Threats To REI Essay

All Businesses face threats that can hinder their growth or success. REI (Recreational Equipment Inc.) is no exception, they face external threats that can potentially impede and stunt their growth as a company. One major threat REI faces is that they neither public nor fully private. REI is a Consumer’s Co-Operative store, which in reality holds just as many disadvantages as advantages; it can also be considered quite a threat to REI. In addition, REI is considered to have very high prices steering a large part of consumers from purchasing their products. These two threats ultimately affect the overall company because as consumer co-operative store, they cannot rely on issuing stocks therefore they rely heavily on sales to acquire their revenue. …show more content…
“REI is the nation’s leading outdoor equipment outlet and largest retail cooperative in the United States” (Pun 45). However, REI faces a threat when it comes to larger chain sporting goods stores, and how they are able to maintain a higher profit margin while still meeting both quantity and quality of any given product. Other larger chain sporting goods stores that are public companies can issue more stocks in order to produce more capital, REI cannot. Therefore, REI sells their goods at a higher price than other retailers. While they cater to those who support environmentally friendly options they do close themselves off of a large part of the consumer public because of their high prices. REI is “A green Co-op is still a corporate Co-op” so therefore even though they have high price they must still have to try to cater to their members. (Pun 47) While REI offers discounts to its members, some of its prices are still not as competitive as other retailers. REI creates a trade off because they lose a good amount of business, while maintaining stewardship for the environment. However, their stewardship takes priority for them and only the future will tell if that is a good financial move or