Finish Line Inc. Company Analysis: The Company's Strategy Implementation Against Current Internal and External Problems

◎Chenyu Zhou（周宸宇）

Finish Line Inc. Company Analysis: The Company's Strategy Implementation Against Current Internal and External Problems

◎Chenyu Zhou（周宸宇）

This paper mentioned six different strategies against the current internal and external problems that – rising labor costs,political/environmental and supply-chain issues,and failing investment decisions – Finish Line Inc.is facing.And for those strategies,this paper specifically demonstrates the process the Finish Line implement those chosen strategy formulations,and it will also include specific timelines,resources needed,and cost that may be required.By introducing all the information,this article can conclude that the strategies,mentioned in the article,are enforceable,and each of them is the best option for Finish Line to deal with each problem.

Finish Line Inc.,strategy,strategy implementation.

Introduction

Finish Line Inc.was established in 1976 as “The Athlete’s Foot”and was renamed Finish Line in 1981.It was listed on the NASDAQ stock exchange in 1992 and made its first online sale in 1999.In 2010,Finish Line Inc.brought in new management team with Glenn Lyon as the chairman and Sam Sato as the President and Chief Merchandising Officer.Finish Line is headquartered in Indianapolis,Indiana and employees over 4,300 people in over 1000 retail stores in the United States and Puerto Rico.Finish Line Inc.acquired 18 running specialty stores known as Jack Rabbit in 2011.Macy’s and Finish Line Inc.signed an agreement in 2012 that would make Finish Line Inc.Macy’s sole provider of athletic shoes.In 2016,Finish Line reported just under $1,900 million in revenues.For products,Finish Line Inc.sells athletic,seasonal,and casual footwear for men,women,and children,while pays a close attention on the area of running,basketball,athletic casual,fitness,and casual footwear.

Problem Statement

The problems that Finish Line Inc.is facing are stated as follow:

1.Labor Costs.

2.Political Issues.

3.Supply–Chain Issues.

4.Decreasing Mail Traffic.

5.Ailing Sporting Goods Industry.

6.Failed Jack Rabbit Investment.

Strategies and Strategies Implementation

I. Shut down 25% local stores & shift focus resources to the e-commerce platform.

Under the high-techera,e-commerce is playing a bigger and bigger part in people’s life,so a better e-commerce platform is the key to Finish Line’s future development.As the time standpoint,shutting down a quarter of its local stores and shifting the focus to e-commerce will cost relatively short time because Finish Line was created and achieved its very first online sale in 1999.

During the implementation process,Finish Line will need financial and staffing resources.Because building a user-friendly e-commerce platform means a convenient shopping experience for customers,which include a succinct,well-organized and multiple devices friendly homepage.Therefore,Finish Line need to change its organizational structure by adding a new department for operating the e-commerce platform.It will be achieved by concentrating the IT professionals within the firm and hiring extra IT professionals if needed.According to Sugden’s (2015) article,the average salary for IT professionals in the U.S.is $132,877 per year compared to $41,213 per year in India (Sugden,2015).So,the potential cost for Finish Line would be $41,213 per person per year instead of $132,877 if it can hire Indian IT professionals who are willing to accept lower payment,and will eventually save Finish Line’s operating budget.On the other hand,per Germano & Hufford (2016),keeping all local stores cost Finish Line $32 million in three mouths (Germano &Hufford,2016).Therefore,compared with operating local stores,the cost of hiring extra IT professionals is relatively low,and it would be the best available option for Finish Line to reduce its operating cost.

II. Keeping supply based in Asia.

For resisting political environments unstable situation,Finish Line should keep supply based in Asia.For implementing this strategy,Finish Line will keep the suppliers they already familiar,so there is no resource will be needed because Finish Line’s Asian suppliers currently exist.Therefore,the cost under the current situation will only include fees that Finish Line used to sign extension contract and pay the variable tariffs.In Baker,Bender and Lee’s (2017) article,Trump said he will no longer consider China as a currency manipulator and will offer China better trading terms for certain political purposes (Baker,Bender & Lee,2017).Therefore,Trump’s new decision will result in a low tariff and stable currency exchange rate,and the future expectation of trading between China and America will be very positive.So,under current political environment,

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（作者單位：奧克拉荷馬大學）