatives to promote health and fitness in the population have led to large-scale procurements from companies for distribution to schools and community centers.

The new taxation regime gives many benefits and incentives to health-positive industries, which can benefit the company by gaining tax incentives and investments.

Threats

Low prices offered by competitors can increase competition and reduce sales in a recession-like economy.

There is a preference among consumers towards e-commerce, which is a weak area for the company. It also threatens the existence of its wide distribution network.

The rise in fuel prices can increase the cost of distribution.

The increasing market share of counterfeit products, often mass manufactured of low quality, from China threatens the company.

There is a demand to increase wages by employees across the country, which affects the costs and image of the company as well.

Proposed Strategies Developed from the SWOT Matrix

Below are suggested strategies for Dick’s Sporting Goods to pursue to stay competitive and continue to outpace the competition and maintain its dominance in the market.

Strengths/Opportunities (S-O) Strategies

Expand ecommerce sales by 25% with a marketing campaign to let customers know Dick’s is not only a brick-and-mortar store but has an online store as good or better than the competition. Leveraged by Dick’s high market share and customer loyalty and offer a price matching guarantee. [S3, S7, O1, O2, O3, O4]

Seek exclusive rights contracts with key brands. [S2, S3, O7]

Weakness/Opportunities (W-O) Strategies

Launch a private label (store brand) capitalizing on Dick’s top of the industry customer loyalty and market share to capture a different customer segment that does not want to pay the high prices for name brands. It will also reduce Dick’s dependence on name brands. With a goal of increasing sales by 15% in the apparel segment. [W1, W9, O2, O4, O5]

Expand into foreign markets. [W2, O1, O2, O3, O5]

Strengths/Threats (S-T) Strategies

Expand and improve ecommerce presence by increasing the research and development budget by 30% to improve Dick’s online experience and service. Also launching a marketing campaign to promote the new and improved online site to let customers know Dick’s is better than other online ordering platforms plus customers have the support of their retail locations too. [S2, S3, S7, T1, T2, T3]

Launch a marketing campaign to show Dick’s community involvement, diverse workforce and its best place to work award to set Dicks apart from its competition. [S1, S8, S9, S10, T1, T2, T3]

Weakness/Threat (W-T) Strategies

Negotiate more competitive pricing with overseas suppliers to reduce costs and consider long term contracts to combat the uncertainty in the markets and world economy. [W1, T4, T9]

Invest more in employee’s well-being and give them more sense of purpose. To keep them happy and healthier to decrease employee turnover. [W7, T5]

Part II -BCG Matrix

Below is a Boston Consulting Group (BCG) Matrix for Dick’s Sporting Goods operating segments by product category. Since Dick’s is only operating within the U.S. product categories are being used for this matrix as well as the IE matrix (below). The revenues given in the table are in billions (US$).

From the BCG Matrix, you can see that Dick’s is well-positioned to continue to grow and

build business in the hardgoods and apparel segments. Footwear is also a money maker and

with some properly executed strategic plans, it could be moved into the star category also.

Dick’s has one dog, the “other” category, because Dick’s Sporting Goods decided to stop selling guns in their stores and the firearms are included in the other segment. Dick’s

should look to invest most of its capital in the other three segments.

Part III- IE Matrix

Below is Internal-External (IE) matrix for Dick’s Sporting Goods operating segments by product category. Revenues listed in this table are in billions (US$) and are based on Dick’s Sporting Goods $12.3 billion revenue in 2021 (“Annual Report”, 2021).

From the IE Matrix above, we see that Dick’s strongest segments are hardlines and apparel. Both product categories have a strong internal and external positioning and account for most of Dick’s Sporting Goods revenues. The company’s other two product categories, footwear, and others, are weaker. A reason for the lower revenues is the number of competitors, especially for footwear as well as the amount of product offering in the specific categories.

References

About us. (n.d.). DICK’S Sporting Goods. https://investors.dicks.com/about-us/default.aspx

Dick’s. (n.d.). Owler. https://www.owler.com/company/dickssportinggoods

Dick’s Sporting Goods, Inc. (DKS) income statement. (2022, June 21). Yahoo Finance. https://finance.yahoo.com/quote/DKS/financials/

E-commerce revenue analytics. (n.d.). E-Commerce DB. https://ecommercedb.com/en/store/modells.com

Skinner, K., Hanning, R. M., Sutherland, C., Edwards-Wheesk, R., & Tsuji, L. J. S. (2012). Using a SWOT Analysis to Inform Healthy Eating and Physical Activity Strategies for a Remote First Nations Community in Canada. American Journal of Health Promotion, 26(6), e159–e170. https://doi.org/10.4278/ajhp.061019136