Dick’s Sporting Goods went public on the New York Stock Exchange on October 15, 2002, under the ticker symbol DKS. As of February 3, 2018, the company operates 716 Dick’s Sporting Goods stores in the United States.
Dick’s has the following mission statement on the corporate website (paraphrased):
We strive to be the #1 sports and fitness specialty omnichannel retailer that serves and inspires athletes and outdoor enthusiasts to achieve their personal best. Basically, Dick’s is on a mission to exceed the expectations of athletes and outdoorsmen around the world by providing quality name brand products, an excellent selection, fair prices, and a knowledgeable and helpful staff of employees.
Dick’s does not have a formal vision statement, but the company strives to serve customers in a manner that they will recognize Dick’s as the number-one sports and fitness retailer that serves a wide array of athletes and outdoor enthusiasts.
Code of Business Ethics
Dick’s Sporting Goods provides separate codes of conduct for associates, vendors, and directors. As CEO Ed Stack mentions in a letter to teammates, he is on a mission to ensure Dick’s plays the game fairly while continuing to offer shareholders value, rewarding loyal customers, and treating associates fairly. Mr. Stack suggests all associates, vendors, and directors read their respective codes and the codes of the others as an athlete would read a playbook or game plan for an athletic event. All team members are expected to prevent unfair play and report any occurrences to their HR representative or anonymously on Dick’s Ethics Hotline. Dick’s ensures protection for whistle blowers promising there will be no retaliation on your employment.
Dick Stack’s (founder) son, Ed Stack has served as chairman and CEO of Dick’s Sporting Goods since 1984, having started with the company full-time in 1977. Based on the executive titles illustrated in Exhibit 1, it appears that Dick’s operates from a divisional-by-product type structure composed of three segments: softlines, hardlines, and team sports. Hardlines are basically anything except footwear and apparel. However, since an official organizational chart is not made public, likely only insiders know exactly who reports to who in the company.
Dick’s operates in a highly competitive market where customers can purchase from traditional retailers or simply purchase from online merchants including Amazon and eBay where virtually anybody can be a merchant and barriers to entry are slim. However, Dick’s has done well with net income up over 12 percent in the year ending February 2018. The company offers a wide selection of brands ranging in prices (according to Dick’s) from good to excellent, providing customers of all income levels and athletic skill levels attractive products. Dick’s is committed to hiring expert personal in the various departments of the store. For example, if you are in the market for a bicycle, Dick’s has bicycle mechanics on staff who often have the same level of knowledge you would find in a bicycle specialty shop.
Want to hit golf balls? No problem—go to Dick’s golf hitting bay and work with coaches to help select the right clubs for you. Want to shoot a bow or test out new running shoes? Simply shoot a few arrows in the archery lane or hop on a treadmill in the store, all supported by knowledgeable employees. This level of service is one way Dick’s competes with online merchants as customers are not as likely to “showroom” (browse the store then go buy online for a cheaper source) if they received such personal and dedicated attention. It is also a great way to build customer loyalty and attract people into the store.
In 2017, Dick’s transitioned from outsourcing its e-commerce platforms to performing these tasks in-house in what Dicks hopes will provide increased control and allow the firm to target and interact with customers more effectively. Dick’s is aggressively adding Field & Stream stores inside existing Dick’s Sporting Goods stores in hopes of cross selling fishing gear with other sporting goods products. In addition, Dick’s offers Golf Galaxy stores inside select Dick’s stores. Dick’s markets itself as offering multiple specialty shops inside each store; footwear, team sports, outdoor lodge, fitness, and others are all considered specialty stores by some measures. Adding similar store-in-a-store concepts is a viable strategy many firms are starting to employ in hopes of increasing foot traffic.
Dick’s offers many popular brands including Asics, Adidas, Nike, Columbia, Callaway Golf, TaylorMade, Under Armour, and Yeti. Offering famous brands aids in attracting customers into Dick’s stores. Dick’s also offers several private label brands which tend to have higher profit margins than brand names. Several private label brands include Field & Stream, Fitness Gear, Lady Hagen, CALIA of women’s athletic apparel, Top-Flite, Quest, and others. Private label brands account for about 10 percent of company wide sales, but Dick’s is planning to aggressively expand private brands, in particular its CALIA line. Dick’s also has agreements from several brand name firms to be an exclusive provider, including Slazenger, Umbro, Reebok, and others.
Dick’s is somewhat dependent on Nike and Under Armour for its products as the two account for 20 and 12 percent, respectively, of Dick’s sales. No other firm accounts for more than 10 percent out of the remaining 1,400 vendors.