Harvard Case - Challenging Sports Authority in Puerto Rico
"Challenging Sports Authority in Puerto Rico" Harvard business case study is written by Shirley Ann Molina, Valerie Rivera Lozada, Victor Quinones. It deals with the challenges in the field of Marketing. The case study is 10 page(s) long and it was first published on : Jun 10, 2015
At Fern Fort University, we recommend that Sports Authority Puerto Rico (SAPR) adopt a multi-pronged strategy focused on repositioning its brand to resonate with the local market, leveraging digital marketing to reach a wider audience, and introducing innovative product offerings that cater to the unique needs and preferences of Puerto Rican consumers. This strategy aims to challenge the dominance of existing competitors and establish SAPR as a leading sports retailer in the region.
2. Background
This case study focuses on Sports Authority, a national sports retailer facing challenges in the Puerto Rican market. Despite its strong brand recognition in the U.S., SAPR struggles to compete with local competitors like Walmart and Kmart, which offer lower prices and a wider range of products. SAPR's current strategy relies heavily on traditional marketing channels, failing to connect with younger, digitally-savvy consumers.
The main protagonists are:
- Luis Rodriguez: SAPR's General Manager, tasked with revitalizing the brand and achieving profitability.
- The SAPR team: A dedicated team of employees committed to the success of the business.
- Puerto Rican consumers: A diverse population with unique needs and preferences regarding sports and fitness.
3. Analysis of the Case Study
To understand SAPR's situation, we can utilize the following frameworks:
3.1. SWOT Analysis:
Strengths:
- Strong brand recognition in the U.S.
- Experienced team with local market knowledge.
- Potential for growth in the Puerto Rican market.
Weaknesses:
- High prices compared to competitors.
- Limited product selection catering to local needs.
- Lack of digital marketing presence.
Opportunities:
- Growing demand for sports and fitness activities.
- Increasing internet and smartphone penetration.
- Potential for partnerships with local sports organizations.
Threats:
- Intense competition from established retailers.
- Economic instability in Puerto Rico.
- Changing consumer preferences and shopping habits.
3.2. Competitive Analysis:
SAPR faces stiff competition from:
- Walmart and Kmart: Offering lower prices and a wider variety of products.
- Local sports specialty stores: Catering to specific sports and offering personalized service.
- Online retailers: Providing convenience and a broader selection.
3.3. Consumer Behavior Analysis:
Puerto Rican consumers are increasingly health-conscious and active, seeking quality sports products and fitness apparel. However, they are also price-sensitive and value convenience. Younger consumers are digitally savvy and prefer online shopping experiences.
3.4. Market Segmentation:
SAPR can segment its target market based on:
- Demographics: Age, gender, income, location.
- Psychographics: Lifestyle, interests, values.
- Behavioral: Purchase frequency, product preferences.
3.5. Brand Positioning:
SAPR needs to reposition its brand to appeal to the local market. It can focus on:
- Value proposition: Offering quality products at competitive prices.
- Unique selling proposition: Providing a personalized shopping experience and expert advice.
- Emotional connection: Connecting with consumers through local sports and fitness events.
4. Recommendations
To challenge the dominance of existing competitors and establish SAPR as a leading sports retailer in Puerto Rico, we recommend the following:
4.1. Repositioning the Brand:
- Focus on local needs: Offer a curated selection of products that cater to the specific sports and activities popular in Puerto Rico.
- Emphasize value: Offer competitive pricing and promotions to attract price-sensitive consumers.
- Build relationships: Partner with local sports organizations and athletes to build brand credibility and community engagement.
4.2. Leveraging Digital Marketing:
- Develop a strong online presence: Create a user-friendly website and mobile app with a seamless shopping experience.
- Utilize social media: Engage with customers on platforms like Facebook, Instagram, and Twitter to build brand awareness and loyalty.
- Implement targeted advertising: Run online campaigns to reach specific target segments based on demographics, interests, and behavior.
4.3. Introducing Innovative Product Offerings:
- Offer exclusive products: Partner with local brands or designers to develop unique products that appeal to Puerto Rican consumers.
- Focus on sustainability: Offer eco-friendly products and promote sustainable practices to appeal to environmentally conscious consumers.
- Embrace technology: Introduce innovative fitness equipment and wearable technology to cater to the growing demand for personalized health and wellness solutions.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core competencies and consistency with mission: SAPR's core competency lies in providing quality sports products. The recommendations align with this by focusing on product selection, pricing, and customer service.
- External customers and internal clients: The recommendations cater to the needs of both external customers (Puerto Rican consumers) and internal clients (SAPR employees) by providing a better shopping experience and creating a more engaging work environment.
- Competitors: The recommendations address the competitive landscape by focusing on differentiation through product selection, pricing, and marketing strategies.
- Attractiveness ' quantitative measures if applicable: The recommendations are expected to increase sales, improve profitability, and enhance brand equity, leading to a positive return on investment.
6. Conclusion
By implementing these recommendations, SAPR can effectively challenge the dominance of existing competitors and establish itself as a leading sports retailer in Puerto Rico. The combination of brand repositioning, digital marketing, and innovative product offerings will enable SAPR to connect with local consumers, build brand loyalty, and achieve sustainable growth.
7. Discussion
Alternatives not selected:
- Focusing solely on price competition: While this could attract price-sensitive consumers, it could damage SAPR's brand image and profitability.
- Ignoring digital marketing: This would limit SAPR's reach to younger consumers and hinder its ability to compete in the evolving digital landscape.
Risks and key assumptions:
- Economic instability in Puerto Rico: The recommendations assume a gradual improvement in the Puerto Rican economy.
- Changing consumer preferences: The recommendations assume that consumers will continue to prioritize health and fitness.
- Competition from online retailers: The recommendations assume that SAPR can effectively compete with online retailers by offering a differentiated shopping experience and personalized service.
8. Next Steps
To implement these recommendations, SAPR should:
- Phase 1 (Short-term):
- Conduct market research to gather insights into consumer preferences and competitive landscape.
- Develop a digital marketing strategy and allocate resources for website development, social media marketing, and online advertising.
- Introduce a limited selection of exclusive products catering to local needs.
- Phase 2 (Medium-term):
- Rebrand SAPR with a new logo, tagline, and marketing message that resonates with Puerto Rican consumers.
- Expand product offerings to include a wider range of sports and fitness equipment.
- Partner with local sports organizations and athletes to build brand credibility and community engagement.
- Phase 3 (Long-term):
- Develop a loyalty program to reward repeat customers and encourage brand advocacy.
- Invest in technology and analytics to optimize marketing campaigns and personalize customer experiences.
- Explore opportunities for international expansion to leverage SAPR's brand recognition and expertise.
By taking these steps, SAPR can successfully navigate the challenges of the Puerto Rican market and achieve sustainable growth.
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Case Description
Shooting & Outdoor Distributor (SOD) was a Puerto Rican family-owned wholesale business selling sporting goods for hunting and fishing. After a year of working for the company, the operations manager was confronted with the arrival of a U.S. retail chain, Sports Authority (SA), to the Puerto Rican market. SA carried many sporting goods sold by SOD, as well as a number of brands under exclusive distribution agreements between SOD and its U.S. manufacturers. Even though SA was a retailer, due to its size, it had the power to negotiate better prices with manufacturers than SOD and pass those deals on to the final customer. SOD's operations manager was considering three options for combating this competition: 1) Develop private branding for a new rifle product; 2) Open SOD retail stores not operating close to SA or to its retail clients; and/or 3) Expand SOD to other Latin American and Caribbean markets where no competition was present.
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