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The Sports Guy Key Events/Case synopsis
Bob (Rocky) Rhodes is the owner of the independent sporting goods store, known as The Sports
Guy. Rocky is a known athlete within his community who was a star in football and hockey in his developing, small town, outside the Greater Toronto Area (GTA). The business runs on a model that operates by 70% of sales coming from local teams purchasing uniforms and equipment, and the remaining 30% of sales consist of in-store sales to the general public.
According to Rocky’s accountant, the last few years of sales to local teams has covered business expenses, while sales to the general public have profited the store. Over the years, the store has been accumulating inventory due to a low turnover rates, which resulted in increases of short-term dept and interest expenses. Rocky is searching for ways that he can grow his sporting goods business’ profits, increase inventory turnover, and lower short-term dept and interest expenses in a community where organized sports has been declining over the years.

Problem Statement and Objectives
The Sports Guy faces a problem of accumulating inventory, which in result is increasing shortterm dept and interest expenses. The owner of The Sports Guy, Rocky wants his business to grow with the growing town that he and the business reside in. In order for the business to grow, Rocky requires access to bank credit to finance higher inventories and future expansion.
Before Rocky is eligible for the bank credit to grow his business, he must first increase the store’s profits. Rocky needs to figure out a solution for increasing The Sports Guy’s profits, so that he can become eligible for a bank credit that will help him grow his business with his town.
Option 1: The lot that Rocky purchased for The Sports Guy consists of two lots, and one lot still remains vacant. A realtor has informed Rocky that the lot is estimated to be worth $120,000.
Rocky can sell half the lot for an estimated $60,000 and expand his business using the other half. Option 2: Rocky could follow the Walmart concept of handling inventory, where all products are displayed on the sales floor and there is no inventory in a warehouse. By following this concept, the sales floor essentially acts as a warehouse and tracking inventory can be more easily managed.
Option 3: Rocky can listen to his accountant’s advice and introduce more sophisticated purchasing techniques and purchase a computerized inventory control system. Before purchasing any product, Rocky should do extensive sales research and thoroughly estimate how long a product will stay in inventory.

Option 4: Offer sales promotions to market to the 30% of business that is from sales from the general public in order to try and increase the 30%. Due to the fact that organized sport has declined within the community, it resulted in The Sports Guy’s sales declining as well. Rocky can spend his time marketing to the general public, since that is a larger market than sport teams.
Option 5: Rocky can build a social media fan base, using the most popular forms of social media in order to reach out and communicate his business to the community. Marketing using social media is free of charge and can generate a lot of positive attention from consumers and teams.
Option 6: Instead of getting a credit from the bank, Rocky could sell a few shares of his business for some money that will help him expand the business. Rocky owns 60% of the total shares of
The Sports Guy, therefore can sell 9% of his shares and still have majority of shares in the business at 51%.
Option 7: Rocky can search for a cheaper mortgage. Instead of paying $8000 in interest, Rocky can search for a bank or mortgage provider that offers a lower rate of interest.