Strategic Management: Analysis and Strategies for JD Sports in Expanding into Asian Markets

This report analyzes the external and internal environment of JD Sports and provides strategies for expanding into Asian markets. Includes PESTEL analysis, Porter's Five Forces, SWOT analysis, VRIO analysis, and Porter's Generic Model.

STRATEGIC
MANAGEMENT

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
External environment analysis ....................................................................................................3
PESTEL analysis ........................................................................................................................4
Porter five force analysis.............................................................................................................5
Internal environment analysis .....................................................................................................6
Swot Analysis ............................................................................................................................6
VRIO analysis .............................................................................................................................7
Porter's Generic Model ...............................................................................................................8
Ansoff Matrix ..............................................................................................................................9
CONCLUSION .............................................................................................................................11
RECOMMENDATIONS...............................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
Strategic management refers to the ongoing planning, analysing, monitoring and
assessment of all necessary things which the company needs to meet its objectives and goals. It
involves the formulation and implementation of main initiative and goals taken by the company
top authorities (Cleberg, 2019).
JD sports is the leading UK specialist retailer of the fashionable branded, casual and
sports wear. The company has dominated most of the European Union market where the
company now wishes and make strategies to expand in Asian Markets of India. The challenge
with the company implies with the consumer expenditure where in the harsh condition of
pandemic COVID -19 it has resulted with target audiences being highly focused around with
meeting to the basic needs which might as the result will affect the sale revenue of the company.
Present report will identify various internal and external analysis with the helps of
PESTEL, porter five force, SWOT and VRIO framework. It will explain with competitive
strategy by Porter,s generic strategy and methods of expansion and modes strategic directions
which is being understood by Ans- off matrix.
MAIN BODY
External environment analysis
This is various macro factors which affects the business operation of the JD sports in
expanding in the Asian market of India which could be understood better with the help of the
following -
PESTEL analysis
Political- This accounts with policies and regulations being prevailing in India which will affect
the business operation of JD sports. It plays a significant role in determining the factor that can
impact the HD sports long term profitability in markets of India. It leads with political instability
in the country and various risk which is being associated with the political environment of the
country and affect the business operation of JD sports. The factors which will affect the
operation of the JD sports in India can trade regulation and tariffs which are being prevailing in
relation to consumer services. It accounts with the factors such as anti trust laws which is being
related with retail industry of India that might affect the business operation of JD sports while
expanding there business (Thakur, 2020).

Economic- This leads with macro environment factors such as inflation rate, interest rate,
savings rate, aggregate demand and investment in the economy of India that might affect the
business operation of the company. It implies company with taking into consideration economic
system prevailing in India and how stable it is (Ariyani and Daryanto, 2018). It considers with
intervention of government in the free market which can affect the policies and functioning of JD
sports. This also take into consideration the infrastructure of retail industry in India which can be
taken in consideration for JD sports to higher rate of sales revenue for the company. This will
also address to removing of unemployment in the economy of the country and leads to
generating of employment opportunity for the population of India.
Social- This is the factors which impact the culture of the company in the environment. Shared
attitude and beliefs of the population of India which plays a great role in how the marketers of
the company to understand the customer of the country and how the company design the retail
message to its consumers.
Technology- This related with the extend to which technology being adopted and implemented
in India which affects the business functioning in the manner as it leads with the ease of getting
things done. This helps the company to how effective the products and services of JD sports are
being offered (Mehjabeen, 2018). It accounts with building positive brand image and leads with
consideration f various cost associated with the same which regards with the expenditure made
on the end of the company which also helps in growing the business of JD sports in India.
Environment- Different markets have different norms of standards of environment which affect
the profitability of the company in markets of India. This leads with company taking various
steps to protect the environment of the country which helps in building positive brand image.
The company can account to this by having strategies for effective disposable of waste and
taking measures to reduce carbon footprints in markets of India (Patil,2018).
Legal – This is the rules, laws and regulations being prevailing in India which is company fails
to follow when expanding in the Indian Asian Market may lead with several imposing of
restrictions, penalties and discontinuation of business in the market of India which have direct
and huge impact on the sales revenues of the company.

Porter five force analysis
It is the model that helps in analysing and identifying competitive force that shape the
industry of JD sport and affect the business functioning. It includes -
Competition in the industry- The first of the five forces refers to the number of competitors and
their capabilities to undercut the operation of JD sports. It states that larger the number of
competitors, along with the high product and service offering, lessor the power of the company.
Buyers and suppliers seeks out with competition of the company if they are being able to offers
best deals (Gürel and Tat, 2017). It states that when the competition is less much is the power of
JD sports to charge with higher prices and leads with increase in the sales revenue and
profitability of the company.
Potential of new entrant in the industry - This force related with company power is not being
affected by the force of new entrant in the marketplace for JD sports. It states that less money
and time it cost for the competitor of JD sports to enter the market and be the effective
competitor. It will affect the company position as it will significantly be weakened
(Mehjabeen,2018). The industry should account with strong barriers to entry which is being ideal
for JD sports as it will lead to charge higher prices and have negotiations on better terms.
Power of suppliers- It addresses with how easily suppliers of JD sports can drive up with the
cost of inputs. It is being impacted by number of suppliers of key inputs of products of the
company, how unique they are and what will it cost the company to switch to next best suppliers.
The fewer the supplier to JD sports more will be the power of the suppliers where they can drive
up with the trade advantages in markets of India. More the supplier, more chances of the
company to switch as a result can enhance the sales revenues and profits of the company.
Power of the customers- It refers to the ability that the customers has to drive the prices lower.
It is being impacted by number of customer company has and how significant each customer is
for the business. It also takes into consideration how much it would cost company to find new
customer. Smaller and strong client base means that each customer has the power to negotiate for
the price which are being lower. It ascertains that will helps the company with better time
charging with higher prices and vice versa (ÖNEREN, ARAR, YURDAKUL, 2017).
Threat of substitutes- It implies with forces that are being focused on substitute goods and
services available against the JD sports product and services. It can be used against the products
and services of the company which possess threat to the company (Tomar, 2020). Company

leading to produce good and services with no close substitute will be at more power to have rise
in prices and lock in positive manner and when close substitutes are being available the customer
may forgot with products of JD sports and may weakened the position of the company.
Internal environment analysis
This refers to the members, events, culture and various others which have the ability to
influences the decision-making in the company. This includes current management, employees
of JD sports and various others (Gürel and Tat, 2017). This could be understood better with the
help of -
Swot Analysis
Strengths- As one of the biggest player in the industry JD sports have number of strengths that
enables the company to thrive in the current and Indian marketplace. Its strengths lie with
reliable suppliers which serves as the strong base which enables the company to lead with
various supply chain bottlenecks (Vlados, 2019). It has lead with the automation of tasks which
has brought the consistency in quality of company products which have boosted the performance
of the company. The company has super performance in new markets where it has built expertise
in new markets and making success of them where the same is being desired in the manner of
entering in Asian markets of India.
Weaknesses – Even thought the company is the leading organization in its industry, it faces
challenges in moving to the new product segment with its current culture. It is being required on
the end of the company to have more investment in technology. By expanding in the markets of
India it is being required to have more money in technology which is being right now not in
consistent with the vision and mission of the company. The company structure is also not
compatible with current business model which limits the company to expand its business in new
product segment. Planning of finance is not proper and efficient whereby the ratio analysis of the
company show that it can use more of cash that what it is being currently doing right now.
Opportunities- The opportunity for JD sports lies with decreasing cost of transportation with
decrease in shipping prices which can bring down the cost of the goods of the company. It will
provide with the opportunity to the company by boosting up with the profitability. The low
inflation rate will bring more stability in the market, enable credit at lower interest rate to the
customers of the company (Phadermrod, Crowder, and Wills, 2019). The new technology will

enhance and provide the products best suited to the customers along with the pricing strategies in
the market going on. Government green drive also opens an opportunity for procurement of JD
sports. Economic untick and increase in the customer spending becomes an opportunity for the
new customers in the target market who engage the customers towards the new product
development.
Threat – JD sports company can be liable to different policy claims in the market as there are
liability laws followed in different other countries which becomes threat to the company.
Shortage of skilled workforce becomes a threat for the company in global market which will lead
to steady growth of profits for the company in those markets. Highly profitable products is
seasonal in nature and any impact or effects in the peak season which becomes an unlikely event
may degrade the value of the products. There arises intense competition between JD sports and
other companies which becomes threat to the company producing the same streamline products
as others. Rise in the raw material becomes a threat to the JD sports company. Local distributors
increase more threat to JD sports company as the growth for the local distributors enhance more
opportunities for them to develop their small scale business on large scales.
VRIO analysis
Valuable – Financial resources of the company are highly valuable as it shows that the financial
stability of the company which helps in investing into external opportunities (Vargas-Hernández,
and Garcia, 2019). The local food products of the company are highly valuable and highly
differentiated. The workforce of JD sports company is of much value as the employees are major
part of the company. A significant workforce is highly trained leading to more profitability and
more output from the product. In producing a product the most important thing is the distribution
chain which proves to be of utmost importance and becomes valuable for the company.
Rare – The employees of the company are a rare resource specially when they are skilled and
this is the positive aspect of the JD sports company as it may not be the case in other companies.
The competitors of the company may require a lot of investment and time to come up with the
better solution in the distribution channel which is not in the case of JD sports, thus distribution
being a rare factor for the company. But the local food products are not found to be rare as these
are easily provided by competitors in the market. The patents of the company are rare to other
competitors.

Imitable – The financial resources of the company are costly to imitate as new entrants and
competitors would require similar profits for growth and development of the company. The local
food products are not that costly to imitate by the competitors as they can afford same variety of
food products for their company (Ariyani and Daryanto, 2018). The employees of the company
can also be imitable as other firms can also train their employees to become skilled and perform
better for the goal achievement for the company. The distribution channel is very costly to
imitate because the competitors would then have to invest a significant amount for same
distribution channel as JD sports company.
Organization – The financial resources of company are organized to capture value being the
most important and significant aspect for company to maintain its financial records. This factor
also creates opportunities for the company. The patents of the company are not well organized as
identified by JD sports company because the organization is not using its patents to full potential.
The distribution network of the company is organized as company producing products need to
have a proper distribution channel so that it does not suffer any product loss and thus maintains
its quality and quantity in production. The company ensures that the products are available on all
of its outlets.
Porter's Generic Model
For identification of competitive strategies porter's generic model is used for JD sports
company which is described as below -
Cost Leadership – The strategy that cost leadership involves is gaining a competitive advantage
by lowering the cost (O'Brien, Parent, Ferkins and et.al., 2019). To preserve the market
leadership position through efficient and effective value chain this strategy is used so that the
product's value is not decreased and the quality of the product is also improved. To expand the
market share by targeting the middle class the company allows this strategy to work. This makes
the largest proportion of overall consumer market mix in different countries. Middle class pays
high attention to the pricing factor as for them before buying any product they need to be
satisfied with the price so that they are attracted and interested to buy that product.
Differentiation – This is most important strategy to build a competitive advantage with
reference to JD sports company (Omsa, Abdullah, and Jamali, 2017).The company uses this
strategy along with the cost leadership to achieve growth and objectives. To expand the customer

base by focusing and producing unique product along with its varied features the differentiation
strategy is helpful in this aspect where the motto of the company is to engage customers in
buying the product which have unique features. The company is producing products with those
features to increase the sales and profits of the company overall. JD sports company has
differentiated its products on the basis of customers interests and have accepted their ideas of
what are their wants and needs for the product. This strategy is applied for the innovation in the
products of the company along with the technological advancements.
Focus Strategy – This strategy focuses on the narrowly targeted segments to be expanded so
that the company concentrates on the resources that are available. The focus strategy helps the
company to serve particular market segments and base their competitive advantage on niche
marketing which proves to be of utmost importance for the company to grow and expand. JD
sports company adopts this strategy both in terms of low cost and offering the best value. The
niche market segment is served by the low – cost focus strategy which provides the product at
possible low prices to its customers (Firoz Suleman, Rashidirad, and Firoz Suleman, 2019). The
best value aspect focuses on the size, taste and design of the product for matching the consumer's
needs and requirements. Product attributes imply the branding strategies which are being revised
and continuous changes are made in the product.
Thus, porter's generic model will help the company identify all the key aspects which it
lacks on surface of its growth and development.
Ansoff Matrix
Ansoff matrix is applied for strategic directions and methods of expansion for JD sports
company described as -
Market Penetration – To sell the products for market penetration factor focus is on price and
promotion of products (Thompson, 2019). The price of products of JD sports is applied such that
the customers buy the product at low prices and company incurs high sales and profit. The
promotion of the product of company can be implemented by outsourcing and producing new
products with varied characteristics. JD sports has gained a large market share by distributing its
products to different fields at a very low cost.
Market Development – JD sports company has extended large ground of market by entering
into new industries. Significant growth has been seen in the company due to the expansion in the

JD stores because it has acquired all sports, scots and blacks. The company has also grown on
the international level as it has acquired many foreign brands. This expansion helped the
company to evaluate its performance on higher level and growth has been evolved. 900 retail
stores are opened for different products to be introduced and made available for the customers to
experience the variety of products the company is producing for development.
Product Development – JD sports has acquired the name of large brands depicting the product
and its diversification in various segments (Cleberg, 2019). Acquisition of the companies Black
Leisure and Chau Sports play a significant role in development of the product for JD sports. This
method of product development helps the JD company to enhance its market area along with the
key features that are being introduced and developed in the product. This factor of product
development also defeats JD's strong market competitors. This results in the excellence of
growth and development for the company to engage its customers and attract the target market
for production.
Diversification – JD sports has expanded its business by producing goods and services in the
market area. The company has introduced skully candy and free to grab the attention of clients
who likes to music while playing sports. The company has increased its growth and sales by the
diversification strategy. The promotion that the company does is through sending emails to its
customers. The supply chain has also added to the value of producing newer and primer products
which represent great use to the customers. Acquisition in markets has increased the sales and
profit of the company. Thus, diversification factor attributes to the company.
CONCLUSION
Thus, it can be concluded from the report that PESTEL analysis for JD sports assisted in
evaluating the political, economic, social, technological, environmental and legal factors. The
Porter's Five Force Model helped in analysing competition in the industry, potential of new
entrants, power of suppliers, power of customers and threat of substitutes. SWOT analysis aided
in examining the strengths, weaknesses, opportunities and threats that prevail in the company.
Further, VRIO analysis recognized the factors which are valuable, rare, imitable and in context
with the organization. Porter's generic model assisted in evaluating different strategies which are
cost leadership, differentiation strategy and focus strategy for the product. Lastly, the Ansoff
Model was applied for strategic directions and methods of expansion best known including the

market penetration, market development, product development and Diversification of the product
along with the expansion of the company. Thus, the strategies and models acknowledged the best
for the organization.
RECOMMENDATIONS
 E – commerce will be of great help as online business expands the aspect of growth and
development of product by improving its quality and enhancing reputation of the
company.
 The advancement in the technology can be made so that the operations and the
procedures in producing a product runs smoothly without hampering the quality and
quantity in the manufacturing.
 Decrease cost of transportation and decrease in shipping prices will boost the profitability
and will gradually increase the value of the products and services that are rendered by
the company.
 Low pricing strategies should be made so that customers are more involved in buying the
products of JD sports plc resulting in improvement in sales and profits of the company.
 Newer products should be initiated more in action so that customer engagement is
constant with the company acquiring to reach stable position in the business environment
by defeating the competitors.

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