Degree
Master of Business Administration
Faculty / School
Faculty of Business Administration (FBA)
Advisor
Dr. Nasir A. Afghan, Assistant Professor, Department of Management
Committee Member 1
Dr. Nasir Afghan, Assistant Professor, Department of Management, Institute of Business Administration, Karachi
Project Type
MBA Research Project
Keywords
https://ir.iba.edu.pk/do/search/?q=Decathlon&start=0&context=8598587&facet=">Decathlon, Sports, Market gap, NPV, Payback period, Consumption patterns
Abstract / Summary
The project aims to determine if the French sportswear and accessories brand Decathlon can establish an outlet in Karachi, Pakistan. Decathlon is a European Sports retailing giant having established in 1976 is headquartered in Villeneuve d’Ascq, France with presence in 57 countries with over 1647 stores till January’2020. In 2017, it expanded to 10 new countries: Columbia, Ghana, the Philippines, South Africa, Switzerland, Israel, Tunisia, Indonesia, Australia and the United States.
Decathlon wishes to explore the existing market gap to target tier 3 (upper middle class) and tier 4 (upper class) population in Karachi. While examining the existing gap, in terms of suitable locality where gym facilities, clubs and sports complexes were prominent, Defence and Clifton came out on top (Other towns include: Gulshan-e-Iqbal, Gulistan-e- Johar, Nazimabad and North Nazimabad, Shahrah-e-Faisal and Karsaz, Shah Faisal Colony and Saddar). These two towns were also on the top when income levels of the population were gauged by the worth of land/house prices (purchase as well as rent) from zameen.com for measuring the affordability of customer.
An online questionnaire, informal focus group and detailed sports facilities/sportswear retail interviews were conducted to find out consumer trends and preferences. For online questionnaire, simple random sampling was used with respondents’ ages ranging from 17 to 40+, both male and female. It was observed that out of 68 respondents, 41 preferred to choose “medium price-high quality” for their sports products. To them quality mattered more than price. For sports facilities interviews, quality and word of mouth for sports apparel/accessories came as defining reason for purchase. In the sports retail interviews, this was again verified as retail personnel at Clifton shopping malls (Nike and Adidas) mentioned that quality triumphs prices in the minds of the customers. However, this was the opposite case with retail interviews in Saddar and Karimabad. As far as sales trends were concerned, the units sold have decreased whereas prices have increased over recent years due to inflation without effecting the bottom line revenues.
In addition to choose a suitable locality for Decathlon to enter, another factor to consider is the store format. Keeping in view the intense competition between Nike and Adidas and high footfall within the shopping malls, a financial model has been developed with 3 store formats (in Shopping Mall, Standalone and Retail). Based on NPV and payback xi period, Decathlon can decide which is the most viable, feasible and cost effective option to establish in Karachi.
Recommended Citation
Munir, A., Sheeraz, G., Khan, M. A., Naeem, R., & Lodhi, S. (2020). Feasibility report of Decathlon sports store in Pakistan (Unpublished graduate research project). Institute of Business Administration, Pakistan. Retrieved from https://ir.iba.edu.pk/research-projects-mba/18
