Strategic Management: Threats, Opportunities, and Recommendations for JD Sports PLC

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................3
1. Identifying threats and opportunities by external environment analysis................................3
2. The Porter five forces that analyse the structure and nature of competition ..........................5
3. VRIO to demonstrate the internal environment for identifying strength and weakness ........7
4. Strategic Recommendations for the Organization..................................................................9
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................13

INTRODUCTION
Strategic management is useful function in every organisation to make sure that they organize, or
monitor their plan in order to achieve its objectives. There are various strategies that the
organization follow in which they assess the current situation, implement strategy accordingly,
and then analyse the effectiveness in the management. JD sports PLC is done its operations in
the sportswear and fashion-wear and established in 1981, founded by the John Wardle and David
Makin. The company is also combining with many famous brands namely Nike, Adidas, and
Puma and also has its own brand name called the Pink soda. In this report, the Pestle analysis is
explain in detail to examine the threats and opportunities of the company and the Porter Five
forces is describe to know about its micro environment. Moreover, the VRIO is evaluate to know
the internal environment along with the Bowman clock or Porter's generic strategies to
understand the competitive strength of the company if they want to expand its business in the
Asian market country like China. In the last, the ways of expansion is examine with the Ansoff's
Matrix and direction with its product or services.
1. Identifying threats and opportunities by external environment analysis
Pestle is vital tool to understand the strength and weaknesses of the company and generally used
in the business for the strategic planning management with the help of various factor. Lets
discuss more and the below paragraph will explain the brief points -
Political - JD sports long term profitability is thoroughly impact by the political factor if they
want to expand its business in the international country. There are various political factor that
effect the company as the JD sports is already operated in the different country and the
increasing tensions in the global market can affect the growth (Dehtiarova., 2018). If they want
to channelise there market in the country China if the political stability is higher and also
provides the friendly environment than the chances of survival is increasing. However, in case of
political disorder, it might demotivate the investors and damage the trust of the stakeholders that
consequently effect the performance of the organisation.
Economic - There are different factors that the need to be address before investing in other
country like the inflation rate, the policies of the bank, economic growth rate and the interest

rates that are applicable (Karyonoand Agustina, 2019). Its vital for the JD sports to understand
the economic factor as they determine the aggregate demand and supply of the product and the
investment in a country. Hence, in China the company should considered the education system,
the present stage of business cycle, unemployment rate, as through this the company will be able
to predict the spending chain of the buyers as a result of this the accurate pricing can be set for
the product easily .
Social - The social norms and values would impact the culture of the organisation. Choosing the
right demographic patterns like the population, the migration patterns of country and the
variables of the social culture would become the essential factor for the JD sports Fashion as they
operate globally. Evaluation of the demographic features of the China beforehand can assist the
JD in selecting the correct market segments for aiming the large growth potential. If company
set foot into the new market with high or low power distance than its must adjust its
management practices accordingly because the increasing inequalities in the many country is
changing the structure of power and become serious issues for the JD sports company.
Technological - JD sports has to assess the technological related factors. The market share is
expanding when the company pay attention on technological innovations or if they enter into the
market when the technology is not reached to the full growth than the chances become high for
long term sustain (Solihat, 2020). Research and development is paramount for the JD sports to
make the investment in order to maximise the profit and re-invest to for future technologies. The
JD sports can analyse the component by understating how the technology would impact the
profitability and help in increasing in long run and their implications on the company's finances.
Environment – As JD is operating in the sports wear so they have look into the matter of the
environment factors. Many countries took the initiative and placing the strict norms to ensure the
effective waste management is being done in every sector of business. Furthermore, accepting
the waste practices units that are located in the urban areas is vital for the JD sports. Business
efficiency can heavily be affected by the weather situation, if the climatic conditions is extreme
than the production department may suffer and compel the JD to make the value chain much
flexible than before.