SWOT analysis of Sports Direct (Sports Direct SWOT)
This is a detailed SWOT analysis of Sports Direct. It aims to analyse the strengths and the weaknesses of Sports Direct. It also aims to explore the opportunities and the threats facing the company. Sports Direct International Plc is the UK’s largest sporting goods retailer. It was founded in 1982 by Mike Ashley in Maidenhead, England.
Strengths of Sports Direct
Sports Direct operates in over 20 countries and has over 765 stores in the UK and abroad. It operates throughout the UK, and in locations in Europe, the U.S. and Asia. Approximately 29,400 people work for the company. Sports Direct has a diversified portfolio of sports, fitness, fashion and lifestyle fascias and brands (Sports Direct International plc, 2021).
Sports Direct is a multi-channel retailer. It reaches out to the customers via a steady voice across multiple platforms, including online, mobile, and on the high street. The competitive pricing strategy of Sports Direct has also been very useful to send a consistent message to customers with a view to persuading them to consider it favourably in their purchase decisions. Even when a lot of brands are struggling, Sports Direct is doing relatively well.
The Sports Direct group was listed in London Stock Exchange as a public company in 2007. The company has made a number of acquisitions over the years. The acquisitions of USC, Cruise, Van Mildert, Flannels Firetrap, Hot Tuna, Dunlop, Slazenger, Carlton, Karrimor, Lonsdale, Campri, LA Gear, No Fear, Title, Voodoo Dolls, Kangol, Field & Trek, Sport 2000, Bob’s Stores and Eastern Mountain Sports are some of the notable examples in this regard.
Weaknesses of Sports Direct
Sports Direct has found itself mired in a number of controversies over the years. For instance, it was one of the 260 employers identified by the UK government for failing to pay workers the minimum wage. Sports Direct was found to have failed to pay £167,036.12 to 383 workers (Hodgson, 2017). Likewise, it was labelled as ‘an embarrassment to the UK corporate governance’ after the tumultuous announcement of its annual results in July 2019, including multiple delays and the shock disclosure of a £614 million tax bill (Butler and Kollewe, 2019).
Sports Direct has been criticised for its poor working conditions and poor work practices. For instance, the company was accused of worker mistreatment, including staff being penalised for taking a short break to drink water and for taking time off work when ill. Between 1 January 2013 and 19 April 2016, a total of 110 ambulances or paramedic cars were dispatched to the Sports Direct’s Shirebrook warehouse to treat people with conditions such as convulsions, fitting and strokes, breathing problems, pregnancy difficulties etc. In fact, one woman gave birth in the toilet in the warehouse (Rodionova, 2016). Unsurprisingly, the company was compared to a ‘Victorian workhouse’ by many people.
Opportunities for Sports Direct
Sports Direct announced in 2017 its plans to expand into the United States with the purchase of the businesses of Bob’s Stores and Eastern Mountain Sports (Megaw, 2017). The deal gave Sports Direct 50 retail stores in the U.S. while costing it $101m. The US market for sports, casual wear and camping equipment is massive; hence a massive opportunity for the company. Likewise, it is heavily focusing on its expansion in the Republic of Ireland, Malaysia, and a number of countries in Europe.
Needless to say that Sports Direct has a very good number of stores in the UK. Yet, further growth in the UK is worth exploring. Likewise, expanding into emerging markets and frontier economies can also be very useful for the company. Acquiring brands or joint ventures with companies in those markets should provide Sport Direct with opportunities to reach out to customers across different segments.
Threats to Sports Direct
Threat is the last element to address in the SWOT analysis of Sports Direct (Sports Direct SWOT). Sports Direct faces threats from a number of fierce competitors. Foot Locker, Snow & Rock Sports Ltd, ASOS, Big 5 Sporting Goods, Hibbett Sports, Genesco, & Amazon are some of its main competitors in sportswear and footwear. Likewise, some of its main competitors in women’s wear are H&M, ASOS, Amazon, OMG Fashion, Boohoo, and Misguided.
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Last update: 16 January 2021
Butler, S. and Kollewe, j. (2019) Analysts criticise Sports Direct over results chaos, available at: https://www.theguardian.com/business/2019/jul/29/sports-direct-shares-results-mike-ashley-house-of-fraser (accessed 16 January 2021)
Hodgson, C. (2017) Primark and Sports Direct failed to pay more than 10,000 workers minimum wage, available at: https://www.businessinsider.com/primark-sports-direct-failed-to-pay-minimum-wage-2017-12?r=US&IR=T (accessed 20 March 2019)
Megaw, N. (2017) Sports Direct plans US expansion with Bob’s and Eastern Mountain Sports purchase, available at: https://www.ft.com/content/5d89247f-6a98-324b-a530-d428906bebae (accessed 01 April 2019)
Rodionova, Z. (2016) The 7 most shocking testimonies from workers at Sports Direct, available at: https://www.independent.co.uk/news/business/news/sports-direct-mike-ashley-worker-conditions-minimum-wage-ian-wright-investigation-a7149971.html (accessed 16 March 2019)
Sports Direct International plc (2021), About us, available at: https://www.sportsdirectplc.com/about-us/company-history.aspx (accessed 16 January 2021)
Photo credit: Westfield
Author: M Rahman
M Rahman writes extensively online and offline with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He holds an MSc in Tourism & Hospitality from the University of Sunderland. Also, graduated from Leeds Metropolitan University with a BA in Business & Management Studies and completed a DTLLS (Diploma in Teaching in the Life-Long Learning Sector) from London South Bank University.