Strengths Sports Direct is well known for being the UK’s number one sports retailer. The company has opened over 661 stores all around the world since the first one was established in 1982. Since then, the company has become a trusted brand over the decades that they have been in business. Moreover, in 2015 the group entered into the fitness industry with the development of SportsDirectFitness.com, comprising of 25 standalone gyms which were purchased from LA Fitness. The company was successful in gaining a larger market share over time while also becoming one of the dominant sports brands in the UK. In addition, they have contracts in place to work with large brands such as Nike, Adidas, Reebok, etc. The group has developed a strong online …show more content…
It will now cost more to deliver products from the UK to Europe because there may be custom duties or export taxes. Sports Direct may also have to raise the prices of goods in order to keep the same profit margin as before. However, this will cause Sports Direct to lose their pricing competitive advantage causing people to buy from other brands instead. Either way, Sports Direct has another option. They can keep their current prices and take up the extra cost of custom duties themselves. In Sports Direct’s recent annual report, it shows a 9% decrease in earnings per share. If Sports Direct chose to take up the extra costs then their profit margins and earnings per share will lower even further. Stakeholders would likely be upset to see this and decide to sell their Sports Direct’s shares. This chain reaction will cause Sports Direct’s share prices to drop even …show more content…
https://www.theguardian.com/commentisfree/2015/sep/08/the-guardian-view-on-sports-direct-big-british-capitalism-at-its-grubbiest Ethical Sports Direct plc has a bad reputation among its consumers and employees as they are known for treating their employees poorly and an unsafe work environment, as well as poorly maintained customer service. 80% of their employees are on a zero hour contract which means that they have no guarantee of work and pay, and are paid on a wage instead of a regular salary. Additionally The Guardian states that “the company doesn’t just treat customers badly”. By giving employees zero hour contracts, they would get a bad reputation from employees and future employees as they don’t know if they would be able to hold a stable income thus worsening the company’s reputation. Their sales might not be affected despite their negative public image as they are currently price leaders in their industry.