C5 SWOT Sports Direct

Jan 4

Sports Direct is a chain of sports stores that operate as part of the Frasers Group. Sports Direct was founded in 1982 by Mike Astley by the opening of a sport and ski store in Maidenhead. There are currently 486 Sports Direct stores in the UK. Sports Direct grew rapidly through takeovers of struggling sports brands such as Dunlop, Slazenger and Karrimor.

This SWOT analysis outlines the current position of Sports Direct in September 2022 in terms of strengths, weaknesses, opportunities and threats.

Strengths

Sports Direct has a wide distribution network. There are currently 486 stores in 386 cities (Scrapehero). This is in addition to an extensive online store. A wide distribution network creates convenience for customers. Saving time and money is a high motivational factor when making a purchase. Creating convenience is likely to lead to higher sales and revenue. In 2021, Sports Direct’s revenue was £3,625.3m (Tighe).

Weaknesses

Sports Direct has been exposed for unfair working practices such as wages below minimum wage and unfair dismissal. This has led to weak customer rankings by stakeholders and customers. In a survey, only 12% of customers stated they would purchase goods from brands with an average or low score (Hobbs). If the reputation damage is not addressed in a way that satisfies stakeholders, customers may switch to rival brands such as JD Sports.

Opportunities

Interest in womens and girls football is rapidly increasing. The UEFA 2022 womens final attracted 17.4m TV viewers, making it the most viewed TV of the year (Sweney). The Football Association is also aiming to have an extra 120,000 women and girls playing football by the end of 2022 (Braidwood). This trend is likely to have a positive impact on sales for sports stores as demand for clothing and equipment targeted at female football fans and players is likely to increase. Sports Direct have launched an ‘Equal Access’ campaign donating footballs to grassroots clubs.

Threats

The consumer price index rose by 8.6% from August 2021 to August 2022 (Gooding). Rising prices increase household spending on essential items and reduce disposable income which could lead to reduced spending on non essential items such as leisurewear. Rising prices also increase business costs. The CEO at Sports Direct has announced that their suppliers are increasing their prices (Simpson). These prices will in turn need to passed onto customer in order for the firm to maintain their profit margins.