PESTEL Analysis - Decathlon

Extract

[...] Decathlon's success has relied on three major points; margin, market share and highest turnover per square metre of retail space. They will need to explore advertising media tactically to create high brand awareness in order to maintain their position in the market. They could also consider consolidating their suppliers as currently, they subcontract to a large number of smaller factories, which gives them weaker bargaining power. A real opportunity exists for Decathlon to take advantage of the increased purchasing power, especially in BRICS countries (Brazil, Russia, India, China and South Africa). [...]

[...] Decathlon currently has 1647 stores in 1,000 cities in 60 countries around the world. Outside of France, the company's largest market share is in China, where it has 214 stores. Worldwide the company employs 93,000 people from 80 different nationalities with their latest revenues reaching US$ 12.8 billion. (Based on 2019 figures) II. Forging Ahead in Innovation and Technology Decathlon has developed 20 of its own brands and has extensive research and development facilities all over France. They aim to produce innovative and quality products at a low price point to satisfy all clients. [...]

[...] Economic High inflation poses a threat to the cost advantage Decathlon currently enjoys. There is also stiff competition from various global and domestic players, and in hard times spending on leisure and sports goods are deemed as luxury and one of the first expenses to be cut. Another significant threat to Decathlon is the fact that rents in China, where it has a large percentage of its stores, have increased by 30% in 2018. This has significantly decreased margins for the company in this region. [...]

[...] Walking into a Decathlon sports store, you are able to immerse yourself in your chosen sporting or outdoor activity. The stores are designed around the belief that in order to make sure you have found the right kit to pursue your activity, you need to be able to try things on, test them in a realistic setting and play around. The average Decathlon store size is 4,000 m2 and houses interactive areas such as golf simulators, where you can test clubs, bouldering walls and a camping section where tents are set up so you can get inside them to name just a few of the in-store experiences that await you. [...]

[...] Social Decathlon has always had a strict policy in terms of employee welfare. All their contractors follow Human Responsibility in Production (HRP) process in all activities, which designates the management system and resources implemented by Decathlon and prescribes workplace conditions at production sites and with suppliers. Since 2003, Decathlon has adopted a social charter set out by the Social and Environmental Responsibility World Forum regarding human rights, health and safety, respect for the environment, corruption and management and communication. However, there is some controversy over the company's suppliers in Sri Lanka which will need to overcome. [...]