Analysis of Décathlon’s competitive environment

Résumé du document

Sporting goods retailers may benefit from the ever increasing purchasing power in developing countries, especially in BRICs (Brazil, Russia, India and Russia). It is not established yet that these developing countries are dedicating more of their budget to sport purchases but it is well-known that, in average, when income increases, the percentage of the budget allocated to primaries goods (food…) tends to slump. Still, should we consider sporting goods as leisure expenditures or as clothes expenditures (which are primary goods)?

However, during hard times, such as the ones we seem to go through, rational customers arbitrate between what is essential to life and secondary purchases. The so-called recession all developed countries are now facing might force customers to slow down or even reduce their expenditures for leisure goods, sporting goods included.

As we see know that more and more customers are reluctant to buy new cars( as the situation of carmakers(GM, Renault) shows it), to acquire new real estate, and simply to consume, the current global pattern of events is far from being brilliant. So, sporting goods retailers, whether they like or not, are likely to suffer from the current recession, just as other industries and activities do.

Extraits

[...] That is why companies are trying to differentiate their offer. Nevertheless a lot of things are at stake for manufacturers: technical innovations must not involve a sharp increase in sporting goods. Otherwise, consumers could turn towards non-specialists, which maybe offer less fashionable products, but despite of all some innovations to match consumer needs and above all more affordable prices. The second priority would be not to offer too highly technological products. Indeed, if consumers get too much information, they could face a selection problem, and finally offering innovations could have an opposite and unpleasant effect: the consumer will eventually not purchase! [...]

[...] Décathlon aims at supplying them sportive equipment. These customers willing to have highly innovated and good quality equipment. Yet they are fussy on price, unlike intensive sportspeople, price is a significant criterion in their choice. Conclusion: Customers have the choice to buy in Décathlon's shops or other elsewhere. As we have seen, the brand names all display high quality and innovative products buyers have the power to compare one brand name from another. Yet, because of Décathlon's predominant position (it covers 71% of French customers, has a worldwide presence) and of the brand knowledge, customers prefer shopping in Décathlon and directly go to their shops. [...]

[...] Conclusion: The rivalry among competitors is therefore high THREATS OF NEW ENTRANTS The first entry barrier in the sporting good market is opening a commercial outlet. Indeed regulation from the State is very tough: companies need to have the approval from a special commission if they are willing to open a store which is over 2500 m2 in an area. Such a regulation limits competition and threats of new entrants. As a matter of fact, Décathlon is playing a lot on this regulation. [...]

[...] Analysis of Décathlon's competitive environment Table of Contents La table des matières est vide car aucun style de paragraphe sélectionné dans l'inspecteur n'est utilisé dans le document. I .A study of Décathlon's macroenvironnement: PESTEL analysis 1. POLITICAL Over the 20th century, our time dedicated to work has kept diminishing, between others thanks to the gradual decrease in working hours, especially in France. As a consequence, our spare time has increased threefold in a century, hence the development of new cultural and sportive activities. [...]

[...] Décathlon's and its competitors' product are all of good quality and are ahead with technology (GO sport's salesman are sport experts, and put forward the performance of their products, Inter Sport developed a special outlet Sport Expert devoted to technical products magasin de vos performances”). The recent arrival of new competitors such as E.Leclerc has turned the tide-only a little in fact. The first outlet was inaugurated in 2006 in Chantilly (Oise). E.Leclerc offers to cut prices on sporting goods, but the market is already clogged up. Finally, recently distributors themselves (Lacoste, Quicksilver, Aigle) have started to sell their own products. They only represent of the sales in 350 stores. [...]