Dick's Sporting Goods Essay

Introductions & Core Question

Dick’s Sporting Goods (hereafter referred to as Dick’s) is in a unique market position where it maintains competitive advantage through its vast network of 741 brick and mortar stores (Dick’s Annual Report, 15). The increasing number and size of large online retailers, like Amazon, endangers the ability of Dick’s to price its products competitively. Furthermore, national brands, such as Nike and Under Armour, progressively try to sell directly to customers (B2C) through their own online stores to avoid sharing profits with a middle-man retailer like Dick’s. While Nike, Under Armour, and Amazon all have a distinct advantage over Dick’s due to lower overhead costs with regards to online sales, they lack the physical, geographical reach through brick and mortar locations. If Dick’s is unable to compete with other retailers on price, it must seek alternative ways to provide value to its customers. If Dick’s wants to remain competitive and profitable in the long run, it must consider the core question:

Only 10% of Dick’s revenues are attributable to their sales through private brands (Dick’s Annual Report, 5). While that is a relatively low percetange of revenues, Dick’s makes a much larger margin on their private brands than they do on selling the products of other companies, despite charging lower prices than Nike, Under Armour and LuluLemon. Pursuing further development within the private label sphere, Dick’s could reduce the dependence on national brands and establish a stable revenue stream for long term profitability. The private label brands could also gain more control over other products especially in terms of size, package design, and distribution. Moreover, with fast trend cycles and changes in customer preferences, it is easier to adjust product assortment to these cycles when dealing with private