Masters Programmes Assignment Cover Sheet
Output : The mini case shall describe a strategic situation/problem/issue either in the past or today which needs resolution. The organisation can be of any type and in any geography. By the end of the case it should be clear to the reader that a problem is faced. The accompanying briefing note will begin by critically evaluating ‘the issue’ in order that it may be subjected to further analysis. In other words, whilst the case may have an apparently simply problem, that is, declining sales and loss of profitability, this may conceal a range of underlying problems which need to be addressed. The briefing note will then select appropriate tools, techniques, frameworks in order to provide insight and potential solutions to the problem. The write up will conclude with a statement of the broader implications of the case for other companies in similar situations and reflect on broader strategic lessons. “I declare that this work is entirely my own in accordance with the University’s Regulation 11 and the WBS guidelines on plagiarism and collusion. All external references and sources are clearly acknowledged and identified within the contents.
No substantial part(s) of the work submitted here has also been submitted by me in other assessments for accredited courses of study, and I acknowledge that if this has been done it may result in me being reported for self-plagiarism and an appropriate reduction in marks may be made when marking this piece of work.”
2 Introduction to Fanatics’ Strategic position
Fanatics, Inc. is a global leader for licensed sports merchandise. Fanatics provides an ultimate shopping experience to sports fans worldwide whether buying gear online, on the phone, in stores, in stadiums or on-site at many of the world’s most significant sporting events. Despite being new in its breed of retailers, Fanatics journey from being a brick and mortar store in 2011 to becoming a giant in the e-commerce business is highly commendable. The company’s success is attributed to the visionary leadership of both the CEOs Michael Rubin and Doug Mack, who believed that Fanatics should be a differentiator to beat its competitors. “If you’re selling the same merchandise that’s commonly available, and you’ve got no point of differentiation, you’re dead,” Mr Rubin said. “It’s just a question of when you die.”
The CEOs’ stressed the need for innovation to drive the company’s strategic vision. Fanatics expanded its foothold by adding FansEdge, a sports memorabilia division and acquired Dreams to strengthen its e-commerce competencies. It spread its wings across the complete value chain of the retail business by segmenting its critical operations into technology, logistics, E-commerce and manufacturing divisions. Fanatics commenced its global expedition by acquiring the online retailer Kitbag and the sports apparel company, Majestic.
Fanatics strategy is to “Be available anytime and anywhere” and become a powerhouse in the retail segment by creating an agile supply chain that increases speed-to-market of high- quality merchandise distributed globally across all retail channels. The institutional investors had every reason to believe in Fanatics’ prospects who helped raise funds to be part of Fanatics’ success story. NFL and Major League Baseball invested about $95 million and $50 million, respectively (Mickle & Hoffman, 2017). SoftBank’s Vision Fund closed a $1 billion funding round, the largest tech fund in history which raised Fanatics’ valuation to $4.5 billion from $3 billion.
Fanatics does about $2.3 billion in annual sales and has a projected sale for $10 billion over the next five years (CNBC, 2019). Fanatics aims to ship more than 10 million items from Cyber Monday, to Christmas, at a rate of 40,000 packages an hour, its busiest holiday retail season to date (Schonbrun, 2017).
Strategic Analysis
How would Fanatics be able to meet its ambitious projections? How could Fanatics sustain its inspiring growth? What should Fanatics do to uphold its role from being a differentiator to a disrupter in the online retail space?
A detailed critical analysis is required to address these challenges and to suggest a strategy that could help Fanatics sustain its incredible prospects and accomplish its Fanatical dream. The macro and micro environments governing the online sports retail sector could be analysed using PESTEL and the Five forces framework, respectively. Barney’s VRIO framework could be used to analyse Fanatics’ core resources and their role in future to help sustain its competitive position (Grant, 2016)