MIS 3210 Homework #2-Part C Industry Analysis and Final Recommendation Part 1: I
ID: 358561 • Letter: M
Question
MIS 3210 Homework #2-Part C Industry Analysis and Final Recommendation Part 1: Industry data and analysis Please answer the questions provided below. Answers can be obtained from the 2016 Industry Report on the Athletic Shoe Industry in the IBIS database available through the U of M library web site. Make sure to follow the format indicated after the question (e.g. bullet points only, one or two sentences, etc.) Do not copy and paste entire sentences or paragraphs directly from the industry report. It is okay to paraphrase a sentence in a web site as long as you cite your source. Quotation from industry report: The Athletic Shoe Stores industry has grown strongly over the five years to 2016 thanks to economic recovery and rising sports participation. The public is becoming increasingly aware of the obesity epidemic in the United States, stirring up a wave of health-consciousness that has encouraged Americans to exercise and, therefore, buy athletic shoes. Paraphrase: Three key trends that are contributing to the recent sales growth in the Athletic Shoe industry are (I) economic growth, (2) increasing popularity of leisure sports and (3) consumers exercising more frequently for health reasons.Source: 2016 Executive Summary of Industry Report on Athletic Shoe industry) 1. What percentage of revenue is contributed by the sales of shoes for men? For women? And for children? What percentage of revenue comes from the sales of other items (e.g, athletic clothing)? (Please answer using bullet points only) 2. What are three key trends that are enabling growth in the Athletic shoe store industry? (Please answer using bullet points only) 3. What about the price of shoes? Are consumers resistant to price increases or are they willing to pay higher prices for shoes that meet their preferences for style, quality, etc.? (Please answer with at least two sentences.) 4. What is the trend in terms of e-commerce sales activity for Athletic shoes? Can we expect online sales of Athletic shoes to increase and in-store sales to decrease? (Please answer with at least two sentences) 5. What about threats to industry growth? What factors/trends may adversely affect sales growth or profitability of an athletic shoe store such as the Athlete's Foor? (Please answer with at least two sentences)Explanation / Answer
Answer 1) Require more information to calculate the revenue.
Answer 2) already answered in the example
Answer 3) Consumers are likely to give higher importance to the quality of shoes than the price of shoes considering the increasing health awareness among them. Secondly, the improved economic state has given the consumers more buying power, which is making them able to pay more prices for the shoes.
Answer 4) E-commerce sales will definitely increase comparing their own past sales. However, it doesn't mean that in-store sales will decrease or the online sales will surpass in store sales because 1) the demand of athletic shoes is very high and it may not be possible for the E-commerce industry to fulfill the demand alone. 2) Secondly, each customer may want different styles, colors and quality which is again not necessarily be available on all websites. 3) Thirdly, but most importantly, cheaper products are the biggest strength of any E-commerce company, however, price is no longer a major concern for the consumers and they are bending more towards the quality, they may not hesitate to visit the stores and look for the quality shoe of their choice. Despite the return and replace policies of E-commerce, consumers may like to avoid getting into that hassle.
Answer 5) Bullwhip Effect could be the biggest threat to the shoe industry growth. It is the phenomenon in which a little shift in customer demand may magnify the supply forecast at every ladder upwards in the supply chain. There could be a scenario in which the shoe manufacturer will start manufacturing in high volume based on the demand requests given by the wholesaler, who has further received huge demand from the retailers considering the increased demand by the end customers. This can lead to surplus stock lying in the store and at the same time the stock can become obsolete due to frequent changes in consumers requirements.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.