Strategic Management for JD Sports Fashion: External and Internal Analysis, Competitive Strategies and Expansion

This report discusses the strategic management process for JD Sports Fashion, including external and internal environmental analysis, competitive strategies, and expansion plans. It includes a PESTEL analysis, Porter's five forces analysis, VRIO analysis, and Porter's generic competitive strategies. The report also discusses the use of Ansoff matrix for strategic expansion.

Strategic Management

EXECUTIVE SUMMARY
Strategic management is a process of setting goals, objectives, strategies of company by
planning monitoring and assessing needs to meet the desired goals. Strategic analysts in the
business use porter's five forces and Michael porter generic strategy as a tool or method to
achieve competitive advantage and also find out about product or service are profitable or not.
These strategies are helpful to identify areas of strengths and what more improvement is needed
such as improving weaknesses in order to avoid mistakes and any uncertainty in the future. For
strategic expansion of business, ansoff matrix tool is used as it helps in planning, analysing,
formulating and evaluating firms growth strategies for future enterprise growth.

TABLE OF CONTENTS
EXECUTIVE SUMMARY.............................................................................................................2
2. INTRODUCTION ......................................................................................................................4
3. Discussing External environmental analysis for identifying threats and opportunities..........4
4.Discussing internal environmental analysis for identifying strengths and weaknesses...........8
5. Identification of competitive strategies ................................................................................11
6. Strategic direction for expansion of business. ......................................................................14
Recommendation......................................................................................................................15
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................17

2. INTRODUCTION
Strategic management is the process which provides the directions for setting the goals
for the business. In business strategic management is applied for gaining the advantage over the
competitors. The strategic manager gives the direction related to plans which needs to be
implemented in the corporate organization. These helps in fulfilling the vision and mission of
the enterprise. The JD sports fashion firm is regarded as multichannel retailer in the sports and
fashion industry. The institution is mainly serving products in fashionable clothes, branded
footwear and also the casual sports wear. Operations of the brand has spread across various
countries.
This report will discuss the details about JD sports background. Analysing the external
and internal environment of the sports company. Also, identifying the competitive strategies with
the strategic directions. Lastly, analysing methods of expansion in the real estate market with the
recommendations.
3. Discussing External environmental analysis for identifying threats and opportunities
Macro- PESTEL analysis
PESTLE analysis is a popular method used by company to evaluate the external
environment of any industry's business by braking down the risks and opportunities into various
factors. With the help of this method company can focus on effective frameworks to use in
planning and easily find out the cons and pros of a business strategy.
Source: (Perera, 2017)

Political factors- This factor play a vital role in determining the elements that can impact
JD sports PLC. When studying about these factors, the firm can look at how government policies
and their rules can affect a business such as tariffs, tax policies and trade restrictions. So it is
necessary for JD sports plc to closely follow the rules and regulation made by government which
is related to business. They must have to follow the territories and state policy because they
operate in various countries. Due to election in UK, the firm has to prepare for rapid changing
policies with new government as it will increase service sector priorities. Various factors are also
involves such as price based regulation and labour laws.
Economic factors- economic factors has been taken into account by the firm in order to
look on each area of business which can get impacted by government decisions or other
economic terms. It includes inflation, interest rates, unemployment rates, exchange rates so, the
firm has to focus on these factors. In UK business, Increasing trend in liberalization of trade
policy can be beneficial for JD sports PLC to invest further into the regions. With these factors,
JD sports plc can easily understand the spending pattern of the clients and therefore proper
decision-making process about pricing and product placement can be done. For example- The
firm can decides to change decisions and make proper planning about its debts after an interest
rate has been announced.
Social factors- In today's business environment, each and every society and culture has
its own way of expanding and operating business. These factors can help company to understand
the market trends and customer purchasing behaviour. For example- health and safety attitudes,
norms, traditions and culture (Phan, 2021). With deep understanding of these factors company
can make decisions and also understand the customer preference in service sector. Social media
and other outlets play a vital role in influencing the UK public and their opinion.
Due to growth in media the purchasing behaviour of customers has been changing
rapidly. JD sports fashion needs to have deep knowledge about these trends to better market and
achieve competitive advantages. By doing so, firm can easily position its services and products
in the competitive market. Also, the clients in the UK are giving priority to experiential goods
rather than traditional value propositions in the business sector. Thus, the firm can leverage this
market trends in order to build the awareness about the brand product and also provide enhanced
customer experience. Migration trend is negative in UK, as it can affect the ability of company to
bring managers and international top management team to handle operations in the country.

Technological factors- Due to heavy competition in technology, the companies in UK
has been impacted by fastest growing market trends such as automation and research and
technology. So, it is important for every business to use up to date and latest trends so that it can
be beneficial for company. Not being up to date about the market trends can be harmful to
business operations and may impact the productivity and performance of firm (JD sports fashion
PESTLE analysis, 2021). JD sports plc needs to analyse the technological factors by
understanding about the new technology and its positive or negative impact on business. It can
also be helpful in increasing customer satisfaction and profitability, and the firm can also find out
how much impact these factors will make on the firm finances.
Due to technology and innovation, the suppliers has to make quick decisions in
developing new products or services. This has put pressure on UK industries and their marketing
department to keep the customers and suppliers happy by promoting various ranges of products
with the help of promotion activities like social media (Vardopoulos and et.al., 2021). The
company has to make more investment in research and development to meet the expectations of
market and have to innovate to stay ahead of the business competition. Because of lowering cost
of production trend the firm has to restructure its supply chain and its management in order to
bring in more flexibility to satisfy customer wants.
Micro- 5 forces framework for analysing industry structure
Porter's five forces of competitive position analysis is the most popular method used by
company for evaluating the market position and competitive strength of the business. This
method is based on the various concept which can negatively and positively impact the business
and thus, it helps to identify where power lies in a business situation (Lord and et.al., 2021).
With the help of this method, JD sports can understand the strength of competitive business
position and strength of a position that a company may look to move. By understanding such
concepts company can easily gain competitive advantages and achieve goals.
Managers of the firm use this theory to understand whether new services or goods are
potentially profitable. By doing so, they can make decisions related to business operation and
also improve weaknesses in order to avoid any uncertainty or mistakes. This model is designed
by Michael porter for analysing things on an industry basis. By using this theory company can
make decisions relating to whether to improve capacity, developing competitive strength and
strategies and when to enter industry.

Threat of new entrants- This is the major factor that can impact the business because
new players into an industry can force current company to keep product price down and attract
more new customers. It has been noted that new entry brings pressure on costs and prices thus, it
is necessary to understand this business situation. The company can attract more new customers
by offering them benefits and build brand awareness to access distribution channels and also
follow government policies.
Threat of substitution- Due to heavy competition in business world, the customer
purchasing power and their behaviour is totally depended on substitution. In other words, when a
new service or goods meets the basic requirements in a very different way, company productivity
and profitability suffers. For example- online shopping and home delivery is a substitute for
physical stores which has attracted more new customers nowadays. After pandemic COVID-19
most of the people wants to purchase goods online instead of visiting physical stores. Due to this
business situation, firm profitability suffers and has to make immediate changes in its business
operations.
Bargaining power of buyers- Business success is depended on power of buyers by
understanding how easy it is for customers or buyers to drive product prices down. It includes
number of buyers, cost to the purchaser of switching from one supplier to other, and role and
importance of each buyer to the company (The five forces, 2021). They can play rivals against

each other in the business market especially when the company's product are undifferentiated, it's
inexpensive to switch customer loyalties.
Bargaining power of suppliers- This is the study of how easy it is for market suppliers to
drive up product or service prices. It includes uniqueness of service or product, strength and
switching cost. It has been noted that powerful suppliers in the market can use their negotiating
power to charge high price from industry competition which decrease industry profitability and
performance.
Competitive rivalry- This is the main driver which has been taken into consideration by
company to understand the factors affecting profitability in a specific industry. Here it includes
the capacity of competitors and numbers of players in the market. Nowadays, many competitors
in the market offer undifferentiated services or goods will decrease market attractiveness. In this
situation, exit barriers are high which can impact the firm's goals and objectives.
4.Discussing internal environmental analysis for identifying strengths and weaknesses
VRIO analysis- It is the method used by company which explains competitive advantage
such as value, rare, imitable and organization. In other words, when a company is in a good
market position to differentiate its service or product from its industry competitors, then it is said
to be a competitive advantage. In order to achieve goals and maintain this competitive advantage,
the firm must be able to demonstrate differential value than its market competitors and pass on
that important information or data to its desired target market.
Value- A company's resources and capability should be valuable and must provide
economic value. The major question include in this analysis is does a resource enable a company
to exploit an environmental opportunity and threat?
Rare- A firm's capability and resources should be unique so that it can attract more new
customers and satisfy existing clients. In other words rarity is seen when the company has a
capability that is unique they must have short supply which means the goods must have good life
cycle. For example- JD sports is focusing on international expansion which helps it to build
relationships with people and spread awareness.
Imitable- The major objective of this factor is whether the company with rare and value
resource make it difficult to imitate its services and product by another industry. This capacity is
helpful for company to be a market leader and helps to gain competitive advantage.

Organization- when resources are available in time and economical in nature, then
resource management can be maintained effectively and efficiently. For example- inventory
skills, knowledge, production resources and Information technology. After acquiring rarity,
value, and imitable the next stage is to optimum utilization of its resources in a systematic way.
If done successfully, the organization can achieve goals and period of competitive advantage.
Source: (Ali and Anwar, 2021)
Capabilities
and resources
Valuable Rare Imitate Organization
capable of
exploiting
Performance
implications/
competitive
advantages

Product
innovation
Yes Yes Yes Yes Above normal/
sustained
Technology Yes No No Yes Normal/
sustained
Supply chain
management
Yes No No Yes Normal/
Sustained
Brand image yes yes yes yes Above normal/
Sustained
Innovation and
marketing
Yes Yes Yes Yes Sustainable
competitive
advantage
Financial Yes Yes Yes Yes Sustainable
competitive
advantage
Customer
loyalty
Yes Yes Yes Yes Sustainable
competitive
advantage
HRM &
culture
Yes Yes Yes Yes Competitive
advantage
Manufacturing Yes Yes No Yes Temporary
advantage
Technology- Technology is not an imitable source nor rare and therefore it offers
temporary advantage to industry. This is the reason the firm has to continuously invest in
innovation and digital technology in order to achieve sustainable advantage. The firm is focusing
on its strong supplier and customer relationship which is helpful for them to gain competitive
advantage. COVID-19 pandemic has highlighted the importance and role of digital technology
for business. Technology plays a vital role in the success of business worldwide and gain
competitive advantages. In the sports and fashion industry businesses are investing more in

technology and innovation for growth and development. Digital technology has helped the JD
sports acquire many people. With the help of digital sales channels and other resources the
company has successfully achieve competitive advantage even during the pandemic.
Manufacturing and supply chain management- both are key sources of competitive
advantage for company which can be helpful for them achieve their market position in the
industry. The company has outsourced all of its supply chain to external manufacturers so that
they can keep its production costs competitive. By doing so, they are able to focus on other
aspects related to its business such as marketing, promotional activities and product designing.
5. Identification of competitive strategies
Porter's Generic competitive strategies ( ways of competing)
With the help of this method company can determine whether a firm's profitability is
below or above the industry average level. The company positions itself in the market by
leveraging its strengths which falls into category such as differentiation and cost advantage.
According to Michael porter, It is necessary for company to choose a right course in order to able
to beat the competition.

Cost leadership strategy- In this strategy, a company sets out to become leader of cost
and the low cost producer in a particular industry. It is necessary for company to choose the right
and clear cost strategy by targeting a large demand and market and also provide the low price.
The firm has option of keeping costs of product or service as low as possible and must have a
high market share with average pricing strategy. If the company offers reasonable product or
service will remain profitable for a longer time period (Ngugi and Gitonga, 2021). The best way
to achieve cost advantages are making optimal outsourcing and by improving efficiencies. For
example- if competing firms of JD sports plc are unable to lower their product costs by a similar
amount then the company may be able to achieve competitive advantage based on this strategy.
Company which is following this strategy have efficient distribution channels and access to the
capital required in order to make investment.
Differentiation- when a firm seeks to be unique and provide different facility related to
product or services in its industry that are widely valued by customers then it is known as
differentiation strategy(Kiprono, B. K. and Kinyua, G. M., 2021). For example- JD sports plc
used this strategy, in order to make their service or product as exclusive as possible so that they
can attract more customers as compared to other firm. It is necessary to have deep understanding
about research and development, ability to provide high quality service and innovation. Here, to
beat the competition company must use effective marketing strategy so that the business market
understands the advantage of unique product offered by firm. Firms that succeed in this strategy
often gave the strengths such as highly skilled and knowledge about innovation, creative product
development department , strong and effective team.
Cost focus strategy- This strategy concentrates on a narrow market segment and thus, this
segment attempts to achieve differentiation or cost advantage in order to beat the competition. If
the firm concentrate on this strategy, then they enjoy a high degree of customer loyalty and trust.
Due to narrow market focus, company pursuing a focus strategy have low volumes and thus they
have less bargaining power with their vendors. But if in case when the company pursuing a
differentiation focused strategy then they pass higher cost of product or service to clients.

Source: (Deshpande, 2021)

6. Strategic direction for expansion of business.
Strategic directions mainly focuses on the action of the company which needs to be
implemented in progressing and growing the business. These directions help the establishment in
growing the market in various fields by keeping clear and achievable goals. By implementing
various strategies in organization assists in leading better and improved performance resulting in
manageable growth (Ansoff Matrix, 2021). For promoting the growth and expansion of the jd
sports brand ansoff matrix will be used for expansion and will help in building the strategic
directions for the business.
The Ansoff Matrix provides four strategies which includes market penetration, product
development, market development and diversification. This matrix helps the business in growing
the business environment and assists in analysing the risks for future growth.
Market penetration help the company in growing the sales of the existing products in the
pertaining market. The JD sports firm uses the market penetration in athlesuire the portfolio of
product such as the track pants, sport hoodies, apparels, footwear withy combining the effective
advertisement helps in selling the product more effectively. The brand image of the company
helps in ensuring continues market penetration resulting in further growth in generating revenue.
Selling of more products in the existing market can be attained by investing the capital in store
expansion which allows the firm to reach the wide target6 market and therefore helps in boosting
the sales of the company. Further more market penetration will help fashion retailer in
developing the production market which helps in expanding the market share. This will improve
the quality of the services which will attract the customers at large extent. Jd sports company has
expanded its businesses area into the outdoor distribution fashion and other fields for attracting
the customers.
By Implementing Product development strategy help the fashion retailer in introducing
the new product to the existing markets. This strategy will direct the company in expanding and
providing new product in fashion style market with different ranges. The company has developed
various products by introducing new product idea from the market research (JD Group Our
Strategy, 2019). JD sports company buys the branded fashion products such as Nike, Adidas
before six months of launching the stores. Acquisitions by the firm is also regarded as the
strategic direction which helps in [roust development, as the JD sports has acquired various

brands such as DTLR, chausports. This will help in reducing the competitors and will help the
company in taking over existing stores .
Market development strategy focuses on the entering into new markets by using the
existing available products. This strategy is based on joining the new market segments which
will assist the company in concentrating on different consumers of the market. The production
and selling method for the company will be changed by using the same technology. By adopting
this strategy helps in expanding the scale of market by entering into more new markets across
various countries. For entering into new countries markets the enterprise will develop the new
competencies which will help in serving the needs of different consumers. For developing the
market the company has recently seen by following the atheleisure trend, which provides
clothing apparels to sports people and athletes which helps in marketing the brands into new
customer segments. This strategy will lead to global expansion internationally across 20
countries. JD sports has also achieved the expansion in existing territory of Europe (Leszczyński,
Metelski and Rabczun, 2022). With the development of the store in us has gained the
momentum, as it is regarded as flagship store of the company. By this strategic direction the
company is continuously expanding and investing in the physical stores , in digital platforms and
creative marketing.
The Diversification Strategy focuses on entering into new markets with the new
products. This strategy involves major risk for the company as well as for the market. Also, with
this strategic direction helps in facing the greatest potential with the increased revenue for the JD
sport company. For the diversification in various market the company has acquired sprinter for
entering into new market with new products (Pizzo and et.al., 2022). But the diversification of
the business, has also effected dealings of business. It is mainly affected by environmental
factors for operating in different countries.
Recommendation
 The company must adopt the right mix of marketing the products for survival of the
business in dynamic environment.
 The company should focus on the internal and external environment, for improving the
customer apparel, building the brand image, and for boosting the overall efficiency. As
the internal and external factor affects firm with many uncertainties with Brexit, tariffs

and laws. Which negatively impact fashion retailing company and result in unfavourably
situation for investment.
 The company can invest into the more marketing research for following new trends and
offer consumers with desired demands. This will also help to maintain the leading
position in the market of the company.
 The company must use various investing styles for building unique portfolio which helps
in development of the market and products.
 The company must acquire continuously for operating in existing market. As by adopting
more and more acquisition will help the company in expanding the scale of the market
into global countries by gaining the relative market share.
 The company must provide the proper weight-age for various factors which will helps in
determining the bottom line and top-line for the company growth.
CONCLUSION
From the above report it can be concluded that Strategic direction of the company is
mainly concerned with positioning different products into competitive market. JD sports firm is
continuously analysing the portfolio of products which help in ensuring the wants of consumers.
The sports retailing company is the second largest fashion brand with the strong market share.
With the internal and external environment analysis helps in identifying the key factors affecting
JD sports company and helps in evaluating future pertaining threats and weaknesses. Also, there
are various modes of expansions and strategic directions for expanding and growing the business
of sports company in various global markets. By using the ansoff matrix model has helped
company in diversifying the products range, product development, market development and aids
in penetrating the market share of the company.

REFERENCES
Books and Journals
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strategies. Psychology and Education Journal. 58(4). pp.3106-3109.
Kiprono, B. K. and Kinyua, G. M., 2021. An Empirical Investigation on the Effect of Image
Differentiation on Service Delivery of Selected Insurance Firms in Nairobi City
County, Kenya.International Journal of Managerial Studies and Research. 9(6). pp.39-
47.
Leszczyński, M., Metelski, A. and Rabczun, A., 2022. Digitalized Sports Products and Various
Generations in the Era of Industry 4.0. Sustainability. 14(1). p.95.
Lord, J. and et.al., 2021. Examination of nursing home financial distress via Porter’s five
competitive forces framework. Health Care Management Review. 46(3). pp.E50-E60.
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Pizzo, A. D and et.al., 2022. The strategic advantage of mature-stage firms: Digitalization and
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Vardopoulos, I. and et.al., 2021. An Integrated SWOT-PESTLE-AHP Model Assessing
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