Decathlon's Growth Strategy

Extract

[...] This strategic positioning was one of the reasons that triggered the departure of the presidency of the sports sign of the Mulliez group, of MatthieuLeclercq, son of Michel Leclercq, The brutal dereferencing of the major brands was an error, the group had to step back and review its strategy of referencing. The sign now authorizes stores to offer international brands in their offers based on local demand. Low prices The primary objective of Decathlon is to bet on a policy of 'the lowest possible price, in order to make sports accessible to all. For the fourth consecutive year, Decathlon has lowered its prices. This is made possible by continuous optimization of internal processes, from production to logistics through design. [...]

[...] Economies of scale and growth relays internationally The group also achieves economies of scale through the growth of its retail network. In total, the brand has 1,511 points of sale or contact. In 2018, Decathlon implemented its store model in 12 new countries. It is now present in 51 countries. The group's ambition is to open a dozen of new countries each year. There is a decade ago, the Hexagon represented 50% of the turnover, currently it no longer represents more than 30%. [...]

[...] The Decathlon group follows the strategy of a large company eager to increase its market share by seeking to enter high-margin segments. Unlike the external growth model based on the creation of a portfolio of strong brands through acquisition, as most companies do on many markets, the Decathlon group has been able to invent a model of growth of its activities, mainly based on the development of a portfolio composed of new proprietary brands. The Decathlon brand has thus chosen to highlight its own brands more in all its points of sale. [...]

[...] The activities of the Decathlon group Decathlon is a distributor-designer. Indeed, the core business of the brand is based on the creation of sports products on the one hand and distribution on the other. The main activities of the group thus include research and development, design, conception, logistics, and direct and online sales of sports and leisure articles and associated technological components. The commercial brand comprises a series of companies dedicated to sport and physical well-being, offering related activities: SAV Workshop (maintenance, repair, and customization of sports articles); Decathlon Insurance (sports insurance); Alsolia (consumer credit); Decathlon Occasions (trade-in with the purchase and sale of used sports products / buyback with the repurchase of used bicycles by Decathlon), Skimium.com (booking and rental of skis and snowboards online) and Decathlon Village (space combining free sports activities and events around a store and Decathlon, Decathlon Foundation . [...]

[...] As for bulky products, Decathlon prefers regional warehouses, which supply nearby stores. This strategy allows it to optimize the delivery time and cost. Innovation in its warehouses allows for a reduction in logistics costs through automation that enables the grouping of multiple web orders into a single, massified order, followed by sorting and the generalization of RFID tags on products, which facilitate faster and more secure order verification. To reduce its logistics costs, the group has installed platforms on different continents. [...]