Strategic Management for JD Sports: External and Internal Analysis

This report provides an analysis of the external and internal factors affecting JD Sports, including PESTLE analysis, Porter's Five Forces, and value chain analysis. It also presents strategic directions and methods of expansion for the company.

STRATEGIC
MANAGEMENT

Executive summary :
The aim of the report was to identify the external factors affecting the of the JD sports
company so that better opportunities for the firm could be gathered in limited time period.
Moreover, these factors had been analysed through applying the PESTLE model so that business
policies could be structured properly. Further, the report had also conducted internal analysis
through value chain analysis so that strengths and weakness of the firm could be identified.
Also, various competitive strategies had been analysed through the porter generic strategies.
Moreover, the study had identified various strategic directions along with various methods of
expansion so that business could use to grow in international markets. Lastly, certain
recommendations had also been provided for future success of the JD company.

TABLE OF CONTENT
INTRODUCTION ..........................................................................................................................4
MAIN BODY...................................................................................................................................4
Analysing External environmental for identifying opportunities and threats with macro (PEST
or PESTEL) & Micro (5 Forces Framework for analysing industry structure and the nature of
competition).................................................................................................................................5
Presenting the internal environmental analysis through value chain model................................8
Identification of competitive strategies:.......................................................................................9
Presenting strategic directions and methods of expansion........................................................11
RECOMMNEDATION.................................................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Strategic management is regarded as the important process of business which helps
corporate system in meeting desired objectives. It is essential for business organization which
helps in providing and developing various strategies, plans policies for allocating appropriate
resources which aids in achieving competitive goals. The fashion retailer company 'JD sport plc'
mainly merchandising in sports and fashion goods. This project report Will provide details about
industry background, challenges faced while establishing the JD sport company in 'India' as a
Asian country. Also, evaluating the External environmental analysis for identifying
opportunities, threats and evaluating company nature and structure. Further more report will
also analyse Internal environment for identifying strengths and weaknesses with VRIO or value
chain analysis. Also, Identifying Competitive Strategies, Strategic directions & methods of
expansion. Lastly, it will provide details regrading recommendation after analysing both
environments.
MAIN BODY
JD the sports fashion multinational retailer company Progressing in distributing sectors
and expanding its markets in various countries. The products portfolio includes clothes,
accessories, footwear and other necessary products. The institution is selling the products and
marketing under various brands including JD chausports, black, millets and various other brands.
The establishment merchandises various products from e-commerce platform. The companies
operations are spreaded across various global countries including Spain, Germany, Australia,
UK, US, Dubai. Organization finance establishing through various international brands such as
Nike, Adidas by selling footwear, equipment of ranges in different sports as well as life style
wear. Black is a retailer in different apparels, and footwear of company (JD Sports Fashion Plc :
Retailing - Company Profile, SWOT & Financial Analysis, 2022). The mission of sports
company is to leading sport retailer fashion brand in the UK and provide various quality goods
for achieving sustainability and growth in profitability.

Analysing External environmental for identifying opportunities and threats with macro (PEST or
PESTEL) & Micro (5 Forces Framework for analysing industry structure and the nature of
competition)
PESTLE ANALYSIS FOR JD SPORTS PLC
Pestle analysis of company will cover all the external factors of environment which
impact the fashion retailer industry.
Political factors analysis: Before analysing political environment The company must asses the
status of various political factors affecting organization. Major political factor which will affect
the institution includes political governance, corruption, price regulations. For entering into new
country market the company must access and grant permission from the Indian government. So
that for easily examining the labour laws and helps in assessing other political factors which will
affect the company expansion and will limit the growth for growing stabling performance of the
organization in the future (Gerke and Dalla Pria, 2018). Also, due to Brexit uncertainty has
affected the company and ongoing trade wars between various country will affect the company
operations externally. By analysing this factors the company will make changes accordingly.
Economic factor analysis : The economic factor including the interest rates exchange rates,
laws, various policies, inflation rates, products demand and supply, the unemployment rates will
affect the company. The competitive norms impacting company will affect competitive
advantage. The demand of product will generally depend upon various exchange rates, policies,
deflations inflation in prices. Also, various economic factors which impact the spending pattern
of the customers and pricing policies of products includes the education level, unemployment
level business cycle and infrastructure of business will be examined by company for expansion
business into Indian market.
Social factor analysis: Social factor affecting the institution generally includes cultural practices
followed various societies. The social status of various national countries will impact the
companies sales of products, generally lifestyle of consumer and buying behaviour, health,
education beliefs of consumers will also change the sales and demand of companies products
after entering into new markets (Wong and et.al., 2020). The growth in economy, raw material,
labour costs of Indian country, will affect the companies manufacturing processes. Recently,

covid has impacted largely on various business sales and profit margins by shifting the business
from offline to online stores. By understanding these factors will help in knowing the target
market of companies products and marketing commodity must be designed in right and proper
way for operating in Indian market.
Technological factors analysis : Dynamic changes in technology will influence the fashion
apparel with products produces, supplied, and delivering to the consumers in Asian country
(India). Emerging internet improvements will helps in advancing products to great height. The
advancement in technology boosts the competitiveness of organization and helps in evaluating
the current status of JD sports. Various technological advancing factor which helps company in
evaluating changes includes technologically changes rate, impact of technology on production
and also the value added by the implementation of the latest technology (Runfola, Milanesi and
Guercini, 2022). By analysing this factor thoroughly will help the company in understanding the
emerging ways of new technology which helps in increasing profitability of company and
provides customer satisfaction for expansion in Indian market. With help of technical factors
finances impact will also be evaluated easily.
Environmental factor analysis : As JD sports company is operating in sports and fashion
apparels , mainly the environmental factor which company must consider are pollution, weather,
climatic factors, waste management. By analysing environment factors will help the company for
spreading awareness among environment. Also, due to covid pandemic the company will take
necessary measure and actions regarding environment, with customer safety and security of
employees (Cham and et.al., 2018). Also, these factors will make aware to the customers for
using organic and environmental friendly products. These forces are important due to increasing
scarcity of raw materials, carbon footprints, emissions, set by government for removing the
changes and performing business with corporate and social way.
Legal factor analysis : Before expanding business in Asian countries the company must analyse
legal factors of that country mainly consist of legal laws, health laws, safety laws, discrimination
rules, equality, advertising and promoting standards, customer rights, labelling of products,
branding and safety of products and also the consumers. The company must consider these all
factors for trading with various products and with different countries. As these all factors will
create unfavourable for increasing organization performance (Macro environment analysis of JD
sports, 2022). So for investing in other country the company must evaluate the impacts for these

all factors and decide to invest in particular country or not as these will help business for
operating in particular country Without hindrances.
Porters five forces model is used for analysing sustainability and competitive
environment. This framework emphasis on the companies rivals, new potential entrants in
markets, suppliers, customers, rivalry of competitors, substitute products which influences
companies profitability (JD Sports Fashion Plc: Overview, 2022). This will assist in
understanding the micro environment factor which will affect JD sports company retail power to
serve the consumers and growth of performance.
Threat of substitutes: In the dynamic competitive environment, the seller has Always have
thereat about the substitutes producers as if the seller will increase the process the consumer will
shift towards other similar products. Through which the seller is very attentive and concentrated
abut the customer satisfaction in the competitive market so that the customer do not switch
towards the another products (Yang and et.al., 2020). Also, this thereat is moderate in retail
industries, there is a high differentiation of products wit low cost and enables customers for
shifting to new products easily. Which will attract the large portion of market further result in
reducing sales of company in products portfolio. For minimizing this thereat the company will
position its products which will not induce them to shift to other substitute products.
Threats of new entrants : By entering new more firms in fashion retail sector will affect power
of company. By new entering in market will affect the company probability as the consumers
will ry to shift to new entrant substitute products will increase more competitiveness. With new
entrants will also suffer the economic recession in the markets which will downturn supplier and
buyers. For reducing the new entrants in existing market the company will maintain healthy cash
flow for operating its day to day operation and liquidity. With this it will unlikely for new
entrants to enter in highly competitive market.
Rivalry among exiting competitors : Rivalry will result in declining profits and revenues
within business. The company will minimize rivalry by engaging better customer relationship
and equalizing brand. When the rivalry is high the company has less power and achieves less
profit, but when it is low than company has more power for charging high prices and getting
more profits for fashion retailer.
Bargaining power of buyer and supplier : The raw materials supplied by supplier play vital
role which forces suppliers of products for increasing process of products by producing in low

quality, and less availability of products. The bargaining power of supplier is being maintained
by company by diversifying its existing products, list of suppliers by getting rights and listing
them (Porter’s Five Forces of Competitive Position Analysis, 2022). The rights will exclusively
taken from suppliers for supplying raw materials and products. Also, bargaining power of buyer
is where the customer forces and pressurize business for providing better quality products and
better customer service at low prices.
Presenting the internal environmental analysis through value chain model.
Through applying this tool JD sports would be able to analyse the internal activities that
are carried out within the firm so that most valuable and those needed for the development could
be identified while expanding into any Asian country like India. Further, the detail analysis of
this model is presented as below:
Primary activities: These are the main activities of the firm so that helps in generating revenues
of the firm in different markets. Also, it includes various elements that are as follows:
Inbound operations: This includes the raw materials that are required by the quoted firm so that
various activities could be undertaken in the target market (Tang and et.al., 2019). Further, these
raw materials would be gathered from reliable suppliers that are providing services to the firm
over the years.
Operations: These activities of JD sports would allow the firm to convert the raw materials into
final products that could be sold in India according to the demand and prices that are existing in
that market against its competitors (Brun, 2019).
Outbound logistics: This is related to delivering the final goods to the customers through
systematic efforts. Moreover, in context of JD sports all the internal and external systems are
evaluated on timely manner so that goods could be delivered to the customers in timely manner.
Marketing and sales: here in this step various marketing activities are undertaken by the firm so
that customers are aware of the brand existence in the market. Also, JD sports would
communicate the marketing efforts in manner that would help the firm in generating maximum
revenues for the firm in India(Hultberg and Pal, 2021) . Further, quoted firm has strong base of
suppliers that are reliable and thus enables company to overcome certain challenges.
Service: After the goods are being sold in the market it is very important that proper after sales
services is being provided by the quoted firm so that repeated sales could be established. Also, it

would help quoted firm in establishing the long term relationship with the customers' that is
essential for the long term growth of the business.
Secondary activities: These are supporting services that provide assistance to primary activities
and hence these are also to be considered as part of this model. Various elements of these
activities are:
Procurement and purchasing: This is stage where the JD sports would find new external
vendors that would help the firm in bringing important and essential materials that are required
to carry out the business activities. Further, it is important for quoted firm to maintain the best of
vendor relationship so that products could be easily in the market without any kind of
hindrances.
Human resource management: It is important part of quoted firm as local resource in the target
market are efficiently hired, trained and build up for the future growth and success of the firm.
Further, it is very essential that the quoted firm provides proper training programs to the new
joiners in India so that organization culture, policies and structure could be easily understood for
smooth functioning of business activities.
Technology development: This internal part of the organization help in conducting proper
research activities that helps to maintain competitive advantage of the firm. Also, the quoted firm
would develop and manage the cyber security in the target market so that future problems does
not have to be faced.
Company infrastructure: This is section where all company activities such as accounting,
finance, administrative, management etc. are operated in better ways so that certain process and
policies could be changed in the best manner so that not many problems are faced while working
in the target market. However, the current organization structure of the company is only
compatible with present model of business which could not be applied in all type of markets.
Thus, through following this value chain model the firm would be able to optimize the
best activities for the organization so that maximum output could be generated in the target
market (Greckhamer and Gur, 2021). Also, this would help the firm in becoming cost advantage
against the certain competitors that are operating in the target market. Moreover, through
following this model the firm would be able to identify the core competencies that are existing
and could be utilized in best way by the firm.

Identification of competitive strategies:
These types of strategies help the firm in conquering the target market through
understanding competition in detail manner and closely evaluating the strengths and weakness of
the firm. For the company like JD sports these competitive strategies could be identified through
the porter generic strategies which as follows:
Cost leadership: It is very important that target market of the company is conquered
through selling the products at very low costs so that more people are attracted towards buying
the services of the firm(Firoz Suleman, Rashidirad and Firoz Suleman, 2019). Also, this type of
strategy would allow the firm to increase the market share in the best possible manner. Thus, it
would help firm in generating economies of the scale which is crucial for the organization
success.
Differentiation leadership: Through adopting this strategy the firm introduce new
features in the product so that it could be easily differentiated from those that are already existing
in the target market. Thus, it would allow quoted firm to target the new customers in most
efficient manner so that maximum sales could be generated.
Focus strategy: This is type of strategy focuses on any specialized market so that unique
needs of the customer could be easily identified. Moreover, using this strategy JD sports would
be able to build strong brand loyalty among the customers and would also help quoted firm in
earning maximum revenues (Karyani and Rossieta, 2018). Also, focus strategy could be applied
either on the basis of costs or differentiation depending upon the objectives of the business.
Furthermore, this strategy would be helpful only when any extra value is added to the existing
products of the company in the market. Also, in case of cost focus strategy the firm aim would be
to seek cost advantage in the target market and in case of differentiation it would be to develop
differentiated products that are based on the needs of the buyers.
Thus based on the above stated strategies the one that would be best suited for the quoted
firm would be cost leadership strategy that would allow firm to develop products that are
comparability low cost than the existing competitors in Indian market. Furthermore, adopting
this type of strategy would allow firm to attract new potential customers so that cost of products
is covered easily and more revenues are generated in shorter time period. Also, it will ensure that
business sustainability is increased that would further help firm in operating longer in the Indian
market. Moreover, it enables the firm in gaining more capital that will also create new

opportunities for the business. Also, being established business in UK and having more amount
of capital and resources this could be easily adopted by the JD sports in newer markets so that
risks is minimized.
Presenting strategic directions and methods of expansion.
Strategic directions helps firm in monitoring and achieving progress towards fulfilment
of certain goals and objectives. Furthermore, strategic direction of the company could be in form
of markets, products or services depending upon the structure and size of the business. Also, in
context of markets it can be said that it includes the target market that any particular firm need to
acquired during specific time period (Lupton and et.al., 2020). Moreover, in case of products
certain strategies are developed so that new products could be launched into the target markets.
Also, in case of services personalized customer experience is the motive of any firm that would
be only possible through launching range services that are different from others. For JD sports
strategic direction of the company would be achieved through focusing on target market where
the business need to be expanded in the future.
Furthermore, there are various methods of expansion that could be adopted by the firm
some of them are as follows:
Exporting: This is the method through which the firm sells the goods directly to the target
market through certain agents and third parties. However, through adopting this method total
cost of transportation can be high that would incur extra costs in the operation of the business.
Furthermore, the exporting method is suitable only when the company has limited resources of
opening the store and conduct business operations in the target market.
Franchising: This type of approach means that different franchisee are set up in various
locations that are running in the name of the company. Thus, it helps the company to expand on
the faster rate as franchise remain motivated for growth and success of the company. Moreover,
if franchise are target at successful locations than greater returns could be generated in specific
time-frame (6 Methods of International Expansion for Businesses, 2021). However, franchisee
could not be managed as efficiently as the actual work locations of the company due to the
limited time and different goals according to the target markets.
Partnerships: It is type of method that would allow the firm to join hands with the other party so
that certain goals of the business could be achieved in collective manner. Also, international
partnerships are very helpful in generating ideas and resources so that minimum cost of the

company is incurred in the target market. Also, the firm is able to access relevant skills,
knowledge and experience that is essential for starting the business in newer markets. Moreover,
better decisions are made related to undertaking of any business activities. However, by adopting
this form the business has unlimited liability that need to bear till the business is running.
Licensing: This is considered method where certain rights are been given by the company to
another company to use the intellectual property rights for given time period. Thus, it helps the
company to enter into international market with limited risk so that no government intervention
is faced in the future (Verbeke, Coeurderoy and Matt, 2018)
Thus, form the above stated ways the one that would be best suited for JD sports would
be licensing that would help firm in doing better marketing related to certain products' in the
targeted market. Also, the additional costs related to packaging, promoting and selling of the
products need to be incurred by the quoted firm. Further, the licensee has the complete
knowledge of the market that would help the JD sports to grow in better manner. Although, the
JD sports would gain only small portion from the sales in the target market but it would help the
in gaining competitive advantage in the future.
RECOMMNEDATION
 The company must focus more on building higher business performance by examining
external factors, it must utilize its various strengths for exploring more opportunities in
Indian market.
 As the company organizational structure is not proper for expanding in global new
markets, for this JD sports company must invest more in research and development tools
for making better and proper organizational structure which is suitable in new markets.
 The company can also build strategy direction relating to marketing of products which
helps to achieve goals and aids in better marketing of products by using penetration
strategy, development of market strategy, also the product development ad diversification
strategy which help in building company value and greater market consistency.

CONCLUSION
With the help of this project report it can be concluded that strategic management is very
important for retail industry as it helps in providing various strategies, policies for allocating
appropriate resources which results in achieving desired competitive goals for the company. JD
sport, fashion retailer company will thoroughly examine the internal and external environmental
factors for expanding in Indian market as it will help in identifying the business strengths and
weaknesses for resisting new markets. Moreover, the company also adopt various strategic
directions and competitive strategies which will help in establishing and achieve growth in new
market.

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