Group 4:
RJ Liggins
Alex Ellinwood
Courtney Prather
SPOKANE KICKS:
Exclusive Nike Retailer
Spokane Kicks is a retail company that specializes in Nike footwear. Our company was founded on January 15, 2010 by RJ Liggins, Alex Ellinwood and Courtney Prather. Our mission was to open a store that exclusively sold Nike shoes to the greater Spokane area for an affordable price. We are located on 2401 W. Wellesley Avenue, which is relatively close to the downtown area, and the Gonzaga University campus. This is a prime location for us to reach our target market. Our company offers retail in-store and online for the convenience of the customer.
Currently we offer 14 different shoes ranging in various colors and sizes. These shoes include: Nike Zoom 4, Nike Air 2, Nike Cross Trainers, Kobe’s, LeBron’s, Air Jordan 23’s, Nike Trainers, Air Max, Air Force, Nike Turbo, Nike Elite, Nike Free, Nike Shox, and Runner’s Delight. As a new company, it is our duties to determine what our customers want by observing which products are top sellers, and which products should be discontinued. Based on the information gathered during our second quarter, from March 1- June 30, 2010, we can determine the shoes and colors that will increase sales, and maximize profit.
System:
We are using Excel to develop a database that will keep track of inventory. The database will record the: Order Date, Product Id, Product Name, Quantity, Unit Price, Unit Cost, Total Sales, Total Cost, Profit, and Customer. This database will keep us organized, which allows our company to run as efficiently as possible. We can analyze the table, and make any corrections or adjustments needed to improve sales and profit. We can analyze the relationships and cardinality between our customers and the products they purchase. Using OLAP, we can construct a pivot table to analyze customer buying patterns. Based on those patterns we can determine which direction we want to take our company.
Porter’s Model:
Customers:Our primary market is 15-25 year old athletic, active men and women in the Spokane Area. Based on our location we would be mostly targeting Gonzaga students, and local high school students that fit the athletic criteria. Our secondary market consists of shoe enthusiasts that either collects sneakers or wear them for style purposes.
We gain a competitive advantage with our company’s database due to the fact that our database quickly and accurately updates the shoes sold to which customers, and the various buying patterns of the customers.
Suppliers: Nike is our sole supplier. Due to the fact that we agree only to sell Nike products in our store, Nike provides us with discounts and wholesale deals. This minimizes cost while at the same time allowing us to sell the shoes at a slightly lower price than our main competitors due to the fact that we don’t have to pay as much to carry the products. This gives us the advantage over competing companies, and allows us to maximize profits.
Substitute Products: Since we only sell Nike products, stores that sell other brand shoes such as Adidas, would have a competitive advantage with these substitute products. However, since we are an exclusive Nike store, we would have the competitive advantage over other retailers since we would have a larger variety of products and be able to offer them at a lower price. Also, there is data evidence that Nike doubles other athletic brands in total sales.
Industry Competitors:We compete with all the athletic footwear retail stores that sell Nike shoes. Also we compete with online retailers such as Eastbay and NikeID. We gain competitive advantage by offering discounts to our primary market, which would be Gonzaga students and high school athletes. By presenting their student id or school uniform, they are entitled to a 10% discount. We also provide additional discounts if coaches purchase team shoes from our store in a bulk order. We would be the only retailer to offer these discounts in the Spokane area, giving us the advantage.
New Entrants: Online shoe retailers are our main threat of new entrants. These retailers could vary from discount shoe stores to individuals selling shoes on auction web sites. We bar new entrants by being a store that exclusively sells Nike products while offering both online and in-store service. We also are the only ones to offer our unique discounts to Gonzaga and high school students.
Our Findings:
Wecompared each shoe by color, unit cost, unit price, total sales, total cost and profit. By putting together a pivot table, we concluded that Air Forces, Air Max, Jordan’s, Kobe’s, LeBron’s, Nike Air 2, Cross Trainers, Elites, Shox, Zoom 4 and Runners Delight all made a profit compared to the Nike Turbo and Nike Trainers that lost money. Due to the fact that none of the different styles of Nike Turbo or Nike Trainers made a profit, we decided to discontinue selling them in order to maximize profit. We also concluded that we can make an even greater profit by discontinuing certain colors of shoes that did make a profit, such as Nike Cross Trainers and Nike Elites. Our most successful shoes are signature shoes that feature an athlete’s name. We decided to increase the amount of signature shoes we carry, especially Air Jordan 23’s, considering those completely sold out. By increasing the amount of shoes that presented considerable profit, and by discontinuing shoes that lost us money, next quarter we should increase our profit and have reached our goal.