Strategic Management of JD Sports: External and Internal Environment Analysis

This report analyses the strategic management of JD Sports, a sports fashion-based retail sector organisation. It includes an external environment analysis using PESTLE and Porter's five forces model, and an internal environment analysis using VRIO. The report provides recommendations based on the analysis.

Strategic Management
1

Table of content
Table of Contents
Strategic Management.....................................................................................................................1
7........................................................................................................................................................1
Table of content ..............................................................................................................................2
Table of Contents.............................................................................................................................2
1Executive Summary.....................................................................................................................18
The report has been emphasising upon the strategic management of JD sports. JD Sports is a
sports fashion based retail sector organisation. JD sports plc. has its shops established throughout
various regions of the globe like the United Kingdom, United States, Asia, Australia and New
Zealand. Strategic management is referred to as the process of planning, properly monitoring,
analysing as well as assessing the various benefits that are required by the organisation in order
to meet the aims and objectives of the organisation. The report has analysed various internal and
external factors that tend to have an impact upon the organisation along with various
recommendations...........................................................................................................................18
2Introduction..................................................................................................................................19
Strategic management is referred to as the process of planning, properly monitoring, analysing
as well as assessing the various benefits that are required by the organisation in order to meet the
2

aims and objectives of the organisation. The dynamics that occur in the environment of the
business tend to have consistent analysis and assessment of success in the organisation. The
process of strategic management involves fostering the organisation to take account of the
current situation of the organisation by chalking out the various strategies, deploying them and
further analysing the effectiveness of the strategies that have been implemented by the
organisation (Adoli and Kilika, 2020). .........................................................................................19
JD Sports is a sports fashion based retail sector organisation. JD sports is a United Kingdom
based public organisation. JD sports has its shops established throughout various regions of the
globe like the United Kingdom, United States, Asia, Australia and New Zealand. Pent land
Group is the major owner of the retail chain store and it has been listed on the London Stock
Exchange. The report comprises of the strategic analysis of JD Sports. (Reference)...................19
3External Environment Analysis...................................................................................................19
The External Environment of JD Sports has been analysed with the help of PESTLE analysis
and Porter's five forces model (Doyle and Brady, 2018). .............................................................19
1PESTLE Analysis ( diagraph! )...............................................................................................20
The PESTLE analysis is a kind of external analysis that has been performed with the help of
studying and researching various external factors like Political factors, Economic factors. Social
factors, Technological factors, Legal factors and Environmental factors. The PESTLE analysis of
JD Sports has been performed below. ...........................................................................................20
3

Political factors- The political factors tend to have a huge impact upon the operations of JD
Sports as the organisation is required to comply with the various political obligations before
entering the market of a specific region. JD Sports will require to take permission from the
government before entering the market. Also, there is a probability that the government may
change in the future and hence it may lead to difference in the opinion between the government
and the organisation. The major political factors that affect decisions and operations at JD Sports
include labour laws , price regulation, etc. (Reference)................................................................20
Economic factors- The economic factors tend to have a major impact upon the organisation. The
economic factors that have major impact upon the organisation are likely to have an impact upon
the demand of the products in the market of the organisation. The various economic factors that
tend to have an impact upon the demand of JD Sports are interest rates, inflation, banking
policies, etc. The several economic factors that are essential to be considered for studying the
economic factors are unemployment rate, business cycle, infrastructure quality and educational
levels in the organisation (Dzwigol and et.al., 2019). ..................................................................20
Social factors- The various social factors that tend to have have an impact over he business
operations of JD Sports include culture, educational levels, interest in sports, attitude towards
health, etc. It is essential for JD sports to consider the social factors in order to understand the
target markets of the organisation in a better way. The consideration of the social factors will
help the organisation to design the convey its marketing message in a prominent manner and it
4

will further facilitate the organisation to design a product that reaches the right customer.
(Reference).....................................................................................................................................21
Technological factors- The technological factors also have a huge and significant role to play in
the organisation. The technological factors tend to have an impact in the manufacturing as well
as supply of the product of JD sports. It is important for JD Sports to analyse the technological
factors that have involvement in the organisation. The organisation can analyse the various
technological factors in order to increase the profitability of the organisation while providing
customer satisfaction and having an impact over the finances of the organisation (Hambrick and
Wowak, 2021). ..............................................................................................................................21
Legal factors- The legal factors are also quite significant in order to have a smooth operation at
the organisation. The legal factors are important to be compiled by JD Sports in order to survive
in the market. The compliance of legal factors can be done easily by understanding and analysing
various kinds of laws in the United Kingdom such as employment law, labour law, copyrights,
etc. The laws are important to be complied with in order to avoid the various legal hindrances in
the workplace of the organisation. (Reference).............................................................................21
Environmental factors- The environmental factors are also necessary for the organisation to
comply with. JD Sports is required to comply with the various environmental factors of the
market in order to fulfil the various environmental factors of the organisation. The various
factors that comprise of environmental factors for JD Sports are pollution, weather, climatic
changes, waste management, etc. The analysis of these factors will help JD Sports to convey the
5

message regarding the changes in the climate along with the various products that are
environment friendly. The compliance of the organisation with the environment regulation will
help the organisation to have a positive image in the market. (Reference)...................................22
2Porter's Five forces model ( diagraph! )..................................................................................22
Porter's five forces model is an external analysis of the organisation that covers various factors
to study their impact upon the organisation. The various factors of Porter's five forces model
includes Bargaining power of the buyer, Bargaining power of the supplier, Threat of the new
entrants, threats of substitutes and rivalry within the industry. Porter's five forces model in the
aspect of JD sports has been discussed below (Jabbar and Hussein, 2017). ................................22
Threats of new entrants- JD sports is a part of the retail sector industry which is capable of easy
entry as well as exit. JD Sports is a constant threat from the newcomers in the market or the
industry. JD sports is consistently working upon the improvement of its products and services in
order to manage the constant threats of new entrants in the sports retail industry. The
organisation aims to enjoy economies of scale which can not be enjoyed by new entrants of the
market. Also, JD Sports has a huge lot of funds that can be used by the organisation to invest in
the research and development of the of new product in terms of innovation and improvement of
the quality which helps the organisation to attain the competitive advantage and further reduce
the threat of new entrants upon the organisation. (Reference).....................................................23
Threats of substitutes- JD sports tend to face threat from its substitutes. The consumers of a
specific product can easily find a substitute product that is capable of fulfilling the same desire
6

and demand of the customers. The threat of substitutes is reduced by JD sports by focusing more
upon the services than the products. The emphasis of the organisation upon the service will
facilitate the organisation to position the products in a way where the customers are willing to
pay more for a particular product in comparison to the low cost products offered in the market in
the form of substitutes (Jumaa and Alleyne, 2017). ....................................................................23
Potential of the buyer- The buyers are searching for the products that can help in providing them
more mental satisfaction in comparison to price they are paying for. It is very considerable that
when the customer base of the organisation is small, then the bargaining power of the buyer
tends to be high in case of the organisation. JD sports experience low to moderate bargaining
power of the buyer as the organisation has a large customer base which belongs to a variety of
other segments like geographical segment. For this purpose, JD Sports has aimed at increasing
upon the product portfolio in order to provide a wide variety of options for the customers to buy
from. Hence, JD Sports has increased its customer base by offering a wide variety of products
and services to its customers with an aim of diminishing the bargaining power of the buyers
(Kavale, 2017). ..............................................................................................................................23
Potential of the supplier- The bargaining power of the suppliers for JD Sports is quite moderate.
The potential of suppliers is a concept that depicts dependency of the organisation upon the
supplier. The suppliers of JD sports or any other organisation play a vital role upon the
organisation. The suppliers tend to have a power through which they can change the demand of
the products through the prices. The organisations need to adapt to various ways through which
7

they can minimise the impact of the suppliers upon the organisation. JD sports has been
successfully making efforts in order to minimise the bargaining power of the supplier by
expanding and diversifying the list of suppliers, researching variety of innovative products that
require different raw materials and also by getting exclusive rights from its suppliers in order to
supply the raw materials or the primary goods to the organisation (Kose, and Kose, 2019). ...24
Rivalry within the industry- JD Sports have a medium rivalry in the retail sector industry that
deals in sports products. It is very obvious that the high competition within the industry is likely
to result in the decline of the revenue within the organisation. The competition or rivalry within
the retail sector can be stagnant but its impact upon the organisation can be minimised through
proper strategy implementation at the organisation. JD Sports can reduce the impact of rivalry
within the organisation with the help of achievement of the economies of scale. The
enhancement of the brand equity of the organisation can also prove useful for the organisation
along with the customer relationship management to reduce the rivalry within the organisation.
(Reference).....................................................................................................................................25
4Internal Environment Analysis....................................................................................................25
1VRIO ( diagraph! )..................................................................................................................25
The VRIO analysis is an internal analysis that tends to analyse the internal environment of the
business. The VRIO analysis is an analysis showcases various resources through bifurcation in
the form of Valuable, Rare, Imitable as well as organised resources. The VRIO analysis of JD
sports has been performed below (Madsen and Scribner, 2017). .................................................25
8

Valuable.........................................................................................................................................25
The valuable resources are basically the resources that are considered as the strength of the
organisation and can not be possessed by other competitors. The valuable resources of JD Sports
have been discussed below. ..........................................................................................................26
The financial resources of JD sports have been considered as highly valuable as they help in
investing upon various external opportunities that may occur at any point of time. The financial
resources are helpful in dealing with external threats of the organisation that are contingent on
occurrence. (Reference).................................................................................................................26
The local food products offered by JD sports can be considered as a valuable resource of JD
sports as they are highly differentiated from its competitors. These resources tend to(Reference)
get perceived of high value to the customers of the organisation. ................................................26
The employees of JD sports can be considered as highly valuable. The reason behind the
consideration of the employees as highly valuable is that the employees of the organisation are
highly trained and are capable of high productivity for the organisation. (Reference).................26
The patents of JD Sports are considered as valuable. The patents help the organisation to sell its
products in the market without the interference of the competitors. This leads to high revenue
generation of JD sports at the workplace (O’Brien and et.al., 2019). ...........................................26
The distribution network of JD sports is considered as valuable. The reason for this is that the
distribution network of the organisation is helpful for the organisation in reaching various
customers and enhances the sales of the organisation. (Reference).............................................27
9

Rare................................................................................................................................................27
The rare resources are the resources which are easily upheld by the various organisations or the
competitors in the market. The rare resources of the organisation have been discussed below....27
The financial resources of JD sports can be considered as rare. The financial resources of JD
sports plc are considered rare as they are possessed only by a few organisations in the industry
(Ogbechie, 2018). ..........................................................................................................................27
The employees of JD Sports can be considered as a rare resource for the organisation. The
employees of the organisation can be considered as rare because JD sports plc has invested a lot
of time and efforts in the training and development of their employees at the workplace.
(Reference) ....................................................................................................................................27
The patents of JD Sports are also considered as a rare resource. The patents that are held by JD
sports are not easily accessible by the various other competitors of the organisation in the market.
Hence, patents are considered as a rare resource for JD sports.(Reference).................................27
The distribution network of JD sports can be considered as rare because JD sports plc has a
widespread distribution network across various regions of the globe. The distribution network of
JD sports is rare because a wide and strong distribution network requires a huge investment
which is not possible by various other competitors (Witcher, 2019). .........................................27
Imitable..........................................................................................................................................28
The imitable resources are basically the resources that can be easily imitated by the competitors
in the market. The imitable resources of JD sports have been discussed below. .........................28
10

The financial resources can not be considered as an easily imitable resource of the organisation.
The financial resources of JD sports have been raised and accessed with the help of prolonged
profits of the organisation. Hence, other competitors will be required to have access to the same
level of profits in order to imitate the financial resources of JD sports (Ongaro and Ferlie, 2020).
........................................................................................................................................................28
The local food products of JD sports are easy to imitate as they are not so costly. This is
probability e that shows that competitors can easily acquire the products of JD sports in order to
capture the market.(Reference)......................................................................................................28
The employees can also be considered as an imitable resource as the employees of JD sports
have appropriate training and skills which can be delivered by various other organisations as
well. Also so you organisations can track the employees through various opportunities of better
compensation packages, work environment benefits etc.(Reference)...........................................28
.......................................................................................................................................................29
Organised ......................................................................................................................................29
The organised resources are the resources that are well organised in order to provide value to the
organisation. The organised resources of JD Sports have been discussed below..........................29
Financial resources of JD sports can be considered as properly organised. The financial resources
of JD sports are capable of capturing value for the organisation in the market. The financial
resources are helpful during the strategic investment at the right places that further the financial
facilitates implementation of strategies in order to grab the opportunities and deal with the
11

threats. Hence the financial resources help in providing a competitive advantage to JD sports
(Özmen, 2018)...............................................................................................................................29
Distribution network of JD sports can be considered as well organised as the network helps in
reaching out the customers while ensuring that products are available through all of its outlets.
Hence the distribution network of JD sports can be considered as a competitive advantage for the
organisation(Reference).................................................................................................................29
5Identification of Competitive strategies.......................................................................................30
1Porter's Generic strategies ( diagraph! )..................................................................................30
The Three generic strategies that have been introduced by Michael Porter are cost leadership,
differentiation and focus strategy. All the three generic strategies have been explained in the
context of JD sports below.............................................................................................................30
Cost leadership- the cost leadership strategy can be referred to as a strategy that involves having
a competitive advantage in order to lower the cost. The cost leadership strategy is considered the
primary generic strategy that is being followed at JD sports. The best leadership strategy is used
by the organisation in order to sustain the market leadership by offering efficient value chain
management to their customers. Price leadership strategy has a loud JD sports to expand its
market share while targeting the middle class section of the society e which comprises of the
largest contribution in the overall consumer market mix in various regions across the globe. Also
JD sports focus upon the idea of accessibility e and affordability in order to increase hi brand
awareness that can result in higher sales (Pramandita and et.al., 2021)........................................30
12

Differentiation strategy- differentiation strategy is a kind of strategy which focuses upon
charging higher prices but offering differentiated products. The strategy usually helps the
organisation to build a competitive advantage. JD sports focuses upon using differentiation
strategies while combining it with cost leadership in order to accomplish the objectives of growth
of the organisation. The motivation behind using of differentiation strategy of JD sports is to
embed innovation and address the health concerns of the consumers.(Reference).......................30
Focussed strategy- poker strategy is the third strategy that tends to encourage organisations in
order to concentrate upon the resources in order to expand through narrow target segments. The
idea behind using a focus strategy is to serve a particular section off the market. Hence it can be
analysed that the organisations base their competitive advantage upon niche marketing. The
focus strategy is used by JD sports in order to provide products at low cost while offering the
best value to its customers (Priem, 2018)......................................................................................31
6Strategic Directions......................................................................................................................31
Strategic directions is a strategy that is concerned with the way in which an organisation is
positioned its products and resources in the market. There are basically two types of strategic
choices that are involved in the size of the organisation. The Strategy that is being discussed in
the context of JD sports is Porter's generic strategy, which is also known as business strategy.
The business strategy focuses upon strategy for growth in the context of new or existing markets
through to new or existing products. (Reference) The strategic decisions that has been adapted by
JD sports is diversification which is basically a strategy where in the organisation of entering
13

new markets with the help of new products. It is helpful for organisations like JD sports as the
current markets of the organisation are saturated or they are at the stage of maturity of the
product life cycle. JD sports focuses upon the concept of sharing a vision through brands with
the help of an elevated marketplace which helps the organisation to build long-term collaboration
with the brands. The focus of JD sports is a pawn the services that are being offered rather than
the products in order to gain competitive advantage (Sarwar, Khan and Sarwar, 2021). ............31
7Conclusion...................................................................................................................................32
It can be concluded that strategic management holds huge significance in a particular
organisation. The report has focussed upon the concept of strategic management along with the
various strategic analyses. The strategic analyses that have been performed in the context of the
organisation are PESTLE analysis, Competitive analysis, VRIO analysis along with strategic
direction. (Reference)....................................................................................................................32
Various recommendations that can be drawn out from the study are investment in research and
development. JD Sports has a huge lot of funds that can be used by the organisation to invest in
the research and development of the of new product in terms of innovation and improvement of
the quality which helps the organisation to attain the competitive advantage and further reduce
the threat of new entrants upon the organisation. (Reference)......................................................32
The emphasis of the organisation can be shifted upon the service that will facilitate the
organisation to position the products in a way where the customers are willing to pay more for a
particular product in comparison to the low cost products offered in the market in the form of
14

substitutes. JD Sports can aim at increasing upon the product portfolio in order to provide a wide
variety of options for the customers(Reference)...........................................................................33
8Recommendations:.......................................................................................................................33
9References....................................................................................................................................34
Adoli, H.L. and Kilika, J.M., 2020. Conceptualizing the role of leadership strategy in the context
of strategic management process: A review of literature. Journal of Economics and
Business, 3(4).................................................................................................................................34
Doyle, T. and Brady, M., 2018. Reframing the university as an emergent organisation:
implications for strategic management and leadership in higher education. Journal of Higher
Education Policy and Management, 40(4), pp.305-320................................................................34
Dzwigol, H. and et.al., 2019. Formation of Strategic Change Management System at an
Enterprise. Academy of Strategic Management Journal, 18, pp.1-8.............................................34
Hambrick, D.C. and Wowak, A.J., 2021. Strategic leadership. Strategic Management: State of
the Field and Its Future, p.337.......................................................................................................34
Jabbar, A.A. and Hussein, A.M., 2017. The role of leadership in strategic
management. International Journal of Research-Granthaalayah, 5(5), pp.99-106........................34
Jumaa, M.O. and Alleyne, J., 2017. Strategic Leadership in Health Care in Challenging Times.
In Organisation Development in Health Care (pp. 114-127). Routledge......................................34
Kavale, S.M., 2017. Effects of strategic management determinants of corporate growth in micro-
finance institutions in Kenya (Doctoral dissertation, JKUAT-COHRED)....................................34
15

Kose, E.K. and Kose, M.F., 2019. Strategic Management and Leadership of Education: Central
and Local Perspectives in Turkey. Educational Policy Analysis and Strategic Research, 14(3),
pp.347-365.....................................................................................................................................35
Madsen, S.R. and Scribner, R.T., 2017. A perspective on gender in management: The need for
strategic cross-cultural scholarship on women in management and leadership. Cross Cultural &
Strategic Management...................................................................................................................35
O’Brien, D. and et.al., 2019. Strategic management in sport. Routledge......................................35
Ogbechie, C., 2018. Strategic Management Practices in Africa. In Indigenous Management
Practices in Africa. Emerald Publishing Limited..........................................................................35
Ongaro, E. and Ferlie, E., 2020. Strategic Management in public organizations: Profiling the
public entrepreneur as strategist. The American Review of Public Administration, 50(4-5),
pp.360-374.....................................................................................................................................35
Özmen, H.I., 2018, December. The Achilles’ Heel of Strategic Management: Strategic
Leadership in a Chaotic Environment. In International Symposium on Chaos, Complexity and
Leadership (pp. 123-135). Springer, Cham...................................................................................35
Pramandita, W. and et.al., 2021. The Influence of Authentic Leadership and Strategic
Management Skills on Organization Performance Mediated by Knowledge Management at TNI
Academy. Business and Entrepreneurial Review, 21(1), pp.61-80...............................................35
Priem, R.L., 2018. Toward becoming a complete teacher of strategic management. Academy of
Management Learning & Education, 17(3), pp.374-388...............................................................35
16

Sarwar, Z., Khan, M.A. and Sarwar, A., 2021. THE STRATEGIC MANAGEMENT MODEL
FOR COVID 19" A RACE AGAINST TIME": EVIDENCE FROM PEOPLE'S REPUBLIC OF
CHINA. Gomal University Journal of Research, 37(3), pp.278-286............................................36
Witcher, B.J., 2019. Absolute essentials of strategic management. Routledge.............................36
17

1 Executive Summary
The report has been emphasising upon the strategic management of JD sports. JD
Sports is a sports fashion based retail sector organisation. JD sports plc. has its shops
established throughout various regions of the globe like the United Kingdom, United
States, Asia, Australia and New Zealand. Strategic management is referred to as the
process of planning, properly monitoring, analysing as well as assessing the various
benefits that are required by the organisation in order to meet the aims and objectives of
the organisation. The report has analysed various internal and external factors that tend
to have an impact upon the organisation along with various recommendations.
18

2 Introduction
Strategic management is referred to as the process of planning, properly monitoring,
analysing as well as assessing the various benefits that are required by the organisation
in order to meet the aims and objectives of the organisation. The dynamics that occur in
the environment of the business tend to have consistent analysis and assessment of
success in the organisation. The process of strategic management involves fostering
the organisation to take account of the current situation of the organisation by chalking
out the various strategies, deploying them and further analysing the effectiveness of the
strategies that have been implemented by the organisation (Adoli and Kilika, 2020).
JD Sports is a sports fashion based retail sector organisation. JD sports is a United
Kingdom based public organisation. JD sports has its shops established throughout
various regions of the globe like the United Kingdom, United States, Asia, Australia and
New Zealand. Pent land Group is the major owner of the retail chain store and it has
been listed on the London Stock Exchange. The report comprises of the strategic
analysis of JD Sports. (JD sports, 2021)
3 External Environment Analysis
The External Environment of JD Sports has been analysed with the help of PESTLE
analysis and Porter's five forces model (Doyle and Brady, 2018).
19

1 PESTLE Analysis
The PESTLE analysis is a kind of external analysis that has been performed with the
help of studying and researching various external factors like Political factors, Economic
factors. Social factors, Technological factors, Legal factors and Environmental factors.
The PESTLE analysis of JD Sports has been performed below.
● Political factors- The political factors tend to have a huge impact upon the
operations of JD Sports as the organisation is required to comply with the
various political obligations before entering the market of a specific region. JD
Sports will require to take permission from the government before entering the
market. Also, there is a probability that the government may change in the future
and hence it may lead to difference in the opinion between the government and
the organisation. The major political factors that affect decisions and operations
at JD Sports include labour laws , price regulation, etc. (Thomas And et.al., 2021)
20

● Economic factors- The economic factors tend to have a major impact upon the
organisation. The economic factors that have major impact upon the organisation are
likely to have an impact upon the demand of the products in the market of the
organisation. The various economic factors that tend to have an impact upon the
demand of JD Sports are interest rates, inflation, banking policies, etc. The several
economic factors that are essential to be considered for studying the economic factors
are unemployment rate, business cycle, infrastructure quality and educational levels in
the organisation (Dzwigol and et.al., 2019).
● Social factors- The various social factors that tend to have have an impact over
he business operations of JD Sports include culture, educational levels, interest
in sports, attitude towards health, etc. It is essential for JD sports to consider the
social factors in order to understand the target markets of the organisation in a
better way. The consideration of the social factors will help the organisation to
design the convey its marketing message in a prominent manner and it will
further facilitate the organisation to design a product that reaches the right
customer. (Gheibi and et.al, 2018)
● Technological factors- The technological factors also have a huge and significant
role to play in the organisation. The technological factors tend to have an impact in the
manufacturing as well as supply of the product of JD sports. It is important for JD Sports
to analyse the technological factors that have involvement in the organisation. The
21

organisation can analyse the various technological factors in order to increase the
profitability of the organisation while providing customer satisfaction and having an
impact over the finances of the organisation (Hambrick and Wowak, 2021).
● Legal factors- The legal factors are also quite significant in order to have a
smooth operation at the organisation. The legal factors are important to be
compiled by JD Sports in order to survive in the market. The compliance of legal
factors can be done easily by understanding and analysing various kinds of laws
in the United Kingdom such as employment law, labour law, copyrights, etc. The
laws are important to be complied with in order to avoid the various legal
hindrances in the workplace of the organisation. (Srdjevic, Z., Bajcetic, R. and
Srdjevic, B., 2018)
● Environmental factors- The environmental factors are also necessary for the
organisation to comply with. JD Sports is required to comply with the various
environmental factors of the market in order to fulfil the various environmental
factors of the organisation. The various factors that comprise of environmental
factors for JD Sports are pollution, weather, climatic changes, waste
management, etc. The analysis of these factors will help JD Sports to convey the
message regarding the changes in the climate along with the various products
that are environment friendly. The compliance of the organisation with the
22

environment regulation will help the organisation to have a positive image in the
market. (Zalengera and et.al., 2019)
2 Porter's Five forces model
Porter's five forces model is an external analysis of the organisation that covers various
factors to study their impact upon the organisation. The various factors of Porter's five
forces model includes Bargaining power of the buyer, Bargaining power of the supplier,
Threat of the new entrants, threats of substitutes and rivalry within the industry. Porter's
five forces model in the aspect of JD sports has been discussed below (Jabbar and
Hussein, 2017).
● Threats of new entrants- JD sports is a part of the retail sector industry which is
capable of easy entry as well as exit. JD Sports is a constant threat from the
newcomers in the market or the industry. JD sports is consistently working upon the
improvement of its products and services in order to manage the constant threats of
23

new entrants in the sports retail industry. The organisation aims to enjoy economies of
scale which can not be enjoyed by new entrants of the market. Also, JD Sports has a
huge lot of funds that can be used by the organisation to invest in the research and
development of the of new product in terms of innovation and improvement of the
quality which helps the organisation to attain the competitive advantage and further
reduce the threat of new entrants upon the organisation. (Reference)
● Threats of substitutes- JD sports tend to face threat from its substitutes. The
consumers of a specific product can easily find a substitute product that is capable of
fulfilling the same desire and demand of the customers. The threat of substitutes is
reduced by JD sports by focusing more upon the services than the products. The
emphasis of the organisation upon the service will facilitate the organisation to position
the products in a way where the customers are willing to pay more for a particular
product in comparison to the low cost products offered in the market in the form of
substitutes (Jumaa and Alleyne, 2017).
● Potential of the buyer- The buyers are searching for the products that can help
in providing them more mental satisfaction in comparison to price they are paying for. It
is very considerable that when the customer base of the organisation is small, then the
bargaining power of the buyer tends to be high in case of the organisation. JD sports
experience low to moderate bargaining power of the buyer as the organisation has a
large customer base which belongs to a variety of other segments like geographical
24

segment. For this purpose, JD Sports has aimed at increasing upon the product
portfolio in order to provide a wide variety of options for the customers to buy from.
Hence, JD Sports has increased its customer base by offering a wide variety of
products and services to its customers with an aim of diminishing the bargaining power
of the buyers (Kavale, 2017).
● Potential of the supplier- The bargaining power of the suppliers for JD Sports is
quite moderate. The potential of suppliers is a concept that depicts dependency of the
organisation upon the supplier. The suppliers of JD sports or any other organisation
play a vital role upon the organisation. The suppliers tend to have a power through
which they can change the demand of the products through the prices. The
organisations need to adapt to various ways through which they can minimise the
impact of the suppliers upon the organisation. JD sports has been successfully making
efforts in order to minimise the bargaining power of the supplier by expanding and
diversifying the list of suppliers, researching variety of innovative products that require
different raw materials and also by getting exclusive rights from its suppliers in order to
supply the raw materials or the primary goods to the organisation (Kose, and Kose,
2019).
● Rivalry within the industry- JD Sports have a medium rivalry in the retail sector
industry that deals in sports products. It is very obvious that the high competition within
the industry is likely to result in the decline of the revenue within the organisation. The
25

competition or rivalry within the retail sector can be stagnant but its impact upon the
organisation can be minimised through proper strategy implementation at the
organisation. JD Sports can reduce the impact of rivalry within the organisation with the
help of achievement of the economies of scale. The enhancement of the brand equity of
the organisation can also prove useful for the organisation along with the customer
relationship management to reduce the rivalry within the organisation.
4 Internal Environment Analysis
1 VRIO
The VRIO analysis is an internal analysis that tends to analyse the internal environment
of the business. The VRIO analysis is an analysis showcases various resources through
bifurcation in the form of Valuable, Rare, Imitable as well as organised resources. The
VRIO analysis of JD sports has been performed below (Madsen and Scribner, 2017).
Valuable
26

The valuable resources are basically the resources that are considered as the strength
of the organisation and can not be possessed by other competitors. The valuable
resources of JD Sports have been discussed below.
● The financial resources of JD sports have been considered as highly valuable as
they help in investing upon various external opportunities that may occur at any point of
time. The financial resources are helpful in dealing with external threats of the
organisation that are contingent on occurrence.
● The local food products offered by JD sports can be considered as a valuable
resource of JD sports as they are highly differentiated from its competitors. These
resources tend to get perceived of high value to the customers of the organisation.
● The employees of JD sports can be considered as highly valuable. The reason
behind the consideration of the employees as highly valuable is that the employees of
the organisation are highly trained and are capable of high productivity for the
organisation.
● The patents of JD Sports are considered as valuable. The patents help the
organisation to sell its products in the market without the interference of the competitors.
This leads to high revenue generation of JD sports at the workplace (O’Brien and et.al.,
2019).
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● The distribution network of JD sports is considered as valuable. The reason for
this is that the distribution network of the organisation is helpful for the organisation in
reaching various customers and enhances the sales of the organisation.
Rare
The rare resources are the resources which are easily upheld by the various
organisations or the competitors in the market. The rare resources of the organisation
have been discussed below.
● The financial resources of JD sports can be considered as rare. The financial
resources of JD sports plc are considered rare as they are possessed only by a few
organisations in the industry (Ogbechie, 2018).
● The employees of JD Sports can be considered as a rare resource for the
organisation. The employees of the organisation can be considered as rare
because JD sports plc has invested a lot of time and efforts in the training and
development of their employees at the workplace.(Murcia, N.N., Ferreira, F.A. and
Ferreira, J.J., 2022)
● The patents of JD Sports are also considered as a rare resource. The patents
that are held by JD sports are not easily accessible by the various other
competitors of the organisation in the market. Hence, patents are considered as
a rare resource for JD sports.(Lopes and et.al., 2018)
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● The distribution network of JD sports can be considered as rare because JD
sports plc has a widespread distribution network across various regions of the globe.
The distribution network of JD sports is rare because a wide and strong distribution
network requires a huge investment which is not possible by various other competitors
(Witcher, 2019).
Imitable
The imitable resources are basically the resources that can be easily imitated by the
competitors in the market. The imitable resources of JD sports have been discussed
below.
● The financial resources can not be considered as an easily imitable resource of
the organisation. The financial resources of JD sports have been raised and accessed
with the help of prolonged profits of the organisation. Hence, other competitors will be
required to have access to the same level of profits in order to imitate the financial
resources of JD sports (Ongaro and Ferlie, 2020).
● The local food products of JD sports are easy to imitate as they are not so costly.
This is probability e that shows that competitors can easily acquire the products
of JD sports in order to capture the market.(Hernández and Garcia, 2018)
● The employees can also be considered as an imitable resource as the
employees of JD sports have appropriate training and skills which can be
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delivered by various other organisations as well. Also so you organisations can
track the employees through various opportunities of better compensation
packages, work environment benefits etc.(Ariyani, W. and Daryanto, A., 2018)
Organised
The organised resources are the resources that are well organised in order to provide
value to the organisation. The organised resources of JD Sports have been discussed
below.
● Financial resources of JD sports can be considered as properly organised. The
financial resources of JD sports are capable of capturing value for the organisation in
the market. The financial resources are helpful during the strategic investment at the
right places that further the financial facilitates implementation of strategies in order to
grab the opportunities and deal with the threats. Hence the financial resources help in
providing a competitive advantage to JD sports (Özmen, 2018).
● Distribution network of JD sports can be considered as well organised as the
network helps in reaching out the customers while ensuring that products are available
through all of its outlets. Hence the distribution network of JD sports can be considered
as a competitive advantage for the organisation(Perera, 2017)
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5 Identification of Competitive strategies
1 Porter's Generic strategies
The Three generic strategies that have been introduced by Michael Porter are cost
leadership, differentiation and focus strategy. All the three generic strategies have been
explained in the context of JD sports below.
● Cost leadership- the cost leadership strategy can be referred to as a strategy that
involves having a competitive advantage in order to lower the cost. The cost leadership
strategy is considered the primary generic strategy that is being followed at JD sports.
The best leadership strategy is used by the organisation in order to sustain the market
leadership by offering efficient value chain management to their customers. Price
leadership strategy has a loud JD sports to expand its market share while targeting the
middle class section of the society e which comprises of the largest contribution in the
overall consumer market mix in various regions across the globe. Also JD sports focus
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upon the idea of accessibility e and affordability in order to increase hi brand awareness
that can result in higher sales (Pramandita and et.al., 2021).
● Differentiation strategy- differentiation strategy is a kind of strategy which focuses
upon charging higher prices but offering differentiated products. The strategy
usually helps the organisation to build a competitive advantage. JD sports
focuses upon using differentiation strategies while combining it with cost
leadership in order to accomplish the objectives of growth of the organisation.
The motivation behind using of differentiation strategy of JD sports is to embed
innovation and address the health concerns of the consumers.(Öneren, Arar and
Yurdakul, 2017.)
● Focussed strategy- poker strategy is the third strategy that tends to encourage
organisations in order to concentrate upon the resources in order to expand through
narrow target segments. The idea behind using a focus strategy is to serve a particular
section off the market. Hence it can be analysed that the organisations base their
competitive advantage upon niche marketing. The focus strategy is used by JD sports in
order to provide products at low cost while offering the best value to its customers
(Priem, 2018).
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6 Strategic Directions
Strategic directions is a strategy that is concerned with the way in which an organisation
is positioned its products and resources in the market. There are basically two types of
strategic choices that are involved in the size of the organisation. The Strategy that is
being discussed in the context of JD sports is Porter's generic strategy, which is also
known as business strategy. The business strategy focuses upon strategy for growth in
the context of new or existing markets through to new or existing products. (Bruijl, 2018)
The strategic decisions that has been adapted by JD sports is diversification which is
basically a strategy where in the organisation of entering new markets with the help of
new products. It is helpful for organisations like JD sports as the current markets of the
organisation are saturated or they are at the stage of maturity of the product life cycle.
JD sports focuses upon the concept of sharing a vision through brands with the help of
an elevated marketplace which helps the organisation to build long-term collaboration
with the brands. The focus of JD sports is a pawn the services that are being offered
rather than the products in order to gain competitive advantage (Sarwar, Khan and
Sarwar, 2021).
7 Conclusion
It can be concluded that strategic management holds huge significance in a particular
organisation. The report has focussed upon the concept of strategic management along
with the various strategic analyses. The strategic analyses that have been performed in
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the context of the organisation are PESTLE analysis, Competitive analysis, VRIO
analysis along with strategic direction. (.Chatzoglou and et.al., 2018)
Various recommendations that can be drawn out from the study are investment in
research and development. JD Sports has a huge lot of funds that can be used by the
organisation to invest in the research and development of the of new product in terms of
innovation and improvement of the quality which helps the organisation to attain the
competitive advantage and further reduce the threat of new entrants upon the
organisation. (Indartono and Wibowo, 2017)
The emphasis of the organisation can be shifted upon the service that will facilitate the
organisation to position the products in a way where the customers are willing to pay
more for a particular product in comparison to the low cost products offered in the
market in the form of substitutes. JD Sports can aim at increasing upon the product
portfolio in order to provide a wide variety of options for the customers(Lopes, Oliveira
and Silveira, 2020)
8 Recommendations:
 The organisation can plan in order to expand in several markets while using the
cost leadership strategy.
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 The organisation must focus more upon their employees in order to sustain them
as a competitive strength.
 The organisation can look upon merger and acquisitions in the industry in order
to reduce the competition in the market.
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