Impact of External Factors on JD Sports: Environmental Business Audit Presentation Part 2

This presentation discusses the impact of external factors on JD Sports, including political, economic, social, technological, environmental, and legal factors. It also includes a SWOT analysis and the interlink between internal and external factors.

UNIT 1 ENVIRONMENTAL BUSINESS

TABLE OF CONTENT
 Introduction
 Impact of external factors on the JD Sports.
 Swot analysis of JD sports
 Interlink between internal and external factors
 Conclusion
 References

INTRODUCTION
 Business environment refers to the sum total of the
external and internal factors of the organisation that may affect the
organisation.
 The current report will be based on the JD sports, that has its
establishment in the UK. It is the one of the largest retailers of
providing sports products to its customers.
 The report discusses that macro environment has positive
and negative impact on the operations of the JD sports.

Impact of the macro environment on the
functioning of the JD sports
 The macro environment can have negative as well
as positive impact on the functioning of the
company. It can be shown as below:
 Political factor
 The political factors refers to those factors
that can affect the company in a way such as
political stability, legal framework, tax rates, trade
regulations and tariffs and many more (Pan, Chen,
and Zhan, 2019).
 The JD sports is working in varying environment
that are impacted by the political factors of the
company.

Economic factor
 Economic factor of the company
refers to those factor which includes exchange
rate, consumer disposable income, inflation
rate, labour market conditions etc (Matović,
2020).
 The change in the exchange rate will impact
the investment plans of the JD sports not only
in the short term but in the long term as well.

Social factors
 The social factor refers to way of
doing the business in the society for increasing
the profits of the company.
 The social factor refers to developing products
as per the tastes and preferences of the
company so that the consumers will not shift
towards the competitors.

Technological factor
 It refers to the change in the way
of performing the activities by adopting the
changes in the organisation by the of
technological development.
 It includes production techniques, e-
commerce technologies, marketing,
information and communication technology
etc.

Environmental factor
 The environmental factor of
the company has the positive impact on
the operations of the company (Çitilci,
and Akbalık, 2020).
 As under the environmental factor the
company is doing CSR activities for
promoting the company and for
increasing the brand awareness of the
firm.


Legal factors
 It refers to the rules and
regulations that are made by the
government of the company, that are
required to be followed by the company
for the development and growth of the JD
sports.
 The company is required to comply with
the Employees Rights Act 1996. for the
protection of the employees from the
unfair trade practices

Swot analysis of the JD sports
 Swot analysis refers to the analysation of the internal strength and weaknesses
of the company for availing the opportunities and overcoming the threats of the business.
 Strength
 It refers to the positive aspects of the company that helps an organisation in
the growth and development of the business (Teoli, Sanvictores, and An, 2019).
 The company has the supplier of the raw material who are reliable and provides the raw
material at the affordable rate. That has reduced the cost of production of the company.

CONT…
 The JD sport has the wide distribution channel
that reaches majority of the retailers in the
competitive market.
 The liquidity position of the company is high
as there are cash flow in the organisation that
helps in expanding and exploring new
projects.

Weaknesses
 These refers to the areas that an
organisation should improve for accomplishing
the goals and objectives of the company
(Vlados, 2019).
 The company is not making profits as much as
is required to handle the day to day inventory of
the company.
 Organisational structure of the company is not
compatible for expanding its business in the
competitive market.

Opportunities
 It refers to the favourable factors
that helps an organisation in growing and
developing its products and services for
reaching the effectiveness in the business.
 As the inflation rate decreases it provides the
higher competitive advantages to the
company.
 As the customers will tend to buy more if
they are providing the products at the
affordable rate.

Threats
 It refers to the factor that has
negative impact on the productivity of
the company (Namugenyi,
Nimmagadda, and Reiners, 2019). Below
mentioned is the threats that are faced by
the JD sports that are:
 The competition for the sports products is
increasing day by day and reducing the
revenue of the company.

The internal factors are interrelated with the
external factors
 The strength and weaknesses of
the organisation are linked with the external factors
of the organisation as the strength and weaknesses
are derived from the external source only (Jonibek,
2021).
 With the help of the external analysis the company
is able to identify the factors that may affect the
decision-making process of the company.

CONT..
 Proper identification and analysis of the
external environment will lead to the
achievement and the success of the
organisation.
 The internal and external environment are
interlinked in such a way that may helps in
reducing the risk of the company.

CONCLUSION
 The report concluded that the various factors of the pestle analysis has both
negative and positive impact.
 As it helps in making the strategies for surviving in the competitive market. It is
recommended that after analysing the internal and external factors of the company, it
will provide various expansion options to the company.


REFERENCES
 Teoli, D., Sanvictores, T. and An, J., 2019. SWOT analysis.
 Vlados, C., 2019. On a correlative and evolutionary SWOT analysis. Journal of
Strategy and Management.
 Jonibek, S., 2021. SWOT ANALYSIS IN THE STRUCTURE OF INFORMATION
TECHNOLOGIES OF PHYSICAL EDUCATION. Web of Scientist: International
Scientific Research Journal, 2(05), pp.131-139.