Transcript Clarks* Sporting Goods - Edwards School of Business

Clark’s Ultimate Apparel
and Sporting Goods
SEGMOS Consulting
Overview
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Marketing Plan
Operations Plan
HR Plan
Financial Highlights
Funding
Implementation
Conclusion
Clark’s Ultimate Apparel
and Sporting Goods
Marketing Plan
P - political
E - economic
S - social
T - technological
E - environmental
Clark’s Ultimate Apparel
and Sporting Goods
Marketing Plan
Supplier Power
Barriers to Entry
Threat of Substitutes
Rivalry
Buyer Power
Degree of Rivalry
Clark’s Ultimate Apparel
and Sporting Goods
Marketing Plan
How big is the market?
Statistics Canada (Per 2006)
-Approximate Saskatoon
Population of 234,000
-Growing as per impact of
SaskaBoom
- Median Income before tax
of $73,480
Clark’s Ultimate Apparel
and Sporting Goods
Marketing Plan
• Market Segmentation & Target Markets
• Individuals
– Targeted based on age
– 15-40 years
• Approximately 150,000 People
• Teams
– Corporate
– Other
Clark’s Ultimate Apparel
and Sporting Goods
Marketing Plan
Who are our customers?
• Psychographic Demographics
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Active & Athletic
Health Conscious
Makes purchases on average 2 times a year
Passionate about sport of choice
Value for money customer (Looking for quality
service and products at reasonable prices).
Clark’s Ultimate Apparel
and Sporting Goods
Marketing Plan
• Marketing Strategy :
– Premier one stop shop for apparel
– When you want to talk to someone who breathes & loves the sport.
• Product ( Wide and deep line of quality products)
– Clothing
– Shoes
– Merchandise
• Price
– Competitive Pricing
• Unique Products : premium priced
• Other products : market based pricing
Clark’s Ultimate Apparel
and Sporting Goods
Marketing Plan
• Place
– Convenient 8th street location
• Ease of parking
• Accessibility re:
– Bus routes
– Saskatoon's Major artery
Clark’s Ultimate Apparel
and Sporting Goods
Marketing Plan
• Positioning
– Significant promotional campaigns
– Blockbuster sales
• Summer Sales and Boxing Week
– Advertising & PR
Clark’s Ultimate Apparel
and Sporting Goods
Marketing Plan
Radio
Newspapers
& Yellow
Pages
Tournament
Sponsorships
Marketing
Message
Web
Presence
Billboards
Marketing Plan
• Why would they come to us?
• Desirable location and competitive pricing.
• Competitive advantage: depth, variety, and uniqueness of
product line
• Exceptional customer service through specialized and
knowledgeable staff.
Clark’s Ultimate Apparel
and Sporting Goods
Marketing Plan
SWOT Analysis
• Strengths
– Convenient location
– Apparel is used in many sports
– Niche market
– Knowledgeable staff
Clark’s Ultimate Apparel
and Sporting Goods
Marketing Plan
SWOT Analysis
• Weaknesses
– Manager lacks experience
• Using outside expertise
– Seasonality
• Carrying equipment for less seasonal sports
– Ultimate and Disc Golf are low equipment sports
• Marketing to other sports as well as disc sports
Clark’s Ultimate Apparel
and Sporting Goods
Marketing Plan
SWOT Analysis
• Opportunities
– First Mover advantage
– No other stores with complete line of apparel
– Disc sports one of the fastest growing sports
Clark’s Ultimate Apparel
and Sporting Goods
Marketing Plan
SWOT Analysis
• Threats
– Competitors can carry same items
• Try to get some exclusive contracts with suppliers
– High staff turnover
• Increased compensation over competition
– Disc sports will not “take off”
• Carry other lines of products for other sports
• e.g. running, soccer, basketball
Clark’s Ultimate Apparel
and Sporting Goods
Marketing Plan
Competitive Analysis
• Competitors
– 3 to 4 large national chains (e.g. SportChek)
– 5 to 10 smaller stores (e.g. Escape Sports)
– Large stores have most of the market share
• Competitor’s Strategy
– Large stores – low cost strategy
– Local stores – specialization
Clark’s Ultimate Apparel
and Sporting Goods
Marketing Plan
Competitive Analysis
• Competitor’s Strengths
– Price
– Brand recognition
• Competitor’s Weaknesses
– Depth of product line
– Lack knowledgeable staff
Clark’s Ultimate Apparel
and Sporting Goods
Operations Plan
Operations Plan
Business Structure
Incorporation
– Limited personal liability
– Equity investing
– Tax
• Small Business Deduction
• Income splitting
Clark’s Ultimate Apparel
and Sporting Goods
Operations Plan
Capital Budget
2009
Computer/software
1,000
Shelves
7,500
Remodelling
10,000
POS system
1,000
Cash Counter
500
20,000
Clark’s Ultimate Apparel
and Sporting Goods
Operations Plan
Floor plan
Operations Plan
Store Hours & Activities
Open
Close
MondayFriday
11:00 am
9:00 pm
Saturday
9:30 am
9:00 pm
Sunday
9:30 am
6:00 pm
Day
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Opening the store
Close store/cash out
Stocking merchandise
Variance analyses
Cycle Counts
Supplier/Customer
management
• Full inventory count
• Compile financials/budget
Human Resources
Plan
Human Resources Plan
• Owner-manager: Dave Clark - $2,000/month
• 3 additional employees will be needed
1. Full Time Employee - $15.65/hour
2. Part Time Employee - $13.65/hour
3. Fill-in Employee - $10.65/hour
Clark’s Ultimate Apparel
and Sporting Goods
Human Resources Plan
• Benefits – Discount, Christmas Bonus
• Training – Pre-opening, Vendors
• Annual costs for the first 5 years:
– Between $90,000 - $100,000 per year
Clark’s Ultimate Apparel
and Sporting Goods
Financial Plan
Financial Plan
Funding Requirements
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Total Investment required= $157,500
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Bank: $87,500
Dave Clark: $30,000 for 60 common shares
Outside Investors: $40,000 for 40 common shares
Start-up costs are minimal:
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Building is leased
Only $20K in capital expenditures
Greatest cost is $125K initial inventory purchase
Something to consider:
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Number of grants available to young entrepreneurs
Clarks’ Sporting Goods
Financial Plan
Financial Highlights
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Five year projection and Sensitivity Analysis
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Positive Cash Flows from Operations by second
year
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Cash is scarce in first year
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Ending balance is just under $3K
Available credit at y/e is more than $52K
Positive Net income from second year on
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Short term and Long term viable.
Expected Sales Revenue: $354K in year one
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Growth in volume until year 5 when annual revenue
hits industry average of $700K
Clark’s Ultimate Apparel
and Sporting Goods
Financial Plan
Financial Highlights
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Return on Investment
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IRR (on equity)=37.48%
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IRR on Clark’s cash equity is 46%, while the IRR on the
outside equity is 29%
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The reason is that Clark receives a 60% interest for his $30K
investment due to Clark’s “sweat equity” contribution
Value of Equity = $117,000
ROE is negative in year one but grows to 50% by
year 5
Clark’s Ultimate Apparel
and Sporting Goods
Financial Plan
Financial Highlights
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Sensitivity Analysis
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Worst Case Scenario
Clark’s Ultimate Apparel
and Sporting Goods
Financial Plan
Financial Highlights
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Sensitivity Analysis
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Best Case Scenario
Clarks’ Sporting Goods
Implementation
Pre-2009
•Obtain Funding
January
•Order Inventory
February
March
•Renovate Location
•Grand Opening
Clark’s Ultimate Apparel
and Sporting Goods
Conclusion
Why should you give us your money?
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Passionate & Hungry Management
Positive Cash Flows from operations and
Positive net income in three years =
SHORT TERM AND LONG TERM
VIABILITY
• Growing Industry and Emerging niche
Market =
REAL GROWTH POTENTIAL
Clark’s Ultimate Apparel
and Sporting Goods
Questions?