Decathlon: International Audacity and Customer Seduction

Abstract

Decathlon, a leading company in the sports market, has learned lessons from its international expansion since 1992, as the company opened department stores on the outskirts of European cities. Decathlon has achieved internationalization by adopting different modes of entry including alliances, partnerships, and greenfields. The company now distributes its products in 69 countries and has three business lines: sports product design, production, and online and in-store distribution. Fueled by a low-price strategy built on efficiency (standardization of raw materials, just-in-time lean processes) in the supply chain, Decathlon’s growth, however, has not been without difficulties.

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Resources

Appendix 1A. Geography of International Sales

Decathlon has its own 10 production plants where some of its articles are manufactured. The objectives with these own sites are to appropriate production methods and to gradually develop good industrial practices (management of people, work methods for continuous improvement, organization of flows, etc.). This worldwide production constitutes a strong barrier to competition, from which Decathlon benefits. Manufacturing requires heavy investment and is sensitive to economies of scale. Decathlon has gained a cost advantage by designing and manufacturing its own products and by investing in large factories to meet global demand. In network with its partners, these factories participate in the creation of the Decathlon Manufacturing Way (DMW), which aims to develop an industrial reference to guide its teammates and our industrial partners towards operational excellence.

Supplier Partners

At Decathlon a partner is an industrial entrepreneur whose vision, values and meaning have much in common with ours. His vision is implemented through an industrial project, in a region where we are planning for the long term. The alignment and our level of trust, built between Decathlon and suppliers, motivates the partner to give Decathlon an exclusive competitive and differential advantage. It is operational excellence that is sought with maximum autonomy. We integrate it into our internal work and delegate numerous decisions to it, for the benefit of our users and customers,” explains Lionel Dias, Purchasing Business Process Organization Leader and Olivier Desbats, Process Organization Manager.

Share of the Quantities of Products Manufactured by Its Industrial Partners

Decathlon has 43 production offices in 25 countries and also collaborates with suppliers in 24 other countries. Depending on the case, teammates drive production in the country in which they are located or in several neighboring countries as well. In 2017, 35 partners are at different levels of maturity with respect to this definition. As a result, a share of purchases is allocated to our partner suppliers. By 2023, the group aims to manufacture 80% of its quantities from its 100 partner suppliers.

Integration Into Poles of Excellence and Innovation

Decathlon participates in the co-construction of solutions with its partners.

  • Decathlon seeks to limit the workforce through extensive use of automation. Its warehouse is mostly automated.
  • Decathlon strives to limit assembly costs, thus designing products with fewer components.
  • Improving quality and reliability.

Decathlon optimizes its returns management with robots. Production factors are the essential means of competition. Let us underline the specialized inputs at Decathlon, that is, the presence of ensembles of:

  • Techniques
  • Skills
  • Infrastructures adapted to the needs of the sporting goods industry.
  • Inputs (purchased) from cluster participants that allow Decathlon to reduce its transaction costs with its local subcontractors.

To innovate, Decathlon has met in some countries (e.g., Morocco) a demand that has guided the company’s choices. In addition, Decathlon uses Morocco as a point of entry into the African markets.

Decathlon’s SportsLab R&D teams rely on partnerships: for example, the LAMIH (Laboratoire d’Automatique, de Mécanique et d’Informatique Industrielles et Humaines - UMR CNRS 8201) is a Carnot ARTS laboratory that complements Decathlon’s own studies with high-level scientific contributions that help speed up the realization of projects. LAMIH’s purpose is to study the relationship between humans and systems. Located within the University of Valenciennes, geographically close to Decathlon’s SportsLab teams, the LAMIH has been able to provide the essential resources to support the group’s innovation strategy.

Suppliers

These are the suppliers with whom we maintain all our requirements and with whom we do not have an exclusivity strategy. We maintain relations with them over several years, always based on trust and performance.

At the same time,

  • We are continuing our strategy of developing production close to our suppliers in order to be more responsive to local market demands and to reduce our transport costs and environmental impact. A refined management of transport costs has strongly influenced the globalization of Decathlon: a clear reduction of transport time (with respect to maritime transport—20 days by train instead of 41 days by ship), carbon footprint, and cost is achieved in China (Sayagh, 2017).

Source: Decathlon Press Release (Decathlon PRESS ROOM 16/04/2020)

Appendix 1B

Table 1. Geography of International Distribution

Nationalities (year)

Number of sales outlets

France

324

China (including Taiwan & Hong Kong)

309

Spain

171

Italy

124

Germany

80

India (2009)

76

Poland

59

Russia (2006)

58

United Kingdom

45

Turkey (2010)

37

Belgium

36

Portugal

34

Brazil

31

Romania (2009)

27

Hungary

24

Czech Republic (2010)

23

Switzerland (2017)

23

The Netherlands

20

Morocco (2009)

15

Mexico (2016)

12

Thailand (2015)

10

Slovakia (2015)

9

Singapore (2016)

9

Bulgaria (2013)

7

Croatia (2014)

6

Colombia (2017)

6

Malaysia (2016)

5

Australia (2017)

5

Canada (2018)

5

Slovenia (2016)

4

Philippines (2017)

4

South Africa (2017)

4

Israel (2017)

4

Sweden (2011)

3

Indonesia (2017)

3

Tunisia (2017)

3

Egypt (2018)

3

Senegal (2018)

3

United States (2017)

3

Chile (2018)

2

South Korea (2018)

2

Republic of Congo (2018)

2

Greece (2018)

2

Ukraine (2019)

2

Vietnam (2019)

2

Ghana (2017)

1

Ivory Coast (2016)

1

Austria (2018)

1

Cambodia (2018)

1

Lithuania (2018)

1

Sri Lanka (2018)

1

Kenya (2018)

1

Japan (2019)

1

Algeria (2019)

1

Malta (2019)

1

Serbia (2019)

1

Present in 57 countries with 2,193 points of sale (as of 12.31.2019 - excluding franchises)

Source: https://www.decathlon.media/fr_FR/a-propos-2020

Data shown by the map are tabulated as follows:

Avec bureau de production Decathlon

Sans bureau de production

Avec bureau de production and Sans bureau de production

Bassin de production Afrique

Égypte, Maroc, Tunisie, Maurice

Éthiopie, Madagascar,

Bassin de production Amériques

Brésil, Mexique

Bassin de production Asie du Nord

Chine, Corée du Sud, Taiwan

Japon

Bassin de production Asie du Sud-Est

Cambodge, Indonésie, Malaisie, Myanmar, Singapour, Thaïlande, Vietnam

Bassin de production Asie du Sud-Ouest

Bangladesh, Inde, Sri Lanka

Pakistan

Bassin de production Europe

Albanie, Allemagne, Autriche, Belgique, Bosnie, Bulgarie, Croatie, Espagne, Finlande, France, Géorgie, Hongrie, Italie, Lituanie, Pays-Bas, Pologne, Portugal, République Tchèque, Roumaine, Royaume-Uni, Serbie, Slovaquie, Slovénie, Suisse, Turquie, Ukraine

Bassin de production CEI’

Russie

Figure 1. Decathlon Centers of Production

A political world map of Decathlon Avec bureau de production and Sans bureau de production.

Source: Rapport Developpement Durable Decathlon 2016 (Decathlon Sustainable Development Report 2016), p. 5. https://engagements.decathlon.fr/les-rapports-annuels

Appendix 1C. Prospective

Stakes and prospects for the sports industries in France and abroad

“A quick overview of the international sports industries.”

Multi-Sports Importers and Distributors

Multi-sports importer-distributors are generalist players; the head office and design/manufacturing activities are located abroad: Adidas (Adidas and Reebok brands), Nike, etc. are part of international groups that provide them with a substantial strike force (financial resources, skills, etc.).

Specialized Distributors

Distributors specializing in the world of sports have physical (e.g., Endurance Shop) and/or online (e.g., Snowleader) points of sale specializing in one or more activity segments (e.g., running, outdoor, etc.).

The market of online specialized distributors (pure players) is very dynamic and booming. Many sites have been created during the last few years, some have disappeared.

Multi-Sports Specialized Superstores

This category of actors includes the large generalist retailers specialized in the marketing of sports articles: Decathlon, Intersport, Gosport and Sport 2000. With the exception of Sport 2000, these brands all offer their own brands that can generate a significant portion of their revenues (nearly two-thirds of revenues for Decathlon).The groups are based on different models and structures (integrated model, cooperatives or franchises) but have in common a dense territorial network and strong distribution capacities (sports.gouv.fr, 2016).

Source: https://www.entreprises.gouv.fr/etudes-et-statistiques/enjeux-et-perspectives-des-industries-du-sport-france-et-a-international

Appendix 2

Table 2. International Rankings of Sports Stores, 2017

Rank

Firm

Country

Category

Revenues (USD millions)

1

Intersport International

Switzerland

Cooperative/Group

12,996

2

Decathlon

France

Distributor

12,785

3

Dick’s Sporting Goods

United States

Distributor

8,592

4

Bass Pro Shops

United States

Outdoor-Distributor

7,837

5

Foot Locker

United States

Distributor

7,782

6

Nike

United States

Brand Network

6,852

7

Adidas

Germany

Brand Network

6,069

8

Academy Sports

United States

Distributor

5,772

9

JD Sports Fashion

UK

Distributor

4,074

10

Belle International (Sportswear)

China

Distributor

3,840

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

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