Strategic Management: Analysis and Strategies for JD Sports PLC

This report analyzes the strategic management of JD Sports PLC, including PESTLE analysis, Porter's Five Forces, and value chain analysis. It explores competitive strategies and methods of expansion, with a focus on the company's position in the marketplace. The report also discusses the challenges faced by the company and provides recommendations for improvement.

Strategic Management
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Table of Contents
EXECUTIVE SUMMARY ............................................................................................................3
INTRODUCTION..........................................................................................................................3
MAIN BODY...................................................................................................................................3
PESTLE analysis and 5 forces framework:.................................................................................3
Internal environmental analysis (Value chain analysis)..............................................................6
Identification of Competitive Strategies......................................................................................9
Strategic directions and method of expansion...........................................................................12
Finding and recommendations...................................................................................................14
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16
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EXECUTIVE SUMMARY
This report is based on the organisation JD sports plc where different tools and analytical
tools have been used in order to identify its current position and what spends can be taken to
improve its position in the marketplace. The PEST analysis. Porter’s five force model,
competitive strategy, marketing mix VRIO analysis and ansoff matrix has been conducted to
identify its position in the marketplace.
INTRODUCTION
Strategic management involves planning, monitoring, analysing, interpretation and
evaluation of the activities occurs in the organisation to achieve the company's objectives and
goals (Wheelen and Hunger, 2011). Regular changes in business environment needs a proper
strategies to access the organisation success. It is required to provide direction to the organisation
in achieving the company's success and goals. JD sports PLC is the UK based fashion sports
brand and also of casual wear. Company was established in the year 1983 by John Wardle and
David Makin. There are about 32,125 employees are working in the company. Company earned
about 4,717 million revenue in a year. There are various issues and challenges faced by the
company in this pandemic situation. Key challenges faced by the company is that there is
reduction in its profits as compared to previous year. Another is that no dividend is declared for
the period of time. And other, there is a rise in cost due to online trading and closing of stores.
The company want to expand its business in Philipines. This report covers external environment
analysis that can create opportunities and threats for the organisation. Also it covers internal
environment analysis to identify companies strength and weakness. There are various
competitive strategies and directions which are mention here and how a company can expand its
business in Asian countries methods are discuss in the below report.
MAIN BODY
PESTLE analysis and 5 forces framework:
PESTLE analysis: This analysis is done by the company to identify the factors which
affect the external environment of the business while introducing business in Philipines market
(Ansoff and et.al., 2018). This include Political, social, economic, technological, legal and
environmental factors which can affect the business externally and how these factors can create
the opportunity and threats for the organisation. Let discuss about these factors:
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 Political factors: Political factors play a significant role in the JD sports Plc. As
company is expanding business in Philipines market so it needs to follow government
rules and regulation formulated by Philipines government. So company suffers from
various political risk from which some can create opportunities or threats for the
business. For example- company is operating in Retail and more then dozen of countries
expose itself to different types of political environment. Also, there is labour laws defined
by government in the country.
Opportunities: Level of corruption is more in Philipines. So if company cannot do
corruption then it can create an opportunity for the company to attract more customers. Another
is if company follows safety regulations for the customers services then it can also attract more
customers.
Threats: Taxation policy are set by the government, so if company does not pay this can
create a threat for the organisation.
 Economical factors: Economical factors like inflation, interest rate, economic cycle etc.
are the major challenges for the company. These factors play important role in impacting
the business environment. For example- high rate of GDP signals the customers to spend
more on offered products. JD sports company should study labour market condition of
the Philipines country to understand how they can attract talented workers who can help
the company to increase its business performance.
Opportunities: In the Philipines government is focusing on creating employment so that
people would able to satisfy their needs and desires. So if company creates job then may be an
opportunity to attract for employees for the company.
Threats: In the situation of recession, it can create a threat for the company.
 Social factors: Sharing beliefs and attitudes is the another social factors which are
important for the business. In JD sports education level is high and beliefs and attitudes
of the population play major role in the company to understand the customer preferences
and design of given market. For example- factors like education level, interest in sports
and attitude towards health can affect the company.
Opportunities: High class people purchases their product. This can create a n
opportunity for the business to increase its profits and revenue.
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Threats: Some people have lesser interest in purchasing a brand for them. This could
create a threat for the company (Eden and Ackermann, 2013).
 Technological factors: This is the last factors which can impact the business. As slow
moving technologies takes more time rather than fast moving technologies. By
understanding new technologies can help the company in understanding customer
satisfaction and increasing profitability. This helps the company in expanding its business
in Philipines country.
Opportunities: Using recent technologies can create opportunity for a company to
compete with its competitors.
Threats: These recent technology could increase the companies operating cost.
Porter's Five Force Model: This is a strategic management tool which is used by
organisations in order to understand the external environment with the motive to increase profit
and revenue (Wheelen and at.al., 2017). In context of JD sports plc they are using this model in
order to understand the five competitive forces which has impact on the profitability and
production of the company in the new marketplace (Philipines). Following is the explanation of
five force of JD sports-
 Threats of new entrants- The company is belonging to retail industry therefore always
have threat of new businesses entering the marketplace. The management is working on
this as by coming up with new products and by offering better services they are working
on this factor. Moreover as they are able to established their brand name in marketplace
therefore enjoying economics of scale as this privileges is not provided to new comers.
JD sports is not facing any fund related issue hence spending in research in order to come
up with new innovative and quality products.
 Bargaining power of suppliers- The supplier within the company play important role as
they are responsible to supply the raw material which used to make the final product
(Velikorossov and et.al., 2020). In context of JD sports they use diversification strategy
in order to manage its suppliers as they are more focused to come up with new products
so their demand also changes regarding raw materials. Moreover they have maintain
quite strong and good relations with its suppliers so currently not facing any problem
from suppliers.
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 Bargaining power of buyers- With the changing business environment and increase level
of awareness has impact on the bargaining power of buyers that is they want worth more
what they are paying (Schilling and Shankar, 2019). In context of JD sports able to
handle customers in most effective manner as they are targeting different segments and
geography by focusing on increasing its product portfolio with wide range of different
products. They are able to satisfy its customers by providing wide range of quality and
stylish products. In new marketplace they would be able to attract the potential customers
because it has able to gain popularity and formulated good brand Moreover with their
new product portfolio they are attracting large number of new potential customers hence
is not effected by bargaining power of buyers.
 Threats of substitute products or services- When customer find the same product at low
cost they will shift to other option which is beneficial for them. In context of JD sports
they are focusing on minimizing the threat of substitutes by improving its services and
product by focusing on bringing more innovative and creative products in the
marketplace which are difficult to copy.
 Rivalry among existing competitors- In this present business environment the level of
competition is increasing and it is effecting the profit and revenue of existing businesses.
In context of JD sports they are taking steps in order to reduce the rivalry condition by
focusing on building strong relations with customers and by providing product which
satisfy the customers that is up to their expectation level.
Internal environmental analysis (Value chain analysis)
Value chain analysis model is one of the most popular method which helps business
organisation in carrying its business operations in most effective and efficient manner
(Ackermann and Eden, 2011). In context of JD sports plc it has been seen that all the activities
do not require same level of scrutiny that is according to different functions methods and actions
are to be changed taking place in the mew marketplace (Philipines). The main motive behind this
method is to know the importance of activities so that different steps can be taken in order to
carry the work in most effective manner. Primary activities helps in carrying the production and
selling work to targeted audience in the effective manner. Here is list of primary activities which
need to be consider in value chain analysis.
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 Inbound logistics- It is basic to make strong relationship with suppliers as their assistance
is essential to get, store and disperse the thing. Without separating the in-bound
collaborations, Jd Sports Fashion Plc (weakness) can face various troubles in thing
improvement stages. Assessment of in-bound collaborations requires an association to
focus in on each piece of progress from rough material to finished thing which act as
strength for company (Mišanková and Kočišová, 2014).
 Operations- The importance of operational activities raises when raw material appears,
and Jd Sports Fashion Plc (strength) is set up to manage the unrefined material into the
eventual outcome and dispatch it keeping watch. Examination of operational activities is
critical for improving benefit, expanding the viability and ensuring the genuine
achievement of Jd Sports Fashion Plc. The extended proficiency can help Jd Sports
Fashion Plc with achieving consistent monetary turn of events, increase advantage and
set a stunning explanation behind high ground. The current operations is acting as
weakness because confusion and miscommunication effect the business operations.
 Outbound logistics- Outbound activities consolidate the activities that pass on the thing to
the customer by experiencing different go between. Some outbound collaborations
practices are material managing, warehousing and many more activities which brings
them closer to their target. Jd Sports Fashion Plc (strength) can look at and overhaul the
outbound collaborations to research high ground sources and achieve its business
advancement objectives. Jd Sports Fashion Plc should pay explicit significance to its
outbound worth chain practices when its offered things are transient and require quick
movement to the end customer. As current customer relationship management is weak
and need to be improved.
 Marketing & Sales- At this stage, Jd Sports Fashion Plc will include the focal points and
detachment motivations behind offered things to persuade the customers that its
commitment is better than competitors. Simply conveying a first rate thing at sensible
costs and specific features can't make a motivation until Jd Sports Fashion Plc contributes
on the publicizing and arrangements works out (Gallus and Frey, 2016). The marketing
and sales activities are important for business as it is the way to reach its potential
customers. In context of JD sports (strength) the marketing department focus on latest
tools to carry its promotional activities in most effective manner. They need to focus on
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sales team training as they are not able to function properly due to which company is
losing its customers and is one of the weakness of company.
 Services- The pre-sales and post-sales organizations offered by the Jd Sports Fashion Plc
(strength) will expect a huge capacity in making customer trustworthiness. The front line
customers consider post-bargain organizations as critical as promoting and extraordinary
activities. The association ought to explore its assist practices with making an effort not
to hurt brand reputation (weakness), and rather use it as an instrument to spread positive
verbal trade as a result of fast, advantageous and profitable assistance organizations.
Secondary activities play important role as it helps in carrying the primary activities by
establishing effective coordination among employees (Jasper and Crossan, 2012). These factors
are explained below-
 Organisation infrastructure- The firm system (infrastructure) denotes an extent of
activities, for instance, quality organization, real issues dealing with, accounting,
financing, orchestrating and essential organization. Reasonable structure the chiefs can
allow Jd Sports Fashion Plc (strength) to improve the assessment of the whole worth
chain. Jd Sports Fashion Plc can control the establishment activities to strengthen the
genuine arranging keeping watch. They are not able to take quick decisions according to
the changes in the business environment which is acting as weakness for the company.
 Human resource management- Jd Sports Fashion Plc can separate human resource the
board by evaluating different HR points, including-enlisting, picking, getting ready,
satisfying, execution the chiefs and other work power the board works out. The fruitful
HR the board can allow Jd Sports Fashion Plc (strength) to reduce genuine weight subject
to motivation, obligation and aptitudes of its workforce. The association can similarly
achieve its cost minimisation objectives by analysing utilizing and getting ready expenses
with their relative return. The weighty dependence of Jd Sports Fashion Plc on agents'
capacity will extend the centrality of this value chain maintain activity. The human
resource management should focus on retaining the existing employees as they are more
effective due to which its performance is decreasing which is weakness for the company.
 Technology development- In a front line, technological or mechanical advanced time,
essentially all value chain practices depend upon inventive assistance. The inventive
coordination in progress, scattering, advancing and human resource practices requires Jd
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Sports Fashion Plc to comprehend the importance of advancement improvement. It will
in general be segregated (strength) into thing and cycle imaginative improvement works
out. A couple of models are-automation programming, development maintained customer
help, thing arrangement investigation and data assessment. The imaginative work part of
Jd Sports Fashion Plc is requested in this class. They should focus on improving
(weakness) its systems and need to invest in more technology based new equipment in
order to increase its production operations (Poister, 2010).
 Procurement- The procurement in worth chain shows the cycles related with purchasing
the data sources that may go from gear, equipment, rough material, supplies, unrefined
material and various things indispensable for conveying the finished thing. As a result of
its linkage with various worth chain works out, Jd Sports Fashion Plc should purposely
consider (weakness) its securing activities to overhaul the inbound, operational and
outbound worth chain. The company is able to maintain effective and strong relation with
its suppliers so do not face any issue related to raw material acquisition which act as
strength for company.
Identification of Competitive Strategies
For an organisation, it is required to evaluate the best strategy that may assist them in attaining
maximum competitive advantages easily (Makadok, Burton and Barney, 2018). Competitive
strategy is defined as long term plan of an organisation that may assist them in gain maximum
competitive advantages over its rivalries. With the help of such, an organisation can easily
develop a defensive position in the industry that may assist them in generating maximum return
of investment. For JD sports, it is required to evaluate available strategic directions that may help
them in analysing growth opportunities (Keupp, Palmié and Gassmann, 2012). In order to
evaluate competitive strategies firm can implement Bowman’s strategic clock model that may
aid them to explore the available options for strategic positioning. Before entering into the new
marketplace (Philipines) it is important to identify the strategies used by the competitors in the
new market. The analysis of this model determine below:
 Low Price and Low Value Added (Position 1): According to this method, firm can only
compete in the competitive market by keeping the price relatively low. This strategy
assists an organisation to gain maximum competitive advantages by offering very low
cost services to the customers in order to capture their eyes towards the firm and its
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services. In the context of JD sports, this strategy may be helpful through which firm can
render their services at very low cost which is hard for its competitors to compete easily.
This strategy will assist them in gaining a desired customer base for grabbing maximum
growth opportunities.
 Low Price (Position 2): Many companies following this strategy who often produce
large quantities of the products as well as their products are valued high in the target
market. The different and possible price wars are fought between competitive brands in
this position. JD Sports can implement this strategy by often sold their products at low
price in order to leading low-profit margins on the individual product. But at this stage
they can generate high volume of output in order to earn maximum amount of profit for
the company. This position in the strategic clock determines cheaper market leaders who
focuses on cost minimization strategy.
 Hybrid (Position 3): This is very effective strategy in the Bowman’s strategy clock
model that determines that it is very essential for an organisation to added value of the
product which are consistent in nature. According to this, JD sports needs to focus on the
aspect of product differentiation that helps in make a product highly valued in the target
market. But at the same time it is needed for them to focus on low price in order to create
a strong consumer base easily.
 Differentiation (Position 4): According to this strategy firm needs to implement
differentiation strategy in order to offer the best products in terms of quality at an average
price. With the help of this, they can make a distinctive identity in the market by
rendering quality services as per customer’s desires. In the context of JD Sports, this
strategy will assist in creating a unique image of firm in the target market by providing
different and unique products to target customers at minimal cost.
 Focused Differentiation (Position 5): This strategy is basically applicable for those who
focuses on the luxury and exclusive products and services. In this regard, it is needed for
firm to focus on differentiation approach on which they can sell high quality of products
at high price. For JD sports, this strategy would be beneficial to attain higher profit
margins by using several strategies as promotion, market distributions, market
segmentation and so on. This stage might be more strategic for an organisation because
the market for these organisations is very tough to compete with others.
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 Risky High Margins (Position 6): Companies that uses this strategy charge high prices
for the products which are perceived as mediocre in value by the customers. This is very
risky stage to opt for an organisation because there is maximum possibility to fail in the
long-term. Major disadvantage of this stage is that customer will look better quality of
products in the similar price range (Powell, 2014). On the other hand, they can find
similar type of product at lower price to cut their cost or get value for money.
 Monopoly Pricing (Position 7): In this stage, company position themselves as the
monopoly leader in which they are the only ones who offering the specific type of
products in the target market. JD sports can run their business by implementing this
strategy but according to this they need to offer the unique product by which they can
develop monopoly in the market. At this stage customer have two choices to buy the
product or not buy the products and it’s totally depends on the product and service which
are offered by monopolistic brand.
 Loss of Market Share (Position 8): This positioning stage is not very desirable for the
firm because at this stage, company is not basically able to offer the similar product or
service that the customer value. The companies in this segment basically opt for the
standard prices of their product offerings in order to stay relevant as well as competitive
at the same time in the market. In context of the JD sports they have face this problem
due to strategies of other brands such as puma, nike, etc as they have capture large area of
market.
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Strategic directions and method of expansion
In context of JD sports the company is based in England is serving across the globe and
covering market area with its rang of clothing, sportswear, footwear and accessories. They focus
on various strategies in order to expand its business in Philipines market that is recycling its
products and focus on using various strategies in order to secure its market share. The company
use pricing strategy that defines the product that is matches the commodity quality. In its
footwear range they use price penetration and competitive pricing in order to satisfy its potential
customers. The company has established its presence through e-commerce platform, popular
shopping centres and by high street. In context of the promotional activities it is using various
popular social media platforms in other to inform and attract its potential customers. Along with
this with the help of media and sponsorship they are able to inform about its new products, offers
to its potential customers (Luo, Sun and Wang, 2011). Furthermore company is focusing on
purchasing products in bulk quantity as it reduces the expenses such as packaging, distribution
and advertising. The company mainly uses three pricing strategy in order to satisfy its customers
and make changes according to the changes in the business environment that are market
penetration, strategic pricing and competitive pricing. Genuine framework enables the
association to keep up over the top expenses for its things, which facilitates those of competitors.
Crucial assessing targets indicating the thing as the best choices as a result of added worth,
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Illustration 1: Revenue share of JD Sports Fashion
Plc, 2016.

quality and charm. In this manner, association sorts out some way to crush the competitors
intentionally. Promotion enables the association to interface with endless potential customers and
sustaining the loyalty of its customers. Through hoisting JD sorts out some way to develop the
extents of its customers. Likewise, seeing the level of competition of things advanced by JD
Company, procedures to detach the brand and remember it from the others is huge. Customers
should be taught on any new things in the market to evade customer spill off to the competitors.
VRIO Analysis
In context of the JD Sports fashion this analysis helps in proper utilization of internal
resources so that it would be able to sustained competitive advantage.
Valuable- In context of the JD sports its financial resources are highly valuable hence they have
opportunity to invest in the external environment. Moreover its employee force is valuable as by
providing effective training to its employees they enhance their skills and ability to increase
productivity level of the organisation.
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Illustration 2: Selling JD Sports: This investment returned 33% annualised over almost 5
years, 2021

Rare- In context of the JD sports according to the VRIO analysis it is identified that its local food
products are not found be to rare as it is easily available in the market that is provided by other
competitors.
Imitable- In context of JD sports fashion PLC the resources obtain by them are costly to imitate
as they are acquired through prolonged profits over the years.
Organisation- The financial resources of the JD sports fashion PLC are organised to capture
value in the marketplace as they are taking steps to use these resources strategically after doing
proper investigation.
Ansoff Matrix
 Market penetration- They use market penetration license as the association to organize an
expense for their things, which prompts an extended bit of the general business. In
context of JD sports they are able to cover large market share by providing products to its
potential customers at low price in comparison to other competitors.
 Market development- By acquiring products in bulk quantity they are saving its extra cost
so that they can focus on its customers belonging to different market. This help them in
focusing on innovation and research so that they would provide better quality products to
its customers. Currently company is planning to expand its business in UK and Europe by
providing stylish range and different products to its target customers.
 Product development- By establishing strong relation with its clients and merchants they
are focusing on developing its product range as level of competition is increasing so they
need to come up with new products in order to attract its potential customers.
 Diversification- In context of JD sports they are focusing on expanding its sales growth
with the help of diversification strategy.
Finding and recommendations
In context of the JD sports the need to focus on investigation that is proper steps and
more time need to be spend in order to identify the market trends and preferences of customers.
Moreover they are facing high level competition in the marketplace so need to study the strategy
of the other competitors such as Adidas, Nike, Puma and many more in order to maintain its
position in the marketplace. They need to focus marketing strategies that is need to improve it by
focusing on social media marketing.
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CONCLUSION
From the above study it has been concluded that for the business organisation it is
important to focus on market study so that they can identify the latest trends taking placing in the
market and can make changes accordingly. Moreover the level of competition is increasing in
market so business organisation need to come up with new innovative and creative products in
order to attract its potential customers. The business organisation need to identify and analyse the
conditions and trends that are taking place in the area they want to expand so that they would be
able to capture the market and attract large number of potential customers. Furthermore its
important for company to focus on its production activities with the motive to improve and
increase the production.
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Online
Revenue share of JD Sports Fashion Plc, 2016. Available through
<https://www.statista.com/statistics/993156/jd-sports-fashion-revenue-share-by-region/>
Selling JD Sports: This investment returned 33% annualised over almost 5 years, 2021.
Available through <https://www.ukvalueinvestor.com/2015/12/selling-jd-sports.html/>
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