Decathlon PESTLE Analysis
Detailed PESTLE analysis of Decathlon examining political, economic, social, technological, legal & environmental factors.
Political Factors:
Decathlon’s business is influenced by political factors present in a country or even globally. Government policies have a serious impact on companies like Decathlon. If a particular government focuses more on sports in the country, then it becomes a golden chance for sports companies like Decathlon to increase their sales by proper marketing. But if the same government imposes heavy taxes over imports over sports material to protect the interests of local industrialists, not only the sports items will become expensive but also the sales will drop, which eventually lead to the loss of trust from the brand. Even government entities can tie up with Decathlon to sponsor their players at international and national levels. This will not only create goodwill for the brand but its sales will also increase if the following players play well. A country's lack of political stability has an impact on corporate tasks. Political stability is especially important for global organizations.
This concludes the political factors in the Decathlon PESTLE Analysis.
Economic Factors:
Below are the economic factors in the PESTLE Analysis of Decathlon:
High inflation rates have a serious impact on the sales of sports products. Because in case of inflation people tend to spend more on necessities, but sports items come under luxury items, so their sales will plump and this will affect Decathlon in a bad way.
If a country has high GDP or the country’s GDP increasing substantially then it will beneficial for companies, because higher per capita income will lead to higher spending on products that Decathlon offers. Recently in the Budget by Indian Government, they allotted almost 300 crores more from the last year for the sports, this will lead to the creation of more sports facilities all over India and more children will start playing different sports, ultimately the Decathlon will gain more customers and their sales will increase. The brand’s total profitability and revenues will suffer as a result of the high unemployment rate. In a particular Country.
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Social Factors:
Following are the social factors impacting Decathlon PESTLE Analysis:
Demographics of the country has a serious impact on the business of the company, especially if the firm deals in sports and lifestyle equipment. In countries like the US and European Union where the average age is above 35 Decathlon have to make their products keep in mind the need of such people, while in countries like India, China and Brazil where the portion of young population is very large, they have to focus more on their needs. Before establishing itself in a country, the company have to look at the culture of the population, they can open separate outlets, or stores in malls or even both depending upon where the people in a particular region tend to visit. Decathlon claims to have a stringent employee welfare policy, and that all of its contractors follow the Human Responsibility in Production (HRP) approach in all of their activities. Decathlon's management system and resources for workplace conditions at production locations and with suppliers are referred to as the HRP. Such types of policies create a good image of the brand in the minds of normal people which help in increasing sales.
Technological Factors:
The technological factors in the PESTLE Analysis of Decathlon are mentioned below:
With the advancement of technology in the field of sports, Athletes now need sports gears more advanced for example shoes with better ergonomics to help marathon runners finish their races in less time than before. Decathlon has a strong product design and development philosophy, together with better marketing will lead to customer retention. For Amazing gender diversity in many countries like India and China, the brand has different products for both genders under different names. With customers moving to the online market, Decathlon has to increase its online operations. By using different Artificial Intelligence (AI) techniques by which customers can try the outfits in the online mode. With the penetration of the Internet, they can now use techniques like E-Wallets, UPI.
They can even set up their virtual reality platform i.e., a metaverse store for Decathlon.
Legal Factors:
Following are the legal factors in the Decathlon PESTLE Analysis:
Before entering a market, every firm needs to check the legal aspects of the particular country and geography. The company alleged that some competitors have replicated its registered brand and slogan. It was also reported that some competitors use logo as the same typeface and color as Decathlon's. But this case was fought in a country where the Judicial system is not that powerful then they will have no choice but to let them use it. Also, recently Indian government is reducing tariffs on the import of sports goods this will help the brand to compete with the local brands.
Environmental Factors:
In the Decathlon PESTLE Analysis, the environmental elements affecting its business are as below:
Subsidies are available in several countries to encourage investment in renewable technologies. Decathlon can take advantage of it and invest in renewable technologies to maintain long-term viability. Due to the improved brand image, this investment will help increase shareholder satisfaction and extend the client base.
So, they are making some products like jackets and shoes from plastic wastes and enabling customers to wear and use them in good conscience and help reduce their carbon footprint. This will not only help them in making a good brand image but will also increase their customer base. The company also offers a 365 days return policy in which you can return a product to the store if you don’t need it anymore, so rather than throwing it, you can just return it.
To conclude, the above Decathlon PESTLE Analysis highlights the various elements which impact its business performance. This understanding helps to evaluate the criticality of external business factors for any brand.
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