Strategic Management for JD Sports: Opportunities, Threats, and Competitive Strategies

This report analyzes the strategic management plan for JD Sports, including opportunities and threats in the external environment, internal environment analysis, and identification of competitive strategies using Bowman's strategic clock. The report covers the company background, challenges faced by JD Sports, external environment analysis, internal environment analysis, value chain analysis, and identification of competitive strategies. The subject is Strategic Management, and the course code is MS60043E.

Strategic Management
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Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
Company Background.................................................................................................................3
Challenges faced by JD Sports....................................................................................................3
External environment analysis for identifying opportunities and threats...................................3
Internal Environment analysis.....................................................................................................6
Identification of Competitive Strategies.....................................................................................8
Strategic Direction....................................................................................................................11
CONCLUSION .............................................................................................................................12
REFERENCES..............................................................................................................................13
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INTRODUCTION
The notion for Business Strategy is stated as an business structure that defines company's
objectives, standards which encourages the company to attain its targets with higher success.
Business strategy commonly refers to an arrangement of various resources, determining different
skills & capabilities, planning or allocating various organisational roles to distinct employee's. In
order to have an effective organisational strategic plan a business should include certain models
into its business decisions that are PEST, Stakeholders analysis, VRIO, SWOT, Porter's five
forces, Generic strategies & Bowman's strategic clock which presents a great role in successful
business (Abdolshah, Moghimi and Khatibi, 2018). The present report determines the mission,
vision & objectives of JD Sports wear that deals in sports items such as cloths, accessories,
equipments and many other. Also, the report covers an impact on the macro environment &
potential of internal environment. Other than this, the Porter's five forces, Porter's generic as well
as Bowman Strategic clock is also highlighted. At last, the strategic management plan is
developed for JD Sports wear.
MAIN BODY
Company Background
The company JD sports was established in 1983 by John Wardle & David Makin. The
company is being a very famous in its UK market for sports related cloths, accessories and
equipments. The company is operating its business with more than 60 stores across UK and is
also having its presence at international level.
Challenges faced by JD Sports
The different challenges which a company JD sports faced are mentioned below:
 Complexities in international business expansion.
 Ineffective management of its business strategies
 Better approach to company's strategic management
External environment analysis for identifying opportunities and threats Political Factors: The present political forces plays a very crucial role in determining
elements which affects JD Sports companies profits in the long-run. The business has
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made possible to diversify its hurdles in the political background so to attain success in
industry and also in different countries. The political elements that are determined by JD
Sports comprises of risks of terrorism, corruption, bureaucracy, legal framework, trade
regulations and various others. Economic Factors: The external factors which can affect JD Sports includes the rate of
inflation, rate of savings, foreign exchange interest rates & the existing economic issues.
JD Sports generally utilizes a nation's economic functions like growth rate and inflation,
customer expenditure to determine the growth of the business as well as the entire sector
(Ansoff and et. al., 2018). Social Factors: The social culture in which a company operates its business also affects
its performance. Determinations of culture like shared values & attitudes of the customers
have been analysed by JD Sports which their marketers use to evaluate their consumers
needs in a specific market. The forces also acts as a crucial point in evaluating how
marketers of JD Sports formulates their marketing strategies for the target consumers.
Social factors that JD Sports considers comprises of demographics, cultural attitudes &
perceptions,or even the educational level among others. Technological Factors: Technology is associated with different industries that affects
company's operations in different ways. A company must consider technology of the
industry & the intensity of such technological intervention within the industry. Slow
modifications in technology will present the company enough time to adapt whereas the
speedy changes would present little more time to the business so to have essential
technological changes. The company JD Sports is required to have a proper technological
analysis dependent on factors like the technological impact for its product, frequency of
technological diffusion & the effects of value chain analysis on customer needs (Ansoff
and et. al., 2019).
Opportunities and Threats
Opportunities  The firm can reduce the transportation
costs by selecting low shipping cost in
order to reduce the total charges.
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 As the existing youth is highly focused
on their fashion and fitness, it can be a
greater opportunity for the company to
capitalize on this purpose.
Threats  The highly profitable goods of firm are
seasonal, any alteration in the trend in
any period of time can shackle the
profitability of the JD Sports.
 There is a rise in the cost of raw
materials. In order to cope-up with the
situation, the firm has to trade-off
between the customer benefits and
profitability.
Porter's Five forces Threats of new entrants: The company JD Sports operates its functions in the retail
business, that has a constant threat from new comers within the industry. The threat is
evaluated by JD Sports through having a constant improvement in its services & by
launching different new products. The business also enjoys high economies of scale that a
new entrants would not be able to enjoy. The company JD Sports is having enough funds
that can spend upon research of new items with innovation & that can improve their
quality (Fozer and et. al., 2017). Bargaining power of suppliers: The suppliers in industry that use to supply raw
materials to the business plays an important role as if they are aware about the
organisation's dependency on them, then they could be able to change their requirements
in different rates. The company JD Sports manages the suppliers bargaining power of
through diversifying their suppliers, having exclusive rights from their suppliers in order
to supply the raw materials to them along with researching for a new products with
different raw materials.
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 Bargaining power of buyers: Buyers demands products worth greater than the amount
that they are paying to company. Smaller the consumer base the greater the bargaining
power of buyers is present. The company JD Sports handles this issue through acquiring
high customers base from various segments as well as geography & by enhancing the
item portfolio so that their buyers can have greater options to purchase. By having this,
the business can be able to enhance its consumer base of broader range & multiple
offerings to them. Threats of substitute products or services: Customers would look for substitute products,
that might fulfil their needs in the identical way. The company JD Sports minimizes this
threat by creating its service more essential than that of product, through positioning them
in a way which consumers might have to pay more when they chose for a substitute
product (Echchakoui, 2018).
 Rivalry among existing competitors: The rivalry among the industry competition
generally results in the reduction of revenue. The JD Sports company could minimize this
by having brand equity, economies of scale & developing better consumer relationship
management.
Internal Environment analysis
VRIO Analysis
Resource Valuable Rare Imitable Organized
Brand image √ √ √ √
Marketing √ √ √ √
Technology √ √ √ √
Manufacturing
capabilities
√ √ X √
 Brand image: JD Sports brand image acts as a important source of advantage for the
firm. The company's brand image is a essential driver of sustainable competitive edge for
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the business. In case of JD Sports too, the organisation's image fosters high popularity as
well as loyalty of company across the. Marketing: Marketing has supported the firm in managing the high competitive pressure
& attain a significant advantage over its rivals. Effective marketing strategies has
supported JD sports in differentiating its brand from its competitors & enhanced their
market position. The company JD Sports is one of the highly well known company across
the world (Kameshand Jin, 2018). Technology: The digital technology as well as other newest technologies such as AI has
become a tool of attaining competitive advantage in different industry involving the
sports industry. In case of JD Sports, the use of digital technology has raised as an
essential tool of competitive advantage for the company assisting them in gaining a
significant advantage over its competitors in the industry. Manufacturing capabilities: The company JD Sports has sustained a huge base of
suppliers as well as manufacturers. The company has virtually outsourced all of its
manufacturings to outside suppliers as well as manufacturers. There are large level of
independent contractors that are located outside the UK who supplies all the sports
footwear to JD Sports company.
Value Chain Analysis
The value chain of any company involves two things that is primary and supportive
activities which allows companies in having proper supply of its goods. The value chain analysis
for JD sports is mentioned below:
Primary Activities:
 Inbound Logistics: The quality as well as the sustainability are its basis of JD Sport's
growth, so eventually, they represents the common in in-bound logistics. JD Sports has
an effective supply chain which surrounding transports, internal delivery, suppliers, as
well as the quality check to deliver fine goods & services. Majority of the items by JD
Sports are produced through independent suppliers. The bought manufactures, after rigid
features evaluation, are sold via various local as well as by distribution centres (Lavery,
2019).
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 Operations: The operations involves producing, assembling, labelling, & testing the
items, but it on the other hand also includes equipment's repair & maintenance. The
company JD Sports analysis represents the significance of managerial actions in the
development of value & attaining a strong competitive edge within the marketplace.
 Outbound Logistics: Outbound logistics within the JD Sports includes all the
organisational activities in order to store & distribute the items to customers. The
offerings are delivered to their regional & distribution centres in order to send them to the
retail marketplace. The sequence of distribution mode assures that the items are offered to
the consumer sooner. Marketing and Sales: The JD sports quality is having a distinctive features, as well as
the brand identity caters numerous customers & the sports enthusiasts, through its
marketing. The company JD sports marketing as well as sales activities are dependent
upon promotional activities, sales force, pricing or the selection of channel.
JD Sports Support Activities
 Infrastructure: The Company’s infrastructure is a major combination of activities,
handling of legal matters, quality management, planning, accounting & the strategic
management. Company's infrastructure activities within the JD Sports value chain
permits the organisation to bring effectiveness within the whole chain. Such actions
offers efficiency, cutting of overhead costs as well as keeping the overall working in
check.
 HRM: JD Sports is an international organization with its distribution centres, production
outlets & other retail shops are present worldwide. Hence, the HRM is an important
function within the JD Sports analysis. JD Sports has greater than 70,000 staff
internationally, operating in various capacities. The business offers a positive
environment for working and assist their staff in order to utilise their talents as well as
determine with the organisational culture of diversity & inclusion. Certain rewards
programs for staff are also an incentive for staff to retain in the organisation. JD Sports is
categorized as America's best employer company for diversity on fortune (McAdam,
Bititci and Galbraith, 2017).
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 Technology Development: The technology development as well as the product quality
acts as a critical role within the JD Sports value chain analysis as JD Sports promotes
itself as the leader being an innovative sportswear. The company JD Sports has
emphasised on utilizing research & technology for product enhancement & its
equipment’s, manufacturing practices or in controlling waste.
 Procurement: The element of procurement within the JD Sports this analysis includes
the procedure & practices within the purchase of raw materials, equipment, machinery,
packing items or various essentials to produce their products and function the whole
process. JD sports team directs the whole process of procurement. They chooses the
suppliers who offers them fine quality raw material at the reasonable cost and those who
believes in the common thoughts of sustainability as well as of environmental safety.
Identification of Competitive Strategies
Bowman's strategic clock Low Price or Low Value: Companies generally does not selects to fight in under this
position. This is the foundation of bargain bin and not the organisations wishes to stay in
this category. Instead it is a strategy which the businesses finds themselves forcefully to
fight in as their item missing unique value. The only manner to have it is via cost
effective sales amount and by regular attraction new consumers. JD sports would not be
successful in any consumer loyalty programs, but can might be competent to retain
themselves as long as they can be one further step forwards of their consumers The items
here are inferior but the rates are catering sufficient to attract customers (Pang, Wang and
Duan, 2019). Low Price: Organisations engaging under this categories have the low expensive
managers. These are some organisations which drives prices down to bare minimal, &
they balances highly low margins with extremely high volume. When low cost leaders
such as JD sports have large amount and sound strategical reasons for their places, then it
could retain this way & become a strong driver within the marketplace. Hybrid (moderate price or differentiation): Hybrids are those which are attractive
businesses. They offers their items at a lower cost, but sells items with a greater
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perceived value than with their competitors. Sales volume is an issue here with JD sports
but this builds a reputation of offering reasonable prices for fair valued goods. Differentiation: Organisations that unique product to their consumers are having greater
shared value. To be competent to bear to do this the company JD sports either enhances
their prices & sustain self through greater margins, or they keep their low prices & seeks
large share. Branding is refereed as an essential with uniqueness here as it permits a
business of JD sports to be a synonymous with high quality & a price point. JD Sports
Company is remembered for high quality as well as premium prices (Prashar, 2018). Focused Differentiation: This are company's designer items that includes high shared
value as well as the higher prices. Customers would buy within this category dependent
upon the value perceived value by them. The items does not forcibly needs to possess any
high exact value by JD sports but the thought of value is sufficient to charge higher
amount. Increased Price/Standard Product: Generally organisations considers a gamble and
simply enhances their rates in absence of any raise to quality of the product. When the
higher price are accepted, then the company like JD sports enjoys greater profitability.
When it is not, the company's market share decreases, until JD sports makes an
adjustment to its cost and value. This strategy might work for the shorter term, and is not
suitable for longer term as an ineffective rates premium would be identified within a
competitive market. High Price & Low Value: This comprises of a monopoly pricing, within a marketplace
in which one organisation sells the products or its service. Beings a monopolist firm,
organisation don’t have to be focused about additional value as, when buyer’s needs what
the organisation offers, the they would pay the rate which a company has set, period. JD
sports is not a monopolist firm in the market so can't charge high prices for the products. Low Value/Standard Price: Any business which pursues this strategy would lose its
market share. If JD sports is having a low value offerings, then only a way in which it
will sell is on actual price. JD sports could not sell old items at new prices.
Porter's Generic Strategies
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 Cost Leadership: JD Sports within a cost leadership strategy sustains competitive
advantage dependent on costs. Within this generic strategy, JD sports minimizes its
procurement costs so to maximize its profitability or minimize the selling prices. This
competitive strategy has supported the company JD sports in gaining its competitiveness,
particularly against its competitors. A strategic aim is depended upon the strategy of cost
leadership as to enhance the organisation's competitive edge by latest technologies to
minimize procurement costs. A monetary target is dependent on this strategy too so to
maximize JD Sports profit ratios, like as on latest sports wears. Diversification: This is the significant for JD sports intensive growth strategies. This
strategy includes development of new products to attain growth. JD sports executes this
intensive strategy in its initial years, like when it has launched sportswear & sports
equipment’s for its product mix. Diversification could support the company JD sports in
having competitive advantage of uniqueness by latest products which can supply
materials for item innovation in its shoes, cloths as well as in equipment’s (Shmeleva,
2017).
 Focus: This is a strategy which enables a business to dominate a niche market. By a
focus strategy, JD sports company can concentrates on a specific part of a market.
Business that attains success with a focus strategy determines the dynamics as well as
unique customer demands of their niche market . As the consequence of developing &
promoting premium products or services, JD sports could attract a larger share of
consumers within that market segment as compared to the competitors. Also, JD sports
can generate above average profits or reduce the threat of rival firms through entering
into niche market.
Strategic Direction
Ansoff Matrix Product Development: When the company JD sports decides to initiate innovative items
for its present customers by modifying designs, items characteristics or features, in order
to hold its present customers then this means a company is utilizing a high growth plan
by developing its product. This is the primary growth plan for JD sports. Product
development is related with the innovation of the latest sportswear to enhance the profit
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margin of the company & is indulged in this intensive growth. Hence, the product
development strategy for JD sports helps its generic strategy of differentiation. The major
objective behind this high growth plan is to expand the organisation’s market share by
indulging the newest technique within the design as well as features of its sportswear. Market Penetration: When a company JD sports utilises an intensive growth plan in
order to penetrate the market through producing the identical product within the same
market & market segment but at various price levels then this is referred to as a market
penetration. This is the secondary growth plan implemented by JD sports to penetrate the
present market. This strategy assists company in earning large profits upon its sales. The
JD sports is penetrating its competitive market by different other manners such as the cost
leadership strategy of a company has extended the market penetration because of
reasonable productivity. The main objective of this aspect is to enhance company's
market share. Also, the financial objective of JD sports is to expand its profits & income
by a large amount of sales (Yuan and et. al, 2020). Market Development: This is the highly profitable strategy for JD sports because it
supports to expand the organisational growth by emphasising upon various markets & its
segments. Such as, JD sports is planning to launch its retailing shops in Asian countries
Japan & the Vietnam to earn more profit by sales. Additionally, the market development
strategy is implemented by a company by the procurement of modified as well as
innovative items in new markets to indulge in new market segments such as the
production of goods & services for sportspersons. The strategic target is related to market
development and to earn revenues through entering into new markets of Japan & the
Vietnam.
 Diversification: This deals with the launch of new products & services within a new
market so to reduce as well as recover losses. The least essential growth strategy for JD
sports is Diversification. The competitive plan of differentiation for JD sports could be
assisted by diversification. The main objective of this strategy is to minimize the chances
of monetary risks through entering into new markets.
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CONCLUSION
From the above discussion it can be concluded that both external and internal
environmental analysis helps in identification of current market trends or company's progress
that can effect the business of company. Also, it is highly important for a company to develop its
strategic plan via looking at different market as well as industry responses such as through
application of Porter's generic strategy, porter's five forces and by the Bowman strategic clock.
In order to have effective business expansion plan the application of Ansoff matrix is highly
beneficial which talks about different elements through which they can be able to expand their
business properly. A proper development of strategy as well as its management helps businesses
in attaining long term growth as well as higher competitive advantage within the market.
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REFERENCES
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