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(Solution) Strategic Management Assignment

   

Added on  2021-06-05

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STRATEGIC MANAGEMENT ASSIGNMENT By Patricia Abad International Business Management University of West London London, UK Washington Machokoto 29th January 2021

Executive summaryFor the company to operate properly, it is necessary to understand theenvironment. JD Sports PLC (“JD”) is one of the companies that has severalcompetitors, therefore, it needs to understand the way they operate to maintain thecompetitive advantage. This report provides a background and the key challenges of thecompany. The external environment: macro (PESTEL) and micro (Porters' five forces),whereas the internal analysis examines the strengths and the weaknesses of thecompany, considering the various strategies that can be used to help in creating a bettercompetitive advantage.

Introduction Company background JD Sports is the leading trainer & sports fashion retailer in the UK. It wasestablished in 1981 by John Wardle and David Makin with its first store in Bury. As theorganization kept on developing, the founders opened several stores in the UK.Nowadays, there are stores all around the UK and Europe, where dominate most of theretailers of sports, fashion and outdoor brands.The company’s continued growth made it to be listed on the London StockExchange in 1996 (www.jdplc.com).Progressively, the JD fascia is drawing a similar reputation internationally withconsiderable expansion in Europe. In 2016, JD officially inaugurated its first store inAsia, while in 2018 opened the first stores in United States. Now, JD Group has over2,600 stores in 20 countries (www.jdplc.com).Currently, JD is planning a gradual development in the Asian markets, where itspositioning is starting to gain momentum.Key challengesJust like other companies in the market, there are several challenges which JDSports is facing that require management to critically investigate. The first problem isthe increased competition. The more JD Sports expands into new areas of operations,the more it gets exposed to new competitors. Managing the competition is quitedifficult, and for the company to improve on their operations, there is a need to come upwith an action plan. Another key challenge that JD faces is the problems related to theexpansion into new markets, which affect it in several ways, and need to beinvestigated. Another problem that is facing JD is the dynamics that are taking place inthe operating environment which involves the changes in customer’s preferences andthe fluctuations in pricings, as some competitors give extreme low prices(www.jdplc.com).

Analysis of the situation JD Sports operates in various international markets, and it is to identify thecircumstances, developments and trends within it that the macro-environment where itresides is analysed, understood as the external forces that affect the company'senvironment and are not controllable by it. A PESTEL analysis is carried out to evaluate this environment. Political factors The international scope of the sportswear sector requires an exhaustive study ofthe social and fiscal policies in different countries. The result may incentivizeinvestment or pose a barrier to entry, as well as highlight potential conflicts that mayaffect the sector. Given that the UK has been a member of the European Union until December2020 and JD operates within it, international relations between these countries directlyaffect its sector, with Brexit being one of the main factors affecting the Europeanmarket, since although it has not yet had a significant impact, it could have a majorimpact on trade policies.The policies that political systems enact regarding how a company shouldoperate differ significantly from country to country, so much so that for JD to besuccessful it must be flexible enough to keep up with the policies of those countries.Some of the opportunities for JD to enter the Asian market are the existence ofpolitical stability, which is directly proportional to business performance and allows thecompany to operate efficiently, as well as low levels of corruption, which permits it tooperate without risk. However, there are several threats that the political systems in Asiacan cause, such as price regulation by governments, as in most cases only theproduction of local companies is subsidized, without favoring new multinationals.Economic factorsThe macroeconomic situation and consumer purchasing power are among themost important economic factors affecting JD's results.

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