Business Strategy: Macro Environment Analysis, Capability, and Competitive Analysis

This document provides an analysis of business strategy for JD Sports, a leading sportswear brand in the UK. It covers macro environment analysis, assessment of internal stability using the McKinsey 7S framework, evaluation of strategic capabilities using the TOWS matrix, and competitive analysis using Porter's five forces. The document also discusses the mission statement, long term goals, and current macro environment of JD Sports.

Business Strategy
Task 1

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Section 1: Macro environment analysis...........................................................................................3
Mission statement & Long term goals....................................................................................3
Current macro environment of JD Sports...............................................................................3
Section 2: Capability........................................................................................................................5
Assessment of internal stability by use of McKinsey 7S framework.....................................5
Evaluation of strategic capabilities by use of TOWS matrix.................................................8
Section 3: Competitive analysis.......................................................................................................9
Porters five force analysis......................................................................................................9
Ansoff matrix and PORTERS Generic strategies................................................................11
Section 4: Strategic plan................................................................................................................12
Strategic management plan...................................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................15

INTRODUCTION
Strategies are one of the very important aspects that can help in achieving of high
growth and profitability to an organisation in a limited period of time. With the growing amount
of competition organisations have to focus more on gaining a strategic advantage and
competition nature so that they can survive in the market. Present report is based on JD Sports
that are one of the leading sportswear brands of UK (Bohari, Hin. and Fuad, 2017). It is a retail
company based in England and is listed on the London stock exchange. There are 32,215
employees that are part of this organisation. They are having a strategic objectives of
achievement of larger markets hare and expand themselves to new areas where they are presently
not having any presence for this there is use of some of models and frameworks for planning of
various strategies & tactics to achieve such objectives. Use of models such as PESTLE, Porters
five force, porter’s generic strategy, for formation of a business plan so that further objectives
can be achieved objectives.
TASK 1
Section 1: Macro environment analysis
Mission statement & Long term goals
 Mission: The mission statement of JD Sports is “To be UKs one of the best sports fashion
retailer”
 Long term goals: The long term goal of JD Sports is that they want to offer quality of
products and services to customers. This is so because through it they able to attract as
well as retain customers for the long time duration which help in growing business
successfully.
Current macro environment of JD Sports
PESTLE analysis is a tool that is used for purpose of assessment of different factors that are part
of the external business environment and are impacting the functioning of a organisation
both in a positive and negative manner (Drnevich, . and Croson, 2013).
Political Factor: It consists of the factors relate to political stability of the country in which a
organisation is functioning.

Positive impact: There have been increase in the political stability and it has lead to increase
in the growth of retail industry of UK that is leading to a positive impact on JD sports.
Negative Impact: There have been increased in pricing regulations and wage legislations as
thee has to be minimum wages that have to be paid to employees. It has lead to increase in
cost of JD Sports.
Economic Factor: This is a factor that consists of issues such as exchange rate, deflation rate,
unemployment rate that has impact on functioning of JD Sports as discussed below:
Positive impact: With the increase in rate of inflation there has been reduction in cost of
products and increase in purchasing power of people that has lead to enhancing of sales for JD
sports (Groverand Kohli, 2013).
Negative Impact: There has been a negative impact on JD Sports as there has been impact on
the efficiency if financial markets and it is leading ti raise capital ratio in the local markets.
Social Factor: It is a factor that is related with social behaviour of people such as lifestyles
changes, trends of society etc.
Positive impact: In case of JD Sports manager is having focus on quality products as they has
been complete shift in the way people are willing to perceive value of products. Moreover
respective company offer products according to requirement of customers which seems as
positive aspect because it provides opportunity for business extension.
Negative impact: The need, demand and other social factors change regularly which help
impact on company’s business because they need to develop as well as re change their
product’s design. Sometime demand change in very short time due to which company’s
already manufactured products get wasted that seems as negative aspects.
Technological Factor: Technology is changing very fast and JD Sports can utilise the
technology to increase their present market share (Huang, 2019).
Positive impact: By adopting new technology respective company able to improve their
manufacturing process as well as it also help in adopting new technology related to change.
Negative impact: There is a requirement to make high amount of investment and it leads to
bearing equivalent amount of risk by JD Sports.
Environmental Factor: there are many environmental factors such as climatic conditions that
impact the functioning of a organsitaion.

Positive impact: There ahs to be adequate attempts made so that there are no harm made to be
overall environment that gain leads to measures that so going to increase the overall cost for
JD sports.
Negative impact: There are several environmental legislations which a company need to adopt
for the attainment of desire goal. In respect of JD Sports, it is not possible for them to adopt
all environmental factors because it leads to increase in expenses as eco friendly products are
expensive in nature.
Legal Factor: Legal factors consist of regulations, laws that are formulated by competent
authorities of a country.
Positive impact: There are numbers of legislation which a company need to follow for
conducting business properly. In context of JD Sports they conduct their business operations
according to requirement legal legislations such as employment law, labour law and many
more.
Negative impact: There is continuous change in legislations due to which respective
company management need to adopt change regularly as well as they also need to develop
new policies, rules and regulation which may lead to delay in business operations and
functions.
Through PESTEL analysis JD Sports able to understand macro environmental factors
which help them in conducting operations properly as well as it also help in making proper
decision according to positive and negative aspects of factors.
Section 2: Capability
Assessment of internal stability by use of McKinsey 7S framework
Hard s
Strategy Strategy of JD Sports is to use some athletes
and high promotion on printed media and
electronic media for achievement of high
market share (Murthy, 2012). Moreover,
respective company need for the more
expansion there is a requirement of use of
more attractive strategy in order to promote

their products in new market and new
locations (STRATEGIC CAPABILITIES.
2019).
Structure JD Sports are operating from basically UK,
they are having a basic centralised type of
structure and it is suitable for this
organisation to use this structure only for
their further new locations. Reason behind
this is that there must not be much
investment that has to be done on opening
of physical stores instead e commerce as a
tool must be used for purpose of
approaching to new markets in different
countries and test the response of customers.
If there is not much positive response then
it’s better to withdraw without much higher
amount of investment.
Systems System is related to way business is being
done and further organised. It is basically
organisational cart of a particular
organisation. In case of JD Sports this brand
is following a functional organisation
structure that is there is complete division
based on various functions such as
production, selling, distribution, marketing,
research, finance etc. It helps in clear
differentiation of what so the basic function
of one particular department.
Soft S
Style Style basically represents the way c
organisation is being managed by the top

authorities in an organisation. There are
various types of leadership styles that can be
used for new strategy implementation in JD
Sports there must be use of democratic and
participative style of management so that
employees will be give more chance of
presenting their views and opinions related
to various new decisions that are being
made by the top authorities of this
organisation.
Staff Staffs is a element that consist of the type an
number of employees required on a
organisation. In JD Sports for
implementation of their new strategy there
will be requirement of more competent staff
for this new hiring and recruitment process
is required by the human resource
department in the present context.
Skills Skills is regarded as the ability of
employees, their competencies and
capabilities in case of change in
organisation such as when there is new
market which is being approached there is a
complete shift in requirement of different
types of skills for JD Sports.
Shared values The value which is shared by JD Sport is
that they always offer quality services to the
customers who help them in attaining their
desire goal as well as objectives. They also
develop sports products according to
requirement of customer as well as it is their

value that they always motivate and
encourage their staffs.
Through above analysis it can be determined that JD Sports has numbers of strengths
which help them in attaining their desire goal as well as objective such as they shared effective
value for both customers and staffs. Through this they able to attract as well as retain both of
them for long time which leads to attainment of desire goal as well as objectives successfully.
Evaluation of strategic capabilities by use of TOWS matrix
 Tows matrix is basically used for the purpose of formation of certain attractive strategies
for JD Sports. It is formed on the basis of use of SWOT analysis as a tool for detailed
analysis of business organisations.
Opportunities:
There is lower inflation rate
that will help in ore stability
in the market for JD Sports.
There is new technology
adoption as a attractive
opportunity that can be
adopted by JD Sports to
practise differentiated
pricing strategies in new
markets
Threats:
There is a shortage of
skilled labours in the global
markets that is leading to a
negative impact on the
profitability of JD Sports.
There is a intense
competition that is being
faced by JD Sports based on
prices.
Strength:
There is a base of reliable
suppliers for JD Sports.
They have strong
distribution network.
SO: The strong distribution
network of JD Sports and
the new markets technology
both can be used together
for expansion of present
market share for JD Sports.
ST: The economies of scale
as a tool can be used for
reduction of threat and the
strong base of reliable
suppliers can be Further
used for achievement of
higher sales by JD Sports.
Weakness:
There is no expansion
beyond the core business of
WO: There is lower
inflation rate on some
countries so this can be
WT: There can be further
changes made in the
structure of organisation by

JD Sports that is they are
only focussing on just the
sports ware with some
limited brands.
The overall organisational
structure of JD Sports is
compatible with their
present business model. If
any future changes will be
made then it is not going to
support such modifications
in long term.
combined with their
weakness of expansions
beyond their core business.
So, they can make
expansions across more
sports related products.
implementation of a
divisional structure along
with the functional
structure. So both of these
combined together and deal
with the high amount of
competition that is a big
threat for JD Sports so that
its negative impact can be
somewhat reduced.
From all the suggestions which is suggested to JD Sports for the growth of business
operations and functions, the best one is expansion new market because through it they able to
attract more and more customers which enhance their customers base. In addition to this, it will
also leads to increase in sales, profitability ration and market shares. It will generally happen
because respective company market presence get increase which help in attainment of desire
goal and target successfully and effectively.
Section 3: Competitive analysis
Porters five force analysis
Porters five force is a strategic framework that is used for making some of strategic
decision by various organisations according to five major forces that are present in the
macro environment in which these businesses are functioning. In context of JD Sports this
analysis is discussed below:
 Competition in the industry: If there is presence of high competition among the existing
players in the industry then it leads to driving down of proves a reduction of overall
profitability (Policy, 2016). In JD Sports, operates in a competitive environment and it
may lead to affecting of long term profitability of JD Sports. This shows that the
competition for respective company in the industry is high because there are numbers of
other companies who are operating in same.

 Threats of the Substitutes Products: If any other competitor is able to provide the
products like JD Sports with similar prices and high value then it will lead to threat of
their existing customers substituting the products of JD products with other products of
competitors. So, JD Sports have to make some differentiation so that their present
customers are not easily able to shift or substitute from their products. Through this it can
be determined that the threat of substitutes is high for respective company as there are
several company who offer similar types of sports products.
 Powers of the suppliers: bargaining power of suppliers is related with the suppliers
having dominant position in the external market. Any powerful suppliers are negotiating
their power to achieve prices according to their willingness. JD Sports have to tackle such
bargaining power and make efforts to reduce to some extent. For this they can build up
efficient supply chain measures for development of a base of dedicated suppliers that can
help them in long term survival. The power of suppliers in respect of respective company
is moderate because they maintain friendly or effective relationship with suppliers who
supply quality products all the time in proper price.
 Powers of the customers: Bargaining power of suppliers is related with putting pressure
on the organisation to provide them products at highly competitive prices. So, JD Sports
have to make their customers understand that if they are charging prices then they are
providing higher value according to those prices. So, based on the variety and quality of
products they must enhance the satisfaction level of their customers. The power of
customers is also moderate because respective company have numbers of loyal customers
but there are some customers who switch from one company to another in order to get
products at low price.
 Potential new entrants: This factor is related top the new start ups and business that
could enter the industry to which JD Sports belongs (Verbeke, 2013). It is very difficult
for any new organisation to enter the sports industry and provide competition to an
established brand such as JD Sports. As it is very difficult for achievement of economies
of scale in usch a short period of time and compete bon the basic of quality and price. This
shows that potential for new entrants is low from respective company because it is not
possible for new companies to develop huge business in less time.

Ansoff matrix and PORTERS Generic strategies
Ansoff matrix: Ansoff matrix is used for the purpose of use of various approaches for growth
and selection of a particular strategy to be implemented in the occurs of business. In JD sports
for achievement of strategy of expanding in different parts of world there are some below
discussed aspects of ansoff matrix that can be studied in detail:
 Market penetration strategy: In this JD Sport will have to focus on their existing products
and they can expand in their present markets only (Varelas,. and Georgopoulos, 2017).
This strategy is not suitable in present scenario because respective company want to grow
their business so in order to attain that objective they need to develop or expand their
business in the new market.
 Product development strategy: In this strategy there will be new products that will be
added to the present product range but there will be launching of product in the existing
markets only. It is also not suitable according to the present scenario as respective firm
want to grow business so when they adopt this strategy then they need to develop a new
products which leads to increase in expenses as well as it will be time taking method. So it
is not considered as appropriate one in respect of JD Sports.
 Market development: In this strategy there will be existing products that will be launched
in the new market so, there has to be new brands that has to be approached by JD Sports
apart from that there is a requirement of high promotion techniques for this particular
strategy. In respect of this they need to open their stores at locations which they are
currently not operating and in respect of this they can introduce online sites where they are
offer their products online.
 Diversification strategy: This is also a very attractive strategy that can be used by JD
Sports as in this there will be two aspects that has to be focussed, such as new product
development and also new markets will be used for purpose of achievement of objectives
behind their strategy of market expansion (Sirén, and Kohtamäki, 2016).
Through this it can be analysis that JD Sports may adopt market develops strategies for
their expansion as well as in which they conduct online business or they can conduct acquisition
with some other sports company. It is so because through it they able to grow their business in
effective as well as successful manner.

Section 4: Strategic plan
Strategic management plan
Objectives: The main objective for JD Sports is that they want to introduce online sites for all
location and through that they want to enhance their sales by 50 % in next 1 month.
Time period: There is a time period of 1 year that has been set up by this organisation for
achievement of overall objectives.
Tactics: There are some of the tactics based on marketing mix analysis that will be used by
JD sports in order to achieve their above mentioned objectives
 Product JD sports is dealing in various sports wear range that can be own by their
customers casually according to their need. Many of the products are of
highly popular brands such as Nike, Puma, Adidas. According to this
respective company will offer their products range online at all locations.
 Price The process of JD Sports are based on their overall cost associated with
each product category, they have lower cost has they acquire products in
large quantities. So, they can have competitive process that can help
them in surviving with other major existing competitors in the market.
Respective company will set their price at the affordable range in the
starting so that they can attain their SMART objective successfully and
effectively.
 Place Various places where JD Sports can have their presence are high streets,
e commerce websites, shopping centres, outside locations etc. (Oldman,
and Tomkins, 2018). In the new countries where JD Sports is willing to
enter, they can use any of these methods according to their investment
and target market of customers. Respective company need to place their
products in effective manner so that they can attain desire objective
successfully.
 Promotion JD Sports can use above lien promotions and below line promotions.
They can use TV, Newspaper radio, magazines, and newspapers. They
can also make efforts in opening up of clubs so that young sports
enthusiast can feel motivated to be a part of these clubs and it will lead

to promotion of brand for JD Sports. Before launching the online site it
is essential for a company conduct proper online promotional activities
so that all people know about it effective. This is so because it helps in
attracting more and more customers which increase sales and attain
target successfully.
 Implementation: Management of JD Sports will be executing the above tactics for
achievement of their objectives for this there will be financial requirement and for this
below discussed budget has been formed by the marketing mangers.
Evaluation: after implementation of the above plan there has to be monitoring and
evaluation of the progress made in achievement of the overall objectives by the
management of JD Sports at the end of the time period stated in this strategic plan.
By adopting respective plan JD Sports able to attain their goal of enhancing their sales
through the online medium in effective manner. this will also leads to enhance in the profit,
customer’s base, market shares and so on.
CONCLUSION
From the above report it can be said that strategies are helpful for every organisation for
their long term survival and achievement of certain laid down objectives. There are certain
tools such as PESTLE, TOWS, porter’s generics strategies that help in development of ideas
and profitable strategies for future growth of certain business organisations. All these help in
development of various business plans for a definite time period and their achievement in due
course of business functioning.

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Online
STRATEGIC CAPABILITIES. 2019. [Online]. Available through:
<https://managingresearchlibrary.org/glossary/strategic-capabilities>.