Olympia Sports Ltd_ugsm_crswk

BBK-MOMN09H6_1516 Strategic Management [OLYMPIA SPORTS LTD BUSINESS REPORT]

Word Count: 2489 Page 1

Carmen Coberly (Chief Operations Officer)

Max Huelber Celante (Chief Executive Officer)

Naiara Fernandez (Chief Financial Officer)

Anthony Ezegou (Chief Marketing Officer)

Mission: “Olympia’s Sports mission is to provide excellence that is needed in sports with high quality sports equipment.”

We are committed to provide our customers with unmatched sports equipment nationally.

The passion for sports is at the core of our business and we encourage the participation of sports to all individuals.

Vision: “The Olympia Sports vision is to be the leading Sports Company that inspires the world of sports.”

Values: At Olympia Sports each member of our team is connected through our core values:

Committed –We are committed in the relentless improvement of Sports Equipment.

Skilled – We are focused and precise.



Executive summary

Olympia Sports Ltd currently operates in Oxford Circus in the heart of London, UK. A study has

been carried out to investigate whether expanding as retail chain store in the main cities of UK, using

a differentiation strategy would be a viable option for the business. The study consists in analysis of

strategic decisions that was based on decisions from a variety of sources: market research, PEST,

SWOT, Porters Generic Strategies, and Ansoff’s Matrix. Olympia Sports Ltd plan is to distribute

affordable cost products according to customer’s needs, and high quality to break the UK market.

Olympia Sports ltd has attained brand awareness through quality production, innovative products

and aggressive marketing which were made through yearly strategic decisions.

Significant importance has been placed on high growth products driven by current social trend such

as tennis rackets and helmets equipment’s. Olympia Sports Ltd competes in a highly fragmented and

competitive market. For this it has thoroughly planned a variety of promotional strategies using the

market analysis models in order to gain as much market share as possible.

The conclusion drawn from the analysis is that the present environment would benefit the company

by expanding as a retail chain store. A number of recommendations are made in order to establish

the new proposed operation including the need to focus on a competitive price, expansion on e-

commerce, distribution channel, and high quality service and to target the younger generation as

the main customer base.



Table of Contents

Executive Summary

1. Introduction

2. Findings

2. Week 2 S.W.O.T Analysis- Internal Environment,

2.1Decisions Period 3

2.2 Results

3. Week 3 S.W.O.T Analysis -External Environment, including PEST

3.1 Decisions Period 4

3.2 Results

4. Week 4 Porters Generic (Business Level) Strategies and Bowman Clock

4.1Decisions Period 5

4.2 Results

4.3 Reflections

Week 5 Corporate Level Growth Strategies Ansoff

5.1Decisions Period 6 & 7

5.2Results

Week 6 Conclusions and Recommendations

References

Appendix



Introduction

Olympia Sports Mission: “Olympia’s Sports mission is to provide excellence that is needed in sports

with high quality sports equipment. We are committed to provide our customers with unmatched

sports equipment nationally. The passion for sports is at the core of our business and we encourage

the participation of sports to all individuals.”

Olympia Sports is a retail company that sells high quality sporting equipment’s that is stylish, in

demand and competitively priced. Olympia Sports Ltd is situated in London, UK currently operating

one shop which has been stablished since 2009.Its focus is the young generation aged between 15-

35 years old that is passionate about sports. Since its existence the company has been selling four

specific sports equipment products (Tennis Rackets, Helmets, Hockey Sticks, Football) with the idea

of exploring other range of sports products. Olympia Sports ltd purchases its inventory at regional

centre which is located in Kent making distribution costs affordable.

Our board of directors consists of three members: Naiara Fernandez (Spanish investor, Financial

PhD), Max Huelber Celante (an investor, Business PhD), and Carmen Coberly (an investor, Operation

Management PhD) Athony Ezegou (an investor, Marketing PhD) which have developed and

strategized plans over the weeks having a management background.

GOALS After carefully analysing the current market situation it was decided that Olympia Sports should

have a differentiation strategy. For this Olympia Sports needs to target a segment of the market to

deliver a message that the product is positively different from all other similar products available. A

product differentiation strategy provides a competitive advantage in market dominated by many

similar companies selling similar products.

Olympia Sports strives to provide the best quality service and equipment. The internal team is crucial

for the success for the company so future investments on training for further learning and growth

development will be carried out. The aim of this action is to have high skilled members with in depth

knowledge of our product that will help increase sales perspectives by 20 % over the next years.

One of the priorities is to increase sales by 20% through innovation, therefore investing in research

and development that provides high quality products. This will make provide Olympia Sports a

competitive advantage over the competitors. In addition increase customer loyalty by 35% by

creating loyalty cards with special offers.



2. Week 2 S.W.O.T Analysis- Internal Environment (Strengths and Weakness), Strategic Capabilities

and Resource Based View

According Goodrich (2015) S.W.O.T model helps develop strategies and actions for capitalizing on

opportunities, create plans for addressing threats and weaknesses that could threaten the future of

the company.

Through the Key Performance Index (diagram 1.1) Olympia Sports has developed a SWOT analysis to

develop/differentiation strategy

Balance Scorecard-KPI 1.1

Edumundo Results (2015)



SWOT DIAGRAM 1.1 Own Ilustrations

Main Strengths

• Strong customer relationship

• Customer trying centre

• Effective marketing strategy/Good sponsorship

Weakness

• Inventory and Stock

• Human Resources

• Financial resources

2.1DECISIONS PERIOD 3

Based on the outcomes of Olympia Sports SWOT internal analysis and significant business

development decisions were made:

Olympia Sports focus was to continue to improve the customer satisfaction. Investing in innovation

is vital to the success of Olympia sports as it wishes to differentiate the products as the competitors

are selling similar products. With the company expect to investment it hopes to continue to increase

customer satisfaction and customer retention, therefore resulting in a higher market share. Staff



satisfaction and the productivity of the staff were low a relevant area that needs to be addressed.

Staff and high salaries were reduced to in order invest on the training and skills of the staff. The

distribution channel was to import directly from the factory as it was the most affordable option. At

the moment of acquisition the net profit was £ 35 369 at period 3. Profit and Profit growth are

standard on the KPI’s, reflecting a good financial position for a company that is growing in the

industry. The concerns are the high administration costs and the high investments in research and

developments. At this level financial position was maintained not cutting the administration costs

and maintaining the investments costs in research and development.

2.2 Results: Olympia Sports maintained market share, marketing image and customer satisfaction

keeping in level with the other competitors. It will be hard for Olympia to decide where to position

itself in terms of market share due to a lack of market research, which makes it hard

to take decisions in terms of product pricing. The profit increased by £ 10 187, therefore

improving financial situation in period 3 and staying quite similar, as no additional expenses were

changed in the decision making from period 2 to 3. It is difficult to analyse the current market

situation with a lack of market research which makes it hard to make decisions in terms of

competitor’s price. It will be hard for Olympia Sports Ltd to decide where to position itself in terms

of market share and also the demand.



3. Week 3 S.W.O.T Analysis -External Environment, including PEST

Further development of the SWOT analysis: opportunities and threats in the external environment.

Based on our SWOT the decisions were made on Opportunities and Threats:

Opportunities

Olympia Sports ltd is situated in one location, as part of the expansion; strategic location is the major

aim in order to attract our target customers. The company is aggressively focused in a marketing

campaign in order to expand nationally where it can be present in every city across the UK.

Furthermore with the advantage of warehouse in place and technology advancement an online

selling system would attract a wider range of consumers alongside with a strong marketing

campaign. A distribution centre would enable the company to have a more effective delivering

system in order to reach our customers efficiently.

Threats

It is not expected that the market will grow as mentioned in the communication for the next year as

a consequence need to consider the customer perception might change over time as well the

government regulations. This company is offering affordable high quality products but customers

may opt for less expensive goods over more distinctive ones. The company needs to be able to

adapt according to the external changes that may arise.

The PEST developed was incorporate in this period as seen in the diagram 1.2. According to (Makos,

Jim 2005) PEST is a strategic analytical tool that helps analyse the impact of the external issues

(Political, Economic, Socio Cultural and Technological).

There was a communication on the economy that affected the company:

“In spite of the optimism of the government body for economic planning, the economic growth which was

predicted has not occurred.” Edumundo communications

3.1 DECISIONS PERIOD 4

The impact of this economic news for Olympia Sports was to change the price and quality of the

products based on real market prices at current time with the aim to differentiate from the

competitors such as J.A.K Athletique. Due to lack of market research investment it was unable to see

the competitor’s prices or the market share it was at present. For this reason prices were lowered

for all the products. It was felt that as period 2 having a good economic growth the board of

directors maintained the inventory ordering high amount of products with aim to achieve high sales



revenue. There has been a reduction of the sales team from 20 members to 7 members and

decreasing the salaries by £200 (£2000-£1800). Olympia sports aims to have further training and

developments for staff in order to have high skilled staff, for this the board of the company decided to

increase the training and working conditions from Average to Good in order to increase revenue. This will aim

to maintain the loyalty of the staff as training and development are seen as essential in the company.

To provide high quality products the board of directors changed the suppliers of the two products

football and drivers helmet as they had a high market share, suppliers were changed high quality

providers Henderson and Schneider’s GmbH. The products Tennis racket and Ice Hockey sticks

remained with the same suppliers Kansas Inc. as the market share and sales were low.

In terms of financial decisions Olympia Sports had high marketing costs and research development

costs. Marketing costs were cut by £4000, research development costs were cut by £7550 as it was

felt that marketing strategy was doing well and money could be invested in other areas such as staff

development.

3.2Results

Products were sold but because the prices were so low that Olympia Sports could not compete in

the market with the other competitors prices. It led to a large loss of the market share and for the

company go down in the stock exchange by 12%. The impacts of the PESTEL: Technology is

responsible for revenue growth. Neglecting the use of this feature would result in disadvantage for

the company. Lack of health and safety at the workplace may contribute to ecological

impact. The PESTEL in the proves that Olympia Sports can have a quite stable external environment. The

key reason behind this might be because it operates in the retail industry. This means consumers

might reduce consumption partially but will not stop buying completely.



DIAGRAM 1.2 (Own illustration)



4. Week 4 Porters Generic (Business Level) Strategies period 4

According to Scholes in (2014) Porters Generic model evaluates how Olympia Sports ltd pursues a

competitive advantage across its market scope. Four distinct business strategies can be determined:

Overall cost leadership, differentiation, cost focus and differentiation focus.

Olympia Sports ltd strategic stance is to be a differentiation strategy (see diagram 1.3) which

according Porter in MindTools (2015) are companies that pursue a differentiation strategy win

market share by offering unique features that are valued by their customers.

Diagram 1.3 Own illustration

4.1 Decisions Period 5:

In period 3 an investment of £3800 was placed in research and development spread between all

products. This was to improve the quality and innovation of our products in order to differentiate

ourselves from the market. According to Olympia Sports Ltd Porter Generic Strategy the elements of

differentiation strategy is the intellectual property-skilled staff with in depth knowledge of the

products. The product that differentiate is from the competitors is high technology tennis racquets.

Having invested in period 4 for the market analysis competitor’s price it was noted that the prices

were not analysed properly and below the market. Prices of all products were increase to the

original prices from period 2, to compete with the competitors. Price of the tennis racquets were

priced higher as it was below the average price. The market demand was analysed for the products

in order to have the correct amount of inventory to meet the customer demand, a lot of inventory

was unsold from some of the products (driver’s helmets and ice hockey stick) from period 4 except

for the tennis racquet. Demand has gone up by 100 units since period 4 and by this analysis orders

for Football were 100 units and for Tennis Racquets 200 units. To improve staff product and staff

satisfaction Olympia Sports ltd recruited a manager who could improve this Julia Wagner. Based on

the managerial criteria in approaching people in a positive manner and although a higher



remuneration of £2600 it was felt that that in order for the success of the company and direction it

was the best decision.

4.2 Results

Key to improving our market share was to invest in the following market research competitor prices,

market analysis and staff satisfaction. This will give in insight of the pricing of the products, what is

the market share and in which product to invest more in.



5. W.5 Corporate Level Growth Strategies Ansoff

Ansoff’s matrix according to (, 2015) suggests four alternative marketing strategies which hinge on

whether products are new or existing. The four strategies according to Ansoff (Business case studies,

2015) are: market penetration, product development, market development and diversification.

Olympia Sports ltd chooses to adopt market development – This strategy entails finding new

markets for existing products. Market research and further segmentation of markets helps to

identify new groups of customers. Olympia Sports Ltd can adapt a market development strategy by

looking into a new distribution channel such as being on-line retailers. For this purpose training of

employees, understanding of centralised warehouse rather than local depots has to be introduced

into the company.

Diagram 1.3

Ansoff Growth Matrix – Own illustration

5.1 Decisions Period 6 & 7

According to the BCG matrix (diagram 1.3) Olympia Sports looked at the market share growth and

demand of the products in order to differentiate from the competitors. This showed that market

demand has been increasing since the last period, therefore Olympia Sports increased stock to meet

the customer demands that is expected with this decision which profit and business capital will

increase. Turnover sales revenue reveals the income generated from sales is below the minimum

(£306.677) the Minimum being 350 000. It is expected that maintaining the product prices and

ordering the adequate level of stock this will cause the company profitability and gains to increase in



the market share. The BCG Matrix (Edumundo) market research showed that three of the products:

Tennis Rackets, Ice Hockey Stick, and Drivers helmets carry a great the potential of gain in the

market. These products are “question market products” meaning that they have a high market

growth but have a low market share. Investment in these products will be done to grow market

share and to become “star” (Market Leaders). The 4th product is football, this is in “dogs” position in

the BCG matrix, meaning that there is low growth and low market shares therefore no investment or

stock was ordered. Olympia Sports Ltd. needs to invest less in this product as the market share and

growth is low. With this decision in place this product should generate relatively low cash and

hopefully be liquidated. The key decision in period 6 was the loan, as there was no cash flow

generated over the last period, to cover the expenses of the company.

Diagram 1.3

Results Edumundo 2015

Results: Gain in the competitive market, staff satisfaction was team leader. The overall impact that prospects

for the company seemed to be positive if they follow the strategy.



Week 6.Conclusion and Recommendations

The main question considered in this report is by using a differentiation strategy if Olympia Ltd could

convert into a retail chain support by implementing the theoretical frameworks. Based on the

preceding analysis the conclusion drawn is that due to the low market share value and financial

situation this expansion was not possible. Through the generic strategies applied Olympia Sports ltd

tried to create a competitive advantage however the result does not reflect this due indecisive

decisions. Olympia Sports Ltd has learnt in the last periods not to react aggressively to the Key

Performance Indicators, too many changes occurred financially and internally which can create a

misconception of what the company represents.

To ensure that market growth for Olympia Sports ltd continues the following recommendations

were made:

Investment in technology should be made primarily focused on the products and services

Distribution processes-Invest in the own storehouse in the long term as transport costs are relatively low, but it requires a large initial investment so this is a long term decision.

The target customer base should continue to be the younger generation with emphasis on products for young women.

To ensure the loyalty and retention of staff the company should continue to develop the skills of staff and provide the clear career pathway.

To enhance the online business of the company to increase company image and to reach customers faster.



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Appendix

Own illustration

Own illustration

Documents

Olympia Sports Ltd_ugsm_crswk