Business Strategy: Macro Environmental Analysis, Internal Capabilities, Competitive Analysis

This report provides an analysis of JD Sports' strategic positioning, macro environment, internal capabilities using McKinsey's framework, and competitive analysis using Porter's Five Forces model. It also includes a strategic plan for the company.

BUSINESS
STRATEGY

Table of Contents
INTRODUCTION................................................................................................................................3
TASK 1 ................................................................................................................................................3
SECTION 1 Macro Environmental Analysis ......................................................................................3
1. Examine the strategic positioning of enterprise by assessing their mission statement & long
term goals ........................................................................................................................................3
SECTION 2: CAPABILITY.................................................................................................................5
1. Determine the internal capabilities by using McKinsey’s framework ........................................5
2. Discuss the strategic capabilities of JD Sports by applying TOWS Matrix ...............................6
SECTION 3: Competitive Analysis......................................................................................................7
1. Use porter five force model & analyse the competitive positioning of JD Sports......................7
2.Evaluate the potential & current strategic positioning in relevance with enterprise....................8
SECTION 4: Strategic Plan .................................................................................................................9
1. Present a strategic plan in relevance with chosen firm ...............................................................9
CONCLUSION..................................................................................................................................10
REFERENCES...................................................................................................................................11
Books & Journal:...........................................................................................................................11

INTRODUCTION
In organisation, every business is able to survive for longer period of time only when it has
a positive business environment. Employee and firm progress as well as performance level depends
upon culture & environment of corporate. BE is defined as external factors which affect the entity
productivity, functions & operation at wider level. JD Sports which is the leading retailer company,
headquartered in UK. It deals with number of brands such as Fila, Nike, Adidas, Vans, DC shoes
USA etc. It has various shops in UK and also provides sports equipment’s to the customers. This
report includes macro environment analysis, examining internal capability by applying McKinney’s
7 S framework, competitive analysis by using porter five force model & evaluation of entity
strategic positioning and strategic plan.
TASK 1
SECTION 1 Macro Environmental Analysis
1. Examine the strategic positioning of enterprise by assessing their mission statement & long term
goals
In market, competition is rising at rapid level and numerous new businesses and companies
are entering into the business sector. It has deep impact on existing organisation and affects their
profitability and growth. So, to overcome with such situations strategies are implemented by firm
and mission statements as well as long term goals are being focused. So, strategies are defined as
action plan in such way so that long term goals are achieved appropriately. Context of strategy is
discussed below-
Mission- It refers to a short written statement in which organisation reason for carrying out
business activities are specified. JD Sports main mission is to provide variety of products and to
become UK‘s emerging fashion retailers (Akter, 2016).
Vision- It refers to accomplishing and analysing the future goals, explore more opportunities
and change the business structure. So, JD sports main vision is to be the global leader in
international market.
Objectives- These refers to what goal that a particular firm wish to achieve. Objective of
chosen entity is to gain profitability and to acquire more customers in market (Peng, 2017).
Role of strategy-

Competitive advantage- By implementing strategy in the entities, firm gain competitive
advantage in market & able to overcome with difficult situations and threats. In context to JD
Sports, they face their competitors such as Decathlon, Hibbett , Big 5 sporting goods etc. in proper
manner. For example-
Value proposition- It is statement in which entity uses to influence end users decision that
their product is effective than the other brands. In relation with JD Sports, employees are skilled
with sales skills and are able to convince prospect into customers.
2. Analyse the current macro environment of JD Sports
It is essential for the firm to determine the factors which slow down the growth of business.
Analysing the current business environment which has affected the functions and operations of
entities at wider level due to emerging COVID 19 (Chaouk, 2020). It is disease or say virus which
is spreading and has a deep impact on market & business. This has affected the environment of JD
Sports at broader scale. To identify the external factors, PESTEL is a framework which is being
used by marketers to track as well as monitor the uncertain situations and is discussed below-
PESTEL Analysis
It is tool adopted by corporates to analyse the factors or elements which has a deep impact
on overall growth and development. JD Sports can use this technique by conducting market
research in proper manner. This tool has various components & has been described below-
Political factors- The first component of analysis is political factor in which trade, labour
law, corruption etc. are involved. In this, governmental activities also affect the business. In context
to JD Sports, labour law has affected the firm operations due to the emerging virus COVID 19 also
known as corona virus. Employee and staff members have refused to do the work and business
environment of entity has been disrupted.
Economic factors- These are those in which tax, inflation & deflation rates, governmental
activities etc. take place. Risk associated with such factors is high and it took time to recover that
risk. In relation with selected firm, tax rates are rising because of lockdown in the country and it
might lead to high cost of production in the enterprise. So, preventive measures are to be adopted by
the corporation in order to face the critical situation.
Social factors- Further comes the social factors which include cost of living, behaviour, and
attitude of people, region & culture. This is necessary for entities to consider so that resources are
used in organisation in appropriate manner. JD Sports, mostly target those people who are into
sports and games. Current environment in business has reduced the scale and scope of both
customers as well as business. For example- JD Sports should focus and target people between 12-

40 so that sports equipment’s are to be used properly by society and individual.
(Jia, 2020).
Technological factors- In this certain elements are included such as use of advanced tools
and technology, artificial intelligence etc. In relation with JD Sports, entity should deliver goods
and services via e-commerce websites which will helps them in reaching and acquiring more end
users and exploring opportunity at both national as well as international market.
Environmental factors- Then comes the environmental factors which involves pollution,
green agenda, waste recycling, climate change etc. Such type of elements has negative as well as
positive impact on goodwill of the firm. So, JD Sports need to consider such forces and carry out
their functions & operations accordingly. For example- In current situation of country’s lockdown,
resources are not being utilised and being kept in inventory. This leads to saving of money and
optimum use of resources in near future (Games, 2019).
Legal factors- Government laws and legislations affect the business and hold up the
functions of firm. Such factors comprises of company law, act, agreement etc. In relation with
chosen entity, they follow the legal factors under governmental consideration which assist them in
maintaining positive relation.
SECTION 2: CAPABILITY
1. Determine the internal capabilities by using McKinsey’s framework
McKinsey model is adopted by the business organisation in order to analyse the hard as well
as soft areas. There are various type of hard element such as structure, strategy as well as system
which is easy to assess and handle in comparison of soft element. Whereas, it is difficult to handle
the soft element of the business organisation in order to gain competitive advantage over rival firm.
In context of JD Sports , the manager adopt this model to analyse the internal capability of company
which is going to be mentioned below:
Strategy: As the business advisor of JD sports, I suggest to make effective strategy, policy
and procedure in order to gaining competitive benefits over rival firm. In addition to this, they can
focus on achieving vision and mission of the company in less period of time in order to gain
revenue and profitability in the future period of time (Baik, 2019).
Structure: It is the most evident element of the agenda and easy to change. In this structure,
the task is allotted to the employees in order to perform in better way. In context of JD sports, it
should represents the method in which the business partition as well as items are organised and
involves the useful information of who is responsible to whom.

System: It is the procedure which helps in taking an effective decision in order to achieve
the goal and objective of business firm. In reference of JD Sports, the main purpose of the manager
is to how effectively the operations of business activities and function is performed throughout
organisational change.
Style: This process signifies how the leader of JD Sports interact with its employees as well
as what action they take in order to accomplish the goal and objective of business firm in less period
of time. For example- Managers of the firm currently uses directive leadership style but to
accomplish mission and objectives it is advisable that they need to adopt participative style so that
morale of every individual increases in the entity. In next 5 years this will help the firm because
goodwill of JD sports will increase at higher level.
Staff: In this process, the manager recruit the talented staff members in order to increase the
productivity of business firm. In addition to this, they provide rewards to its employees on the basis
of their good performance at workplace (Shaqrah, 2018).
Skills: The HR Professional of JD sports focuses on hiring the skill, able and competent
employees in order to increase the performance level of employees within business organisation.
Shared Values: In this process, they standard as well as norms are used to provide guidance
to the employees in order to take appropriate action that helps them in increasing the revenue profit
in future period of time.
2. Discuss the strategic capabilities of JD Sports by applying TOWS Matrix
Tows matrix
This matrix s a framework which is used by the business firm in order to analyse the internal
and external factor which imposes direct impact on the productivity and profitability level. In
addition to this, it helps in assessing the strength, weakness. Opportunity and threat. The manager of
JD sports focuses on grab the opportunity in order to minimize the risk prevailing at marketplace.
This matrix in relation to JD sports which is going to be mentioned below.
Threat: The cost of implementation of new technology is very high and adds cost to the
product of the JD sports can be considered as a major threat for the business firm. In addition to
this, due to change in taste and preferences of customer, it is not possible for the business firm to
cope up with the dynamic environment in an appropriate manner. So, for future development as a
business advisor I suggest that company need to be more competitive and advanced in market.
Opportunities: The main advantage of JD sports is to execute the latest technology for
offering innovative and specific products as well as services to its customer for retaining them for a

longer period of time. Also, due to low rate of inflation, it helps the company in increasing the trust
and loyalty of buyer towards the product of business entity. Also, resources which are valuable for
the firm should be used only when there is urgent need as well requirement this will help as overall
growth & development.
(azam, 2020).
Weakness: In addition to strength, there are several weakness available at marketplace. The
financial planning of JD sports is not done in an appropriate manner imposes direct impact on the
productivity of business firm in negative manner. In addition to this, they need a lot of funds for
Investing in implementation of advanced technology in order to provide innovative products and
services to its customer.
Strength: JD sports is one of the well-established company which provide high quality
accessories sportswear and many more to its consumer. In addition to this, they achieve leading
position at marketplace. The main strength of the JD sports is to have a great brand portfolio that
helps them in achieving competitive advantage over rival firm. Apart from this, they distribute the
products and services to its customer on right time in order to satisfy them.
SECTION 3: Competitive Analysis
1. Use porter five force model & analyse the competitive positioning of JD Sports
Porter five force model is a framework which is used to analyse the competition available at
marketplace. The manager of JD sports provide quality products and services to its customer in
order to gain competitive advantage over rival firm which is going to be mentioned below-
Threat of new entrants
The threat of new entrants in JD sports is quite high, because there are many business firm
brings innovative product at marketplace. Therefore, it is important for the manager of this
company to provide unique and specific products and services to its customer at reasonable price. In
addition to this, the manager make effective strategy, policies and procedure in order to identify the
need and wants of consumer for satisfying them. Apart from this, they offer differentiate products in
order to increase the revenue of business firm (Hashim, 2020).
Competitive advantage
There are large numbers of Competitor of JD Sports available at marketplace such as
Adidas, Nike as well as academy sports and many more. Therefore, the manager focuses on
providing unique products and services to its buyer in order to gain competitive advantage over
rival firm. They provide superior quality accessories, sportswear and many more to its customer in

order to satisfy them. The main aim of the company is to increase the loyalty and trust of buyer that
helps them in achieving competitive benefits at workplace (zhang, 2020).
Bargaining power of supplier
The Bargaining power of supplier is low in the retail industry. There are number of business firm
who provide similar products and services to its customer at affordable price. Therefore, the
supplier has no control over price. In addition to this, it is crucial for the JD sports to offer products
and services according to the need and wants of buyer at reasonable price in order to increase sales
and profitability level at future period of time.
Threat of substitute products
The threat of substitute products is high in the retail sector. There are ample of business firm
who offer similar kind of products and services to its customer at reasonable price. In assistance of
this, it is necessary for the salesperson of JD sports to offer quality products and services to its
customer at low cost for increasing sales and profit at future time period.
Bargaining power of buyer
There are number of buyer in comparison of supplier within retail sector. Therefore, the
buyer has a control over the price of products and services. The consumer wants the quality
products and services at affordable price. Therefore, it is important for the manager of JD sports to
offer goods according to the need and wants of consumer that helps them in retaining them for a
longer period of time (Arifin, 2019).
2.Evaluate the potential & current strategic positioning in relevance with enterprise
In this competitive era, corporates cannot survive without implementing strategies & tactics.
It is crucial to analyse firm tactics and strategic positioning so that decision making is done in
effective manner. So, Ansoff matrix is being adopted by the entity to examine the strategic
positioning. A brief analysis has been given under-
Ansoff matrix is strategy framework used by organisation to plan for growth and
development. Also, it assist in analysing the risk associated with each market/growth strategy is
clearly specified in the quadrant. It includes four quadrants and has been explained under-
Market Penetration- The first aspect of matrix is market penetration in which improvement
is done in existing market and products. In context to JD Sports, to acquire larger market share and
customers, they reduces the prices of the products and it helps them gaining profit compared to
other rivals (Dawes, 2018).

Product Development- In this aspect, new products and goods are introduced in existing
market. This help in attracting more end users towards the brand. In relation with chosen entity, the
corporation has acquired the different brand like Chau Sports and in retailing acquiring such
ventures leads to product development.
Market Development- This stage comprises of new market but existing products.
Analysing customer perception is important in this scenario and also it results to adopting change
according to market and end users need/ requirements. JD Sports is rising and increasing its market
by acquiring more retail stores such as Ireland’s Champion and this has results in higher
profitability.
Diversification- This is most riskier strategy from all of the above mentioned strategies.
Because it includes new products into new markets with uncertain market activities. In relation with
selected entity, they are also using diversification to attract market and create brand awareness by
introducing McKenzie glasses and various supplements. Via approaching to this method manager of
the company has to be aware about changing trends of market so that effective decisions are taken.
SECTION 4: Strategic Plan
1. Present a strategic plan in relevance with chosen firm
In business, planning is required and essential at every phase because without plan goals and
objectives cannot be carried out in appropriate manner. It helps in clarifying the path which has to
achieve by the enterprise. Thus, being a business advisor it is my duty prepares a strategic plan for
company so that future development of organisation will be known in easier manner. JD Sports,
managers and leaders prepare strategic plan so that functions are carried out effectively. So,
strategic planning is done for basically long term objective; for five years. This involves several
steps –
Environmental Scanning- It refers to collecting information and data about the changing
surroundings which affect the entities activities at deeper level. In context to JD Sports, manager
and leaders of the firm scan the environment properly to avoid the hurdles. This will help firm in
future by saving time as well as cost.
Strategy Formulation- This is defined as process in which corporation select the suitable
techniques and methods to achieve the mission. This requires skills & knowledge as well as
expertise so that positive outcome occurs. Formulating a strategy is challenging task and JD Sports
focuses on culture such as exerting/ supportive corporate culture, functional and divisional
structure. So, when formulating a strategy proper analysis should be done so that in future less
changes are needed when required.

(Rezaei, 2016).
Strategy Implementation- Further comes the implementation, in which plan is converted
into course of actions. This crucial because it gives a path to organisation to follow their goals. In
context to chosen entity, leaders and mangers are responsible for strategy implementation.
Strategy evaluation- The last step in the plan is evaluating the strategy that has been taken
during the process. It comprises of testing and determining performance level as well as level of
strategies which are being used are effective or not (Akter, 2016).
After a brief analysis of above matter it is stated that planning is most important of business
and needed to carried out carefully with proper understanding and knowledge. This process also
helps firm to deal with competitors and rivals. In the next 5 years, entity will be developed at high
scale rate if strategic plan is used appropriately. This will also leads to new thoughts and ideas
generation in future.

CONCLUSION
After a brief discussion of the above report, it is concluded that business strategy plays vital
role in enhancing and improving the business progress & performance of the organisation. Business
environment is the backbone of entities and HR of the company make ensures that all the operations
in management are running smoothly without any conflicts & errors. Macro environment analysis is
being used in which PESTEL has been applied to track the factors. To monitor and analyse
capability of the firm it TOWS matrix has been used and McKinsey’s framework has been applied.
Market is full of competition and to compete with competitors Porter five forces model as well as
Ansoff matrix is being used. Further to achieve the long term goals, strategic plan is being
produced. Thus, market research and level of expertise is required for successful business strategy.

REFERENCES
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