INTERNATIONAL TRADE WORK

by MOREAU Laura and BLACHON Cléa

I. About our company

A) Presentation of the company B) Our exported product

Decathlon S.A. is a French sporting goods retailer.
Founded by Michel Leclercq in 1976, Decathlon started with
a store in Lille, France. Its holding company was formerly
known as Oxylane. With over 1,697 stores in 60 countries and
regions, it is the largest sporting goods retailer in the world
with a global turnover at 13.8 billion of euros (excluding taxes
at the end of 2021), and 4.2 billion of euros only for
Decathlon France.
The company manages the research, design,
production, logistics and distribution of its products in house;
partners with global suppliers; and markets their own brands
directly to consumers in Decathlon-branded big-box stores.
We have chosen to export the WED'ZE fleece neck
warmer produced by Decathlon to XXL shops, which is the
equivalent of the French company in Norway: the company
is a famous Norway retailer in sports equipment. Our product
is sold at a price of 4€ in France, equivalent to NOK 44.01. It
is made from polar stitch, to ensure maximum warmth and
comfort. The tanka cord on the top can be tightened to be
adjusted around the neck but can also be transformed into a
hat.

II. Matrix to compare countries for market penetration

Variable Weight Country I: Norway Country II: Denmark Country III: Nigeria

1. Favourable (F), Unfavourable (U) factors

a. Location - F F to U F
b. GDP - F F F

2. High (H), Medium (M), Low (L) factors

a. Market size and potential - M to H M H
b. Market accessibility and infrastructure - H H L
c. Competition - M to H M to H L
d. Cost of living - H H L
e. Natural resources - H M H
f. Cultural differences - H H H

3. Return (Higher number=preferred rating)

a. Market size, present 0-4 3 3 4
b. Market size, 3-10 years 0-3 3 3 3
c. Market potentiality, present 0-4 4 3 2
d. Market potentiality, 3-10 years 0-3 3 2 2
e. Demand for goods and services 0-4 4 3 2
f. Immediate potential market share (in %), 0-2 2 (10%) 2 (10%) 1 (5%)
0-2 years
g. Potential growth of the brand abroad 0-5 5 5 4

Total 24 21 18

4. Risk (Lower number = preferred rating)

a. Potential market loss 0-3 1 2 3
b. Political environment 0-4 1 1 4
c. Economic and financial risks 0-4 1 2 4
d. Legal and regulatory environment 0-4 0 0 3
e. Risk of exchange problems 0-2 1 1 2
f. Level of non-performing loans 0-3 0 0 3

Total 4 6 19

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 Based on the matrix analysis, Norway appears to be the most favourable market for Decathlon France to penetrate with the
WED'ZE neck warmer. Norway has a great location, has a relatively low level of risk in terms of its political, economic, and financial
environment, legal and regulatory environment, level of non-performing loans, and exchange rate problems. Additionally, Norway
has a high GDP (one of the highest in the world), high potential market size and a greater demand for exporting new goods related
to winter sports which is a big culture in Norway.

In contrast, Denmark has a slightly higher level of risk in terms of market loss, economic and financial risks because of its
vulnerability to cyber-attacks, but also, it’s a country quite isolated from the rest of Europe which could result in higher logistics
costs for companies such as Decathlon looking to export products to the country. Nigeria, at the same time, presents a much higher
level of risk across all categories, globally linked to its history of political instability and corruption and its weak legal system.
Furthermore, while Nigeria may have a larger potential market size, the risks associated with exporting to the country outweigh the
potential benefits.

III. Export diagnosis

A) Internal diagnosis

Physical resources Retail Stores, warehouses, production facilities, distribution centres, transportation, and technology.

Financial resources Revenue, capital expenditures, debt financing, equity financing, cash reserves, partnerships, and joint ventures.

Range of goods Cycling and rolling, Fitness, Running, Team sports, Water sports, Hiking and Camping, Winter sports, Nature,
Racquet sports and golf, health.

Degree of preparation High degree of preparation as the brand is already present in 60 countries, product adaptation, market research, supply
to exportation chain management, compliance and regulation, local presence, and cross-cultural competence.

Quality management 5 pillars of management: unique business model, key hub of innovation, product testing, supplier management,
continuous improvement, control over their own logistics, customer support, Decathlon’s teammates barometer.

Decathlon has strong physical and financial resources, a diverse range of products, significant experience in exporting, and
a strong management team. However, like any company, there may be areas for improvement, such as optimising its supply chain
and further enhancing its digital capabilities to support online sales and customer engagement.

B) Internal strengths and weaknesses

Strengths Weaknesses

Wide range of products: Decathlon offers a wide range of Dependence on physical retail: Decathlon's business model relies heavily
sporting goods and equipment, which appeals to a diverse on physical retail stores, which could limit the company's ability to adapt
customer base and provides a competitive advantage. to changing consumer preferences towards e-commerce.

Global presence: Decathlon operates in many different countries,
which allows the company to leverage economies of scale and gain
access to new markets.
Affordable pricing: Decathlon's pricing strategy focuses on
affordability, which appeals to price-sensitive consumers and helps
to differentiate the company from competitors.
Brand reputation: Decathlon has built a strong reputation for
quality and innovation, which helps to attract and retain customers.
Supply Chain sustainability: Decathlon could face challenges related to
sustainability in its supply chain, such as ensuring that suppliers meet
environmental standards or reducing the environmental impact of
transportation and logistics.
Lack of brand awareness in some markets: Decathlon may face
challenges in expanding into new markets where the brand is not as well-
known.

Here are some proposals that we think would be beneficial for the brand:

In order to increase its strengths, the brand should invest in product innovation, e-commerce expansion, should focus more
on sustainability because consumers are becoming increasingly aware of environmental and social issues and are demanding
sustainable and ethical products. By focusing on sustainability, Decathlon can attract more customers and strengthen its brand image.

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 The brand will also gain competitive advantage thanks to it. Also, inventory management is a tool that Decathlon already uses a lot,
but we think that they can develop it more by managing their robots even more through RFID technology.

If the company would like to reduce or solve their weaknesses, they should consider the following ideas: improve their
customer service to develop a better relationship with customers and have better feedback to increase customer satisfaction and
loyalty to the brand.

Regarding potential international development paths, here are some strategies that could be employed: a further expansion
in Europe following the paths of Norway, also make some partnerships with local retailers such as XXL shops in Norway for
example. If such company is present and well-known in all Scandinavia, it could be interesting to develop a new range of goods or
create a joint effort with them. The brand should also be more focused on e-Commerce as it is something very important nowadays
with the Gen Z or Gen alpha which will soon further develop this trade phenomenon.

C) External diagnosis

Here is an analysis of the opportunities and threats of the sport equipment retail market/industry in Norway, based on a
PESTLE model:

Political Economic Social Technological Legal Environmental

Opportunities Supportive Strong economy Growing interest in Growing interest in Strong product Interest in outdoor
government and high sustainability sustainability safety activities and
policies towards purchasing power presents presents regulations can appreciation for the
sports and fitness of consumers can opportunities for opportunities for help retailers natural environment
activities can lead create retailers who offer retailers who offer ensure quality can drive demand for
to increased opportunities for eco-friendly sports eco-friendly sports standards and outdoor sports
investment in retailers to offer equipment and equipment and build trust with equipment, such as
infrastructure and premium and packaging, as well packaging, as well consumers. hiking and camping
facilities, which higher-priced as those who as those who engage gear.
can drive demand products. engage in corporate in corporate social
for sports social responsibility
equipment. responsibility initiatives.
initiatives.

Threats High regulatory Fluctuating Aging population Disruptive Liability risks Concerns over climate
requirements, such demand due to may lead to a technologies can for retailers in change can lead to
as product safety seasonality, high decline in demand threaten traditional case of product decreased demand for
regulations, can operating costs, for certain types of sports equipment defects or certain sports
create barriers to and competition sports equipment, retailers and require accidents can equipment, such as
entry for new from international and changing them to innovate to pose a threat to those that use fossil
retailers and retailers can pose consumer remain competitive. the reputation fuels or contribute to
increase operating a threat to the preferences can and financial pollution.
costs for existing profitability of require retailers to stability of the
retailers. sports equipment quickly adapt their business.
retail businesses. product offerings.

To conclude, the sports equipment retail industry in Norway presents opportunities for retailers who can leverage
supportive government policies, advancements in technology, and growing interest in sustainability. However, the industry is also
subject to threats related to high operating costs, competition from international retailers, and changing consumer preferences.
Retailers must carefully navigate these challenges to succeed in the market.

IV. International secondary data

To ensure that Norway is a country with good import conditions, we have conducted research through external sources of
international secondary data. Indeed, we must make sure that all information found is accurate to help the company make the right
choices for exporting in Norway. As Norway will import a WED'ZE fleece neck warmer from France, we have to know more about
the textile industry in the country and how big are its imports related to it.

First, we found that the import of textiles is important in Norway as the country does not have a large domestic textile
industry. Norway imports a significant number of textiles and clothing more particularly sports equipment, from various countries
such as China (NOK 2.9 billion), Germany (NOK 1.8 billion) or even Sweden (NOK 1.2 billion), according to data from 2021 from
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the Norwegian customs. The demand for textiles in Norway is driven by factors such as changing fashion trends, increasing
population, and growing disposable income but there is also more and more demand for good quality and affordable products, which
is what Decathlon is an expert at.

In 2020, Norway imported a total of NOK 1.5 billion of sports apparel and NOK 1.4 billion of skis, snowboards and related
equipment including textile, thanks to the Norwegian customs data. Also, we found that the second main category of winter
accessories that Norway imported in 2020 were hats and headgear with a total of NOK 1.0 billion, closely followed by scarves and
shawls with a total of NOK 666 million. This means that there is a high demand for such products.

Norway is a country with a cold climate, and winter accessories are essential items for many Norwegians during the winter
season. The demand for winter accessories in Norway is influenced by factors such as weather conditions and outdoor activities
such as skiing, snowboarding, and ice skating. As a result, and as we analysed it, fleece neck warmers are a popular and versatile
item that could potentially appeal to Norwegian consumers, especially during the colder months. Additionally, Decathlon has a
strong brand reputation for offering affordable and high-quality outdoor gear, which could give them an advantage in penetrating
the market and develop a competitive advantage in this sector. Indeed, exporting this type of product, with several functions (neck
warmer or hat), of good quality and at a more than affordable price (EUR 4 = NOK 44) will be an opportunity for them.

Furthermore, when looking at the other types of neck warmer already available in the XXL retail shops in Norway, the
lowest price is NOK 59 (= EUR 5.36), and the highest price for a product that most closely matches the one created and developed
by Decathlon is NOK 299 (= EUR 27.17). The product will therefore be within everyone's reach, the cheapest and of indisputable
quality.

V. French support for exportation

As we know, several solutions are proposed by organisations to help finance the export project. By analysing all the
conditions of eligibility for these helps, we were able to see that Decathlon will not be able to benefit from them. For example, as
we only want to export our product to Norway and not build infrastructure there, the “Trésor Loan” aid is thus ineffective in this
situation. The "FASEP études" or the "FASEP innovation verte" by the Direction Générale du Trésor is an aid for which Norway is
not eligible too because data are not available for this country on the map of the website. The "Loan Croissance International" and
the “Assurance prospection à l'international" by BPI France are aids that Decathlon will not be able to benefit from either because
the eligibility conditions concerning the turnover and the maximum number of employees are largely exceeded by Deacthlon
(turnover = 4.2 B°€ and numbers of employees = 22 500). Finally, the "Prêts and outils Proparco" by Agence Française de
développement (A.F.D.) and Proparco do not intervene in Northern Europe in the Scandinavian countries, so its field of action does
not allow decathlon to obtain aid to export to Norway.

As a large and well-established company, Decathlon may have a strong financial position with significant cash reserves
and positive cash flow. This means that they may have enough funds to finance their expansion into new markets, such as Norway,
without the need for external financing from banks or credit. Finally, Decathlon may have a solid understanding of the market
conditions in Norway and thanks to its business plan, it will allow them to generate sufficient revenue and profits to fund their
expansion without the need for external financing.

Therefore, it may still be beneficial for Decathlon to work with some insurance providers in order to protect its transactions
within the contract. The first step to export our product will be to negotiate and conclude an export contract. But, to protect the risks
that may arise during its conclusion, it is possible to subscribe to a commercial contracts insurance which can cover risks arising
during its execution (interruption and/or non-payment) and/or the risk of non-payment of the receivables held on the debtor. For
other insurances, Decathlon is not eligible because it is a large enterprise and not a SMB, nor an intermediate-sized enterprise.

Finally, given the present state of the economy and the current inflationary environment, exchange rate evolution is very
likely. As a result, we have the option to turn to insurance, such as the BPI's proposed exchange rate insurance contract. In fact, it
will prevent the exchange risks that could cause us to lose money if we and our buyer concur on one of the three currencies included
in the insurance, such as GPB. The insurance supports our company from the moment the commercial offer is submitted and allows
us to negotiate and export in foreign currency while neutralising the exchange rate risk prior to the business contract's signature or,
at the latest, within fifteen days of it, up until the final payment term.

As a result and following our Business Plan which you can consult below, we are ready to export our WED'ZE fleece
neck warmer from DECATHLON France, in XXL shops in Norway.
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 BUSINESS PLAN

KEY PARTNERS KEY ACTIVITIES VALUE CUSTOMER CUSTOMER

AND SUPPLIERS PROPOSITIONS RELATIONSHIPS SEGMENTS
- Product design
Key Partners - Manufacturing - Offering high quality Relationship strategy that Outdoor adventurers
- Logistic - Sustainable packaging sports equipment and focuses on self-service and Ages: between 25 and
companies - Logistics for delivery in apparel at affordable automated service (detailed 45, and have a higher
- Marketing Norway prices guides and FAQs on their income level
agencies - Customer after sales website)
- Partnership with a - Seamless customer Mobistore: Application Fitness and wellness
local retailer (XXL) experience through accessible on a tool connected seekers
online and physical to the wifi in shop = complete Ages: any age but more
Key Suppliers stores information based on products between 18-45
- Manufacturers and but also on the state of stocks
raw materials - Highlight their and availability in shops Families interested in
suppliers expertise and Community forum online, to sports and outdoor
- Continental knowledge in various help in building a community of activities, sports teams
Supply Centres sports with loyal customers
- Regional Supply personalised + Mobile applications to Budget shoppers
Centres recommendations and motivate customers to do sport usually students, young
- Customs brokers advice adults, or individuals
KEY RESOURCES DISTRIBUTION with a lower income
Potential joint - Emphasise their CHANNELS
ventures Tangible commitment to Professional athletes
with Norwegian - Inventory sustainability and Online channels: e-commerce Age: between 1à and 35
companies to help - Manufacturing equipment ethical production platforms, social media, mobile years
fill any gaps in their and machinery practices app, and online third-party Specialized sports
knowledge of the - Transportation and logistics marketplaces (Amazon, E-bay) equipment and gear
local market equipment
Physical channels: partnerships By understanding these
Intangible with local retailers, own stores, customer segments,
- Brand recognition and test and buy system Decathlon can tailor its
reputation products and marketing
- Patents and trademarks Marketing channels: strategies to better appeal
- Customer knowledge and advertising, influencer to each group's specific
data analytics marketing, and emailing needs and preferences.

Human Delivery channels: Click and

- Skilled employees in collect, local couriers, postal
manufacturing, logistics and services, or international
marketing delivery and transport services
- Local employees
- “Great place to Work” After-sales channels: after-
sales service such as customer
Financial support and returns handling à
- Capital for manufacturing Customer relationship centre
and inventory cost developed by Decathlon
- Budget for marketing,
advertising and logistics costs
-Funding for research and
innovation

COST STRUCTURE REVENUE STREAMS

Direct sales through physical stores or online platforms and premium
Baseline costs: cost of goods sold, marketing and advertising expenses, services or features for a fee, such as specialised training programs or
rental and utility costs for physical stores, employee salaries and supply personalised equipment fittings + monetize customer data and insights
chain costs through targeted advertising or partnerships.

Key resources expenses: manufacturing and sourcing of products,

Decathlon could consider the local market and competition when
technology and software systems for online sales, physical store’s defining its revenue streams. It may need to adjust its pricing strategies
locations, and infrastructure to align with local purchasing power and consumer behaviour. The
company could also explore partnerships with local sports
Key activities expenses: product design and development, logistics
organisations or influencers to increase its visibility. Regular analysis
and supply chain management
and evaluation of revenue streams will help Decathlon ensure their
profitability and sustainability over time.
Decathlon’s business model: more value-orientated than cost-
orientated and strong emphasis on innovation and design (value-
oriented approach)

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