CASE STUDY- Sportswear
Joe and Jane are customers of ABC's. They own a sportswear retail shop. Their shop is in an area that has changed over the last
five years form a once vibrant business and retail hub with three large shopping centres to a business environment focusing
nowadays mainly on vehicle maintenance and support services.
The rental cost in the area is very competitive in comparison to other new shopping centres in the vicinity. Various new and
exciting shopping centres in the neighbouring suburbs have opened their doors. The business was exceptionally successful, but
has experienced an average annual drop in sales of 10% during the past four years.
Joe is convinced that the decline in turnover can be attributed to the drop in customer traffic in the shopping centre. Competitors
are opening new stores in other suburbs. There are currently two similar stores who are extremely price competitive and provide
a variety of goods at lower prices.
Joe has lowered the prices of their popular products since the beginning of last year. Although sales increased by 15% during the
previous year, profit dropped by 5%. During December, two shop owners in the area were gunned down.
i. What external factors are influencing the success and survival of the sportswear shop in the shopping centre?
ii. What factors should they have considered in their strategic planning?