Strategic Management of JD Sports: External and Internal Environment Analysis

Strategic Management
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Table of content
Table of Contents
Strategic Management.....................................................................................................................1
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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
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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
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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
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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
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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
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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
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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
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