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WA5. SWOT Analysis of Athlete’s Warehouse

Introduction

SWOT analysis is a process that is used to evaluate a company’s competitive position and to develop strategic planning. It consists of two internal elements: strengths and weaknesses; and two external elements: opportunities and threats (InvestoPedia, 2024).

The case study discusses Athlete’s Warehouse; a company that is about to be incorporated. It will specialize in selling sport clothes and equipments with focus on running shoes. The company will be a family business as it will start as a partnership between two brothers Colin and Ed Power of Grand Falls, who are both experts athletes. The two have tried this before but their attempt has failed (Howse, 1992).

The text will perform SWOT analysis on Athlete Warehouse according to the information presented in the case study; it will start discussing each of the four elements separately and then does collective analysis of these elements together and it will conclude with answering the question of wether the company will be successful.

Strengths

Strengths are the areas where the company shines; they include the internal factors of which give the company an advantage over the competition; here are some of strengths of Athlete Warehouse:

  • Expert management: Colin Power was a Physical Education teacher with a Ph.D in the field.
  • Experience in sales:
    • Colin Power had some experience in selling sports equipment to schools.
    • Although his expertise was in wholesales as opposed to retailing the Athlete’s Warehouse required, the skills were still relevant.
  • Expert partners and investors:
    • Ed Power, Colin’s brother, was a successful Athlete himself.
    • He played Hockey, and then later he became a runner.
  • Existing Base:
    • The brothers had some existing stuff from their previous business.
    • This included $12000 worth of inventory and the cash register.
  • Existing relationships with suppliers:
    • The brothers had existing relationships with suppliers from their previous business.
    • This would help them get the best deals on the equipment they needed.

Weaknesses

Weaknesses are areas where the organization needs improvements; they include the internal factors that do not look right and may give competitors advantage over the company. Here are some of weaknesses of Athlete Warehouse:

  • Lack of Capital:
    • Ed had to invest the money he had put in his retirement fund.
  • Colin’s unemployment:
    • While Ed was able to support the business and work part-time without a salary, Colin was unemployed.
    • Colin had to take a salary from the business from the beginning.
  • The shadow of their failing business:
    • The brothers had previously failed in a business venture.
    • This could have a psychological impact on them.

Opportunities

Opportunities are external factors that may help the company in its way to success; they include factors from competitors, local community, government, and the overall economy. Here are some of the opportunities of Athlete Warehouse:

  • Large customer base:
    • Grand Falls serviced a population of 50,000 people.
  • Lack of specialized competition:
    • None of the sports stores had specialized in the equipment that Athlete’s Warehouse was going to sell.
    • None of the stores had trained staff to provide consultation services to the customers.
  • Good economy:
    • The inflation rate was low, and the economy was doing well.
  • Different vacant locations:
    • The brothers had the option to choose from 2 different locations for their store.
    • The Valley Mall and the Downtown area.

Threats

Threats are external factors that may prove disadvantageous to the company and cause it hard times; similar to oppurtitinties, they may include factors from competitors, local community, government, and the overall economy. Here are some of the threats of Athlete Warehouse:

  • Other sports stores:
    • There were already three sports stores in Grand Falls.
    • These stores had been in business for a long time.

Overall Evaluation of the Organization

The company appears to have more strengths and opportunities as opposed to threats and weaknesses. The fact that the brothers have worked together on a previous project rules out the possibility of conflicts, but the shadow of their previous failure can not be ignored.

The fact that two brothers are experts in the field that the company enters and already have some good network of relevant communications seems appealing; however, the two must address their lack of experience in management and sales/marketing by hiring experts to do the actual work, although this may form extra pressure on the budget.

Conclusion

In this text we did a SWOT analysis for Athlete Warehouse that was about to get incorporated; the company has higher chances of wining especially with good economy surrounding that period of time. The brothers must learn from previous mistake and hire experts to do things for them instead of just trying themselves.

References

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