Abstract
Hot Shot Boards, a skateboard business owned by Barry Davis and Jim Russell, collapsed due to poor management. After a few years, Davis seeks to revive the business. He has acquired accounting and marketing knowledge after he undertook a diploma course. However, the skateboard market in Canada has changed significantly.
Davis has to analyze the characteristics of skateboarders. Additionally, he has to determine the popular brands of skateboards and apparels used by skateboarders. Furthermore, he has to determine the income levels of skateboarders. Finally, he has to consider the competition level in the market. This paper recommends that Davis should revive his business.
Introduction
Barry Davis and Jim Russell operated Hot Shot Boards, a skateboarding business, in Calgary. However, the business collapsed after Russell entered into contracts that the business could not deliver. Davis explores the possibility of setting up a new business in the same city. The author examined the changes in skateboarding business that has taken place. He has discussed the anatomy of a skateboarder, consumer behavior, economic statuses and preferences.
Additionally, he discussed changes in market composition. Finally, the article discussed issues about price and quality of skateboards, and the social and economic impact of the sport. According to Gardner (2012), Davis has to consider these factors before he decides to set up a new business. Notably, there is a potential for success. Furthermore, the diploma course in accounting and marketing will assist him to understand the different aspects of the new business. Davis should consider the factors discussed in the article.
Author’s Main Points
The main points of the author include analysis of a skateboarder, the profile of skateboard consumers and changes in Canadian market composition. Through these main points, the author discussed market research, segmentation and competition. Organizations must consider these key factors to survive. The assumption made is that Davis has sufficient resources to set up the new business.
Analysis of the Author’s Main Points
The main problem in the article is whether Davis should set up a new business in Calgary or not. Davis has to investigate the existence of a market and the current trend in skateboarding. He has to determine the clients and their needs. The author noted the characteristics of skateboarders. Davis must consider these characteristics.
Secondly, the author noted the profile of skateboard consumers. Market research is necessary before an organization makes a decision to enter into a market. Market research assists a business to communicate better, identify opportunities, minimize risks and evaluate success.
The author determined youths of ages 13-24 years as the main consumers of skateboards. Additionally, these youths skate daily, and are likely to buy more than five skateboards in a year. Further, the author noted the brands ‘Girl’, ‘Plan B’, ‘Chocolate’, and ‘Element’ as the top brands popular among these youths.
In addition, the amounts that skateboarders spend on apparels depend on income levels. Youths from higher income families preferred apparels from Volcom, LRG, Pacific Sun Wear, Zumiez, Hurley and Vans. Conversely, youths from average income families obtained their apparels from Fox Racing, American Eagle, Nike, Vans, DC, LRG and Hurley. Upper income youths prefer Nike, Vans, UGG Australia and Steve Madden brands for footwear while the average income youths prefer Vans brand for footwear (Gardner, 2012).
Thirdly, the author discussed the changes that have taken place in the market. These changes determine the level of competition in the market. Davis has to determine the competitors his business will face in the market.
According to James Mako (2012), knowledge of competitors assists an organization to determine the products that competitors offer. Additionally, knowledge of competitors assists an organization to develop promotion strategies that focus on the weaknesses of the competitors. Finally, it enables an organization to improve business performance.
Many top skateboard retail giants plan to move into Canadian market. Target plans to open over 200 stores while Express Incorporation plans to open 50 stores in Canada. Other firms that are likely to enter the Canadian skateboard market include Marshall’s, Norstrom’s, Kohl’s, J.C. Penny and Dick’s Sporting Goods (Gardner, 2012). The mode of entry these firms are likely to use is the acquisition of Canadian chains already in operation. The result of their entry is the reduction of profits realized by small retailers.
Finally, the author discussed the impact that American chains have on the quality of skateboards manufactured in Canada. Some foreign companies manufacture poor quality skateboards. Additionally, skateboard enthusiasts are concerned with other matters apart from price and competition. The true costs of poorly produced skateboards must reflect the lack of labor and environmental laws in overseas production plants. Davis has to consider these factors before he sets up a new business.
Validity of the Authors Arguments
The ideas the author expressed in the article are valid. They are vital to consider when an individual seeks to set up a new business. It is crucial for a business to identify its target market. This assists the business to determine the likely buyers, their characteristics and preferences. Additionally, it is vital for a business to know the income levels of the likely buyers. Moreover, knowledge of competitors assists an organization to determine how it will compete in the market (Mako, 2012).
Finally, the image that a company has is essential in development of a marketing strategy. These factors can assist Davis to determine the possibility of success in skateboarding business. The author noted that skater-owned skateboard shops sponsor contests and usually invite professional skateboarders to entertain people. Additionally, many individuals prefer to buy skateboards from local retail stores. Finally, the accounting and marketing course that Davis took will assist him to manage the business properly.
Conclusions
Based on the changes that the Canadian skateboard market has experienced, it is advisable for Davis to revive his business. However, he should select a new name for the business. He knows the characteristics of skateboarders, and the market that the business should target.
Furthermore, he knows the brands that many skateboarders prefer. Based on this knowledge, he can determine how to segment the market with the marketing strategy that he adopts. He should distribute skateboards and apparels that many people in Calgary prefer. The knowledge of competitors in the market will assist his business to develop a marketing plan that focuses on the weaknesses of the competitors.
Finally, he can develop a business that appeals to the residents of Calgary. The business can organize contests and invite professional skateboarders. Major skateboard retail giants do not organize such contests. Besides, some are associated with exploitation of workers and the environment. There is also possibility for growth of the business since the market is not fully exploited.
Applications
SWOT (Strengths, weaknesses, opportunities, threats) analysis can use the information provided in the article. SWOT analysis involves determination of the advantages and disadvantages that an organization has, and the opportunities and threats that it faces. The strengths that Davis has include entrepreneurial skills and experience in skateboard business.
His weaknesses include the lack of marketing skills. The opportunities presented include the existence of unexploited market. The threats presented in the article include the entry of giant retail chains in the market. Davis can use SWOT analysis to develop a promotion plan. The analysis will guide the plan that he develops for the business. He can use the strengths and opportunities to protect the business from the weaknesses and threats that exists.
References
Gardner, B. (2012). Case Study- Barry Davis: Back on Board? Retrieved from http://www.vaniercollege.qc.ca/business-administration/files/2017/06/barry-davis.pdf
Mako, J. (2012). Business- Why Its Important To Know Your Competitors. Retrieved from http://ezinearticles.com/expert/James_Mako/658483