Strategic Management of JD Sports PLC

This report discusses the strategic management of JD Sports PLC, including an analysis of its internal and external environment, competitive strategies, and methods of expansion. It also provides recommendations for the company's expansion in Asia.

Strategic Management

Executive Summary
Strategic management is concerned with the process in which organisation link its
resources and activities with its goals and objectives. In order to do so firms undertake extensive
research of external as well as internal environment of organisation and identify factors affecting
performance and effectiveness of organisation. On the basis of these strategies are developed and
Organisation undertake strategic management. This report has discussed about JD Sports PLC
and undertook research and Analysis of it internal and external environment. In order to analyse
the external environment pest analysis was used along with porter’s five forces framework
analyse competitive environment of organisation. Internal environment of JD Sports PLC was
analysed application of value chain analysis model. In order to identify competitive strategies of
company Porter generic strategies were applied and strategic direction for company was
discussed through Ansoff Matrix and its strategies.

Table of Contents
INTRODUCTION...........................................................................................................................4
External Environment Analysis.......................................................................................................4
Pestle Analysis.............................................................................................................................4
Porter’s 5 Forces Model...............................................................................................................6
Internal Environment Analysis........................................................................................................8
Value Chain Analysis..................................................................................................................8
Identification of Competitive Strategies........................................................................................10
Porter’s Generic Strategies........................................................................................................10
Strategic directions and & methods of expansion.........................................................................12
CONCLUSION..............................................................................................................................13
Recommendation...........................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Strategic management can be defined as management of resources of organisation which
enables organisation to achieve its goals and objectives. This report aims at discussing strategic
management of JD Sports PLC, a British sports-fashion retailer. Company was founded in 1981
and is headquartered at Bury, England, UK. JD Sports PLC is a subsidiary of Pentland Group
and has shops throughout UK, Europe, US, Asia and Australia and employs more than 50000
employees. As company aims at expanding its operations in Asia it requires considering different
elements affecting its successful expansion in Singapore. Concerned with its expansion in
Singapore there are different challenges for JD Sports PLC. These challenges include
intensifying competition in sport-fashion industry. In addition to this, another important
challenge for company is economic and fiscal threats affecting and reducing customer
expenditure. In order to determine strategy for expansion this report will involve analysis of
external environment through Pest Analysis and Porter’s 5 forces and internal analysis through
value chain analysis. In addition to this competitive strategies will also be discussed in this report
along with identification and analysis of strategic directions and methods of expansion. On the
basis of this analysis and discussion strategy will be recommended that JD Sports PLC can
implement to expand its operations in Asia.
External Environment Analysis
Pestle Analysis
JD Sports PLC aims at expanding its business in Singapore and this is why it requires to
analyse environment of Singapore in order to make right decision regarding expansion of JD
Sports PLC. Pestle analysis of JD Sports PLC is as follows-
Political- This is concerned with factor that includes government and political decisions and
their impact on business operations and activities. JD Sports PLC is a British company and aims
at expanding in Singapore and this is why it gets affected by political environment of England as
well as Singapore (Achinas and et.al., 2019). In this success and operations of JD Sports PLC
gets affected by political stability of the country and in this political risk in Singapore is low and
this is favourable for JD Sports PLC. Singapore is a democratic country and Singapore enjoys

lowest political risk in continent. Political stability of a country is very important specifically
when new companies or organisations are looking for expansion. This means that political factor
of JD Sports PLC is favourable for its expansion.
Economical- This involves impact and effect of economic condition of the country and market
where JD Sports PLC operates. In addition to this, it also involves GDP, Per Capita Income and
employment rate of the population. Economic conditions and factors plays very important role in
profitability and financial performance of the organisation. In context of expansion of JD Sports
PLC in Singapore, it is a free market economy and country is developing at very fast pace and
along with this per capita income of population of Singapore is highest in ASEAN. In addition to
this corruption free environment is also very favourable for businesses. This means that on the
basis of economic impact Singapore is an important opportunity and its economic environment is
favourable for JD Sports PLC. In addition to this cheaper labour cost in Singapore is also a
favourable element of this environment (Nandonde, 2019). However, some of the issues that can
create difficulties include labour shortage, and declining productivity.
Social- This is another factor of external environment and macro factor of JD Sports PLC. This
involves customers of the company and their purchasing behaviour and their buying habits. JD
Sports PLC is a company from Europe and Singapore is a Asian country and this is why
customers preferences and their buying behaviour are different and this requires JD Sports PLC
to understand purchasing behaviour of customers or population of Singapore. Singapore is a
country that follows traditional family values but as its younger generation has a tendency to
follow western culture and this is why it is a favourable element for JD Sports PLC. In addition
to this purchasing power of customers is also high and this is why it is a opportunity for JD
Sports PLC to strengthen its position and expand market and increase profitability.
Technological- Technology has become centre of success of the businesses and efficient use of
technology is also important for JD Sports PLC. This involves technological development of
competitors and also supportive technology at new market where company is looking to expand
their business. Singapore is a technologically advanced country and technological advancement
has played important role in changing and improving lifestyle and quality of life in Singapore.
This requires that JD Sports PLC is able to use technology in most appropriate manner and use
infrastructure in most effective way to ensure it can get maximum benefit of technological

resources available in Singapore (Vallati and Grassi, 2019). Internet and other methods of
communication improved communication and connectivity and along with this reduced cost and
time for businesses. JD Sports PLC can also take advantage from this advancement.
Legal- This involves different rules and regulations that govern operations and functioning of JD
Sports PLC. This involves different types of regulations and laws that an business organisation is
required to follow in order to operate and function legally. JD Sports PLC requires following
rules and laws of UK as well as rules and regulations of Singapore while operating in Singapore.
Singapore offers a very favourable environment for businesses and this is why their rules and
regulations are also favourable for business and this is an opportunity for JD Sports PLC. In
addition to this, in Singapore e-commerce program was launched to develop e-commerce
services and JD Sports PLC can take advantage of this.
Environmental- This is a factor that considers impact of business services on environment and
its sustainability. It is very important that JD Sports PLC considers its environmental impact
because of increasing consciousness of people and government towards environment and its
safety. Practices that JD Sports PLC should consider is sustainable supply chain having least
impact on environment and initiating for other environmental sustainability practices (What is a
PESTEL Analysis?, 2021). It is important that JD Sports PLC undertake environment friendly
services and this will not only save environment but will also contribute in building positive
image of JD Sports PLC. In addition to this demand for environment friendly clothes is also
increasing and this is an opportunity for JD Sports PLC.
Porter’s 5 Forces Model
Threat of New Entrants- This is concerned with threat that JD Sports PLC gets from those
organisations that are newly entering into industry. New organisations that enter into an industry
increase competition within industry and also affect profitability and growth of existing business
organisation. This force gets affected by barriers to entry and these barriers to entry are those
factors that create difficulty for firms to enter into an industry. These factors include government
rules and regulations, capital and resources required and economy of scale. On the basis of these,
there is high threat from this force, this is because in order to enter into industry resources and
capital required are not significant (Wee, 2017). However even after strong threat, position of JD

Sports PLC is strong in this because they are operating at multinational level and it is very
difficult for firms to enter at that level.
Threat of Substitute- This is concerned with threat of competition that an organisation gets
from its substitute. Substitute is a product or service that can be used in place of a given product
service. Threat from this force of competition is based on number of competition and cost of
switching and on this basis, there is strong threat for JD Sports PLC in this force. This is because
there are several substitutes that can be used in place of products of JD Sports PLC and their
switching cost is also insignificant. This means that position of JD Sports PLC in this force is
weak and this requires JD Sports PLC to consider this threat and make strong and effective
strategies to maintain its competitive position in industry.
Bargaining power of Suppliers- Bargaining power of suppliers is concerned with power that
suppliers have and its effect on organisation. This is a very important force in competition of the
industry because power of suppliers enables them to increase price of material being supplied by
them. Strong power of suppliers can ultimately lead to increase in cost and price f products being
sold by JD Sports PLC. Bargaining power of suppliers gets affected by number of suppliers and
products and material being supplied by them and their relative importance for organisation. In
addition to this cost of switching is also important factor affecting bargaining power of suppliers
(Varelas and Georgopoulos, 2017). In competitive force of JD Sports PLC suppliers have limited
power because there are many suppliers who can supply required material and input to JD Sports
PLC. This is the reason that JD Sports PLC has strong position in this force of competition.
Bargaining power of Buyers- This is concerned with power that buyers or customers of the
company have and this power enables them to reduce price of the products. Power of buyers in
this force gets affected by number of buyers and sellers. In order to have strong power in this
force JD Sports PLC requires having high number of buyers and less number of sellers.
However, in this force of competition bargaining power of buyers is strong. This is because there
is high number of buyers but at the same time there is high number of sellers and this enables
customers to have strong power in this force. Position of JD Sports PLC in this force is weak
because overall power of buyers is high and in addition to this in present customer centric
business, customers have strong power and influence in decisions of business and competition in
industry.

Industry Rivalry- This is concerned with competition and rivalry among existing organisations
in industry and more organisations operating in an industry create strong industry rivalry.
Industry rivalry in sport-fashion industry is strong because there are several organisations
operating in industry. Some of the organisations operating in sport-fashion industry and
competitors of JD Sports PLC include Sports Direct, Big 5, Hibbett Sports Inc, Kitbag Limited
and Adidas, Nike and Under Armour (Bruijl, 2018). All these organisations are having strong
position in industry and give strong competition to JD Sports PLC.
Discussion outlines that JD Sports PLC is operating in a highly competitive industry
environment. However nature of competition is fair and JD Sports PLC can successfully operate
with help of right strategies. This means in power of suppliers it can maintain its strong position
by providing high quality products and value to customers.
Internal Environment Analysis
Value Chain Analysis
Primary Activities
These are core organisational activities on the basis of which organisation create and
delivers value to its customers. Primary activities of JD Sports PLC are as follows-
Inbound Logistics- Inbound logistics is one of the most important and primary value activity and
inbound logistics is concerned with the practice through which JD Sports PLC acquires goods
from suppliers in order to use them for production activities. This is one of the most important
activities because this activity leads to other value activities (What is Value Chain Analysis?,
2020). In order to ensure effectiveness and value of inbound logistics JD Sports PLC maintain
effective relationship with suppliers. Relationship with suppliers play very important role in
ensuring timely completion of activities and acquisition of resources on time.
Operations- This is concerned with practice in which inputs and raw material is converted into
output and final products. Effectiveness and value of operations is significantly dependant on
efficient use of technology by JD Sports PLC in its manufacturing process and operations.
Technology and equipments as well as processes through which organisation can achieve highest

productivity is used by JD Sports PLC in order to gain value for products of company. In
addition to this JD Sports PLC also uses highly specialised processes and practices through
which it can ensure highest quality of its products.
Outbound Logistics- This is a activity through which JD Sports PLC distributes its products to
different points from where they can be sold to customers. This includes distribution of products
to distribution centres, wholesaler, retailers, and customers. JD Sports PLC delivers its products
to different retail stores that it have at different places from where customers can buy products of
JD Sports PLC (Rosales and et.al., 2017). It is important to maintain effective collaboration with
different distribution and sales points so that it can deliver products on time and can ensure that
customers can access products easily.
Sales and Marketing- This is another value activity in which marketing is aimed at informing
target market and customers for the availability of products. Sales on the other hand are an
activity through which organisation undertakes and complete transaction with customers that
involve exchange of products and price with customers. In order to ensure effectiveness of
marketing and sales, marketing mix is used by JD Sports PLC that includes different strategies
for marketing. Marketing mix is used by organisation to get competitive advantage and to
communicate to target market.
Services- This is another important value activity that involves providing after sale services to
customers. Guarantee and warranties are included in this, in which customers are provided
services in which if their product is damaged or gets damaged in less than time guaranteed period
they are given another product and if not other product they are provided repair services. In this
any organisation that provides guarantee or warranty for their products are more likely to be
trusted by customers compared to those that do not provide any guarantee or warrantee.
Supportive Activities
Supportive activities of JD Sports PLC enable it to effectively complete primary
activities. Supportive activities of JD Sports PLC are as follows-
Firm infrastructure- This is concerned with system within organisation that help in getting
highest productivity and efficient use of resources in organisation (White and et.al., 2018).

Resources that JD Sports PLC uses include financial, legal structure of organisation and
management structure of JD Sports PLC. JD Sports PLC ensures that all its systems are well
aligned and in addition to this JD Sports PLC also has efficient infrastructure which enables firm
to effectively utilise all resources and create highest and qualitative productivity for JD Sports
PLC.
Procurement- This is an activity that is concerned with sourcing material having best quality at
best price. This helps in ensuring that JD Sports PLC is able to develop high quality products at
reasonable or low price. Material that organisation uses for its products play very important role
in providing highest quality of output and this is why procurement is very important supportive
activity for JD Sports PLC.
Human resource management- This is concerned with hiring, training, retaining right people in
organisation that can make their best contribution in realising goals and objectives of firm. JD
Sports PLC hires highly competent employees and in addition to this provide them regular
training and development so that they learn new trends and can develop their capabilities to fulfil
changing requirements of the company (Fernandez-Stark and Gereffi, 2019). Human resource of
the firm plays very important role through other resources of the firm functions. JD Sports PLC
also provide effective compensation to ensure that human resources within organisation is
motivated to work to best of their potential.
Technology development- This is another important supportive activity in which technology
enables organisation to achieve its goals and objectives. Technology development enables JD
Sports PLC to increase productivity and reduce cost of products. In addition to this, technology
development is also useful for research and development to develop new products and add value
in existing products.
Identification of Competitive Strategies
Porter’s Generic Strategies
Cost leadership- Cost leadership strategy is a competitive strategy in which firm has
competitive advantage through lowest cost in industry. In this firm gets benefit of being lowest
cost producer in industry. In order to adopt and implement this strategy firms require to have

economies of scale on the basis of which it can increase its production and reduce its cost leading
to reduction in cost. Cost leadership can also be achieved by JD Sports PLC by application and
implementing effective technology (Islami, Mustafa and Latkovikj, 2020). Cost leadership
strategy enables firms to maintain strong margin on their products. In addition to this JD Sports
PLC can also sale its products at low price and attract more customers.
Differentiation- Differentiation strategy focuses on differentiating products of an firm or
organisation from its competitors. In this strategy products that an organisation developed are
clearly distinct from products of competitors. Differentiation includes high quality and advanced
features associated with a product or service. JD Sports PLC is a Sports fashion retailer and this
is why differentiation strategy is highly appropriate for company. Differentiation strategy of
organisation provides higher value to customers and also create basis for charging premium price
by organisation.
Cost focus- Cost focus strategy is one in which organisation adopt and implement cost
leadership strategy however focus of Organisation in context of target market narrows down.
This means that in order to implement Court poker strategy JD Sports PLC will require to select
a target market from its overall market that it target and implement this strategy to that selected
market. Cost focus strategy can we adopted when organisation is operating in in market where
customers are price sensitive. This also helps Organisation in creating different image of brand
or product in the market and true cost focus strategy JD Sports PLC can create image of
affordable brand.
Differentiation focus- Differentiation focus is another important competitive strategy that JD
Sports PLC can adopt and implement. Differentiation focus strategy is application of
differentiation strategy in which organisation selects a target market and implements
differentiation strategy for selected target market (Bhattarai, 2018). This strategy can be adopted
by JD Sports PLC when customers are seeking higher value and when organisation wants to
create an image of premium brand or product in a selected target market. This application of this
strategy can also help Organisation in implementing premium price strategy in a market and gain
profitability from a selected market.

Among these competitive strategies JD Sports PLC adopt an implement differentiation
strategy as company is a Sports fashion retailer and provides high quality products from different
brands.
Strategic directions and & methods of expansion
There are different strategic directions that JD Sports PLC can use in order to expand its
operations in Singapore. These strategies have been outlined in Ansoff Matrix and are as
follows-
Market penetration- Market penetration strategy includes increasing sales of products in
existing market with existing products. In order to increase sales at utilise this strategy and JD
Sports PLC required to adopt and implement strategies like price variation and increasing
promotional and marketing efforts. With the help of this strategy JD Sports PLC can increase it
sales for a limited period of time.
Product development- Product development strategy includes developing new products for
customers of existing market and this involves organisation to identify and understand
requirements of existing market and customers (Martins, 2020). Effective understanding of the
requirement helps in developing a product that can we successful and fulfilling requirements of
customers. JD Sports PLC required to undertake research for existing market and also undertakes
research and development practices to develop and provide required products and services to
customers of existing market. Product development strategy is highly beneficial when
organisation is new in a market and has strong possibilities for growth in existing market.
Market development- Market development strategy is a strategy in which organisation identify
and develop new market for its existing products and services. This means that in this strategy
organisation identify a market which is similar to its existing market and is likely to except
products being offered by an organisation. In this strategy organisation requires to ensure that
new market being developed is not very different from existing market.
Diversification- Diversification strategy includes developing new market as well as new product
(Cleberg, 2019). Adapting the strategy can help in developing new revenue streams for an
organisation. This is the riskiest strategy for expansion of an organisation.

Methods of Expansion
Mergers and acquisition- Merger and acquisition is concerned with method of expansion in
which company merge with other company operating in similar industry (Renneboog and
Vansteenkiste, 2019). Acquisition is concerned with acquiring shares and power within an
organisation and becoming owner of an organisation.
Franchising- Franchising is concerned with a method of expansion in which JD Sports PLC
required to provide licence to use its name and resources. This is one of the easiest method
through which JD Sports PLC camp expand its operations in international market. In this
strategy franchisee buy or get license to operate on name of franchiser.
Joint Venture- Joint venture is another method for expansion of an organisation. In this method
two organisations come together to start a completely new venture (Nippa and Reuer, 2019). In
order to adopt this method JD Sports PLC will require creating new business along with another
business organisation.
New Markets- New markets method of expansion includes expansion of business activities in a
new market. Adopting this strategy will require JD Sports PLC to start its operation in Singapore
opening its retail stores.
On the basis of method discussed above new markets and franchise are two of the
methods that JD Sports PLC can adopt and implement for its function of its market (Is
Franchising the Best Method of Expansion?, 2020). Among these two options, franchise is most
suitable option because it will not require JD Sports PLC to undertake and make any investment
in order to expand its operations.
CONCLUSION
On the basis of above discussion it can be concluded that JD Sports PLC operates in a
very complicated external environment. Analysis of external environment helps in identifying
different factors that affect success of JD Sports PLC in its expansion. These factors create
opportunities as well as threats for organisation and this is why considering these factors can
help in developing effective strategies for JD Sports PLC. Later report discussed about internal

environment of JD Sports PLC and on the basis of analysis it can be concluded that organisation
has strong internal environment and there are several factors that are strength of JD Sports PLC.
This includes Technology and suppliers relation of organisation along with its infrastructure,
Human Resource Management and supply chain management. On the basis of discussion
regarding competitive strategies of JD Sports PLC it can be concluded that company has adopted
differentiation strategy to ensure that it can provide high value to customers. Other than this a
differentiation strategy also has been adopted by company because it provides products from
premium brands providing high value and quality to their customers.
Recommendation
On the basis of overall discussion undertaken regarding environment and strategies of JD
Sports PLC recommendation for expansion of company in Asian country or Singapore is as
follows-
Here it can be recommended that JD Sports PLC should adopt and implement market penetration
and market development strategy. Market penetration strategy should be adopted by organisation
to increase its sales in existing market of Singapore.
However market development strategy should be highly focused by company and JD Sports PLC
should work on developing market within Singapore. This is because with its existence in
country company is aware of different factors affecting its success and on the basis of this it can
make right strategies to show successful expansion in Singapore. This means that JD Sports PLC
should open more stores in Singapore and success of Organisation in Singapore will facilitate it
to expand its business and more Asian countries. This is because Singapore is like any other
Asian country and is also one of the developed Asian country and success and effectiveness of
JD Sports PLC will create strong basis for its expansion in other Asian countries.

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