Strategic Management for JD Sports: Analysis, Strategies, and Recommendations

This report analyzes the strategic decisions impacting JD Sports, including key challenges, micro and macro factors affecting the business, internal analysis, competitive and expansion strategies, and recommendations for improvement.

Strategic Management

Executive summary
The aim of the report was to analyses the strategic decisions that impact the business on
long run. Also, the report had analyses key challenges that are faced by the JD sports and also
identified various micro and macro factors affecting the business through conducting the external
analysis. Moreover, the study had also conduct the internal analysis so that working of the
business could be understand deeply. Also, various competitive business strategies along with
expansion strategies for the future had also been provided under this study. Lastly, the report had
given certain suggestions for the improvement for the business in future against some of its
competitors.

Contents
INTRODUCTION...........................................................................................................................4
MAIN BODY..................................................................................................................................4
Background of company..............................................................................................................4
External analysis of the firm........................................................................................................5
Internal analysis...........................................................................................................................7
Identification of competitive strategies........................................................................................9
Presenting the strategic directions..............................................................................................10
Recommendations......................................................................................................................12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Strategic management is important part of the business as it allows the firm in setting
better goals for overall company and ensures that there is proper implementation and monitoring
of business activities. Further, the present report is based on JD sports that is well known brand
selling variety of fashionable consumer goods both through online and offline medium. Also, the
report will identify the external analysis of the quoted firm so that better policies and strategic
decisions could be made in due course of time. Moreover, the study will also conduct the internal
analysis that will suggest the firm to introduce certain changes within the workplace in the right
manner so that garter efficiency could be derived. Moreover, competitive business strategies will
be analyzed along with certain strategic directions that will allow the firm to grow in the future
in best manner. Lastly, the report will provide certain suggestion that will allow the quoted firm
to gain competitiveness in short period of time in various business markets.
MAIN BODY
Background of company
JD sports is British fashion retail sports company headquartered at Greater Manchester
and is specialize in selling variety of goods ranging from top famous brands. Also, the company
aims as inspiring people so that higher level of performance could be achieved. Moreover, to
achieve these standards the company is focused on hiring highly skilled, motivated and perfect
individuals that are experienced in carrying out certain tasks of the business. Furthermore, the
company is also having the global distribution center and is actively involved in establishing
creative thinking so that bests alternative solutions could be find out for every business problem.
Moreover, through successful acquisitions of various brands such as GO outdoors, The hip store,
Blacks, Millets etc. have help the firm to get new customers for the business so that maximum
revenues could be generated (Aguilar and et.al., 2021). Furthermore, most of the sales of JD
sports comes for the people that are living in UK as people are able to have best customer
experience of various brands at one particular location that saves much time and costs of the
people. However, the firm has faced some of the major challenges relating to the supply chain
and logistics in recent times. Also, threat to consumer expenditures in time like COVID has
worried the business in maintaining the higher amount of sales.

External analysis of the firm.
Though JD sports is operating on much larger scale it can be said that there are several
factors that affects the sales of the business that could be present within or outside the business
environment. Also, the micro factors that affects the business environment internally could be
done through Porter five forces model that is as follows:
Threat of new entrants: The firm known for performing best in the newer markets and
that has also enabled company to build new revenue stream and diversify the risk of operations
in other regions. However, the threat of new competitors coming up better market strategy
always put pressure on the quoted firm to conduct several business activities in best manner.
Further, JD sports is having business culture that is rigid and is not flexible according to the
changing needs of the people (Vyshnevskyi, 2021). Hence it is very difficult for the firm to
operate in newer markets where the wants and demeans are completely different
Bargaining power of buyers: The company is also known for the loyal customers that
has led to repeated purchases. Further, these customers have developed high level of trust and
loyalty that has allowed the firm to attract new customers for the same. Although, with small
customer base the firm need to fulfill all the needs in timely manner so that people do not switch
to other options available in the market (Liu and et.al., 2018). Moreover, there are chances that
demands for products of the quoted firm is only on specific season and is not yearly basis. Thus
this might create problems in form of less sales for the firm during the whole year. Also, to keep
the business running it is essential that firm is earning enough profits.
Bargaining power of suppliers: One of major strength of the business is that it is
having large amount of trusted suppliers that are supplying variety of raw materials on regular
basis to the firm that has allowed the organization to maintain the brand loyalty for longer time
period. However, these suppliers have the dominant power over the firm and plays major role in
decreasing the overall revenue for the firm. Although, the firm has the opportunity in lowering
down the overall transportation costs on various products that will ultimately reduce the prices of
various goods that will attract more people to buy the good of the firm
Threats of substitutes: With the growing competition in the market there are chances
that there are more number of similar products available in the market at low costs. Also, the

firm has not been able to move into other product segment that is also major challenge as to
remain competitive in various markets it is important that the business also enhance the creative
level and thinks out of the box. However, the newer concept of making use of more sustainable
and environmental friendly products would allow quoted firm to raise awareness among its
potential customers and thus increase the sales for the business.
Rivalry among the existing players: With greater rivalries in market the prices of
product would be lower and overall profits would be decreased. This is the area where JD sports
has the major weakness as due to lack of proper fund the firm is unable to take up certain
projects that are necessary for the growth and expansion of the business (Petera and Šoljaková,
2020).. Also, due to this the firm is unable to invest in newer technologies that is also important
with the changing business culture. However, the quoted firm has vast opportunities available in
terms of expansion into newer regions. Also through practicing different pricing strategy the firm
would earn greater revenues in new markets.
The external macro factors that are affecting the operations of JD sports could be
identified through PESTLE analysis that consists of several factors that are as follows:
Political: With continuous changes in the country and upcoming of the pandemic it can
be said that high political instability might negatively affect the operations of the business on
large scale. Also, high tax rates might increase the prices of various goods of quoted firm that
might also lower the existing and new customer base of the business.
Economical: Factors such as import export restrictions, tariff duties, inflation rate etc.
also affects the business in way that it does not allow the firm to expand business easily. For
instance, if export restrictions are very high than the firm would be able to reach only few
customers in newer markets (Amason and Ward, 2020).Also, if inflation rate in any country is
very high than people would not purchase the goods unless it is in the category of basic
necessities.
Social factors: These are the factors that are based on the current trends, attitudes,
beliefs, traditions etc. that are prevailing in any society or culture of people. Moreover, in UK it
can be said that income inequality is on large-scale and hence selling goods at very high prices
might not allow the firm to conquer the UK market on large scale than its competitors.

Furthermore, it can be seen that people nowadays are more influenced through power of social
media and hence the quoted firm need to take special care in identifying how content on social
media could be used in better ways to increase sales.
Technological: This is factor that very business either big or small need to consider so
that manufacturing work could be done on the faster pace. Also, for quoted firm technology need
to be upgraded in timely manner so that competitive advantage could be maintained easily.
Further, the JP sports have invested in good amount in latest technologies so that it can stay
ahead in competition. However, the firm need to closely monitor to ensure that cost of
investment is less than the revenue that is being generated.
Legal: Various elements such as governmental rules and regulations have to be strictly
followed so that there are no problems in the future operations of the business. Also, JD needs to
completely analyses the government requirements and laws such as employment laws,
environment laws, business laws etc. before entering into newer markets so that unnecessary
conflicts and costs could be avoided.
Environmental: The changing environment and concern to protect it in best of manner
has raise the concern of people to consume only those goods that are sustainable and cause less
damage to the environment (Bailey, Pitelis and Tomlinson, 2020). Also, there are certain
environmental norms that set the guidelines for business to perform and act in certain manner
that might sometimes create pressure on the firm to re devise certain policies so that business
work could be done according to the current environment situations. Thus, it will create positive
impact on the business work culture but will also keep the customers happy and satisfied for
longer time.
Internal analysis.
This type of analysis will help the firm in identifying certain factors that might impact the
business internally. Moreover, this analysis could be done better with the value chain analysis
that helps in identifying the most important activities of the organization so that better products
could be delivered in faster time period. Also, it contains the following elements that are as
follows:

Primary activities: These are the ones that is involved in directly selling various goods to the
targeted customers. Moreover, it also includes various key elements such as
Inbound logistics: It is very important for JD sports to build strong relationship with all
its suppliers so that it could receive, store and distribute goods to large number of customer. In
case of quoted firm all raw material is brought in respective warehouses and later transformed
into finished products.
Operations: There are various types of operational activities that are undertaken once
the raw materials are received in the warehouse of the JD sports. Also, in this stage raw materials
are transformed into finished goods that includes packing, testing, assembling, testing etc.
Furthermore, through better processing the quoted firm is been able to increase the productivity
and achieve consistent economic growth (Value Chain Analysis Of Jd Sports Fashion Plc,
2022).
Outbound logistics: This is the stage where all the finished products are made available
to variety of customers through different sales intermediaries. JD sports continuously aims to
optimize outbound logistics so that competitive advantage could be easily gained in long run.
Marketing and sales: JD sports finds ways through which the product could be easily
marketed among the people better than its competitors so that the total costs and efforts could be
analyzed (Witcher, 2019). Also, for better marketing aspects such as business objectives, brand
image, current market structure etc. is identified so that better sales of the products could be
done.
Services: this refers to the activity once the product is successfully sold to the customers.
after that it is responsibility of the firm to hear all types of queries relating to the product so that
better solutions could be provided.
Secondary activities: These activities are not major activities but is the sources that supports the
primary activities of the firm within the organization. It includes the following things:
Firm infrastructure: JD sports could use the best infrastructure facilities that will allow
firm to develop work culture that everyone wishes to work. Also, handling the legal matters of

various departments of the business will also allow the firm to develop the best business
practices at the workplace.
Human resource management: This is very crucial that every organization need to
focus on managing the people in best of manner so that employees are motivated in best of
manner. Also, higher level of commitment and loyalty would allow the firm to introduce new
changes within the firm easily. Moreover, HR policies of JD sports need to be developed in way
that it provides better rewards and incentives to those people that have performed extraordinary
well in any of previous business tasks.
Technology development: To remain in target market for longer time it is necessary for
JD sports to continuously innovate products within the workplace through using efficient
technology systems. Also, for this purpose the quoted firm need to install software’s that would
make the manufacturing process much easier.
Procurement: JD sports need to carefully consider all types of procurement activities so
that inbound, outbound and value chain could be optimized in best of manner.
Thus from the above value chain analysis the firm would be able to identify the areas that
are performing ineffectively so that corrective measures could be taken on time that will also
help in avoiding duplication of resources and firm will incur least mistakes in the future.
Identification of competitive strategies
It is very crucial that firm takes certain steps regularly so that competitive advantage
could be maintained for longer duration. Also, for JD sports better performance means better
sales for the business and for this purpose competitive strategies could be identified through
porter generic strategies that provides organizations with different dimensions that could be
adopted while operating in different market segments (Ravenda and et.al., 2019). According to
porter there are four ways through which the company could launch the new product in the
market. The first one is the cost leadership strategy in which the firm increases the profits of
the business through cutting down the costs or either through increasing the market share by
selling across various regions and by charging relatively lower prices than competitors of that
market so that success could be gained easily.

Other category under this is the differentiation strategy where products or services are
offered by the firm are relatively distinct or have particular attribute that is completely unique
from rest of its rivalries in the market (Jd Sports Fashion Plc Porter Five Forces Analysis,
2022). Thus, through distinct attribute the firm is able to sell goods to large number of people
and the bests attribute could be developed only when the firm has done complete market research
on its so that customers are able to relate better with the products based on the current needs and
wants. However, while adopting this feature the firm need to keep in mind that this strategy will
not always results in greater profits and thus the firm need to invest in new product wisely.
Moreover, last is this strategy is the focus strategy where the firm focuses on one particular
niche market and then later identifies what are the major requirements of this sector or group so
that demands could be met accordingly (Tytenko, 2018). Furthermore, the company is able to
focus either in the form of cost or differentiation policy whichever suites better in that point of
time. For instance: If targeted people are more cost conscious than the firm need to develop
lower cost products but if the small segment of group wants products that are high in quality and
are not existing in the local market than the firm need to conduct extensive research that will
allow the firm to identify the new products that could be offered in that market. Thus, through
this strategy the company is adding something extra than the in case of its earlier products and
this strategy will allow the firm to get greater expertise for its various products. Also, this is
beneficial in those cases where the firm need to build long term relationships with its customers
in the target market.
From the above all strategies one that will be best suited for the quoted firm would be
cost leadership strategy as it would allow the firm to enter new market regions while maintain
the leadership position in the older targets markets. Also, through this the firm would be able to
systematically expand the market share that has been impacted due to the pandemic and their
financial reasons (Henry, 2021). Moreover, by becoming the cost leader JD sports would be able
to compete with lower prices competitors and stay ahead in competition for longer time.
However, adopting this type of strategy could be riskier for the firm as cost leaders are totally
dependent of the volume of sales and to maintain high level of sales in times like crisis could be
much difficult tasks. Also, being the cost leader the JD sports might difficulty in adapting to the
market changes in faster manner as all the policies need to be redesign that is difficult.

Presenting the strategic directions
The company like JD sports PLC that is running successfully in the local markets of UK
it is very essential that new growth and expansion strategy of the firm is strictly made after
identifying the strength’s and weakness of the target market so that better services could be
offered. Also, if the firms fail in delivering products up to the quality standards than it might
badly impact the goodwill of the company (Drnevich and et.al., 2020). Furthermore, proper
strategic directions allow the firm to accomplishing certain business goals in well-defined
manner and allow the employees to work in coordinated manner to work towards the vision of
the business. Also, the quoted firm before entering into the new market clearly identifies the
maximum revenues that target market would offer otherwise it would not be good option for the
firm to enter into those markets where political conditions and other matter is very high.
Moreover, highly differentiated products along with the best of after sales services need to be
analyzed well in advance so that best customer experience could be given.
Also there are various methods through which the firm could expand into the target
market This could explained through Ansoff matrix that suggests that there are four ways on the
basis of which the firm could grow its business (Barney and Mackey, 2018). The first one under
this is market penetration method that would allow the firm to mainly focus on sales of the
existing product in the existing market. This means that company would think of measures such
as increasing the marketing or promotional activities etc. that would help in generation of
greater revenues. Other one in this is product development where the new products are
launched in the existing market.
This strategy is adopted by the firm when market share in the host country need to be
increased in against competitors. Further, in this matrix is market development strategy that
allows the firm to enter completely new market using the existing products. This is mainly done
when the company is unable to increase the sales of certain products in the already exiting
market and due to lack of more resources the company wishes to sales the same products to the
new target customers (Konovalova and et.al., 2018). Last under this category is diversification
strategy in which completely new market is entered by the firm with new products. However,
this method is more time consuming for the any firm as detailed market research need to be

carried out along with the proper amount of investment. Thus it is not suitable method for startup
companies that is having limited resources.
Thus, from above all methods the one that need to be taken into consideration by JD
sports in the future would be diversification in which the firm could either opt for vertical or
horizontal diversification. Moreover, vertical diversification would allow the firm to introduce
new product line under the existing product categories and horizontal would be done when
completely new product is to be launched in the different market (Simbolon, 2019). Hence, in
both cases the firm would be able to minimize the overall risk through long term investment
plans. Also, it would be able to maximize the returns that was otherwise be difficult for the firm
while operating in the same market for longer time. However, while opting for such option
quoted firm need to incur the cost of diversification and also inherit the risk factor while selling
goods to new regions where the customers are unknown.
Recommendations
 It is to be recommended to quoted firm that with the growing demands of people on the
online platform the firm need to develop efficient marketing strategies that will fulfill
the needs of the customers efficiently via its official website. Also, firm need to employ
professionals that would be able to handle the social website of the company in best
manner so that quick replies and queries would develop greater brand loyalty and
satisfaction among the public (Liu and et.al., 2020).
 Moreover, it is to be suggested to JD sports that more big sizes warehouse need to be
open so that all online orders and supplier’s raw materials could be stored in right manner
and thus quick demands of the public could be fulfilled in timely manner. Thus, it would
ease the manufacturing process and also give best customer experience while keeping the
extra products in that stock so that customer does not have to wait longer.
 Also, it is to be suggested to the quoted firm that JD sports Plc need to engage more in
long term collaborations with the big brands so that customers are able to have variety of
products on regular basis. Thus, it would help the firm in attracting more of potential
customers and earn more profits in the future.

CONCLUSION
From the above report it can be concluded that proper strategic management helps the
firm in setting clear vision and goals for the business so that organisation could become highly
competitive. Further, the report had identified the key challenges that are faced by JD sports that
has affected its business. Moreover, external analysis through PESTLE and five forces
framework had been conducted so that certain macro and micro factors could be analysed that
business could consider while working in changing business environment. Also, internal analysis
through value chain had been done for the quoted firm so that special measure could be taken to
improve the primary and secondary activities of the business. Moreover, the study had identified
porter generic strategies that could be used by the firm to generate maximum revenues for its
products. Lastly, the study had given strategic direction to the firm through Ansoff matrix so that
company is able to identify the best growth strategy for all its future projects and decisions.
Further, certain recommendations for the future improvement of the business had also been
covered under this report.

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