Decathlon SWOT Analysis – SWOT Analysis of Decathlon: Decathlon is a French supplier of sports products. It is present in 45 countries and is the biggest retailer of sporting goods worldwide. In the year 1976, the company began operations with its headquarters in Lilly, France, and was established in 1976 by Michel Leclercq. The company began its expansion 10 years later, in Germany around 1986. It also expanded to Spain in 1991, Italy, and so on. It extended its reach into China, Malaysia, and the Philippines and now has over 82000 employees from more than various nationalities.
The retailer offers a broad selection of sporting items including tennis rackets, to the latest Scuba equipment. The stores are huge in size with an average of 4,000 square meters. The company has more than 20 brands and has R&D facilities throughout France dedicated to creating innovative designs. They also have around 40 patients each year. Every company or sporting group comes with individual product creation or design tools. As of August 2018, the brand had 1414 Decathlon stores across 15 countries.
Decathlon fun facts: Decathlon Group are the 3rd biggest R&D facility in France, with the upstream carrying out research to find out the needs of sports people.
About Decathlon – SWOT analysis of Decathlon
Company: Decathlon S.A.
CEO: Michel Aballea
Founder: Michel Leclercq
Year founded: 1976, Lille, France
Headquarters: Villeneuve-d’Ascq, France
Annual Revenue: Euro11.4 billion
Profit | Net income: Euro550 million
Number of employees: 100,000
Products & Services: Clothing | Sportswear | Sports equipment
SWOT analysis of Decathlon – Decathlon SWOT analysis
SWOT Analysis Of Decathlon is brand-based. SWOT Analysis of Decathlon evaluates the brand’s strengths, weaknesses, opportunities, and threats. Advantages and disadvantages can be attributed to internal factors while opportunities and threats can be attributed to external factors. We will be discussing Decathlon’s SWOT Analysis. Below is the detailed SWOT Analysis of the Decathlon.
Let’s talk about Decathlon’s SWOT assessment.
Strengths of Decathlon – Decathlon SWOT analysis
1.) Private Labels
Decathlon offers 20 different brands, and each brand is committed to the development and creation of new products that are specifically designed for specific sports. At present, Decathlon has offered over 70 different sports items. Their love for sports is growing every day and so do their desire to succeed. The company is planning to offer only private label brands exclusively on the market. The brand has advised major brands to cut or stop sales in 2020. The company’s own brand share is about 70-80%.
2.) Brand Retention
Decathlon is primarily focused on customer loyalty and has proven to be a successful formula. The company is committed to spending time with the client rather than on the amount of money. The company has representatives who monitor outstanding items and customers follow up promptly. They integrate chat functions that allow customers to respond to inquiries and follow-up which have increased their level of customer service satisfaction rate as well as improved the team’s efficiency and also.
3.) Integration of technology
The latest store of Decathlon located in Eva Mall, Bengaluru is equipped with technological innovations. It is equipped with a VR system that allows customers to test the various kinds of camping tents, and take an overview of the items, and has enhanced customers’ experience. the shopping experience in the stores.
The Decathlon app lets customers determine the exact location of products within the store, so they are able to navigate the massive stores. Customers are also able to scan RFID tags on the items using the app to obtain more information on the products and read the authentic reviews from customers as well. The purchase is also possible on the internet so that the buyers do not have to wait in line for the checkouts They just need to use the scanner in order to confirm their purchase.
Weaknesses of Decathlon – SWOT Analysis Of Decathlon
1.) Dependence on French Market
In France, markets have become overcrowded with over 300 shops. The market is currently close to being overcrowded and focusing solely on the market won’t help in achieving the goal of double-up in size over the next five years. Its approach is to make it an international leading player in the world of sporting goods. In addition, opening additional stores in France will not aid the brand.
2.) Mature market
The brand is a hit across the majority of Europe and also in BRIC countries but has been unsuccessful in other regions of the world. The US would never be able to take the name on the street. In fact, the North American market is saturated by American brands such as Under Armor, Reebok as well as Nike.
Decathlon doesn’t employ any prominent sportsperson to promote its brand, and so the odds of doing very well within the USA were not easy because Decathlon has had a tough time determining its place within market “mature marketplace” in developed nations because of the products they sell were lower, and this didn’t seem to be a good fit for their brand. In the UK Decathlon needs to alter its approach and sign a contract with a retailer in the supermarket known as ASDA to increase the sales of their products.
Decathlon does not have to pay large starlets to promote or publicize the brand. This is a strategy to reduce costs and utilize this money to offer better services to current customers. Nike’s annual budget for communications is equivalent to the annual revenue of Decathlon. JD sportswear has been performing extremely well on the market They have expanded significantly globally, and are serving the European market with a good performance. the majority of their 65 international new stores opening in Europe. The other rivals are Kit Bag and Early Winters.
Opportunities of Decathlon – Decathlon SWOT analysis
1.) Brand creation with a newer name
Multinational corporation such as Decathlon must refine their services and product offerings so that they be able to appeal to local tastes and be priced at a reasonable price to the consumers. The emerging markets such as India, Turkey, Malaysia, and others. provide the potential for the creation of new goods and solutions. Decathlon is contemplating separating the brand into two and creating a brand for each sport it serves. Decathlon could consider moving its headquarters for certain companies from France to other nations, for instance, badminton is very popular in China therefore the headquarters of the badminton brand maybe China.
The annual sales from the market that is emerging are expected to rise to $30 Trillion in 2025. This will be a massive increase in the number of customers coming from the market that is emerging. For France, Decathlon has a business model of opening stores outside of cities but makes bigger in size. Decathlon ought to think about rethinking its model as the current trend is that more increasing people reside in larger cities. So when expanding internationally, Decathlon should take a look at this new culture that is affecting people. It is believed that the “mall cultural” is present in Brazil as well as China. Emerging markets provide immense potential to Decathlon for growth over the next years.
Threats of Decathlon – SWOT analysis of Decathlon
1) Counterfeit products
The internet offers a massive area for counterfeiters, so companies such as Decathlon have to be aware of safeguarding their reputation and their customers. The most frequently counterfeited items include sporting equipment, shirt balls, and other items. Decathlon, which is growing in China at a faster pace needs to be vigilant since the Chinese Market is home to one of the highest-tech counterfeiters around the globe. International brands in a lot of countries do not have enough rights, so Decathlon must take smart choices to avoid such problems.
2.) Rent costs are rising in China
China is home to many of the Decathlon stores that are not in France. There are 214 stores located in China which is more than any other country, with the exception of France. The cost of rent in China has grown by 30% in 2018, especially in Southern cities. This will raise the fixed costs of operations and impact those margins that are a part of Decathlon.
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