Philip Island Essay Example | Topics and Well Written Essays - 1000 words

Philip Island - Essay Example Enroute to the Philip Island the Cranbourne, Richmond, Tooradin and San Remo cities were also superficially studied to examine the impact of urbanization as well as tourism on these cities. I. Cranbourne: Melbourne, on its south east seemed to be rapidly expanding into the agricultural estates of Cranbourne. The transition of agricultural lands to residential plots as an answer to the growing needs of people daily commuting to city was clearly evident. The houses were usually single storeyed made up of bricks and tiles of medium blocks separated from each other. It provided space for business like news agencies, bakery and hardware stores. However agricultural practice and agricultural products were still evident. III. Tooradin: Tooradin is a rural area with rich darker clay sand where agriculture is the main occupation. But recent trend is that it supports tourism for holiday lovers who wish to spend quiet holidays and enjoy fishing. IV. San Remo: San Remo a former fishing village is well connected to Philip Island through the bridge. San Remo provides a better lodging and boarding facility at reasonable prices with excellent beach activities like fishing for tourists who visit Philip Island. The impacts from inappropriate changes due to urbanization such as conversion of agricultural land for residential purpose, deforestation, soil erosion, over population, transportation and other related problems could be resolved by implementing proper land use planning, construction practice, engineering, architecture, and design processes. Attractions in Philip Island V. Cape Woolamai Faunal Park: Cape Woolamai is the home to the short-tailed shearwaters on Philip Island. The sand dunes reveal the perfect interaction between the lithosphere-the sand and rock, the atmosphere-the wind, and the biosphere components- marram grass and the spinifers. The vegetation is completely covered by the dunes due to winds. Sand for the beach of Woolamai mainly comes from the erosion of cliff coast present towards the east of coast of cape Woolamai. Attempts are being such as car not allowed on sand dunes, making exclusive car parking facility, people not allowed to walk on vegetation, regulations to impose fines if violated etc., are made to prevent erosion of sand dunes which formed due to long shore drifts. VI. Cowes: Cowes is the principal township of Philip Island lying on the northern side facing French Island and Western Port Bay. The Cowes have safe beaches with fine sand caused by the deposition of waves. Waves are small and not too wild providing a safe zone for beach swimming and boating. Piers have been constructed on the shores. The waves are harsher near the rocks, eroding them. VII. The Nobbies: The Nobbies are at the western most end of the Philip Island. It is a strong volcanic rock which is more resistant to erosion. It is a popular tourist destination with a blowhole, a spectacular sea cave that thunders during big southern swells. The Nobbies boardwalk

Case study , subject HUMAN RESOURCE STRATEGIES FOR THE INTERNATIONAL Essay

Case study , subject HUMAN RESOURCE STRATEGIES FOR THE INTERNATIONAL MANAGER - Essay Example This work has looked into the problems in detail using a combination of academic as well as practical perspectives so that fitting solutions can be derived. The results from this study indicate that Manners Europe will have to restructure current human resource management practises without compromising the overall framework brought in from the parent company. Measures include changes in the work schedule styles, compensation patterns as well as hiring and screening procedures. Manners Europe is experiencing visible problems with its human resource management framework being implemented in the European domain. The bulk of these problems originate from Netherlands that has comparably different norms from the American principals. The markedly different cultural attributes resound from the fact that employees expect different behaviour from management while management expects different behaviour from employees. As a result of this friction, neither employees nor management are able to solve this dilemma. It must also be borne in mind that Manners Europe derives itself and its structure from its American origins. Competitiveness and efficiency are the rule of the day for Manner Europe’s higher management who have been bred accordingly in the American organisational cultural perspective. However, for the Dutch working for the organisation, this mode of operation is opposed to cultural values that they have acquired through their socialisation process. The situation demands that the existing Americanised human resources framework of the organisation be adapted to the peculiarities of the Norwegian situation. However, while such an adaptation is being initiated it must be kept in mind that the entire framework should not be remodelled. Such a remodelling attempt would lead to multiple problems such as increased costs for remodelling as well as deviation from the principal

Business Continuity Policy Statement

Business Continuity Policy Statement Purpose The main purpose of the business continuity policy is to prepare SanGrafix for any kind of threat. Business continuity policy is just another term for backup. Running a company without backup is not a smart move in business industry. Our business continuity plan should contain a comprehensive roadmap to restore any information during any disaster. Copies of the plan should be sent out to all important personals so that the services are never threatened, and it should present complete analysis of all the possible threats to the company. Company should response to the threat because of both type of threat and extent of the threat. All SanGrafix sites and online storages are expected to implement preventive measures to minimize network failure (Shinder, 2017). Scope The scope of this plan is limited to manage both locations of SanGrafix in the best possible way and to provide the best service and most reliable form to all customers. Plan Objectives Will provide a guide for the SanGrafix recovery teams. Provides procedures and resources needed to assist in recovery. This will identify customers that must be notified in the event of a disaster. This assists in avoiding confusion experienced during a crisis by documenting, testing and reviewing recovery procedures and maintain a sound connection between both the locations This will identify alternatives for supplies, resources. Assumptions Each support organization is liable to have its own different and unique plan for recovery procedures and critical resource information. Disaster definition Any kind of loss in utility service such as water and power, connectivity between the systems of SanGrafix, or any kind of natural disaster that causes an interruption in the service, provided by SanGrafix operations. Recovery teams Emergency Management Team (EMT) Location Response Coordinator (LRC) Technical Services Engineering (TSE) Team member responsibilities All the members should keep an updated contact list of all the concerned staff members   Ã‚   All team members should read this file at least once so they know the contents of this file Data backup policy Full backups system should be available for the files and software that are irreplaceable or have a high replacement cost. Backup material should be stored in a secure and a completely separate location from both the locations of SanGrafix. Following is the basic key for its data backup and archiving: Files retention policy Backup material should be stored in a secure and a completely separate location from both the locations of SanGrafix. Billing files Tapes greater than four years old are destroyed every year months. Tapes less than three years old must be stored locally offsite. System software files A copy of the most current updates files must be every week. Offsite backup is also necessary. Procedures for emergency management The following procedures are to be followed by system operations personnel and other designated personnel in the event of an emergency. Where uncertainty exists, the more reactive action should be followed to provide maximum protection and personnel safety. In the event of any situation where access to a building housing a system is denied, personnel should report to alternate locations.   Primary and secondary locations are listed below. Alternate locations Workplace: San Francisco Try to contact your immediate supervisor or management Workplace: Sunnyvale   Try to contact your immediate supervisor or management In the event of a natural disaster In the event of a major catastrophe affecting a SanGrafix facility, immediately notify the managerial department Notify Regional Technical Manager of pending event, Transfer portable generators with fuel within 100 miles. Deploy support personnel, tower crews, and engineering within 100 miles. Thing you require for the deploy plan Create an image of the system and files Back up critical system elements Verify backup generator fuel status and operation Create backups of e-mail, file servers, etc. Fuel vehicles and emergency trailers In the event of a fire In the event of fire or smoke in any of the facilities, the guidelines are provided below that should be followed: If fire or smoke is present in the facility, evaluate the situation and determine the severity, categorize the fire as Major or Minor and take the appropriate action as defined in this section. Call 911 as soon as possible if the situation warrants it. Persons need to attempt to put out minor fires (e.g., single hardware component or paper fires) by making use of hand-held fire extinguishers located all through the facility. Any other fire or smoke situation will be handled by experienced building workers until the local fire department arrives. In case of a major fire, call 911 and immediately and leave the area. In case of any emergency situation, system site security and individual safety are the major things to consider. In case of a major catastrophe affecting the facility, notify the Regional Technical Manager immediately.(Business Continuity Plan). In the event of a network services provider outage Procedure If outage will be greater than half hour, direct all calls via microwave or other service to alternate location in Sunnydale. If outage is major and in case all networks are down and downtime will be greater than 12 hours, organize satellite equipment, if available. In the event of a hack attempt to the system Shut down all the system to avoid any loss and contact headquarters. Notification of incident affecting the site On-duty personnel responsibilities In office hours: Upon observation or notification of a potentially serious situation use proper evacuation methods and notify the Location Response Coordinator. If out of hours: Technical Services providers should contact the Location Response Coordinator (Shinder, 2017). Inform team members of decision If a disaster is not declared, the team of location response will continue to address as well as manage the situation and will provide regular updates to EMT. the EMT. If a disaster is declared, the Location Response Coordinator will notify the Incident Response Team members immediately for deployment. Declare a disaster if the situation cannot be fixed within the predefined time frames. The authorized person will declare a disaster and a backup is vital who is also authorized or declaring a disaster if primary person is not available. Operations recovered Assuming all related operations have been recovered to an alternative site, and employees are supposed to support the operations, the company can announce that it is operating in a normal manner at the recovery location (Shinder, 2017). SanGrafix recovery teams Emergency management team (EMT) Responsibilities: Organization must be responsible for overall management of the disaster recovery effort, evaluation and determining disaster declaration, and communications with senior management They should evaluate which recovery actions should be invoked and activate the corresponding recovery teams. They should provide senior management with ongoing status information Acts as a communication channel to corporate teams and major customers Work with vendors and IRT to develop a rebuild/repair schedule Location Response Coordinator (LRC). Support activities: Notify the Incident Recovery Team Gather harm assessment info and report it to EMT à ¯Ã¢â‚¬Å¡Ã‚ · Determine recovery wants. Command center and connected operations musts be established. Command center can be a organized meeting facility wherever EMT/LRT/IRT members meet to organize harm assessment and business recovery tasks for the affected operations. Notify all Team Leaders and advise them to activate their arrange (s) if applicable, primarily based upon the disaster scenario. If no disaster is asserted, then take applicable action to come to traditional operation victimization regular employees. Determine if vendors or different groups are required to help with elaborate harm assessment. †¢Prepare post-disaster interrogation report †¢Coordinate the event of website specific recovery plans and guarantee theyre updated semi-annually. Location Response Team (LRT) Charter: The Location Response Team (LRT) is accountable for the early alerting/notification of the issue to the LRC during normal business hours. In case of off hours, the LRT will be notified as well as LRC. In case of a disaster announcement, this team will become a part of the Incident Response Team. Support activities: Provide the subsequent data to the LRC within the event of Associate in Nursing outage: a. form of event b. Location of incidence c. Time of incidence Coordinate commencement of voice and knowledge communications: a. Work with management to re-route voice and knowledge lines, particularly once alternate Web site (s) or alternate work locations square measure predefined b. Recover voice mail and email correspondence systems once requested by EMT. c. Verify voice mail and email correspondence square measure operational at the alternate web site. d. Review the Minimum Acceptable Operational necessities list to confirm if enough resources square measure in situ to support operations Coordinate commencement of knowledge system operations: a. Recover important knowledge files and connected data once requested by EMT b. Make sure that network and perimeter security is re-established at alternate location c. Verify traditional, secure operation of systems and servers at alternate web site d. Review the SanGrafix Minimum Acceptable Operational necessities list to confirm if enough resources square measure in situ to support operations Business Continuity Sprint Business. (2017). Sprint Business. Retrieved 14 March 2017, from https://business.sprint.com/solutions/business-continuity/?ECID=sem%3Aggl%3A20170303%3ADWASearch%3ANB%3AB2B%3APhrase%3ABusinessContinuity Business Continuity Plan. Ready.Gov. Retrieved 14 March 2017, from https://www.ready.gov/sites/default/files/documents/files/BusinessContinuityPlan.pdf Shinder, D. (2017). 10 Things You Should Cover In Your Business Continuity Plan. TechRepublic. Retrieved from http://www.techrepublic.com/blog/10-things/10-things-you-should-cover-in-your-business-continuity-plan/

Mao Zedong :: Chinese China History

Mao Zedong Mao Zedong is one of the most controversial leaders of the twentieth century. He has been known both as a savior and a tyrant to the Chinese people. From his tactical success of the Long March to his embarrassing failure of the Great Leap Forward, Mao has greatly influenced the result of what China is today. Most of Mao's major successes have been in the CCP's rise to power, while Mao's failures have come at a time when the CCP was in power. Mao Zedong was born on December 26, 1893 is Shaoshan village in Hunan. He experienced a middle peasant upbringing with a very conservative father. Ironically Mao went to an old-fashioned school where he learned the traditional Chinese curriculum. At this time in his childhood, the whole country could foresee the fall of the previous dynasty. Mao studied to be a teacher at The First Provincial Normal School , in Ch'ansha, which influenced his future thinking and beliefs. Mao believed that the Chinese way of thinking needed reform, therefore focused on younger people and peasants to build his political career. Mao ruled one quarter of the worlds population for one quarter of a century, and the way in which he was brought up and studied influenced his future decisions greatly. Mao was known to be rebellious when he was younger, but his first real experience came in 1912 when he decided to go to Wuhan and serve in the revolutionary army. For five years Mao studied and received an education in academics, but also politics. When Mao graduated in 1918 he was a political writer with a notable following. Mao had studied Marxism and other socialist ideas and by 1919 considered himself to be a Marxist. For a couple of years Mao wrote on his beliefs and even began organizing groups to share their ideas. Mao had organized a group of Communists in Changsha and in 1921 he went to Shanghai to participate in the First National Party Congress of the Chinese Communist Party. By the 1930s Mao was at the center of the Communist party after its defeat in 1927 by Chiang and the KMT. Mao organized and developed plans of a peasant-based guerilla strategy. Based in the province of Jiangxi, otherwise known as the Jiangxi soviet, Mao ruled nine million people and the CCP was begin to be a reckoning force. The KMT seeing the CCP as a threat attacked the Jiangxi soviet.

Dark tourism: mediating between the dead and the living Essay

Dark tourism Introduction            In general, tourism covers several kinds of travel and a very broad destination ranges. One of the niches of tourism is what is known as Dark tourism that covers the visitation of places where tragedies or where ancient deaths in history have taken place and the institutions that deal with the human heritage (Stone, 2012). In the last decades, this type of tourism has received more attention and hence it has become very popular (stone, 2012). As Lennon and Foley (1999) states, tourism that is associated with the death sites and also tragedy places are registering a huge number of visits hence experiencing a rapid growth. Smith (1996), in her research shows that the warfare memoralia along with the allied products are probably forming the largest category of tourist attraction in the globe, in spite of the dissuasive and tragedies that have happened there( Stone, 2012). For instance, the Jailhouse in the United States has formed one of the earliest example of dark t ourism in the break of the 19th century has received a lot of attention due to its novel practices and architectural innovations( Stone, 2012).            In the meantime, visitation of the sites of death and tragedy has developed into a global phenomenon. However, the demand for the spots of dark tourism is becoming very versatile. Besides the death and tourism matters, culture interests or just the desire for entertainment are some of the other reasons why thousands of people are pilmigraging in the dark tourism sites day by day (Stone, 2006). In spite of the ever increasing number of research on this topic, the reasons why people are visiting these dark tourism sites and also identifying themselves with death matters, genocide and disaster is not clear (Foley and Lennon, 2000; sharply and Stone, 2009). Owing to the daily and rapid increase in the dark tourism niche, it is very vital for people to understand the reasons that motivate people to visit the places of genocides and disaster. Dark Tourism definition            As described by Foley and (Lennon, 1999), dark tourism is the type of tourism that encompasses the supply and consumption by the people who are the visitors, of real and commodities of disaster and death sites( Stone, 2012). One example of dark tourism in the in the ancient ages is the gladiatorial games of the area of the Romans or the execution during the medieval age as noted by (Stone, 2009). Boorstin (1964), shows that the first England tour which was organized and carried in the year 1838 was a trip by a train, where people had organized to go and witness the hanging of two murderers.            (Sharply, 2005) denotes that Dark tourism is not only becoming more popular but it also varies very much in their presentation of death. Dark tourism is reaching from the jocular houses of horror in the famous places of the well know individuals to the sites of mass murder especially the Holocaust death camps. (Seaton, 1996), demonstrates a lot of attraction sites which include th Waterloo Battle fields along with the buried city of Pompeii with the latter being cited as the largest and the most famous destination for the thanatoptic travel of the Romantic period (Seaton, 1996)            Mostly, the word Thonatourism is preferred to Dark tourism as it describes the travel to locations that are partially or wholly motivated by the actual or symbolic desire to the death encounters which is particularly and not exclusive to the violent death, to a varying degree that it is activated by the individual’s specific features of the ones that deaths is their focal objects. this shows that the main reasons for the people who visit these places are only active visiting there so as to experience the atmosphere of such places. Stone believes that thanatourism should only be defined by the motives of the consumer and also the motivation of the individuals in this kind of tourism plays a lot of roles. The other definition synched with Dark tourism is â€Å"the black spots† which are the commercial development sites of graves or the places where celebrities or famous people have been met with sudden or violent deaths (Rojek, 1993). Rojek quotes three different examples of these black spot sites; the site of the famous murder of John Kennedy murder in Dallas, Texas, the annual travel to the Californian highway where Dean James met his death in a sudden car crash and the annual candlelight vigil in the memory of the famous Presley Elvis (Stone, 2012).            In this paper, both thanatourism and Dark tourism will be used as they got the same meaning although they are interpreted differently. Dark tourism is based on the attraction and location based while thanatourism basis on the motivational aspect. Black spots are the places associated with Dark tourism in the sense that they are the sudden and violent death sites. Benefits of Dark tourism            Dark tourism creates an exotic experience to the travelers for the tourists who are seeking an unusual experience apart from their everyday lives (J Khang e etal, 2012). In most instances, it creates a dull vacation concept to the people who are more open minded and they usually want to explore the world (J Khang e etal, 2012). It is a general nature of human beings also to want to have a eyewitness of the suffering of others that is formed basically from the curiosity of the mind (J Khang e etal, 2012). Also, Dak tourism is a very interesting aspect of tourism where visiting of the battlefields, cemeteries and concentration camps give one a firsthand information experience of the hardship through their own eye witness. Dark tourism is a muti-dimensional feeling that could have a deep impact in life (Daams, 2007).            (J Khang e etal, 2012) notes, Dark tourism also generates income for the society that has or was affected by the said tragedy or disaster to rebuild itself. The tourist influx helps the local by bringing in money to them. Without these tourists coming in to witness the sites, it could be very hard for the community that is affected to rebuild itself and live to their original standards. For instance the Katrina hit places of Orleans saw the tourist figures drop by 35 percent of what was there before and hence a tourist surge would help this part rebuild itself (Dams, 2007).            Dark tourism also provides emotional benefit not only to the tourists but also to the community where they are situated (J Khang e etal, 2012). Also dark tourism site could be used for educational purposes to educate the young generations on the cause of the tragedy and how to evade such. For instance, the Auschwitz in the country of Poland was listed in the UNESCO world heritage site in the year 1979 and it became mandatory for every school child in German to visit it during their education9Kate N.d). By raising the soberness of the past horrific events it leads cooling of our minds in our endeavors of understanding the world that we live in (Daams, 2007). Also, dark tourism helps us to notice and pay tribute to the ones who fought for the betterment of the country (Kendle, n.d)            Dark tourism gives a positive impact both to the economy and to the emotional wellbeing of the community at hand along with the visiting tourists. It generates income to the economy, provides a new experience to the tourists and also provides emotional wellbeing of the affected residents. So the dark tourism revenues generated should be channeled to the right places so that it can help the affected people to rebuild their lives and also raise their living standards (J Khang e etal, 2012). Examples of Dark tourism sites The Buried village            One of the examples of Dark tourism site is the buried village in New Zealand. This happened when mount Tarawera started to erupt in the early hours of 10th June 1886 and it is termed as one of the greatest natural disasters. It was just after the midnight when Te Wairoa people were woken by a sequence of earthquakes (Chris Ryan and Rahul Kohli, 2006). About a period of two hour after this, a huge earthquake took the center stage which was followed by a big explosion and the for the following four hours, the peaceful village was bombarded by rocks, ashes and mud. This sadistic and unanticipated eruption buried the village of Te Wairoa along with other several neighboring villages in the area with hot mud, ash and mud (Chris Ryan and Rahul Kohli, 2006). The eruption destroyed the white and pink terraces, a silicon- stained natural formation, which formed the largest New Zealand’s tourist attractions changing the landscape dramatically. It led to loss of more than 150 people, and has since been a tourist attraction which is one of the dark tourism sites as coined by Croy and Smith (Chris Ryan and Rahul Kohli, 2006). The Jeju Massacre            The Jeju massacre is one of the forms of the dark tourism site where more than 30, 000 people were executed by the military (J. khang et al, 2012). . A peace park was constructed and every year people go there to commemorate theor loved ones. This is termed as one of the biggest dark tourist sites in the world, for instance the 3rd April peace park case (J. khang et al, 2012). Dark tourism Motivators            In accordance to Smitt(1996), the war sites attract basically people with strong interests in history and also the military strategists. The people who visit these sites are always keen to analyze the past event while they walk around the scene. This is to show that the battlefield visitors are not motivated by any interest on the deaths but by the interest in the history of the battlefields. These same results were also confirmed by Crompton (1979) and also Anderson (1995), who stipulated that Historical and cultural interest could also be a motivator for travel. Crompton (1979) formed this conclusion from interviewing 44 adults that novelty and education are also travel motivators. To sum up the topic on history motivation, it can be noted that history could be the major motivating factor that drives people to visit the battlefield and disaster sites. Owing to the little research that has been carried on the tourist motivation to the disaster sites, it can be con cluded based on the little research that the motive to learn more and more about history could be the main driving factor but not only or single reason why individuals visit these sites. Below are the other reasons why people visit the dark sites. Education            So as to understand the reasons behind battles and deaths and what were their aftermaths, dark tourism could be very helpful in opinion forming. Also, some people needs to know why their relatives and friends had to die. Travel education was introduced into learning in the break of industrialization back in the 17th century, when educational enhancements and also infrastructure increased 9Burkart and medlik 1981). In the year 1982, the first exhibitions on dark tourism with educational components were prompted in the city of New York, USA. Presently, Dark tourism sites are implementing educational aspects ni them so as to promote themselves. The tourists also get a chance of self learning through these educational travels. There are many institutes which are offering educational tours to the war sites and also delivering information sessions, for instance the Smithsonian associates in Washington a D.C educational department which was offering a tour that was tracin g the route of the murderer of president Abraham Lincoln. One of the main reasons for such tours and events is for the people to learn from the past and put mechanisms on how re-occurrence of such events could be prevented. In most of the learning places, like pearl Harbor in USA, people always believe that education could provide a more secure tomorrow. The people who visit such places are thought to know why these tragedies happened and hence they should realize that it should never happen anymore (Ryan, 2007). Remembrance            Lennon nad foley(1993) describe remembrance as an important human activity which connect people between the past and the future. They also declare that how humans remember defines us in the present. These sites are mostly constructed for remembrance and to commemorate the ones who died or the event which led to their deaths. Like for instance, there is a day in Christianity which is meant to remember all the saints that died and it is known as all saints day. It is a common practice where the Christians visit these cemeteries where loved ones were buried. It is meant also for the remembrance of the events that formed the identities of these individuals. Identity            People also visit these sites for indent purposes. Even if people have no direct connection to the people in these sites or event which lead them to it, they visit these sites for identity purposes. For example, people who visit the sites where famous people met their deaths, mostly they have the soul purpose of indentifying themselves with the dead character (Rojek, 1993).            According to a research by Ashworth (2004), many tourist visit the sites of disaster or battlefields because of their curiosity. Other researchers have it that people visit the atrocity sites so as to view the macabre exhibits (Yuill, 2003) and (cooper, 2003) as (Yuill, 2003) states, the tourists or visitors who come to the atrocity sites rarely have no connection to any of the person that fought in these wars or participated in the battlefield. The future of dark Tourism            Owing to the fact that Dark tourism has been increasing day by day, there has been a lot of incites on the future of this kind of tourism (H. Muzaini, 2007). One of the most exploited parts is in the educational part of it. Many Universities have launched courses that are basing their information from the dark tourism. For instance, the University of Central Lancashire launched a program where they will be examining the reasons why people visit these sites, what are their motivations and also offering trips to these sites (Reed Courtney, n.d).            Also, the business minds people are converting these sites into big hotels especially the prisons which were famous dark tourism sites are being converted into hotels and they attract a lot of tourist who want to feel the identified with these places (H. Muzaini, 2007). For instance the Oxford prison has been converted into a luxurious hotel that is attracting a lot of visitors. Most of these sites are being converted into luxurious sites (Reed Courtney, n.d).            In addition, we have the websites that are designed for visitor’s attractions to the museums in most cases employ images and narratives of the life in prison in the ancient times and also the more punitive incarnation elements (Reed Courtney, n.d). You will see some of the writings like, â€Å"Sit in a prison cell, hear the door slam shut and imagine the harsh conditions of Victorian prison regimes. Try on prison uniforms, imagine the horror of being set in the pillory, strapped in a restraint chair or hung in chains. Turn the crank, carry out shot drill or work the treadmill† (H. Muzaini, 2007). References A.V. Seaton (1996) Guided by the dark: From thanatopsis to thanatourism, International Journal of Heritage Studies, 2:4, 234-244, DOI: 10.1080/13527259608722178 Malcolm Foley & J. John Lennon (1996) JFK and dark tourism: A fascination with assassination, International Journal of Heritage Studies, 2:4, 198-211, DOI: Alcatraz and Robben Island. Annals of Tourism Research, Vol. 30, No. 2, pp. 386–405. Elsevier Science Ltd. Chris Ryan & Rahul Kohli (2006) The Buried village, New Zealand – An example of dark tourism?, Asia Pacific Journal of Tourism Research, 11:3, 211-226 Walter, T. (2009) Dark tourism: mediating between the dead and the living. In: The Darker Side of Travel: The Theory and Practice of Dark Tourism. Aspects of Tourism . Channel View Publications, Bristol, U. K., pp. 39-55. ISBN 9781845411152 Walter, T. (2009) Dark tourism: mediating between the dead and the living. In: The Darker Side of Travel: The Theory and Practiceof Dark Tourism. Aspects of Tourism . Channel View Publications, Bristol, U. K., pp. 39-55. ISBN 9781845411152 Philip Stone and Richard Sharpley,(2012). CONSUMING DARK TOURISM: A Thanatological Perspective. Annals of Tourism Research, Vol. 35, No. 2, pp. 574–595. Elsevier Ltd Daams, Eric (2007) ‘Dark Tourism: Bearing Witness or Crass Spectacle? http://www.bravenewtraveler.com/2007/10/10/dark-tourism-more-than-a-spectacle/ [accessed 20 October 2009] Erik H. Cohen (2011) EDUCATIONAL DARK TOURISM AT AN IN POPULO SITE.The Holocaust Museum in Jerusalem. Annals of Tourism Research, Vol. 38, No. 1, pp. 193–209. Elsevier Ltd Griffiths, Kate (n.d) ‘Ground Zero & the Phenomena of Dark Tourism’ http://www.pilotguides.com/destination_guide/north-america/new-york/ground_zero.php [accessed 20 October 2009] Rasul A. Mowatt and Charles H. Chancellor. (2011) VISITING DEATH AND LIFE. Dark Tourism and Slave Castles. Annals of Tourism Research, Vol. 38, No. 4, pp. 1410–1434. Elsevier Ltd Philip R. Stone, (2012)DARK TOURISM AND SIGNIFICANT OTHER DEATH. Towards a Model of Mortality Mediation. Annals of Tourism Research, Vol. 39, No. 3, pp. 1565–1587 Elsevier Ltd. Park, Korea, Eun-Jung Kang, Noel Scott, Timothy Jeonglyeol Lee, Roy Ballantyne, (2012). Tourism Management. Beneï ¬ ts of visiting a ‘dark tourism’ site: The case of the Jeju April 3rd Peace. School of Tourism, University of Queensland, Brisbane, QLD 4072, Australia Reed, Courtney (n.d) ‘Shedding Light on Dark Tourism’ http://www.gonomad.com/features/0704/dark-tourism.html [accessed 20 October 2009] Hamzah Muzaini , Peggy Teo & Brenda S. A. Yeoh (2007) Intimations of Postmodernity in Dark Tourism: The Fate of History at Fort Siloso, Singapore, Journal of Tourism and Cultural Change, 5:1, 28-45, DOI: 10.2167/jtcc082.0 Source document

Dick’s Sporting Goods, Equity Valuation and Analysis

Table of Contents Executive Summary2 Company Overview2 Economic Analysis GDP Growth3 Inflation3 Interest Rates3 Housing5 Consumer Spending5 Sovereign Debt6 Unemployment6 US Dollar7 Impact of Sporting Goods Stores Industry7 Industry Analysis8 Porter’s 5 Forces8 Big Four Analysis11 Industry Life Cycle13 Dick’s Sporting Goods Analysis Review of Annual Report16 Company SWOT Analysis18 Trend Ratio Analysis20 Cross Sectional Ratio Analysis22 Analyst Analysis/Estimates24 DuPont Ratio Analysis25 Valuation P/E Multiplier26 Valuation FCF to Equity27 Summary of Analyst Reports28Beta Analysis29 Technical Analysis29 Conclusions31 Executive Summary After analyzing Dick’s Sporting Goods and taking into account both positive and negative aspects associated with the stock, I am giving the stock a Moderate Buy Recommendation, with a target price of $46. 50. The recommendation took into account DKS’s recent earnings report, improving financial health, growth estimates, and i ndustry outlook. In this report I will evaluate the current overall economic conditions and how they affect the Sporting Goods Stores industry and the Retail sector in general.The report then focuses on Dick’s Sporting Goods’ key measure of financial health, profitability, and growth compared to historical levels and competitors. A P/E Multiple analysis and a Free Cash Flow to Equity valuation approach was then used to derive an intrinsic value of the stock. Company Overview Dick’s Sporting Goods is the largest Sporting Goods Store in the United States, selling sports equipment, exercise and fitness equipment, apparel and footwear along with outdoor sports equipment and accessories.Dick’s was founded in 1948 and operates 455 stores in 42 states primarily in the eastern part of the United States. Dick’s Sporting Goods controls 13. 4% of the market share within the industry and has the largest market cap at $4. 75 billion. When the most recent fiscal year ended in January of 2011 (FY 2010), Dick’s Sporting Goods generated over $4. 8 billion in sales and had Net Income of just over $182 million. Currently Dick’s Sporting Goods has 120. 72 million shares outstanding. Economic Analysis GDP Growth Recently GDP grew at an annualized rate of 1. % and 2% in the second and third quarters of 2011 respectively. Consumer Spending is one of the key drivers and is a large portion of the US economy and with consumer confidence still below healthy levels. Combined with low consumer spending current monetary and fiscal policy have prevented GDP from getting above the aforementioned growth levels for an extended amount of time. Also contributing to low GDP is the traditionally higher unemployment as of late, lack of confidence in the US government, and low home values as a result of the housing crisis.The low growth in GDP will more than likely continue in the near future as the economy will work out of the recent recession and wi ll therefore keep interest and inflation rates. Once the economy starts to strengthen and expand however, GDP growth rates will increase from their current bleak levels. Inflation Inflation expectations have remained low recently, showing trust in the Red to monitor/control inflation rates when the economy begins to start expanding.With Ben Bernacke and the Fed’s commitment to keep interest rates at their historically low levels, it seems that monetary policy is following a trend of attempting to prevent any policy from causing further struggle to the U. S. economy. In the short term there seems to be no immediate threat/fear of inflation rising in the US. According to an article from Reuters, the Fed wants to keep inflation around its 2% target in order confirm the Federal Reserve’s ability to keep control over inflation levels. Interest RatesInterest rates set by the US Federal Reserve within its over-arching monetary policy are very important in terms of the world e conomy. Recently the Fed pledged to keep the federal funds rate close to zero through mid year 2013. Operation Twist, a plan to buy long-term U. S. debt and sell short-term debt, which will result in a flattening of the yield curve and a drop in long-term debt yields, is a part of the expected future according to the Fed. This means that the historical lows in interest rates that we are seeing will continue in the short run.In the long run however, there looks to be a divergence from that short-run trend. Consumers and businesses in the long-run will get away from the de-leveraging process that we are seeing in the recent past and currently and begin to build up cash that will circulate more unreservedly. This will cause the Fed to set interest rates at higher levels in order to combat against the rise in inflation in the post-deleveraging period. Housing Post-housing/financial crisis of 2007-2009, the housing market seems to be showing signs of improvement after great downturn.With the downturn in housing prices, many homeowners did not have enough equity to avoid taking a loss on the sale of their homes so they are sitting with home loans based off of higher-than-current mortgages. However, in November the National Association of Home Builders’ sentiment index jumped to 20, which is the highest reading in over a year. Demand for mortgages has also seemed to pick up a bit according to the Fed’s 4th quarter loan survey. Construction remains at historically low levels but has increased as of late, and the number of foreclosures has increased this quarter also.These trends do seem to be geared to a more short-term thought process and many analysts believe that in the long run, the housing market will improve and strengthen along with the strengthening of the US economy. Consumer Spending In October personal income increased $48. 1 billion and disposable personal income increased $30. 2 billion according to the Bureau of Economic Analysis. In additi on, personal consumption expenditures increased $8. 2 billion. With consumer spending representing about 70% of total GDP increases in the different income categories translates into more consumer spending.Analysts believe that with continued increasing we can start to return to pre-recession levels of spending. This increase is a positive sign for retailers because there is more disposable income to purchase their products than recently as we continue to move away from recessionary levels. From the chart below you can see the upward trend from the 2008 lows in personal consumption spending. The chart on the next page does a good job portraying the recent trends in consumer spending. Sovereign Debt Foreign currencies have been seen weakening relative to the US dollar due to many debt issues in countries abroad.This has caused investors to flock towards the safest reserve currency, which is the US dollar. Fear in Europe stems from economies that are much too large to be bailed out or allowed to completely default on their debt and the means for a solution have not come about as of yet. Greece, Italy, and Spain are among those countries that are seeing investor fear and are also causing investors to be cautious to the other European economies, even ones that have proved to be more reliable (Germany and France). There have been austerity measures that are aimed at reducing the debt levels of the countries in fear of defaulting however oliticians in the near future must discuss the outlook of the European Union and whether or not there is a need for countries to break apart. These threats significantly reduce the expected growth in forecasted GDP and spending, which could be harmful to worldwide markets that depend on Europe. Unemployment The unemployment rate and the number of unemployed persons have remained stagnant through October ranging around 9%-9. 2% and 13. 9 million respectively. Within retail trade, employment increased in general merchandise stores and the industry has added 156,000 jobs over the past 12 months.The unemployment rate is forecasted to decline as the economy starts to strengthen and pull its way out of recessionary levels. This obviously affects consumer spending and consumer confidence in general. Higher unemployment rates tend to mean less disposable income, which would affect the pricing point of retailers and would hurt big ticket items such as different luxury goods. With dropping unemployment rates predicted for the future, consumer confidence will ultimately increase and consumer spending, therefore benefitting the retail sector. Value of the US DollarAs mentioned before with the fear of default and crisis abroad foreign currencies have weakened in relation to the dollar. Also this chaos in Europe helps support against the loose monetary policy of late, limited growth see in GDP, and large trade deficits, which would otherwise weaken the dollars position. Investors favor the safety that the US dollar provides . This strengthening in comparison to other currencies also gives sentiment to the fact that investors are becoming more and more confident in the US market again and thus moving more and more capital back into it.In the near future I believe that the dollar will remain strong relative to other foreign currencies and that investor confidence from abroad will continue as a direct relation to a strong future currency. Impact on Industry Many of the indicators listed in the Economic Analysis greatly affect the Retail Sector and Sporting Goods Stores Industry as a whole. The most obvious one is the gradual rise in consumer spending and therefore GDP. Both of these are positive signs for the retail sector, who’s profits are directly linked to variations in consumer spending.Consumer spending will also increase when consumer deleveraging process begins to slow down in the next few years. Due to low consumer confidence as a result of the financial crisis people were paying down more debt in order to be more financially healthy (deleveraging. ) As confidence increases consumers will use more disposable income towards consumption and less towards paying down debt. The high unemployment rates that we are currently seeing have negative effects on disposable income and therefore negatively affect the retail sector.However, with the forecast of adding jobs and a declining unemployment rate, the result will be increases in disposable income and therefore increases in consumer spending. The strong dollar in relation to foreign currencies makes US goods more expensive, however this does not have an adverse effect on Dick’s Sporting Goods because it generates the vast majority of its sales domestically. Industry Analysis Dick’s Sporting Goods operates in the Sporting Goods Stores Industry within the Retail Sector.Companies in this industry retail new sporting goods including sports equipment and apparel, exercise and fitness equipment, footwear and other s porting goods and accessories. Dick’s Sporting Goods also owns 81 Golf Galaxy stores in 30 states. DKS operates in off-mall locations and feature an interactive store-within-a-store environment. Revenue growth for the past five years in the industry has been volatile due to drivers such as high volatility in disposable income. Average annual revenue growth over the past five years was just 0. 3% and the forward five years are forecasted for average annual revenue growth of 2. % Porter Five Forces Barriers to Entry The most dominant barrier to potential entrants into the industry has to do with the large start-up costs associated with firms. The initial cost of establishing a retail outlet or acquiring a retail outlet with sufficient inventory to supply customers is a great inhibitor to new entrants. High marketing and advertising costs are also important cost barriers to be dealt with in order to become competitive in the industry. This expenditure increased in the five years to 2011, which was a directly from rises in competition.This has caused massive investment in brand promotion and promotional campaigns in attempts to increase store traffic and differentiate. This is another capital barrier to entry for possible entrants. In addition, the present and well-established channels of distribution between suppliers and the major players of the industry can be a major deterrence. In order to achieve success new entrants would have to need to somehow establish strong relationships with the upstream manufacturers and wholesalers in order to obtain high quality, low-priced stock. CompetitionDespite their low market shares individually the concentration in the Sporting Goods Stores industry is increasing due to increases in M&A as of late. This trend along with the growth in the number of outlets operated by the larger players of the industry create high levels of difficulty for the smaller and specialty firms within the industry. These smaller firms have be en forced to reduce product margins in order to remain competitive. In addition, IBISWorld estimates that through 2016 the number of enterprises within the industry will grow at an average rate of 0. 9%, further intensifying competition.There has been recent competition from department stores and other mass merchandisers and IBISWorld predicts that this will be the single biggest threat to the industry in the years to 2016. Because of their great size and buying power, these competitors are able to offer merchandise at considerably lower prices and in bulk quantities. From there department stores and mass merchandisers are able to pass cost savings onto the consumers via lower prices, while still maintaining margins. Large chains like Walmart and Target can also lower prices more readily making it harder to compete on price.This has caused larger Sporting Goods Store Chains to open â€Å"superstores† that allows them to compete more effectively on price with department stores . Substitutes/Compliments In terms of sports equipment, which is the largest product segment in the industry, market share has declined since 2000 and can be attributed to the growth in the rental market. With declining disposable income levels, it became more cost effective for consumers to rent sports equipment then purchasing it outright. Sale of sports equipment by external competitors like department stores has also accounted for this loss in market share.Other substitutes that affect this industry have to do with how people spend their leisure time and competition with products such as toys, crafts, fashion, and music related items exist because of this factor. Home entertainment products also directly compete with sporting and recreational goods depending on how consumers spend their leisure time. With advances in technology the competition for these substitutes increases, which holds true in advances in video game systems, computer games, and online resources to spend leisur e time.Buyer Power Buyer power can be seen mostly through the affects that disposable income takes on industry sales. The products that Sporting Goods Stores would not be generally viewed as necessities and therefore sales are hurt when consumer spending takes a downturn due to tightening of disposable income. Fluctuations in income levels among consumers also alters price levels of goods purchased. In continuing with price, price remains the single largest basis of competition between firms within the industry.Consumers are price conscious and will ensure that they purchase goods at the best possible price. Therefore, buyers have the power to shift pricing points of firms and facilitate competition based on those pricing points. Along with price comes quality and the demand for popular branded items by consumers. Consumer preferences can determine the range of merchandise carried by companies and also the brands that stock the shelves. Therefore changes in consumer preferences grea tly affects the products offered to public by consumers and the quality of products offered. Supplier PowerSupplier power within the industry has come mostly in retailers seeking exclusive contracts with them in the hopes that those retailers gain an advantage over rivals with the types of products they are able to offer. For example, Foot Locker, which is more of a sports apparel retailer but nonetheless, has secured specific partnerships with Adidas and Reebok for the back-to-school period. With the partnership Foot Locker became the exclusive retailer of new-release Adidas and Reebok shoe products. This trend of seeking exclusive contracts with suppliers is forecasted to ontinue in the future in hopes of increasing industry revenue. However, this also gives more power to suppliers in terms of which companies they competitively position themselves with. Big Four Analysis Demographics Sports participation rates by age have a pretty solid effect on industry revenue. Children aged 5 to 17 years old are estimated to represent the key market for the industry, comprising of about 53 million individuals. This age group also has the highest participation rates in sports, thus driving sales for this age demographic.The problem is that as this age group gets older there is a trend of decreases in sports participation in order to focus attention on activities other than sports. The relative size of this market in the five years to 2016 is expected to decrease by 9% because of this changing of activities. Also, as people live longer they want to maintain healthy lifestyles, which is why the aging baby boomers are expected to lead to higher sports participation rates among people 64 years and older. This will have a very favorable effect on the industry given the vast number of individuals that fall within this category.Sporting Goods Stores are also found to greatly position themselves in areas of the United States most densely populated. The industry is largely concent rated in the Southeast and West regions, which account for 24. [email  protected] and 17. 5% of industry establishments. These two regions also account for the largest share of US population at 25. 2% and 17. 0% respectively. Lifestyle Increases in consumer awareness regarding living healthy lifestyles and incorporating regular exercise into their daily lives is a positive factor for the industry.This lifestyle thus boosts sports participation rates resulting in increasing revenue for industry players. There has also been recent rise in popularity for sports activities that strengthen the mind-body spiritual connection, which also has a positive effect on the industry. Another key driving factor that has positive results for the Sporting Goods Stores Industry is the national culture of the United States. Sports are a very important part of our nation’s culture whether it be via the professional sports exposure or the team sport participation driven by association with secon dary and tertiary schools.The exposure and the vast amount that sports are imbedded within our every day life create continued positive figures in terms of sports participation. Legal/Regulatory Sports retailers that sell firearms must comply with the Federal Brady Handgun Violence Prevention Act, requiring retailers to perform presale background checks of consumers who want to purchase hunting rifles. Each background check generates a specific transaction number that is recorded on Form 4473 of the Bureau of Alcohol, Tobacco, and Firearms and retained for 20 years for auditing purposes.In addition retailers must hold a federal firearms license. Retailers are not exposed to tariffs on goods supplied but do have a range of organizations that provide guidance and support to them. Some key examples of such organizations include the National Retail Federation, the American Apparel and Footwear Association, and the National Sporting Goods Association. Technology Some technological advanc es that have made firms more competitive in the industry include, point of sale systems, bar-code scanning and electronic data interchange.These enable firms to control merchandising, distribution, sales, and markdowns. Increases in labor productivity have also been a direct result of such technological advances. Establishments of online means of shopping also have given retailers another channel of product distribution and have created further competition. Some technological threats to the industry have to do with shifts in consumer preferences as far as how they spend their leisure time. Wii Sports for Nintendo is an example of this as consumers have shifted to digital games as opposed to physical sports.The Wii series also offers additions such as Wii Fit and Wii Fit Plus Yoga, which shows the ways in which consumers view sports participation has altered. Technological advances in video and computer games have enhanced the quality, affordability, and experience of undertaking the se leisure activities and continued growth in those areas has a drastically negative effect on traditional sporting activities and the Sporting Goods Stores Industry as a whole. Industry Life Cycle The Sporting Goods Stores Industry is currently in the mature stage of their ife cycle, with growth rates failing to outpace the overall economy, the consolidation of the industries players, and the lack of product innovation significant enough to change the industry’s landscape. Maturity in the industry has been supported by competition from department stores and the lack of change in the key buyers and sellers of sporting goods along with a slowdown in the rate of technological advances. Department store competition has caused contraction within the industry, which is typical of a mature industry.While more affluent firms have been the primary targets for consolidation, the industry also experienced a decline in the number of non-employing operators, such as the small â€Å"mom and pop† stores. Finally, while manufacturers look to continue enhancing product designs and functionality to make products faster, lightweight, more durable, and more versatile, these types of product advancements generally have little impact on the overall growth of the industry. These product advances aren’t the catalyst that can propel this industry into a growth phase.Sporting Goods Stores as % of GDP (in millions) Year| 2006| 2007| 2008| 2009| 2010| Industry Sales| 38,132. 60| 39,980. 40| 39,826. 80| 39,000. 00| 38,385. 70| Sales Growth| -| 4. 8%| -0. 4%| -2. 1%| -1. 6%| Nominal GDP| 13,398,800| 14,061,800| 14,369,100| 14,119,000| 14,582,400| GDP Growth| -| 4. 95%| 2. 19%| -1. 18%| 3. 28%| Sales as % of GDP| . 285%| . 283%| . 271%| . 272%| . 265%| The industry sales chart that is shown above includes all companies that operate within the Sporting Goods Stores Industry, from major players to small and specialty stores.From the data above we can see that revenue gro wth for the industry has lagged behind Nominal GDP growth. Supporting the notion that the industry is in the mature stage. This was most likely caused by the fact that growth in the industry over the previous five years was hit hard by declines in consumer spending and consumer deleveraging. Declines in consumer confidence and consumption levels seemed to affect Industry revenue than Nominal GDP as a whole. Sporting Goods Stores Companies with over $250 million in Sales as % of GDP (in millions) Year| 2006| 2007| 2008| 2009| 2010|Industry Sales| 9,705. 20| 11,404. 40| 11,881. 10| 12,265. 80| 12,838. 50| Sales Growth| -| 17. 5%| 4. 18%| 3. 24%| 4. 67%| Nominal GDP| 13,398,800| 14,061,800| 14,369,100| 14,119,000| 14,582,400| GDP Growth| -| 4. 95%| 2. 19%| -1. 18%| 3. 28%| Sales as % of GDP| . 00072%| . 00081%| . 00083%| . 00087%| . 00088%| The second chart is the same breakdown as the one before, however it is a make up of only the 7 firms in the industry that receive revenue over $25 0 million on an annual basis (Sports Authority is included but is privately held so only basic revenue data was able to be retrieved).What we see now is quite a different story, with industry revenue growth outpacing Nominal GDP growth in all years of the historical breakdown. This suggests that the large cap firms within the industry are not as mature in nature as the broad industry and have ample room for growth in the future. This would suggest that based on the forecasts of increased consumer spending/consumption in the future as the economy strengthens and consumer confidence returns, growth figures for these large cap firms will be even higher. Dick’s Sporting Goods Analysis Review of Annual Report Key Risk FactorsThe following are some of the risk factors presented from management as their biggest threats in terms of influencing sales. : * Economic and financial downturn causes declines in consumer spending, which will adversely affect the company’s operations. * The business is very seasonal and is highly dependent on the success of the 4th quarter. * The industry is very sensitive to general macroeconomic changes that would affect either consumer sentiment or consumer spending. * The terms of their senior secured revolving credit facility impose certain restrictions that may impair their ability of available capital. The lack of acceptable retail store sites on terms acceptable to Dick’s Sporting Goods, rising real estate prices and other costs related to new store openings could limit expansion plans. * Private brand offerings, which are being emphasized more and more, expose DKS to many other risks than more popular brands. * If inflation were to increase it would greatly affect Dick’s Sporting Goods’ operating results unless DKS was able to fully pass on the increases in costs to the consumer via price. Legal Proceedings In 2011 Dick’s Sporting Goods has 14 cases ongoing in litigation, which is down from 20 10 when there was 39.One of the cases that received a lot of notoriety recently was Tamara Barrus vs. Dick’s Sporting Goods in 2010. Barrus was a former employee who was suing her former company on claims that DKS failed to pay her wages and failed to compensate her for overtime. The reason this case got so much attention was because as the case drew on, additional claims were added to the case from 35 other states with the same allegations. The settlement ended up being for approximately $10. 8 million before taxes in favor of Barrus and the other defendants.What is important to note is the potential vast negative effect this could have had on DKS’s reputation as well as the losses they had to pay in court. Off Balance Sheet Arrangements The off balance sheet arrangements for Dick’s Sporting Goods relate to operating leases, future minimum guaranteed contractual payments, and letters of credit. In the annual report, Dick’s Sporting Goods holds a firm sta nce that these off balance sheet items do not have any material effect on the financial condition of the company, revenues or expenses, results of operation, liquidity, capital expenditures, or other resources.When looking at the figures however there seem to be a different story. DKS lists $3,717,112,000 in total contractual obligations and $21,527,000 in total other commercial commitments that are not listed on their balance sheets. This would definitely seem to affect their operations and liquidity when looking at the magnitude of those numbers. In addition, DKS lists over $200 million in goodwill on its financial statements but its largest subsidiary Golf Galaxy was determined to have their goodwill unit fully impaired upon further investigation, which calls into question the size of the goodwill figure.DKS lists $130,496,000 in financing leases and $9,524,000 in capital leases, the financing leases do not have to be listed in financial statements but as you can see carry a very large amount. Finally, Dick’s Sporting Goods agreed to new terms on its Credit Agreement that allow DKS to incur unlimited capital lease obligations and indebtedness to finance the acquisition or improvement of any fixed capital assets. The new agreement also allows Dick’s to increase their ability to incur up to $200 million of unsecured indebtedness. ManagementIn examining the upper management of Dick’s Sporting Goods there are only a few things that I would like to point out. Edward Stack, whose father founded Dick's, has served as chairman and CEO since 1984. One area for concern is the board's staggered terms and the firm's dual-class common stock structure, which includes Class B shares with super-voting rights. Stack owns about 26% of the outstanding shares (including 23 million Class B shares) and controls 66% of the voting power. This drastically limits the control of minority shareholders.Dick's also has takeover defenses in place to prevent potential suitors from acquiring the firm. Executive compensation is weighted toward Stack, who received more than $7 million in total compensation over the past two years while the other top four officers received between $3. 8 and $1. 2 million. Salaries, all less than $1 million, are relatively small in the executive compensation system, but stock awards and stock options have been generously given and have consistently increased share counts. The dealings of the CEO and his family are also means for concern.Company SWOT Analysis Strengths Store-within-a-store merchandising concept With this type of merchandising model Dick’s Sporting Goods is able to gain advantages as a large store as well as that of a specialty store. Each of DKS’s large 50,000-75,000 square foot buildings it has specialty stores including: Golf Pro Shops, Footwear Centers, Fitness Centers, Outdoor Centers, and Team Sports. Deep product selection and knowledgeable staff are two advantages that DKS is able to provide with these specialty shops.These stores focus on specific categories and carry very deep products selections within each area of interest. The area that hurts specialty stores is competing on price but since DKS is also a mass merchandiser it is able to be competitive on price in that aspect. The combination of these two types of stores increases the average spend, customer satisfaction, price competitiveness, and product selection. Leading Market Position Garnered from Competitive Pricing Dick’s Sporting Goods is the leader in market share in the industry capturing about 13. 4%.The small number of large cap firms in the industry create an attractive competitive dynamic for these companies, as they have better bargaining power and can pass on the benefits of this large scale to customers in the forms of lower prices and higher quality merchandise. At the end of fiscal year 2011 DKS operated 486 stores and has growth plans set in the motion to increase that number at a staggering rate. A key aspect that has fueled its market position is its price positioning. DKS maintains a policy of matching competitor’s advertised prices and maintains the notion of providing value at each price point.Weaknesses Strained Relationship with the Employees Dick’s Sporting Goods has been involved with labor issue lawsuits over the past few years. Claims by former employees of failing to pay wages and overtime wages and various class action lawsuits. These not only deteriorate the relationships between corporate and lower level employees but also result in financial loss and gives a hit to the company’s overall reputation. Opportunities Increased Health Consciousness As mentioned in the lifestyle section, the health and wellness trend is expected to gain tons of momentum in the coming years.Industry analysis shows that yoga, aerobics, tennis, hiking, and running/jogging were the top five sporting activities that people were involved in 2010. Growing participation in these areas can be attributed to growing public awareness and emphasis on the benefits of a healthy lifestyle. In order to take advantage of this DKS can push its exercise/fitness equipment areas and fitness apparel lines, which would directly benefit in sales from higher participation in those five sporting areas mentioned. Offering Merchandise with Higher Margins in order to Enhance Profitability DKS has been ontinually improving profitability by offering higher margin merchandise such as apparel and footwear. In 2010, DKS incorporated Nike Field House shops at its retail outlets and plans to open 100 Nike Field House shops at its stores by the end of 2011. By partnering with manufacturers who are trying to push these types of products, DKS stands to benefit by way of product differentiation and product exclusivity as it is Nike’s key strategic apparel partner. More initiatives such as this will stand to boost profitability for DKS and will increase its return on investments. Threats Lower Participation in GolfPrimarily due to the economic slowdown there has been a decline in golf participation in the last few years as club members have not been able to afford the high fees charged by golf clubs. According to estimates participation is down 11. 5% from the year before, which has led to sluggish sales growth in that area for DKS. Gold equipment related purchases decreased 14% industry wide last year, which is a threat to Dick’s Sporting Goods as the revenue from the sale of golf equipment forms an important part of DKS’s total revenue. It also hurts the sales revenue of the 81 Golf Galaxy stores that are owned by Dick’s Sporting Goods.Non-replicable Characteristic of Products Demand for particular sporting goods equipment depends heavily on the region of the United States and DKS has limited scope in terms of replicating its products across all of its stores because of this. Climate changes play a significa nt role as well in the merchandising mix to be offered in regions and demands changes in the seasonality of certain products. With these obstacles to deal with, it limits DKS’s ability to have huge gains on inventory even though it is a large retailer. Trend Ratio Analysis Key Growth Ratios, YOY| 2007-01| 2008-01| 2009-01| 2010-01| 2011-01| Revenue %| 18. %| 24. 9%| 6. 2%| 6. 8%| 10. 4%| Net Income %| 3. 6%| 3. 9%| (1. 0%)| 3. 1%| 3. 7%| Dick’s Sporting Goods has had positive growth each of the last five years in terms of revenue, and has had positive growth four of the last five years in terms of their bottom line. This can be attributed to its strong position with the industry in terms of market share and its ability to compete on price as a mass merchandiser and be profitable in terms of its specialty stores. Growth looks to continue in the future for DKS with analysts predicting around 8% growth in fiscal year 2012 and low double digit growth in 2013.Liquidity/Fina ncial Health| 2007-01| 2008-01| 2009-01| 2010-01| 2011-01| Current Ratio| 1. 5x| 1. 4x| 1. 7x| 1. 5x| 1. 8x| Quick Ratio| 0. 3x| 0. 1x| 0. 2x| 0. 3x| 0. 7x| Cash Conversion Cycle| 59. 5| 66. 8| 71. 4| 62. 5| 51. 3| Receivables Turnover| 90. 2x| 76. 5x| 68. 9x| 94. 7x| 138. 4x| Inventory Turnover| 3. 8x| 3. 6x| 3. 4x| 3. 7x| 3. 8x| Dick’s Sporting Goods’ liquidity ratios seem pretty stable over the past five years. However, the quick ratio is very lower compared to the current ratio because inventory represents such a large part of DKS’s current assets.Despite this the quick ratio has been increasing over the past four years of operation. DKS’s cash conversion cycle has declined in recent years after extreme growth in the beginning of the last five years. Inventory turnover has been pretty stagnant for Dick’s Sporting Goods and DKS should look to improve this number in order to reduce inventory costs and storage costs. Finally the receivables turnov er of Dick’s Sporting Goods has seen great growth in the past five years meaning that it has been doing a better job of collecting on its accounts receivable.Profitability| 2007-01| 2008-01| 2009-01| 2010-01| 2011-01| Asset Turnover| 2. 3x| 2. 2x| 2. 1x| 2. 1x| 2. 0x| ROA| 9. 1%| 9. 4%| 7. 5%| 7. 0%| 8. 3%| ROE| 21. 8%| 20. 0%| (4. 5%)| 13. 7%| 14. 9%| ROIC| 17. 7%| 18. 0%| 14. 0%| 12. 8%| 14. 7%| Dick’s Sporting Goods’ profitability ratios are down from their beginning levels in this recent five-year period. These are unfavorable trends in terms of investor confidence. Return on Equity is lower than the beginning of the period by 6. 9% and Return on Invested Capital is at 3% lower than fiscal year 2006 levels.The good note is that all the ratios are improving from the previous year in attempts to return to levels prior to the recession. These ratios will hopefully increase as consumption increases and consumer confidence returns to pre-recessionary levels. Leve rage Ratios| 2007-01| 2008-01| 2009-01| 2010-01| 2011-01| Debt/Equity| 29. 2%| 20. 4%| 20. 3%| 13. 1%| 10. 3%| Long-term Debt/Equity| 29. 1%| 20. 4%| 20. 2%| 13. 0%| 10. 3%| Interest Coverage| 18. 2x| 13. 2x| 13. 7x| 51. 9x| 22. 8x| Financial Leverage| 0. 29| 0. 20| 0. 20| 0. 13| 0. 10| Dick’s Sporting Gods has approximately $. 3 of liabilities for every $1 of assets. Dick’s has also done a very good job of reducing its long-term debt relative to equity in addition to reducing its debt relative to equity. In addition DKS currently covers its interest expenses 22. 8 times with earnings. This is a significant drop from the previous year but it is an overall increase from the beginning of the five years leading to fiscal year 2010. Cross Sectional Ratio Analysis I chose to compare Dick’s Sporting Goods with Cabela’s Inc. and Big 5 Sporting Goods, which are its two biggest publicly owned rivals in the industry.All three are industry leaders in many statistica l and ratio categories. For comparison sake I will use the most recent fiscal year (2010) for the cross sectional ratio analysis of the three firms. Key Growth Ratios, YOY| DKS| CAB| BGFV| Revenue %| 10. 4%| 4. 3%| 0. 1%| Net Income %| 3. 7%| 5. 0%| 2. 3%| In looking at the year-over-year key growth ratios, Dick’s Sporting Goods’ revenue is more than double above Cabela’s and substantially higher than Big 5 in the most recent fiscal year. DKS is only second however in year-over-year net income, losing out to its closest industry competitor Cabela’s Inc.Liquidity/Financial Health| DKS| CAB| BGFV| Current Ratio| 1. 8x| 2. 0x| 1. 8x| Quick Ratio| 0. 7x| 1. 6x| 0. 1x| Cash Conversion Cycle| 51. 3x| 76. 4x| 100. 3x| Receivables Turnover| 138. 4x| 61. 0x| 63. 2x| Inventory Turnover| 3. 8x| 3. 3x| 2. 5x| The current ratios for the industry leaders are pretty similar across the board and CAB is the leader of the three in terms of quick ratio with DKS in second. I n terms of receivables turnover, Dick’s Sporting Goods is much more efficient in collecting on its accounts receivable than either CAB or BGFV, however DKS is last of the three in its average cash conversion cycle.Finally, DKS is has the best inventory turnover among the top three public players of the industry meaning that it is more efficient in reducing its inventory costs and DKS does a better job of getting its products off the shelves and into the customer’s hands. Profitability| DKS| CAB| BGFV| ROA | 8. 3%| 3. 4%| 5. 9%| ROE| 14. 9%| 11. 2%| 14. 6%| ROIC| 14. 7%| 5. 1%| 11. 3%| Profitability measures of the industry’s three largest players shows that Dick’s Sporting Goods earns greater income off of their equity relative to its two competitors.Return on Assets and Return on Invested Capital also favor DKS in comparison to its peers. Leverage Ratios| DKS| CAB| BGFV| Debt/Equity| 10. 3%| 227. 4%| 34. 4%| Long-Term Debt/Equity| 10. 3%| 120. 8%| 33. 1% | Interest Coverage| 22. 8x| 9. 5x| 25. 8x| Financial Leverage| 0. 10| 4. 42| 2. 60| As you can see Dick’s Sporting Goods is a much less levered company in comparison to its two largest competitors. It has drastically lower debt to equity ratios and a dramatically lower financial leverage statistic. This make Dick’s Sporting Goods a less risky company in comparison to Cabela’s Inc. and Big 5 Sporting Goods Inc.However, DKS’s beta is slightly greater than one; around 1. 24, which means that its is riskier than the market. Analyst Analysis/Estimates A key factor in DKS’s merchandising strategy is strong vendor relationships. Most mass merchants and specialty retailers have limited access to sports equipment because they can’t offer the high level of service that manufacturers demand from the firms they supply to. The store-within-a-store layout however Dick’s Sporting Goods provides that high level of service through experienced profess ionals, value-added repairs, maintenance, and assembly services.There is also an interactive shopping experience for customers with them being able to try products out before purchase, which most competitors don’t match. Dick’s has a great opportunity to expand nationwide in terms of number of storefronts and overall market share. Management has identified the potential for at least 900 DKS stores in the US before it nears saturation, which means that as of right now Dick’s is only halfway to its ultimate goal in terms of store base. It’s estimated that Dick’s Sporting Goods will open on average 36 new stores per year in the near future, suggesting a mid/high single digit square footage growth rate.In the long run, analysts expect more M&A similar to the acquisition of Golf Galaxy in order to provide immediate market penetration into several new markets. These types of acquisitions will also give DKS a better understanding of local markets, which w ill allow for DKS to adjust for regional preferences as discussed earlier. Dick’s Sporting Good’s category-leading inventory turns and high profitability within the industry will likely produce enough cash to fund its store growth initiatives in the near future.This will prevent DKS from having to turn to capital markets or the use of levering up. This will allow the firm to remain one of the industry’s healthiest companies financially. Analysts give Dick’s Sporting Goods a Fair Value Estimate of $41 per share, which is an increase from prior estimates based off of longer term operating margin assumptions. In terms of comparable ratios for valuation, analysts’ fair value estimate implies 22 times forward earnings, 9 times enterprise value to EBITDA, and 3% free cash flow yield.In terms of operating margin, analysts estimate that it will be on average between 8%-9%, which is a conservative estimate compared to company estimates of double-digit margi ns in the next three to five years. The model that the Morningstar analysts are using takes into account the growth plans that Dick’s Sporting Goods has in the future in terms of store openings at an average of 35 per year and that the chain reaches a total store count of more than 800 in the next 10 years at the end of the forecast.For fiscal year 2012, the model gives just under 8% growth in revenues, continued leverage of operating margins are to reach 8% on both gross margin improvement and SGA leverage. In 2013, analysts project low double-digit growth on a faster store-opening rate and slightly improved same-store sales along with flat operating margins as percentage of revenue. DuPont Ratio Analysis Over the most recent five-year period, Dick’s Sporting Goods saw drastic decreases in Return on Equity and moderate decreases in Return on Assets.By breaking down these ratios into the Dupont formula we can see what played a part in these decreases. Return of Assets= Net Income/Total Assets= Profit Margin*Asset Turnover | 2007-01| 2008-01| 2009-01| 2010-01| 2011-01| ROA=NI/TA| 9. 1 %| 9. 4 %| 7. 5%| 7. 0%| 8. 3%| Profit Margin= NI/Sales| 20. 93%| 20. 68%| 15. 75%| 14. 7%| 16. 6%| Asset Turnover= Sales/TA| 2. 3| 2. 2| 2. 1| 2. 1| 2. 0| From dissecting Return on Assets further we see that the main contributor to the decreasing ROA was the decreases in profit margin from the beginning of the most recent five-year period.Profit margins were cut because due to decreases in consumer spending during recessionary periods, Dick’s Sporting Goods was forced to cut its prices while input costs remained high, thus narrowing margins. Asset turnover was reduced during this five year period but not at a significant enough rate to be a major contributing factor to the massive decreases in Return on Assets. We now look at the Return on Equity based on the Return on Assets computations. | 2007-01| 2008-01| 2009-01| 2010-01| 2011-01| ROE= ROA*TA/EQ| 21. 8%| 20. 0%| (4. 5%)| 13. 7%| 14. 9%| Fin. Lev= TA/EQ| 0. 29| 0. 0| 0. 20| 0. 13| 0. 10| With the financial leverage decreasing because of there being less equity in the market as the recession continued after 2007, in order for Return on Equity to increase the ROA needed to offset that decrease in financial leverage. As we saw before, due to the drastic drops in profit margin over the period the Return on Equity suffered also. Therefore, variability in ROE can be attributed to volatility in the Return on Assets of Dick’s Sporting Goods. (Some of the values are not exact because of miscalculations in on the part of the Capital IQ database).Valuation P/E Multiplier The current P/E for Dick’s Sporting Goods is 20. 1. Since the economic outlook calls for expansion I will use the average annual growth of earnings from 2002-2007, which was deemed an economic expansion era. The average annual earnings growth rate over this time period is 24. 084%. This is a realistic estimation because if the economic forecast proves correct the we would experience a similar type of growth as we did post Internet bubble crisis, which is right around the beginning of 2002. Dick’s Sporting Good’s current earnings per share is $1. 92.Therefore, in order to get estimated earnings you take the current earnings per share and multiply it by the average annual growth rate of earnings during economic expansionary times. This gives us estimated earnings of $1. 92*(1. 24084)= $2. 3824. From there we multiply expected earnings per share times the current price to earnings ratio in order to get the intrinsic value based on this valuation model. Therefore we take 20. 1*$2. 3824 to get an intrinsic value of $47. 886. The current stock price of DKS is $38. 53 (as of 11/29/11). This would suggest that the market undervalues DKS by about 19. 54%.Free Cash Flow to Equity Approach In using the free cash flow to equity approach there are many inputs in which you need to identify and defend their use. Here are some of those inputs: * WACC=11. 64%; This was based off of a WACC calculator in which total debt and total equity were extracted from the most recent financial statements, corporate tax was 38. 8% based on public information, cost of debt was 7. 0% based on analyst information, and cost of equity was found using CAPM. For risk free rate the 3 year treasury rate was used of . 4% and for market return the 3 year return on the Russell Midcap Growth Index of 10. 8% was used because that is the style of stock DKS is and 3 years after analyst growth estimates for 2012 and 2013 is when we expect economic expansion. * 2012 growth rate is 8% based on analyst estimates and 2013 growth is 11% based on analyst estimates. * From 2014 until 2016 we expect there to be growth but at a decreasing rate of about 1. 5% per annum until after 2016 when we expect growth to mimic economic expansion from 2002-2007 in which the average annual growth rate was 6. 31%. Calculatio n of Intrinsic Value on Following Page Year| FCF/Share| 2002| . 3902| 2003| . 3168| 2004| . 0283| 005| . 3412| 2006| . 0541| 2007| . 7692| 2008| -. 5089| 2009| 2. 2119| 2010| 1. 8934| 2011| 2. 032| 2012| 2. 19456| 8% growth| 2013| 2. 43596| 11% growth| 2014| 2. 66737| 9. 5% growth| 2015| 2. 88077| 8% growth| 2016| 3. 06802| 6. 5% growth| Perpetuity| 61. 1934| 6. 31% growth| Intrinsic Value| $41. 0685| The current stock price is $38. 53 (as of 11/29/11), and based on the intrinsic value this suggests that the market undervalues DKS by about 6. 18%. Summary of Analyst Reports According to Morningstar Investment Research Center, the fair value estimate for Dick’s Sporting Goods is $41. 0. In addition, analysts recommend to consider buying the stock at $24. 60 and consider selling the stock at $63. 60. Morningstar also gives Dick’s Sporting Goods a three star rating. In looking at YahooFinance the mean target for the stock based on analyst estimates is $46. 50 with a high target of $50. 00 and a low target of $36. 00. Accordingly, this month there are 10 Strong Buy recommendations, 7 Buy recommendations, 9 Hold recommendations, and 1 Underperform recommendation. Beta Coefficient Dick’s Sporting Goods has a Beta coefficient of 1. 4, indicating that it is generally more risky than the general market. This risk factor is most likely determined by the high revenue volatility that the industry is exposed to as a direct result of consumer spending and also due to the industry’s mature state. Technical Analysis In examining Dick’s Sporting Goods using technical analysis I chose to pick a few popular technical analysis indicators and use them to assess DKS. First we look at Bollinger Bands, which are variable width bands that become narrower during less volatile periods and wider during more volatile periods.In examining the Bollinger Bands for DKS we can see that as of right now there seems to be low levels of volatility in pricing espe cially compared to August where there was much volatility in pricing for DKS along with the overall market. The recent lower volatility would suggest stable pricing trends to continue in the near future. Next I looked at the Relative Strength Index. The RSI is a calculation where average up and average down are calculated using a simple average method for the initial observation. Subsequent values are computed using these initial values in conjunction with a damping factor to smooth out extreme points.An RSI indicator falling below a value of 30 indicates an oversold condition. A buy signal is triggered when the indicator crosses 30 from below. Similarly, an RSI value greater than 70 indicates an overbought condition. A sell signal is triggered when the indicator crosses 70 from above. If you look at the bottom half of this picture you can see the Relative Strength Index for the current year. In going with the description on the previous page, it seems that in late August/early Sept ember the RSI crossed 30 from below, which would have signaled a buying situation at the time.In looking at other technical analysis trends, financial visualizations or FINVIZ. com, gives distance from simple moving average statistics. The SMA50, or the distance from the 50 day simple moving average is 3. 25%, which according to the site is a favorable statistic. In addition it states that the SMA200 or the distance from the 200 day simple moving average is 2. 28%, which is once again a favorable statistic according to the site. Conclusions * Dick’s Sporting Goods has the leading market share in a mature Sporting Goods Stores industry that’s marked by high levels of pricing competition. The industry is very dependent on consumer spending and disposable income per capita. Decreases in these along with consumer confidence pose huge threats to the industry as we saw with the extremely marginal average annual growth from 2006 to 2011. * DKS is the leader in the golf indust ry with its acquisition of Golf Galaxy and its us of the store-within-a-store model for specialty golf stores. * The industry is seeing decreases in sports participation among children in lieu of other avenues to fulfill leisure time that could put restraints upon growth within the industry. Dick’s Sporting Goods’ high lease expense represents off-balance-sheet financing and means the company is more leveraged than investors realize. * DKS has benefitted from its ability to compete on price as a mass merchandiser and from offering deep product selection and higher margin items within it’s specialty stores. * Management has store expansion plans that on average would open up about 35 new stores per year and would put Dick’s Sporting Goods over 800 stores within the 10 year forecast, which is just under the estimate for number of stores until saturation. ————————————— —- [ 1 ]. Zumbrun, Joshua. â€Å"Fed Says Economy Has Picked Up While Still Detecting ‘Significant’ Risks. † Bloomberg – Business & Financial News, Breaking News Headlines. Bloomberg, 2 Nov. 2011. Web. [ 2 ]. EVANS, KELLY. â€Å"Housing Market May Be Nearing a Bottom. † Business News & Financial News – The Wall Street Journal – Wsj. com. Wall Street Journal, 21 Nov. 2011. Web. [ 3 ]. Bureau of Economic Analysis. Personal Income and Outlays: October 2011. Accessed 11/27/11. [ 4 ]. Bureau of Economic Analysis. Real Personal Consumption Expenditures.Accessed 11/27/11 [ 5 ]. Bureau of Labor Statistics. Employment Situation Summary. October 2011. [ 6 ]. IBISWorld Market Research Industry Report. Sporting Goods Stores. Accessed 11/21/11 [ 7 ]. BizMiner [ 8 ]. Bureau of Economic Analysis [ 9 ]. BizMiner [ 10 ]. Bureau of Economic Analysis [ 11 ]. â€Å"Capital IQ. † Financial Records: DKS. Accessed 11/30/11 [ 12 ]. â€Å"Capita l IQ. † Financial Statements: DKS, CAB, BGFV. Accessed 11/30/11. [ 13 ]. Morningstar Investment Research Center. Swinand, Paul. Analyst Research: DKS. Accessed 11/21/11. [ 14 ]. â€Å"Capital IQ. † Financial Statements: DKS. Accessed 11/30/11.