The article summarizes the expansion efforts made by Performance Sports Group, owners of Bauer equipment, and the results. A second related article, Bauer owner files for bankruptcy protection, gets lifeline from Fairfax and Sagard, by Janet McFarland, Christina Pellegrini and Jacqueline Nelson on October 31, 2016 is referred to in the Confirming Activity section of this lesson.
Appropriate Subject Area(s):
Marketing, business management, business finance
Key Questions to Explore:
- What options are available for a mature company that wants to expand its reach and its sales? What are the risks to mitigate?
Introduction to lesson and task:
Students will learn about the growth and expansion strategy of a mature business and discuss the options for expansion and the risks.
Action (lesson plan and task):
- As a class identify several companies that are in the sports equipment sector and what each of them manufactures.
- Ensure that Bauer is included in the list. Have students work in groups of four and select one of the companies from the list, then research and create a historical financial profile from the company’s inception to today.
- Have students share their findings.
- Distribute the article for reading.
- Ask the group (s) of students who researched PSG to talk about how each the acquisition strategy served PSG in its growth plans.
- Once the acquisition strategy took PSG as far as it could in achieving its growth targets, the company had to look for other growth options. In small groups have students brainstorm what options were available to expand. Share the ideas as a class.
- Many of the retailers who were carrying PSG products were concerned about the expansion strategy PSG decided upon. Enquire what that strategy was and why retailers would be concerned. Was the reaction of retailers justified?
- Discuss whether the situation contributed to bankruptcy.
Consolidation of Learning:
- Discuss the relationship between participation in a sport and its retail sales. Should investors make decisions based on this information? Why or why not?
- Students understand the risk involved in expansion as well as the potential risks involved.
- Either provide this link to the second article to students or print and distribute. http://www.theglobeandmail.com/report-on-business/performance-sports-files-for-protection-gets-lifeline-from-fairfax-sagard/article32588735/
- Discuss what bankruptcy protection means. Explore with the class the factors that they believe led to this filing.