Sports Center is a company that has been developed to meet the needs and requirements of skaters all around the world. With our high quality designs, Sports Center will be manufacturing different types of skates that can be used for leisure and in professional sports.
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Consequently, this initiative aims at promoting healthy living among individuals of all ages through physical exercise. The contemporary world is characterized by unhealthy eating habits that lead to the development of health complications such as diabetes, obesity, and high blood pressure (Tookey, 2004).
This initiative therefore aims at suppressing these conditions through sports (specifically, skating). Our future products will focus on all types of sports from basketball to soccer.
With the use of our products, our customers will enjoy taking a trip to the coffee shop or local stores while skating. This concept will eliminate the time that people lose while being stuck in traffic or looking for a parking spot in restaurant and in malls.
At the same time, individuals can skate to work or as a morning exercise. This will ultimately improve their physical fitness hence enhancing their overall health status. However, poor ankle support is the main challenge that skaters face due to the narrow that skates have towards the tip of the toes (Reynolds, 1997).
In this respect therefore, skaters have to tighten their skates harder than normal shoes. However, this affects the comfort of the leg and in some rare cases, it might bring about structural complications to the leg.
The design of our product has overcome this problem, a move that we hope will play a critical role in increasing our sales.
Consequently, we have put in place effective pricing and marketing strategies that will ensure that we stand on a competitive edge over our rivals by commanding a huge market share. This will ensure our sustainability in the short run and in the long run.
The main aim of this business is to enhance healthy living in individuals all around the world. Consequently, through this business initiative, we hope that Sports Center will become a reputable brand that is operational all around the world.
Most importantly, we aim at being profitable and sustainable in the short run and in the long run.
The following are the objectives of this business initiative:
- To reach the breakeven point after 12 months of operation.
- To maximize our profit margin within the first 2 years of operation.
- To enhance our services through the application of e-commerce strategies.
- To support skaters and create feedback mechanism through the application of e-commerce strategies such as social media.
- To encourage our clientele to have a healthy lifestyle.
Consequently, the mission of Sports Center is to meet the needs and requirements of our target market by providing them with aftermarket products within the skating industry.
Given the sales figures for the last five years within the United States of America, Europe, Asia, And Australia, our business has identified a skating market that is vibrant and growing at a tremendous rate (Sussman, 2007).
Therefore, our business will develop skating gears that will enable our target market to incorporate skating in their daily routine hence making the activity to be a part of their lifestyle. Therefore, our brand aims at achieving the following goals:
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- To replace excessive driving with skating.
- To connect skaters all around the world who regard the sport as a means of fitness and healthy living.
- The transform SkateSailing into a global sporting activity.
Market Size and Growth
According to Klein (2007), the success of any business entity highly relies on the viability of its target market, its pricing and marketing strategies, and most importantly, the market share that it commands.
Sports Center has already identified a vibrant market of individuals who view skating as a leisure activity that enhances their physical fitness and overall well-being of their health.
In the last five years, over 30 million pairs of skates have been sold annually within the United States of America alone (Yao, 2006; Puick, 2007). From these sales, Sports Center has identified the following market segments:
- Recreational sports
- Speed skating
- Extreme Skating
With this niche market, Sports Center is hopeful that it will achieve its goal of developing skating as a fitness activity as well as ensuring that SkateSailing becomes a popular sport within the United States and all around the world.
According to the statistics that were presented by McLean (2003), skating is one of the sporting activities in the United States that is growing at a tremendous rate.
This sport has recorded high popularity growth rate figures as compared to sports such as soccer, rugby, football, and baseball.
Of our five niche markets, Sports Center aims at targeting the individuals who fall under the recreation and fitness categories due to the positive growth rates that have been recorded in these two market segments over the last five years.
It is projected that these two groups will comprise about 85% of the total consumers who are loyal to our brand in the next three years.
The presence of free entry and exist in a market has increased the level of competition in the contemporary business world. Despite the fact that there might be barriers to entry such as high start up costs, copyrights, patents, and stringent requirements, competition is an essential factor in business (Boblitz, 2006).
It is through competition that firms come up with creative and innovative strategies and ideas that enable them to produce high quality products and services in order to stand at a competitive edge over their rivals.
In this respect therefore, Sports Center is not the only company that manufactures and sells skating gear in the United States. The company faces stiff competition from various companies.
Strengths and Weaknesses of Pegasus Sports
Pegasus Sports is a firm that manufactures and sells skates. Based in California, this firm has been in operation for the last four deceased. Thus, its major strength is the reputable brand name that the firm has developed over the years.
Consequently, the firm commands a strong market share within and outside the United States. During its last financial year, the company sold approximately 4 million pairs of skates within the United States alone.
In addition to its other products, the firm commands a huge market share both within and outside the United States. However, its major weakness is its failure to keep up with the changing trends in consumer needs.
As a result, the firm has failed to meet the needs and requirements of emerging markets such as fitness skaters. Consequently, its products are highly priced.
Strengths and Weaknesses of BladeBoots
BladeBoots also offers stiff competition to Sports Center. Established during the 1980s, the firm has managed to capture the attention of the baby-boomer generation. The firm also has an effective distribution chain since it has outlets in every state in the United States.
Since 1995, the firm expanded its operations to Canada where it was successful in capturing the Hockey market. However, the firm has failed to market its products effectively especially using the e-commerce platform.
In this respect therefore, it has failed to capture the attention of young skaters in the United States and Canada (Melvin, 2007). Despite its diverse product line, most of its products are of a lower quality hence they tear and wear quickly. This fact can be used to explain its declining sales especially during the 21st century.
Strengths and Weaknesses of Sports Center
With regards to the above competitors, Sports Center stands on a competitive advantage due to the fact that our products are of a higher quality. We have managed to manufacture versatile products by putting into considerations the ideas and comments that we receive from our customers.
In the process, we have managed to manufacture products that conform to the needs and requirements of our customers hence satisfying their needs and requirements (Mendenhall, 2007). Consequently, our products are pocket friendly due to our effective pricing strategy.
This move has greatly increased our market share due to the affordability of our products (Hodgetts, 2003: Latta, 1998). Most importantly, Sports Center has mainly focused its operations on an online platform.
Through our e-commerce strategy, we have managed to reach out to a wide range of consumers who shop online (especially the members of the new generation). This concept has given us a competitive edge over our rivals who have been reluctant in incorporating e-commerce strategies in their operation.
Despite our strengths, Sports Center is facing several challenges. First, the funds available are not sufficient to maintain our operations. Consequently, there are consumers who are reluctant to purchase our products due to the fact that we have not been operational for a long period of time.
This brings about the problem of brand credibility due to the fact that we do not have a strong brand name (Nakiye, 2005; Pinder, 2012).
Despite our weaknesses, Sports Center stands at a competitive advantage due to the fact that it has a highly qualified workforce that comprises of individuals who are skilled in running and managing an organization at a national and international level.
The Chief Executive Officer, various managers, and the employees at all levels of management have a successful track record. Consequently, the firm has a strong organization culture that focuses on excellence and aims at meeting the needs and requirements of its customers.
Given its complexity, it is impossible for our competitors to copy and implement it successfully within their organizations hence giving us a competitive edge (Thompson, 2008).
Sports Center also has an effective value chain system that maximizes the efficiency of producing, marketing, and delivering its products to its customers.
This system greatly reduces the costs of production while maximizing profits. Most importantly, our products are protected by patent and copyrights that ensure that other firms cannot copy our designs. This is an essential factor in brand differentiation (Gee, 2003).
As it has been stated, Sports Center will target skaters from the following market segments:
- Recreational sports
- Speed skating
- Extreme Skating
To ensure that our products are sustainable in the long run, the firm has targeted individuals from the age of five years to sixty five years. This will ensure continuity of its brand regardless of the generation gap that might be present.
Consequently, all of our products are unisex hence they can be utilized by either male or female consumers (McNally, 2002). However, there Sports Center has the customization option where a customer can request for a customized product. This service will be offered at an additional fee.
Sports Center has taken into consideration the market trends as well as the feedback of its customers to manufacture its products. This strategy is effective as it ensures that the manufactured products conform to the needs and requirements of the target market (Porter, 2010).
The first product, The Glider, has been manufactured specifically to meet to the needs and requirements of recreational and fitness customers. These skates have covers on their wheels that enable a user to skate in almost every terrain.
The other product, The Sail, has been manufactured to meet the needs and requirements of SkateSailing customers and those individuals involved in speed skating, hockey, and extreme skating. These skates are extremely light and have ankle support to avoid mechanical damage of the legs of the users.
One of the main objectives of Sports Center is to ensure that its products are affordable to the target market. To achieve this goal, Sports Center has developed a pricing strategy that ensures that its products are affordable to its customers.
With this price, the firm ensures that the production cost is below this price. Therefore, the difference between the set market price and the production cost will be the ultimate margin earned. This strategy was adopted from IKEA to ensure that its products are pocket friendly to its customers (Grebe, 2005; Moorhead, 2008).
The manufacturing process will be outsourced to third party firms. Consequently, all of the products will be sold online. This will greatly reduce overhead costs required to rent stores all over the United States.
The goods will only be transported once they have been bought online. However, the shipping costs will be met by the firm.
Sports Center will mainly use e-marketing strategies to reach its customers. Other than having its own website, the firm will place adverts on social network sites, websites that attract a lot of traffic such as Google, Yahoo, YouTube and so on. Consequently, the firm will place adverts on the television, radio, and billboards.
Sports Center will also have an online platform where customers upload their ideas and comments with regards to their experience with the firm’s products. This will be useful in improving the quality of the products (Oddou, 2011).
Plant and Equipments
The key plant and equipments include a warehouse storage facility that will be located in New York and website servers.
Background and Details of Key People
At the present moment, the CEO of Sports Center is Daniel Roberts. Roberts is also the founder of the firm. Prior to being the CEO, Roberts was the Branding Manager of Google. With his skills and expertise, Sports Center stands a high chance of being profitable and sustainable in the long run.
Philip Mane is the Managing Director of Sports Center. Mane is the former head of the North American unit of Pepsi. During his time in Pepsi, he managed to increase the market share of the product throughout North America especially after releasing the low-cal Pepsi into the market.
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Profit and Loss Account
Break Even Analysis
Break Even = Sales x Net Profit
= 750,000 x 354,000
Cash Flow Forecast
NB: Expenses such as Depreciation, insurance, and utilities are paid once a year (in January).