Strategic Management: Analyzing Business Environment and Competitive Strategies

This document provides an overview of strategic management techniques and frameworks used to analyze the business environment and identify competitive strategies. It includes a case study of JD Sports PLC and their plans for expanding business in Cambodia.

Strategic Management

Executive summary
Strategic management refers to the procedure of analyzing as well as monitoring the
overall performance in an effective manner. In addition to this, there are different strategic
management techniques that are required in terms of fulfilling the purpose. The main objective
of report is to analyze business environment and assist in attaining competitive advantage for
organization. For this, several frameworks are used for identifying strategic directions and that is
Porter generic strategy, Ansoff Matrix and so on. Furthermore, it is also suggested to the
organization that they can use cost leadership & market development strategy in order to expand
business in Asian market which is Cambodia.

Contents
Executive summary..........................................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
Identify current positioning of respective organization with the help of frameworks...........4
Identification of competitive strategies and strategic direction with suitable recommendations
................................................................................................................................................9
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Strategic management refer to the process of management of organization resources in order
to achieve goals and objectives. In addition to this, it provide direction by developing policies
and after that allocating resources to implement it in a proper manner. Strategic management is
important for an organization as it assists in identifying Prominent strategy that can be
formulated for the betterment and growth of business (Akyuz and Gursoy, 2019). It is an
ongoing process that is concerned with the management of organization. It is important for an
organization to place strategies properly so that an effective decision will be taken. For the
present report, JD sports PLC is taken into consideration. It is a British sport fashion retail
organization which was founded in year 1981 and is head office is located in Greater
Manchester, England. The company is operating business in various countries such as France,
Denmark, Spain and so on. In the present time, JD Sports PLC is willing to expand business
operations in Asian country that is Cambodia with an objective to earn higher profits. Along with
this, the company has more than 32,130 employees who performed activities in different location
and is one of the reason of its success. The report will cover the strategic positioning of
respective organization. In addition to this, internal an external analysis of company is
conducted. Moreover, there is a discussion about the strategic directions that a company have in
order to expand its business along with some of the recommendations.
MAIN BODY
Identify current positioning of respective organization with the help of frameworks
In order to identify the current positioning, the higher authorties of JD Sports PLC conduct
internal and external an analysis, which is given below:
External analysis: it depicts the environment which consider several forms of external factors
that influence on the operations and performance of an organization. It is important for a
business entity to analyze its existing position at the time of planning for the expansion. For
conducting external analysts, pestle framework is applied by managers of JD Sports PLC.
Pestle analysis:
It is defined as a framework or our strategic management tool that is used by an
organization for identifying the influence of macro environmental factors on its business

activities an operations. In context to JD Sports, it is important for them do identify current
position of business. This framework involved factors that is discussed below in context too
respective organization:
Political factor: it involves aspects such as political stability, taxation policy, administration
intervention and so on. With reference to JD Sports, it is operating business globally and is
requiring to keep a tab on the changing political conditions in which it operates (Baumgartner
and Rauter, 2017). It is analyzed that free trade is one of the important aspect that positively
impact on the operations of JD Sports in Thailand. It helped company in running all the business
activities effectively. On the other hand, Brexit is one of the factors that develop an unfavorable
influence on the business expansion and decline its performance as well as profitability level. For
the expansion in Cambodia, it might be a threat for the company as government tend to change in
future and is regularize the labor laws as well.
Economical factor: It involves factors such as interest rate, inflation rate, financial growth,
currency rate, unemployment rate, deflation and so on associated to the economy. In the present
time, It is determined that the buying power of people is decline which impact directly on the
sales of JD Sports in a negative manner. Therefore, it is important for company to develop
effective policy as well as pricing strategy in according to with the changing in deflation and
inflation rate while planning for expansion in Cambodia. Moreover, it is analyzed that the people
of Cambodia is easily accept quality products which help company to gain success at
marketplace.
Social factor: It undertake the lifestyle, income level, culture, attitude and beliefs,
demographics and so on. It is important for an organization to ensure that they consider the
viewpoint and perception of customer before offering the product and expand the business. In
relation to JD Sports, it tends to develop strategies by paying more attention towards the
customer requirements in order to gain prominent position at marketplace. The social factor of
Cambodia such as education level, attitude, health, culture is effective and beneficial for JD
Sports for understanding the target market and fulfilling their requirements in a proper manner.
Technological factor: This external factor plays an important role for an organization to
gain growth and retain at market for longer time (Bryce, 2017). It is important for a business
entity to adopt new technology as people before to buy and consumed those products which is
new and innovative at marketplace. With reference to JD Sports, it make use of advance and

updated technology for providing its products which leads to facilitate large number of
customers. In addition to this, using of innovative technology help company to reach globally
that impact on its sales and profitability level in a positive way. Furthermore, undertaking the
manufacturing to supplying the product, the company tends to identify the technical factors that
is useful for the expansion of business in Cambodia.
Environmental factor: This factor consider various forms of elements such as
Environmental Protection act, social responsibility and so on (Carayannis, 2018). It is important
for company such as JD Sports to ensure that all the norms and standards associated to the
Environment Protection with in Cambodia is followed in a proper manner. It help company to
implement activities in a systematically manner and develop it’s brand image at marketplace.
Legal factor: It is important for an organization to consider all the laws and policies so that
activities is implemented in a systematic and smooth manner. In context to JD Sports, it is one of
the largest retailer in United Kingdom and is currently running and expand its business in Asian
market. For this, it is important to ensure that all the policies and the laws associated to
employees and government in Cambodia is to be followed. These laws are labor law, copyrights,
employment law and many more that is useful to run business without any issues and legal
hindrances.
Porter’s five force analysis:
It is defined as a framework that is used by business entity in order to analyze the level of
competition prevailing at marketplace. In addition to this, it undertakes the suitable combination
of factors that are needed to focus for the overall functioning and attainment of competitive
advantage at marketplace. The framework involve five competitive forces that is given below in
context to JD Sports:
Threat of new entrants: It is determined that the threat of new entrants is moderate for JD
Sports PLC as it is not easy to establish a well settled market that company has. In addition to
this, It is important for the respective organization to focus on maintaining effective relation with
its customers as the new business introduced within the sector decline its market share and
performance as well. Moreover, the company can conduct research in order to gain knowledge
about the new product so that it can bring innovation and improve its profitability in an
appropriate manner.

Threats of substitute: It is determined that customer will locate alternative products that
satisfy their requirements. In context to JD Sports, it is determined that this threat is moderate
and the company can reduce it by shaping and focusing on providing unique and innovative
offerings at marketplace (Ethiraj, Gambardella and Helfat, 2018). Moreover, the company can
place its product in a way that attract large number of customers so that they did not think to
switch to another brand.
Bargaining power of buyers: It is stated that customer required value of product more than
what they are paying for it. In context to JD Sports, the company can handle such issue by
obtaining vast consumers from different locations and sections and by expanding the
specification of goods in a proper manner. With the help of this, the company can improve its
customer preference and retain them for longer time.
Bargaining power of suppliers: There are large number of suppliers available in which the
JD Sports deals and this shows that the company has low bargaining power of suppliers
(Holloway, 2018). It is determined that the higher authorities’ of JD Sports maintain good
relations with its suppliers in order to ensure availability of raw material timely. Along with this,
the company handles contract ability of its providers by improving their list of providers an d
investigating new products from raw stuff.
Industry rivalry: This element state the suitable analysis of organization undertaking the
effective extent of competition within the market. It consider various competitors of JD sports
such as food locker, armour and so on. The company has a high threat from its competitors and
for this it is important for JD sports to develop effective strategies and attract customers by
providing quality and innovative product effectively and properly.
Internal analysis:
It is considered as an effective combination of Internet aspects which leads to influence
under business environment in both negative as well as positive manner. It is important for
business entity to ensure that they are capable to identify internal aspects as it help in gaining
knowledge about the strengths as well as weaknesses of company (Keding, 2020). For internal
analysis, it is stated that organization uses VRIO analysis as it assist in identifying the defective
level of competitive advantage. It also helps JD Sports to develop effective strategies in dealing
with the internal issues of company.

VRIO analysis: It is a technique which is useful for an organization to ensure that they are
capable to fight with the prominent players prevailing within the industry. By the assistance of
this, company is able to identify its strength as well as capabilities. This framework help JD
sports to analyze its internal aspects so that an effective strategy is developed in order to attain
competitive position or leading position in market. The analysis involved for factors that is
valuable, rare, inimitable, organized and is mentioned below:
Resources Valuable Rare Inimitable Organised
Use with latest
technology
Yes No No No
Effective
marketing
Yes Yes No No
Skilled
workforce
Yes Yes Yes No
Good market
image
Yes Yes Yes Yes
Valuable: This factor consider those elements that is capable enough to offer suitable
values to company and is one of the valuable factor for an organization. It is determined that
there are different factors which result as valuable for business entity that is human resource,
goodwill, technology and so on. In context to JD Sports, it is determined that using of new
technology and human resource is the most valuable factor that help company to carry forward
its activities and operations in an effective manner. In addition to this, it also helped company in
expanding business which leads to attainment of higher growth and development at marketplace.
Rare: It involves the form of rare resources that is not easily acquired by all the
organizations and sometimes by the business itself. If an organization have this rare factor then it
has the capability to attain competitive advantage at marketplace (McKiernan, 2017). With
reference to JD Sports, use of advanced technology is not rare for company as there a lot of
competitors who uses innovative technology for carry out activities effectively. The rare
resources that company have is skilled human resource and brand image in market that help
company to stable for longer time but is not an effective resources to achieve competitive edge.

Imitable: It considered resources which cannot be copied easily by other companies. it is
important for an organization to bring out those products, services and strategies that is not easily
copied by its rivals prevailing at marketplace. If it is talking about JD Sports, it's effective
marketing techniques is easily copied it by others. The imitable resources that company has is its
skilled and talented workforce and market image that cannot be copied by other rivals of JD
Sports. It is important for respective organization to maintain it's brand image and motivating
staff members so that it can maintain its leading position within the market.
Organized: It mainly undertake the prominent factors as well as capabilities that are
organized by business entity in an effective manner. If it is talking about the skilled workforce, it
is not organized by JD Sports as it is difficult to satisfy the requirements of staff members and
engage them for longer time period (Okumus, 2019). Market image should be undertaken as an
organized factor that facilitate company to carry forward its operations as well as activities
properly and timely. It is significant for the higher authorities of JD sports to focus on organizing
its staff members so that all the activities is implemented smoothly and systematically which in
turn impact positively on its productivity and profitability level.
Therefore, it is stated from the above discussion that there are various elements which
tends to result as strength for organization and is important part for them to keep align with the
essence and growth of business. In addition to this, it helped company to capable enough to fulfil
its short as well as long term objectives in an effective manner. It will also help company to
expand business and raise its market share in an effective manner.
Identification of competitive strategies and strategic direction with suitable recommendations
It is stated that it is important for an organization to identify and analyze appropriate
strategic direction for expanding its business. It helped company to carry out activities and
operations timely and effectively that leads to attainment of higher growth. It is determined that
identifying the competitive position help c business entity to develop effective strategies and
plans which can be implemented and help in attaining leading position within the industry. For
this, the higher authorities of JD sports uses porters generic strategy and Ansoff Matrix, which
are as follows:
Porter’s generic strategies: This model is used by business entities for determining the
competitive strategies which are beneficial in order to attain competitiveness within the industry.
In addition to this, it depends on different alternatives which prominently emphasize on business

to attend competitive advantage. In order to expand business in Cambodia, JD sports use this
model as it facilitate in determining the best option to expand and develop its business
operations. This model involves four strategies that is given below in context to respective
organization:
 Cost leadership: The company undertake this strategy in order to decline the cost of
product without compromising the quality. The main objective here is to increase sales
and gain higher profits which in turn leads to raise in market share of a company (Phillips
and Moutinho, 2018). For developing business in Cambodia, the higher authorities of JD
Sports tend to focus towards this strategy that help in declining the cost of commodities
and enhance its market share.
 Cost focus: According to this strategy, a company tends to decline the probable
procedure for small marketing undertaking the response of customer which can be
reduced in the best possible strategies for the period of time. With reference to JD sports,
it tend to choose this option in context of expanding business within the Asian market
that is Cambodia. Moreover, it help respective organization to launch product at low
price which leads to higher growth and success.
 Differentiation: Herein, a prominent strategy is developed in context of developing
innovative and creative product offering at marketplace. In addition to this, it help
business entity to attract large number of customers which leads to raise in performance
and profitability of company. With reference to JD sports, it emphasis on expanding
business in Cambodia and adoption of such strategy help in attracting and acquiring large
market share effectively.
 Differentiation focus: It is stated that by focusing on the option of business expansion
and bringing innovative product help in satisfying and attracting large number of people.
In context to JD sports, it uses this method for business expansion in Asian market which
is Cambodia. It assists in facilitating organization to identify new product that is accepted
by target audience of organization.
Thus, it is analyzed from the above study that cost leadership strategy is feasible and
appropriate for JD sports (Koseoglu, 2016). In addition to this, it help company to attract
large number of people and increase its customer base level in an appropriate manner.
Ansoff Matrix

It is also known as product expansion grid that help an organization to plan and analyze
strategies for growth. In addition to this, this model ensure that company get more aware
regarding their strategic decision which assist in emphasizing them to expand business
effectively. With reference to JD sports, the company is expanding business in Asian market and
for this it is important to focus on analyzing the strategies available for expansion. The model
involve four strategies that is discussed below in relation to respective company:
 Market penetration: According to this strategy, an organization is able to attract large
number of customer prevailing in existing market by offering existing product to them. In
addition to this, It is important for an organization to develop effective strategies for
market so that prospective customers can be attained from the existing market in an
effective manner. In context to JD Sports, it is determined that expansion of business in
Cambodia, market penetration strategy is useful and helpful in context of developing
suitable strength for the existing market (Priem, 2018). Furthermore, it is beneficial for
attracting large number of customers and maintaining performance level in a proper
manner.
 Market development: With the help of this strategy, an organization is able to offer its
existing product in the new market with an objective to improve its market share. In
addition to this, it helps company to consider various number of customers from different
locations (McMillan and Overall, 2016). If it is talking about JD sports, it is willing to
expand business in Cambodia and by using this strategy the company can prominently
offered its existing product to the new Asian country which leads to attainment of higher
growth as well as success at marketplace.
 Product development: This strategy facilitate business entity to offer new product and
services to the existing market in order to retain customers for longer time period. The
higher authorities of JD Sports can adopt product development strategy as it is beneficial
to enhance sales within the existing market and also help for the expansion plan in
Cambodia. Diversification: If a company introduce a new product as well as services within the new
market then it is stated as diversification. This strategy is risky as compared to others and
requires lots of funds as well as research. By opting this strategy, JD Sports can expand

business in Cambodia and also enter in new market which leads to increasing customer
base level and attainment of higher growth as well.
Recommendation & justification: By analyzing the above strategies, it is suggested to the
higher authorities of JD sports to adopt market development strategy as it is useful and feasible
for the company (Vitolla, Rubino and Garzoni, 2017). In addition to this, it assist in introducing
and launching product in Asian market which is Cambodia. Moreover, it is recommended to the
company to make use of process of internationalism in order to expand business in Cambodia.
This will help company to enter into the new market without any issues and conflicts.
Furthermore, it is suggested to company to provide training and development session in order to
make them introduce about the culture, preferences and the policies associated to the country in
which they enter for gaining growth at marketplace. Furthermore, by undertaking this option
organization is able to gain large market share and attain growth as well.
CONCLUSION
From the above discussion, it has been concluded that strategic management help business
entity to manage its operation and activities in an effective manner. In addition to this, it is
important for an organisation to conduct internal and external analysis so that an effective
strategy is develop in order to deal with the issues and implement activities in a proper manner.
with the help of Porters five force model, an organisation is able to identify its competitive level
at marketplace. Moreover, there are various methods available to company in order to expand its
business at marketplace such as exporting, market development, market penetration and so on.

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