Strategic Management for JD Sports Fashion in Pakistan

This report discusses the strategic management of JD Sports Fashion in Pakistan, including the analysis of the external and internal environment, identification of competitive strategies, and recommendations for growth and expansion.

STRATEGIC
MANAGEMENT

EXECUTIVE SUMMARY
In this report it has been mentioned that strategic management is the core function of any
organization in order to expand its business operations and to achieve its organizational goals. In
this study the internal and external analysis of JD sports fashion company has been considered to
analyse the market before diversification of the company in the new market of Pakistan. The
strategies have been measured on the basis of Bowman's clock and Ansoff’s matrix to clearly
state the marketing activities to expand their business into new market space.

Table of Contents
INTRODUCTION...........................................................................................................................4
MAIN BODY..................................................................................................................................4
External environment analysis.....................................................................................................4
Internal environment analysis......................................................................................................7
Identification of competitive strategies.......................................................................................9
Strategic directions of JD sports fashion...................................................................................11
Recommendations......................................................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES................................................................................................................................1

INTRODUCTION
Strategic management is a management of any organization resources to reach its
objective and goal. It is a ongoing plan, assessment of all the requirement of organization to meet
its end goal. The different industries make use of strategic management to meet its objectives
effectively. JD sports is a multinational retailer of British sports fashion. The company founded
on 1981 its headquarter in bury, England (Velikorossov and et.al., 2020). This report is to expand
JD Sports fashion in Asian country that is Pakistan. JD Sports mainly faces the challenge of high
competition in the existing markets as well as the markets in which the company plans to
venture. Additionally, there is also the impending challenge to maintain quality and goodwill in
the sports market regarding the products that are sold. This report will evaluate the external
environment analysis to identify JD sports opportunities as well threats and intrinsic environment
analysis to get companies strength and weaker points. Further it will determine the competitive
strategies through porter's generic strategy and then explain the strategy's direction with Ansoff’s
matrix. The recommendation will provide for the JD sports for better grow and expansion.
MAIN BODY
External environment analysis
PESTLE analysis
JD sports is a brand of fashionable sports clothes and PESTLE analysis of JD sport will act as
tool to analyse the macro factors of environment throughout organization (Hitt and Duane
Ireland, 2017). PESTLE stands for Political, Economical, Social, Technological, Legal,
Environmental factors that influence the activities of company. The occurrence in macro factors
have direct impact on the company process. This analysis of external factors provides
information regarding the operational challenges.
Political factors that affects the JD sports: The political factors of Pakistan play a great role in
every organization as it impact of JD sports fashion profitability in long-term. The JD sports is
operating in different countries, so they have to expose itself to different political environment
and different system. As JD sports is majorly impacted by political stability and retail sector over
the country. The different nations are also had different tax rate and incentive. The trade
regulation and other related tariff in customers service are vary from country to country so the JD

sports is effected by the same. The intellectual property and its protection in different countries.
The JD sport fashion face issue while entering into Pakistan as they have to take permission from
the government. The government also changing in nature in different countries and affect the
functions of JD sports. To expand in Pakistan the company have to look at the political factor
which is currently existing in the country (Nandonde, 2019).
Economic Factors that impacts JD sports: As the economy of Pakistan is a vital influencer of
JD sports because the economy of Pakistan is facing inflation than the buying power of customer
is low in this. The customers can not able to purchase products of JD sports. The other factors
such as saving rate, interest rate, foreign exchange rate. JD sports fashion pls can make uses of
economic factors which will affect the profitability and performance of JD sports. As the
company is operating in different countries so there stability and type of economic affects the
growth and expansion rate of company. The government intervention in major country are as per
the customer services of the company and JD sports is having a favourable service, so they got
comparative advantage.
Social factors that impacts JD sports: this is another factor that affects the new entrance
organization in social environment of Pakistan. The society of Pakistan prefer those goods which
are reasonable and have quality so the social factor. JD's sports have to launch its products
according to the taste and preference of customer's if they are not able to launch the product in
the respective manner than brand product will not able to attract the customer's (Taylor And et.
al., 2018).
Technological factors that impacts JD sports: The JD sport have to focuses on its technology
from the time of manufacturing to final distribution. The company should make efforts to make
regular update so that they can attract more customer in new market place. With the help of
technology the JD sports will able to generate profitability and develop customer satisfaction.
As every company is coming in new market with innovative production style so that it can reach
to more customers.
Legal factors that impact JD sports: the legal factors used to influence the JD sports expansion
in the new market of Pakistan. The Pakistan have some different anti trust laws for retail sector
that protect the country from illegal business activities and unfavourable practises which are not
good of entire country. The another law that influence profitability and earning in the market of

JD sports is had to follow the laws of discrimination as in this law all the people are same and
can buy the products and services of JD sports.
Environmental Factors that impact JD sports: As every country have its individual
environment, and they work accordingly with that so if the JD sports have to entire in market of
Pakistan then they have to understand the environment that is weather, climate changes and
environment pollution. JD's sports have the knowledge of all this aspect because these all are
necessary to survive in competitive market.
Porter's five forces
The porter's five force framework help the JD sports to analysis the micro factors, the JD sports
profitability that impacted by five forces.
Threat of new entrants (High): As the JD sports is a retail industry organization. In this there is
continuously threat of new entrant in the industry. The Pakistan is welcoming new company
regularly so if the JD sports will not improve its product with the time then the threat will
increase by this. As the JD sports is had a good product with a higher price in Pakistan and new
entrant comes with a lesser price and smilier quality then customers are definitely preferred that
brand product because of the lesser price.
Bargaining power of supplier (Medium): the supplies play a great role in any company
because if any organization is based on a particular supplier than they can raise the price
according to them. JD sports is resolve this issue of bargaining power of supplier by
diversification its suppliers. They are ordering their raw material from number of suppliers.
Bargaining power of customer's (High): The customers of retail industry have higher
bargaining power as if the JD sport fashion company offering its products at higher prices than
the potential customer's and new customer's both move to some of its rival who is offering
similar quality and reasonable price. The buyer in the market of Pakistan have different chooses
to buy their product in retail sector. If the JD sport will increase its product portfolio so that
buyer gets more variety to choose from it will make them attracted towards the products. By
increasing its products company base of customers in wider area.
Threats of substitute product (High): Customers can easily find substitute goods in the retail
sector which can fulfil the customer's requirement in similar aspect. The threats of substitute are
resolved by JD sport by making its services more effective than its products. So, it can
understand that threats of substitute product is high as there are various small firms that tries to

limited product of JD sports in order to attract customer's. Therefore, the brand is focused on
bigger products' portfolio to stand out in the market and to build a favourable image in the mind
of their customer's (AYDIN, 2017).
Rivalry among existing competitors (High): the retail industry is having fewer companies
which are providing fashionable sports goods. The JD sports will be new entrants for Pakistan
existing companies in retailer for sports goods. The company can easily enter the market with
innovative product and technologies that would be fruitful in attracting the people and increase
the sell. The existing retailer in the Pakistan have threat of JD sports as it has good brand value
which will attract customer's rapidly in that market.
Internal environment analysis
VIRO analysis is the technique to evaluate the resources of the company and weakness or
competitor advantage. VIRO states for value, Rareness, limitability and organization. It is the
complement to the PESTLE analysis which shows the macro environment factors (Indartono and
Wibowo, 2017). VIRO analysis find four attributes that firms resources are used in the manner in
order to sustain the competitor advantage.
Resources and
capability
Valuable Rare Cost of Imitate Organized to
capture value
Product YES NO YES YES
Technology YES YES NO YES
HR YES NO YES YES
Brand Image YES YES NO YES
Organization
structure
YES NO YES YES
Supply Chain YES YES YES YES
VALUABLE:
JD's sports have the valuable product in the field of sports and gear due the quality and
effective price they are offering to the customers. These products are made with high technology
and equipment which shows the valuable products are been produce by the company in order to

maintain the quality. Human resource is an important factor that help company to trained their
employee to produce the quality product by using high tech technologies. Brand images of JD
sports is very high in the market where loyal customers and athletes are preferred sports gears
and accessories of JD sports. On the other hand, organizational structure and supply chain of the
JD sports are the valuable resource that create the flow of work in the systematic manner without
any interruption or barrier to any department.
Rare:
The JD sports products that are not so rare as they are also produced by other competitor
with same equipment and quality product which make different from other brand. While the
technology used by JD sport can be rare due to high tech equipments which are not used by
every company and also expensive. Human resource are not so rare in the companies and can e
similar in the every organization. Brand image can be rare in the new market investment as every
company different image for the consumer (Yudiono, Wilopo, and Iqbal, 2019). Most of the
company have same organization structure of working but supply chain can be rare in the every
organization which make different from other company.
Cost of imitate:
The cost of imitate of the product which are offered by JD sports can e substitute by the
local producer which tried to copy goods and sell it on the cheap price. But the technology
cannot be substituted by other producer as some company make the patent on the technology
used or due to high investment in the technology. Human Resource are the common talent that
can be found on other companies too. While the brand image cannot be copied by some other
company and have individual brand image (Buzatu, and et.al., 2019). However, organization
structure and supply chain process can be same by other companies too which can be copied and
had its substitute.
Organized: The product's category of JD sports are well-organized so customer's get more
option to buy in new market. The technology is also organized in the company as product are
produced with an innovative technology. Human resource of JD sports are organized as they are
performing their role and responsibilities in effective manner. Brand image is also goods and
their organizational structure is well-defined.

Identification of competitive strategies
Porter's generic strategies
JD sports fashion industry is a multinational firm with high acknowledgement in targeted
market segments. The deep competition in this industry has made it challenging for JD sports
fashion to sustain their position in the market space and increase their market share without
putting any extra significant efforts. There are three main streams for Porter's generic strategies
that has been used by multinational firm to expand their business in Pakistan (Firoz Suleman,
2019). Three strategies includes: Cost Leadership: Cost leadership strategy includes gaining of competitive advantages by
lowering the cost of its products. It is the main and important generic strategy that used
by the company in various consumer markets. With the help of this strategy the
organization will able to preserve the market leadership position with the help of efficient
chain management in Pakistan (Abdullah , 2017). This particular strategy assist JD sports
fashion will able to expand the market share by targeting middle class consumers which
makes the largest proportion of total population of Pakistan. With this strategy, company
is easily able to focus on affordability and accessibility its products. Other than charging
low prices by lowering production costs and maximizing supply chain management
efficiency, company will able to easily establish in different country as well. This
strategy helps the JD fashion industry in gaining quick brand recognition, expanding the
customer base, encouraging consumption and achieving sales targets by promoting their
business at new place i.e. in Pakistan. Differentiation: Company adopts differentiation as second strategy that allows the
organization to expand the consumer base by focusing over the unique product features.
With the help of this study, JD sports fashion will enhance the product line in Pakistan
after studying the consumers changing interests to differentiate itself from their
competitors and expand the scope of opportunities (Latkovikj , 2020). The combination
of both the strategies allows the JD fashion to build strong customer base in Pakistan.
Differentiation factors includes large experiences, the oldest brand and strong presence
will highlight the company marketing and communication strategies. Apart from all these
factors, brand logo also plays a vital role in building strong brand image in the mind of

consumers. However, company offers a wide variety of flavours in order to attract
consumers. Focus strategy: This is the third generic competitive strategy which encourage the JD
sports fashion to concentrate on expanding their resources in Pakistan. Organization
adopts this strategy in order to low cost and offering the best value to their customers.
Low cost focus strategy will be adopted to serve middle and lower market segments at
the lowest possible price while on the other hand, best value focus strategy will be
adopted to serve other factors also such as taste, size, colour, design, etc. of the product
that could best match the consumers needs and demands.
Bowman's Clock Strategies
It is a model which explore the options of strategic positioning which includes how a
product should be positioned to give it the most competitive position into the market. The
purpose of using this strategy by JD sports fashion company is to place their products in the
market place of Pakistan according to two dimensions i.e. price and value (Viltard, 2017). This
strategy includes 8 positions such as:
 Low price and low value added (Position 1): According to this position of the clock the
JD sports fashion company will emphasize upon bargain-basement strategy. in this
situation, the only way to remain competitive is to be as cheap as chips and hope that no
other competitor would be able to undercut the company.
 Low price (Position 2): The company positioning themselves here to become low cost
leaders in the market place. According to this position of strategy, organization will lower
the cost of its products which attracts the maximum number of customers and apart from
low cost, they will also entertain their position of high volume of output and high overall
profits in Pakistan.
 Hybrid ( Position 3): In this position, company offers low price but also added values to
the products. Its purpose is to influence customers with low prices along with good added
values through the good combination. This can be an effective strategy in order to expand
their business in Pakistan.

 Differentiation (Position 4): The aim of this strategy is that the JD sports fashion
company offers high quality product along with strong brand awareness to the customers
of Pakistan.
 Focused differentiation (Position 5): According to this strategy, the company aims to
position product at the highest price level where the consumers of Pakistan will buy the
products because of its high brand value. However, it might be possible that the
organization will not spend in this strategy.
 Risky high margins (Position 6): With this strategy position, the company offers higher
price value to its consumers without offering anything extra or giving any kind of value
added services to the consumers of Pakistan.
 Monopoly pricing (Position 7): Monopoly pricing includes the least attention with
regard to tension about their competitors because there is no alternate available in the
market for that particular product so, the JD sports fashion organization also offers such
kind of products in this stage which are new in the market place of Pakistan.
 Loss of market share (Position 8): As the name itself suggests that in this situation, the
product value is higher from their competitors irrespective of its demand by the
consumers. This position is a disaster in any competitive market space.
Strategic directions of JD sports fashion
The JD sports fashion is a leading store of UK dealing in sports and leisure. To expand
business in Pakistan, the firm needs to conduct market research before implementing required
changes for the betterment of organization (Sabbena, 2018). Ansoff matrix is divided into four
stages such as market penetration, market development, product development and
diversification.
 Market penetration: The purpose of this stage is to sell existing products into the
current market to attract existing consumers by focusing on price and promotional
activities. The main purpose of this stage is to attain a competitive edge to divert the
attention of competitors consumers (Bhattarai, 2018). JD's sport is a big merchandize
company. JD sports will gained a large market share by distributing its products to
customers of Pakistan at a very low cost. Sometimes this strategy creates price warfare

among the companies but instead of that it is most often considered strategy to enhance
the market share.
 Market development: Market development is basically entering into the new world of
market through bulk production of goods and providing excellent services. For market
development in Pakistan, the firm would require to consider the demands of the
customers of Pakistan (Echchakoui, 2018). The selling and production techniques might
be differed. To attract more and more consumers of Pakistan, the company have to invest
a large amount into e-commerce strategies to grab large number of consumers at
Pakistan.
 Product development: The process of introducing new products to existing customers
are comes under product development. The company will innovatively introduce
themselves in the market space of Pakistan so that they will be able to attract more
consumers within a very short span of time (Helmold, 2020). This method also helps the
company to defeat strong market competitors.
 Diversification: This stage includes the expansion of business into new market space
through the production of the latest goods and services. Basically, in this situation, the
company expand their business in Pakistan with the introduction of existing and
advanced new products to the customers of Pakistan (Eker, 2019). For the expansion of
their business at new place, company will use various advertising techniques in order to
attract more customers. Company can also adopt traditional way of advertising their
goods and services. Therefore, diversifications plays an important role in the growth of
the company's market share.
Recommendations
In order to diversify the business into new place the JD sports fashion company have to
adopt certain measures which includes introduction or addition of new and advanced products
and services to the consumers of the new market space. There are certain steps which needs to be
followed before entering into the new market area. The primary step is to study the competitors
accurately in order to create effective marketing strategies (Kasongo, 2019). Second is targeting
the ideal customers with accurate products. Next is creating a unique value proposition which
includes clear understanding of the offered product in order to stand apart from the competitors.

Next is defined marketing strategies and tactics. After this testing of concept and marketing
approach should be done by the managers of the organization. The last is to know product life
cycle will enhance the sale of the company in order to meet demand and supply of goods and
services of JD sports fashion (Echchakoui, 2018).
CONCLUSION
This report concludes that the strategy's management is basically managing the resources
to achieve organizational goal and objectives. The JD sports is a multinational company tries to
expand its business in Pakistan for that they need to have an attractive and innovative products
and technologies as per the preference of the people over there. The external and internal
analysis will help JD sports to inspect the environment of Pakistan and launch its product in
efficient way. In this further concluded that bowman clock and porters generic has inspected the
competitive strategies to enhance their business and make an effective strategy that is specified
in all aspect. The JD sport has done the Ansoff matrix to analysis its products and market for
expansion. The recommendation is based on the JD sports expansion in Pakistan as the company
have the motive to generate profit and reach its potential and new customer's.

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