Five Forces Analysis
Internal Rivalry
Internal rivalry within the outdoor recreation retail industry is moderate to high. The industry consists of many sellers resulting in high competition. However, majority of the market share is owned by large companies such as Cabela’s, Dick’s Sporting Goods, Big Five Sporting Goods, and Hibbit’s.1 Smaller companies reside within the industry too but they have trouble competing with larger company’s prices. The larger companies have lower profit margins but sell substantially more products so they can take part in price competition and still be profitable. The Outdoor Industry Association estimated that consumers spent $120.7 billion on outdoor recreation products in 2012.1 Based on that estimate, …show more content…
For example, a few strengths are the large loyal consumer base and large retail stores. By having a loyal base new ventures have some leeway as a portion of the customer base buys Cabela’s because it is simply Cabela’s regardless if products are overpriced. The large retail stores are designed to provide consumers with a memorable experience. Consumers that go to these extravagant retail stores get hands-on experience with the products available. Some of the stores also have restaurants, gift shops and arcades to further the memorable experience for consumers of all ages. Also, Cabela’s is a very specialized company that diversifies themselves from competitors based on their huge inventory available. Such a large inventory proves as a strength because consumers can find basically any products they need at Cabela’s rather than having to shop at multiple …show more content…
As a result of this and their brand image, many of their items tend to be overpriced. While this can prove profitable for them, it also serves as a weakness. Companies competing with Cabela’s can gain some of Cabela’s customers by pricing products more fairly. Also, the capital costs associated with opening such large retail stores can be seen as a weakness, too. If a retail store continually doesn’t meet sales expectations, then Cabela’s may have to cut their losses and close down a store. This would not only negatively impact their bottom line but it could also be very detrimental to their
Internal Rivalry
Internal rivalry within the outdoor recreation retail industry is moderate to high. The industry consists of many sellers resulting in high competition. However, majority of the market share is owned by large companies such as Cabela’s, Dick’s Sporting Goods, Big Five Sporting Goods, and Hibbit’s.1 Smaller companies reside within the industry too but they have trouble competing with larger company’s prices. The larger companies have lower profit margins but sell substantially more products so they can take part in price competition and still be profitable. The Outdoor Industry Association estimated that consumers spent $120.7 billion on outdoor recreation products in 2012.1 Based on that estimate, …show more content…
For example, a few strengths are the large loyal consumer base and large retail stores. By having a loyal base new ventures have some leeway as a portion of the customer base buys Cabela’s because it is simply Cabela’s regardless if products are overpriced. The large retail stores are designed to provide consumers with a memorable experience. Consumers that go to these extravagant retail stores get hands-on experience with the products available. Some of the stores also have restaurants, gift shops and arcades to further the memorable experience for consumers of all ages. Also, Cabela’s is a very specialized company that diversifies themselves from competitors based on their huge inventory available. Such a large inventory proves as a strength because consumers can find basically any products they need at Cabela’s rather than having to shop at multiple …show more content…
As a result of this and their brand image, many of their items tend to be overpriced. While this can prove profitable for them, it also serves as a weakness. Companies competing with Cabela’s can gain some of Cabela’s customers by pricing products more fairly. Also, the capital costs associated with opening such large retail stores can be seen as a weakness, too. If a retail store continually doesn’t meet sales expectations, then Cabela’s may have to cut their losses and close down a store. This would not only negatively impact their bottom line but it could also be very detrimental to their