DECATHLON Case
Contents Introduction The environment (PESTEL & PORTER) The SWOT model The key success factors Building a competitive advantage Conclusion
INTRODUCTION Decathlon is the European leader in the retail sporting goods market. Decathlon maintain its leadership through a long-term growth and strong managerial policy, innovation in various sectors such as a creation of lines of clothing and sportswear and sports equipment Competition in this sector has increased in recent years with the expansion of the supply of sporting goods in hypermarkets In a market increasingly competitive, it is necessary to focus on the strategy to sustain its position "Athletes satisfied is our business."
PESTEL Analysis Political Over the 20 th Century, people are allocating more time to leisure and sport. Various Government around the world are promoting sport to prevent obesity and helping people to be more active. Economic Increase in the purchasing power specially in the BRICS. When income increase, people are willing to spend on leisure and sport. During hard times, Spending on Leisure and Sport goods slow down.
PESTEL Analysis Social: Boom of the leisure and sport in the developing countries due to a rise of free time and an increasing in available saving. The potential customers is increasing, women are doing sport more than ever. People are willing to pay attention to the image they send to society, the sport goods has to be fashionable too. People buy sport goods even if they are not doing sport, they are willing to show that they are dynamic, healthy and strong.
PESTEL Analysis Technological People and athletes are demanding of efficient and comfortable sport goods. Manufacturer are facing race of technology to meet customer demand Environmental and Legal Sport Manufacturer had value rules to respect, teen ager employment. Tariff barrier to reduce importation of sport goods to prevent unfair competition.
5 Forces Analysis M W H L H
SWOT analysis Strength 1. Stores located throughout the world with 800 stores all over 2. Group is largest sporting goods reseller in domestic market 3. Large variety of sports goods in affordable pricing for all classes of consumers 4. Own private label brands to get high brand recall 5. Innivation 6. Strong and innovative marketing since years have created a strong brand retention in the minds of customers Weakness 1. Limited global presence as compared to leading global companies 2. E- retailing is gaining importance but still company has limited presence on the same
SWOT analysis Opportunity 1. Brand building by tie-up with emerging clubs/teams/players 2. Company has opportunity to innovate on technology front to design new products 3. Creating high brand awareness by exploring advertising media tactically Threats 1. High inflation doesn't give opportunity of cost advantage in competitive environment 2.High competition from global and domestic players 3.Threats from other brands who provide goods at lower price
KEY SUCCES FACTORS of DECATHLON MANAGEMENT SKILLS: Implanting: High capacity for investment implementation Relations with the suppliers: strong partnerships, and creativity, innovation of new products Logistics: Efficiency & perenity of DECATHLON brands with a mastery distribution channel Human Ressources: Rigorous recruitment policy (skills & competencies required & training)
KEY SUCCES FACTORS of DECATHLON MARKETING SKILLS: Communication policy: Mass to market & low prices with a sports activities positionning Advertising in various supports (magazines, radio) Services: satisfaction & customer relationships Experts sellers, consulting, equipment rentals, Development of points of sale
KEY SUCCES FACTORS of DECATHLON DIVERSIFICATION & QUALITY PRODUCTS Wide range of products (amateur to advanced) Range of each use & kind of sports activities Development of own brands (Tribord, Btwin, ) to maximize profits because intermediate margins are reduced Best quality/price ratio Research & development: Innovation, new materials, KEEP COMPETITVE ADVANTAGE & CONSOLIDATE ITS IMAGE OF PERFORMANCE & QUALITY PRODUCTS AT THE BEST PRICE.
Competitive Advantage Consumer s preference of the firm. Fitting with the consumers demand. Low Price. Cost reduction. Development and produce its own product.
CONCLUSION Decathlon is the leading French distributor Compared to the competition with they have a very special position: they offers a very wide range quality products at a very attractive prices The key success factor Decathlon is primarily the marketing of its brand "passion" and especially the brand "Quechua" which alone makes 400 million turnover strategy of cost leadership, the company ensures a strong financial health and recovery of margins in its industry "production"
RECOMMENDATION Develop its international expansion through store openings and through the Internet. Decathlon should continue its sponsorship actions (presence in various sports events: tennis competition, climbing, water raid) Develop brand awareness "passion" to follow the new trend of consumers