Bass Pro Shops' strategic response to post-merger integration challenges

APPLICATION OF CHANGE MANAGEMENT AND INNOVATION: BASS PRO SHOPS

Founded in 1972 by sporting enthusiast Johnny Morris, Bass Pro Shops (hereinafter alternatively “the company”) has grown from occupying just a few feet of shelf space in his father’s small-town liquor store in Springfield, Missouri, to become the leading sporting goods retailer in North America today. Following its recent merger with its main competitor, Cabela’s, the company now operates more than 180 retail stores in North America, and many of these are the megastore format known as “Outdoor World.” Each of the company’s retail stores shares the rustic outdoor look as well as restaurants, ocean-themed bowling alleys and sporting arcade games, but they are also especially themed according to local wildlife species and consumer preferences (About us, 2017). In addition, the company markets is wide array of products and services through popular catalog sales and a state-of-the art Web site (http://www.basspro.com/) that also feature seasonal specials and discounts. Taken together, it is clear that Bass Pro Shops is well situated for sustained growth in the future, but there are some external changes taking place in its operating environment that must be taken into account in order to facilitate this outcome. This business report provides an analysis of the current state of Bass Pro Shops followed by a SWOT analysis of the company. In addition, a strategic plan that addresses the organization’s fundamental problems identified in the SWOT analysis is accompanied by a multimedia presentation for the leadership of Bass Pro Shops that clearly outlines the key points of the business report presented below. A. Analysis of the current state of the chosen organization 1. Description of the mission statement of the chosen organization. The format mission statement of Bass Pro Shops is “to be the leading merchant of outdoor recreational products inspiring people to love, enjoy, and conserve the great outdoors” (Our mission, 2017, para. 2). In pursuance of this mission, the company has some serious challenges ahead in achieving its organizational goals in the near term as discussion further below. a. Description of the goals for the organization over the next 3 years. The company’s goals for the next 3 years include the following: 1) Bass Pro Shops has pursued aggressive growth strategies including the recent $4.2 billion acquisition of all Cabela’s sporting goods retail stores in North America (Rocco, 2017). Therefore, one of the overarching goals of the company will be to effectively manage its merger with Cabela’s to ensure seamless transition to the Bass Pro Shop organizational culture and brand; 2) There have been some significant changes in the sporting goods industry in recent years that have required the company to develop new product lines and themes, especially the growth in the number of female sporting enthusiasts that are in sharp contrast to its traditional male-oriented target markets. Therefore, a second goal for the company over the next 3 years will be to respond efficiently to changes in consumer preferences for sporting goods and attire. 3) A final goal for the company will be to sustain the profitability it has consistently experienced since its founding in views of the enormous outlay of resources that was required to effect the Cabela’s merger. 2. Identification of the key external and internal stakeholders of the organization (e.g., board members, employees, the community, shareholders). With more than $4.58 billion in annual retail sales, the company has tens of millions of external stakeholders in the form of loyal consumers. This level of sales also means that the company’s supply chain partners are important stakeholders. Likewise, the company has heavily invested in community-based youth sporting programs and environmental initiatives. Finally, although Bass Pro Shops remains a privately owned enterprise, the company’s leadership team also represents important key stakeholders. Finally, the recent addition of more than 18,000 Cabela’s employees with the company’s existing 22,000 employees has created a large number of key internal stakeholders. 3. Discussion concerning the current leadership (e.g., structure, policies, procedures, organizational systems) in the chosen organization. The company’s leadership structure is strictly mechanistic and hierarchical, with its majority owner and long-term chief executive officer Johnny Morris continuing to direct the day-to-day operations, including the oversight of marketing functions and decisions. To its credit, the company’s policies and procedures are highly aligned with its mission statement, and its sophisticated North American distribution system and supply chain management practices have helped it achieve and sustain a competitive advantage in a highly competitive sporting goods marketplace. 4. Analysis of two fundamental problems in the chosen organization. One of the fundamental problems facing the company is also one of its major strengths: the company’s current CEO has been in charge for nearly 40 years, and it is reasonable to posit that his ability to remain effective in this capacity will become increasingly diminished in the years to come. This is not to say, of course, that Morris has entered his dotage – to the contrary because he currently appears to be in his prime – but it is to say that the 69-year-old CEO will become increasingly vulnerable to age-related disorders and diminished leadership capacities in the future that may adversely affect his ability to remain as effective as he has in the past. A second problem facing the company today (which also represents a potential opportunity as noted in the SWOT analysis that follows below) include the changes that are taking place in the sporting goods industry, with increasing numbers of female sporting enthusiasts changing the industry’s landscape. 5. Explanation concerning why fundamental change is necessary for the chosen organization to meet its mission and goals. From a strictly pragmatic perspective, it is going to become increasingly important for the company to groom a replacement for Morris in order to ensure a smooth transition, especially given the turbulence that follows any type of merger or acquisition in larger organizations such as Bass Pro Shops and Cabela’s. Given the significant changes in the company’s marketing landscape, fundamental changes in its marketing strategies are also going to be needed to sustain the company’s North American leadership position in the future. B. SWOT analysis for the organization A strengths, weaknesses, opportunities and threats (SWOT) analysis for Bass Pro Shops is provided in Table 1 below. Table 1 SWOT Analysis of Bass Pro Shops Factor Description

Strengths The company’s main strength is its well-established brand and current overwhelming dominant leadership position in the sporting goods and attire industry. The company also has a mature decentralized distribution network throughout North America and sophisticated supply chain management practices with its downstream partners.

Weaknesses The company’s current geographic concentrations of its retail stores (see Figure 1 below) limit Bass Pro Shop’s ability to provide its high value-added services as well as the walk-in traffic that drives its Outdoor World format success. In addition, the company’s remains highly vulnerable to major disruptions in its leadership due to the advanced age of its current CEO who has not announced any plans for retirement.

Opportunities Although the company dominates the North American market, it has significant opportunities available by expanding its operations to Europe, Mexico, and South America. In addition, the company also enjoys a significant opportunity to increase its target market by developing and marketing female-oriented sporting goods and attire. While the company does currently feature some products that are geared towards female consumers, many of its other sporting goods (i.e., archery, camping and firearms) have remained targeted at its traditional male-oriented market.

Threats Although some of the company’s products (i.e., firearms) remain best sellers irrespective of downturns in the economy, many of Bass Pro Shops’ other products and services such as its bass boats are largely discretionary and luxury purchases that decline with downturns in the economy. There have also been some changes in consumer preferences in sporting goods and attire that have not been match by corresponding marketing efforts by the company, including significant declines in boating, bowling and camping (-12.0%) (Sport Participation Trends, 2011).

Figure 1. Current Bass Pro Shop locations C. Strategic plan that addresses the organization’s fundamental problems 1. Proposed strategy based on your SWOT analysis to address the organization’s fundamental problems. Fortunately, the company’s numerous strengths facilitate the development of a timely strategic plan that can address the fundamental problems identified in the weaknesses in SWOT analysis presented in Table 1 above. The strategic plan will be comprised of two concomitant stages as follows: a) Stage one: Develop and implement a transition program to groom a replacement for the current CEO. b) Stage two: Create a marketing division focusing on female-oriented sporting goods and services. a. Explanation concerning how the proposed strategy will benefit the organization and its stakeholders. By ensuring a smooth transition in the company’s top leadership position, the strategic plan will help to ensure that the company remains competitive and profitable. Likewise, by creating a marketing division that is focused on female-oriented goods and services, the company can significantly expand its current market share. 2. Explanation concerning how the strategic plan will be implemented. By of the above-listed stages will be implemented simultaneously. Stage one (CEO transition initiative) will be implemented by developing a human resource program to identify optimal candidates to replace Morris as CEO and complete the on-the-job training that will be needed to ensure that the new CEO succeeds is sustaining the organizational culture that has fueled the company’s success to date. This is an especially important initiative given the company’s longstanding family-owned business structure. In this regard, Flegener and Brown (1999) point out that: Organizations are especially susceptible to loss of vision and purpose during periods of CEO transition, as the leaders who helped shape the vision are replaced by others who may not share the same values and abilities. Although the timing of a transition may be a surprise (as when the CEO suffers an unexpected illness or injury), the fact that it is inevitable affords an organization the opportunity to prepare for its eventuality (emphasis added). (p. 16) The second stage of the strategic plan (female-oriented marketing division) will be implemented by appointing a new suitable female candidate as division head and tasking her will the responsibility of researching current trends and preferences and developing corresponding products and services that will appeal to women who are already sports enthusiasts as well as attracting new female consumers. a. Explanation of three steps key stakeholders need to take to prepare the organization for change implementation. Both of these changes will require three steps from key stakeholders in order to prepare for their implementation as follows: 1) Top-down support will be required to ensure that each stage of the strategic plan remains a priority and receives the organizational support that will be needed for success. 2) Given that Bass Pro Shops has never had a woman on its board of directors (Company overview, 2017), changes in the organizational culture and marketing philosophy will be essential to ensuring the success of developing a female-oriented marketing division. b. Identification of the resources needed for each step in the implementation plan. The respective organizational resources that will be needed for stages one and two are outlined below. 1) Stage one – CEO transition: Support from the company’s human resource division for recruiting, assessment and final interviewing will be required to identify optimal candidates for a replacement for Morris. In addition, an attractive pay and benefit package will be required to attract and retain a suitable replacement that possesses the industry-specific experience needed to take the reins of Bass Pro Shops in the future. 2) Stage two – female-oriented marketing division. Conceptualized as comprising a full-time division head, three full-time managers, 10 full-time staff,5 full time support staff and seasonal part-time staff as required, this stage will require corresponding appropriate pay and benefit packages to attract and retain qualified leaders and employees. c. Outline of the implementation timeline for each step within the plan: The respective timelines for the implementation of the strategic plan are outlined in Table 2 below: Table 2 Implementation timeline for strategic change initiatives Stage Phase one: initiation Phase two: planning Phase three: execution Phase four: closure

Stage one: CEO transition 1 month 1 month 3 months 1-3 years

Stage two: Female-oriented marketing division 1-2 months 1-3 months 3 month Indeterminate