Decathlon China: Using Social Media to Penetrate the Internet Market SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Decathlon China: Using Social Media to Penetrate the Internet Market
After successfully establishing more than 33 retail stores in large cities across China, Decathlon, a large sporting goods manufacturer and retailer, planned to open its official online shopping website in China. The marketing department head of Decathlon China, has experimented with several new social media in China in order to increase the brand awareness among online shoppers. In the upcoming executive meeting, marketing department head would like to persuade the chief executive officer to dedicate more resources to social media to increase both online sales in the short term and market share in the long term.
Authors :: Nicole R.D. Haggerty, Raymond Pirouz, Grace (ChunXia) Geng
Swot Analysis of "Decathlon China: Using Social Media to Penetrate the Internet Market" written by Nicole R.D. Haggerty, Raymond Pirouz, Grace (ChunXia) Geng includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Decathlon China facing as an external strategic factors. Some of the topics covered in Decathlon China: Using Social Media to Penetrate the Internet Market case study are - Strategic Management Strategies, IT, Marketing, Social platforms and Technology & Operations.
Some of the macro environment factors that can be used to understand the Decathlon China: Using Social Media to Penetrate the Internet Market casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing energy prices, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Decathlon China: Using Social Media to Penetrate the Internet Market
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Decathlon China: Using Social Media to Penetrate the Internet Market case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Decathlon China, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Decathlon China operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Decathlon China: Using Social Media to Penetrate the Internet Market can be done for the following purposes –
1. Strategic planning using facts provided in Decathlon China: Using Social Media to Penetrate the Internet Market case study
2. Improving business portfolio management of Decathlon China
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Decathlon China
Strengths Decathlon China: Using Social Media to Penetrate the Internet Market | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Decathlon China in Decathlon China: Using Social Media to Penetrate the Internet Market Harvard Business Review case study are -
Sustainable margins compare to other players in Technology & Operations industry
– Decathlon China: Using Social Media to Penetrate the Internet Market firm has clearly differentiated products in the market place. This has enabled Decathlon China to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Decathlon China to invest into research and development (R&D) and innovation.
Strong track record of project management
– Decathlon China is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Decathlon China
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Decathlon China does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Decathlon China digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Decathlon China has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Low bargaining power of suppliers
– Suppliers of Decathlon China in the sector have low bargaining power. Decathlon China: Using Social Media to Penetrate the Internet Market has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Decathlon China to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Decathlon China is one of the leading recruiters in the industry. Managers in the Decathlon China: Using Social Media to Penetrate the Internet Market are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Decathlon China: Using Social Media to Penetrate the Internet Market Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Highly skilled collaborators
– Decathlon China has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Decathlon China: Using Social Media to Penetrate the Internet Market HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Technology & Operations field
– Decathlon China is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Decathlon China in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Decathlon China is present in almost all the verticals within the industry. This has provided firm in Decathlon China: Using Social Media to Penetrate the Internet Market case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Cross disciplinary teams
– Horizontal connected teams at the Decathlon China are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Superior customer experience
– The customer experience strategy of Decathlon China in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Decathlon China: Using Social Media to Penetrate the Internet Market | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Decathlon China: Using Social Media to Penetrate the Internet Market are -
High bargaining power of channel partners
– Because of the regulatory requirements, Nicole R.D. Haggerty, Raymond Pirouz, Grace (ChunXia) Geng suggests that, Decathlon China is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Interest costs
– Compare to the competition, Decathlon China has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Workers concerns about automation
– As automation is fast increasing in the segment, Decathlon China needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
No frontier risks strategy
– After analyzing the HBR case study Decathlon China: Using Social Media to Penetrate the Internet Market, it seems that company is thinking about the frontier risks that can impact Technology & Operations strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Decathlon China: Using Social Media to Penetrate the Internet Market HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Decathlon China has relatively successful track record of launching new products.
High cash cycle compare to competitors
Decathlon China has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High operating costs
– Compare to the competitors, firm in the HBR case study Decathlon China: Using Social Media to Penetrate the Internet Market has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Decathlon China 's lucrative customers.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Decathlon China supply chain. Even after few cautionary changes mentioned in the HBR case study - Decathlon China: Using Social Media to Penetrate the Internet Market, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Decathlon China vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study Decathlon China: Using Social Media to Penetrate the Internet Market that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Decathlon China: Using Social Media to Penetrate the Internet Market can leverage the sales team experience to cultivate customer relationships as Decathlon China is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Decathlon China has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Products dominated business model
– Even though Decathlon China has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Decathlon China: Using Social Media to Penetrate the Internet Market should strive to include more intangible value offerings along with its core products and services.
Opportunities Decathlon China: Using Social Media to Penetrate the Internet Market | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Decathlon China: Using Social Media to Penetrate the Internet Market are -
Creating value in data economy
– The success of analytics program of Decathlon China has opened avenues for new revenue streams for the organization in the industry. This can help Decathlon China to build a more holistic ecosystem as suggested in the Decathlon China: Using Social Media to Penetrate the Internet Market case study. Decathlon China can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Decathlon China can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Decathlon China: Using Social Media to Penetrate the Internet Market suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Decathlon China in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Decathlon China is facing challenges because of the dominance of functional experts in the organization. Decathlon China: Using Social Media to Penetrate the Internet Market case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Decathlon China can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Decathlon China can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Decathlon China can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Low interest rates
– Even though inflation is raising its head in most developed economies, Decathlon China can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Decathlon China to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Decathlon China can use these opportunities to build new business models that can help the communities that Decathlon China operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Developing new processes and practices
– Decathlon China can develop new processes and procedures in Technology & Operations industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Better consumer reach
– The expansion of the 5G network will help Decathlon China to increase its market reach. Decathlon China will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Decathlon China can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Decathlon China to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Threats Decathlon China: Using Social Media to Penetrate the Internet Market External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Decathlon China: Using Social Media to Penetrate the Internet Market are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Decathlon China with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Decathlon China in the Technology & Operations industry. The Technology & Operations industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Decathlon China in the Technology & Operations sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Decathlon China can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Technology acceleration in Forth Industrial Revolution
– Decathlon China has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Decathlon China needs to keep up with the evolution of technology in the Technology & Operations sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Decathlon China: Using Social Media to Penetrate the Internet Market, Decathlon China may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
Consumer confidence and its impact on Decathlon China demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Decathlon China can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Decathlon China: Using Social Media to Penetrate the Internet Market .
Regulatory challenges
– Decathlon China needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Technology & Operations industry regulations.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Decathlon China needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Decathlon China.
Shortening product life cycle
– it is one of the major threat that Decathlon China is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Decathlon China: Using Social Media to Penetrate the Internet Market Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Decathlon China: Using Social Media to Penetrate the Internet Market needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Decathlon China: Using Social Media to Penetrate the Internet Market is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Decathlon China: Using Social Media to Penetrate the Internet Market is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Decathlon China: Using Social Media to Penetrate the Internet Market is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Decathlon China needs to make to build a sustainable competitive advantage.