1.Assume that you are a risk management consultant hired by Sports Authority.

2.On the trailing pages, list the potential risks faced by the company based on the case below.

3.Then, select the top five most significant risks, and describe the way in which you would recommend treating these risks. Be specific. You may use additional pages if necessary.

Company Background

Sports Authority manufactures and retails a line of skateboards, designed for people ages 8 through adult. The company is a privately-held corporation that has been in business for three years. During this time, sales increased an average of 10% annually.

John Sport, the president and CEO of the firm, is a renowned former professional skateboarder. His reputation in the skateboarding community added immeasurably to the products brand. The 10-to-14 year-old demographic group accounts for 70% of the companys sales.

The Market

The popularity of the X Games skateboarding events contributed significantly to the growth in sales. Three large international sporting goods manufacturers currently account for 50% of the domestic skateboard sales. Sports Authority trails these companies (in fourth place) with 9% share of the domestic market. Recently, competition has intensified as the three large rivals, as well as other manufacturers, moved to exploit the opportunities in this market sector.

The companys management believes that growth will continue over the next few years. The growth will be realized through a combination of new products and new markets.

Product Development

In the summer of 2018, the company plans to introduce the John 500, a new model of skateboard that features reduced wheel friction and lighter weight. Although the board is slightly less stable than other skateboards in the product line, it is capable of moving 25% faster. Focus groups told the marketing department that a faster-moving board is the most important product attribute.

Distribution

The United States accounts for about 75% of the firms sales. Sports Authority leases 25 retail stores located in major U.S. metropolitan areas. Also, the Internet has accounted for an increasing percentage of sales.

Sports Authority distributes its products internationally thought selected foreign sporting goods retailers.

Production

Sports Authority conducts all operations from a single-story building in suburban Miami. The building houses the corporate offices, the factory, and the warehouse. The company owns the building.

Assignment

1. List the risks faced by Sports Authority. Be specific.

2. Select the top-five most significant risks, and describe the way in which you would recommend treating these risks. Be specific.