C.A.G.E Analysis Report on U.S. for Decathlon

C.A.G.E Analysis report on U.S. For Decathlon Group

In this paper, we will present a C.A.G.E (Cultural, Administrative, Geographic and Economic) analysis of USA. The main purpose here is to assist Decathlon Group which is a French sports goods retailer in providing key points that will make them consider if to make any overseas expansion in the U.S. market.

G.E Analysis of U.S.

The culture of United States is prominently Western which has been influenced by many European cultures. The American way of living has been under constant development long before the U.S. officially became a country. This culture has its own unique sense of social habits as well as other characteristics like different dialects, arts, cuisine, music and social habits. Today the American Society is known to be very racially and ethnically diverse which has resulted from huge immigration from different nations throughout its past. On governmental level the U.S. mainly has three branches, the executive, legislative and judiciary. The powers of all the branches are detailed in the U.S. Constitution. Geographically, United States is situated in the Western Hemisphere. It has fifty states in which forty eight are contiguous. Economically, United States is regarded as a global manufacturing powerhouse. It is the biggest economy on earth, it also has one of the highest per capita income both nominal and purchase power wise. The American consumer is known for its spending and the American economy itself is based on consumer spending. The American consumer is also known to be very sports addictive and since it has the ability to purchase more therefore this fact should make any foreign sports goods retailer like Decathlon very keen to expand in the American market. However, there are certain strategies which Decathlon should consider before making any expansion move, firstly the consumer demand here is different in terms of sports. Here people prefer Baseball, Basketball and Ice hockey more than Soccer (which is a European favorite). Therefore if Decathlon wants to expand here it must adapt to different strategies. "Culture deeply determines the wants and desires of any society" (Georgas 2003).

The environmental factor in the United States depends on five key components which are technology, demographics, government, culture and economics. In order to expand, Decathlon must first asses the overall competitive alternatives which it will face in the market. It should also look closely at the government regulations regarding the sports goods retail business in order to avoid any sort of legal problems. The society in America is very fashion conscious. They always seems to update themselves according to the latest trends, this is a very important point that any foreign firm like Decathlon should take note of before making investment. Other environmental factors include the variations of income levels of different consumers, here any firm should try to introduce wide varieties of products which satisfy everyone i.e. items for individuals with high income as well as for consumers with low salary. This can be achieved by selling products which varies in different qualities, fashions and other aspects all in range of the different demands made by different consumer types. The American consumer is also a very young one, its median age is low as compared to many different European and Asian markets. Therefore in order to properly succeed here Decathlon must focus on targeting the youth so that it results in more buyouts and it must also be successful to make a good image of itself since it will face a tough competition there. "Tougher regulatory policies are often responsible for the demise of any business" (Farazmand 2002).

There are many business challenges which Decathlon will face in the U.S., since it is a new brand therefore consumers might take time in adapting to it. It is here that it should rely on quality products which are offered at a nominal price as compared to its rivals. Even if it does offer quality products then still in a competitive environment like that of the U.S. It will face a tough time in properly establishing itself.

Business opportunities

The business opportunities in the United States have become less friendly in the recent times, after the global economic crisis of 2008 many small as well as large business have been closed down. This has resulted in overall increment in the unemployment levels of the nation. Here, the setback for the investors is that there are less people for consumption as compared to previous levels since those with jobs have also seen their wages shrunk or stagnated which restricts them from consuming. However, there is a positive side to this as well, the labor workforce can now be categorized as either low wage earners or high wage earners. This fact can make a lot of firms hire personals at a low cost as compared to any other global market which provides them the same services but at a cheap rate. The government on its behalf has also introduced many regulations in recent times which are provided to assist the local as well as foreign investors to further invest in the U.S. economy but these have yet to show their full potential to the foreign investors therefore all these effort can not translate into a successful business venture for any firm and any investor must rely on experience as well as a bit of luck to succeed in the American market. Besides this, other related facts which may count as opportunities include a more safe and sound environment for any foreign investor to invest in. America also provides one of the best infrastructures in the world for businesses to utilize in their favor, this includes the transportation facilities and utilities. America also has one of the highest literacy rates in the world making any foreign investor to choose from its vast pool of young and enthusiastic workers for hiring but to manage this workforce requires great expertise which any foreign firm may find difficult to do in the start.

Final recommendation