This report focuses on the strategic management of JD Sports, a leading UK specialist retailer. It covers the external environment analysis, internal environmental analysis, and competitive strategies for the company. The report also provides recommendations for the management of JD Sports.
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Strategic Management
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Executive summary Strategic Management concern with essential to identify the management's mission and vision and facilitates in knowing the future plans that required to be adopt by organisation to fulfil their objectives. In this report the chosen company is JD Sports, which is established as leading fashionable brand, sportswear and casual wear that is operated in 56 stores. The challenges was faced by the firm is tough competition with other companies. In this report some methods and concept are used to identify the suitable tools and techniques that could be used in the organisation.
Table of Contents Executive summary..........................................................................................................................2 INTRODUCTION...........................................................................................................................4 MAIN BODY...................................................................................................................................4 Evaluating external environment analysis to identify the opportunities......................................4 Determining the internal environmental analysis of organisation...............................................7 Assessing the competitive strategies for the company................................................................9 Identification the strategic direction to use in the management................................................10 Recommendation...........................................................................................................................11 CONCLUSION..............................................................................................................................12 REFERENCES..............................................................................................................................13
INTRODUCTION StrategicManagementrefers to planning,monitoring the organisationalneeds and necessity to meet the goal of objectives. This is ensure the changes that require in achieving the success and helps in process the certain strategies management(Alexander and Eberly, 2018). In this report the company which is taken is JD Sports which is established as leading UK specialist retailer of fashionable brands, sportswear and casual wear. In this report the external environmentanalysisofopportunitiesandthreatstoidentifytheindustrystructureand competition is used. To identify the internal strength and weakness of company is used to evaluate the capabilities and opportunities for the organisation to achieve their goals. Apart from that competitive advantages strategies is identify to assess their overall position of company and to give major policies that could be used in the management. The kind of strategic direction concept has been determined to implement them in their organisation to deliver best output to the company. MAIN BODY Evaluating external environment analysis to identify the opportunities To identify the major competitive advantages there are some tools and techniques that used in company to provide the adequate analysis of dynamic environment that exist outside the workplace and that gives benefit to the company in many ways(Alstadsæter, Jacob and Michaely, 2017). This is important to identify the opportunities and threats that usually present in the market. To monitor that PESTEL analysis is used to find the external factors. PESTEL analysis is useful tool which is used in the company to analyse the external factors and that helps in achieving goals and objectives that is beneficial for long term growth. For the company JD Sports is important to understand the need and requirement of analysing the external environment. Following are the factors that impact the company are as follows- Political Factor-This factor concern with political policies that include tax policy, political stability and corruption that exist in the country(Yao and Whalley, 2016). For thecompanyJDSports, thisfactorimpactthevariouspoliciesandrulesthatis formulated by them and influence the major condition.This will be positive impact as China, government has favourable laws and rules that will be useful for future. It might
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impact negatively on the organisation if there were imposing high interest rate and unstable economy. ï‚·Economical Factor-This factor include the exchange rate, interest rate and disposable income that impact the working condition of organisation(Beeson and Li, 2016). In the chosen company, this factor impact the long term on the company and will influence the demand and supply. This might impact positively on the management asChina, there is strong economy and will facilitates in better functioning of company. After the trade war issue it creates the negative changes in the country and because of that it impact the strategies and policies formulated by the organisation. ï‚·Social Factors- This is refers to the taste and preferences, norms and customs of the costumer that exist in the organisation. For the JD sports, this factor is essential to be consider as their major business is depend on the taste and behaviour of costumer.This factor impact positively as in the Asian market like China, there is large number of customer who prefer to wear the fashionable brands and casual wear It might influence the organisation negatively if they are not fulfilling the demands of people of China and will impact the business of their company. ï‚·Technological factor-This factor refers to the innovation in the technology and new creative operations in the management to compete in the market. For the JD Sports, this factor is very useful in taking the innovative concept or technology in the management to improve their effectiveness. It might impact the organisation in positive manner if technology is proper use and implemented by them because it increases the overall effectiveness. This might put negative impact when company is not using new innovation in their management and that will reduce the market base of company in the market. ï‚·Environmental factor-This factor concern with the ecological and environmental aspect that affect the industries in different ways. For JD Sports, this factor increase the awareness of environmental friendly practices in the organisation(Boot and Ratnovski, 2016). It might impact the chosen company in positive way if they were properly following the rules and policies of environment. It might impact the negatively when company is not adhere with the defined rules and does not involve the practices such as corporate social responsibilities and sustainability.
Legal factor-This factor includes some laws, employment laws, consumer protection laws and health and safety laws. In the selected company, this factor is important to consider as this will facilitates in successful trade globally. This factor influences the firm positively when they are aware about the laws, rules and regulation and follow them.This is will be negatively impact when China has strict legal laws and regulation will impact their working conditions. This will be positive if china has comfortable rules regarding trade business. Portersfiveforces:Portersfiveforcesistheframeworkforanalysingthecompany's competitive environment(Bottazzi, Da Rin and Hellmann, 2016). It includes power for buyers, suppliers, competition rivals, new market entrants, substitute goods, services for the market which makes higher profitability for the businesses.In context to JD sports, the company use this model for know about the market which helps its for its better performance which helps for higher profitability for the businesses. Threat for new entrants:It is about when the new company's enters for the market it influence the activities for the existing company's. In context to JD sports, new entrants for the retail brings innovation for the businesses which makes pressure for JD sports fashion Plc for lower pricing strategy. JD sports for managing its sales it has manage its pricing strategies for its business. It helps company for better performance which helps for higher profitability for the businesses. The company has high moderate power for its lower pricing strategy for its business.Thus, there is high threat of new entrance at the selected organisation to face the high level of competitors.When the company which are new for the china market enters for the market it influence the power for the company for sales which helps for the better performance for higher profitability for the businesses. Bargaining power for the suppliers:It is about when the suppliers has high power for its buyers they sets their pricing. Suppliers for dominant position for the company decreases the margins which the company earns for the market(Tursunbaevich and Mamatovich, 2019). The higher power for suppliers for retail sectormakes lower profitability for the company. The company has high moderate for its margins. The company has makes various pricing strategies which helps it for higher profitability for the businesses. This makes impact for the China’s economy as customers has less power to negotiate.
ï‚·Bargaining power for the buyers:It is about when the power for company, its buyers are compare, when the buyers has higher power for its goods, services. The company has various buyers for the China market for this buyers makes pressure for company for lower pricing strategies. The company has high moderate for its price for the buyers. Company makes its pricing strategy lower for its buyers for higher sales which helps for higher profitability for the businesses. ï‚·Threat for substitute goods, services:It is about when the competitors has substitute goods for company's goods it influence the company's sales(Obstfeld and Taylor, 2017). The company has high moderate for its substitute goods it use lower pricing strategy which helps its for higher profitability in China market. The company's lower pricing strategy makes its performance better for the substitute goods for its competitors which helps its for higher sales which helps for higher profitability for the businesses. ï‚·Rivalry among the existing competitors:It is about the businesses which are already exist for the market these are the competitors for the JD sports at China market(Busch, Bauer and Orlitzky, 2016). The company has high moderate for this its has lower its pricing strategy which helps for higher profitability for the businesses. Thecompetitors makes their prices for lower price which helps them for higher profits which influence costs for JD sports, the company has makes its pricing strategy lower for the higher sales which helps for higher profitability for the businesses. Determining the internal environmental analysis of organisation This is necessary to properly execute the internal strength and capabilities that leads to identification of certain ways through which help the organisation to asses its resources. To improve the performance of organisation it is important to undertake the following the methods and tools that will help in enhancing the overall effectiveness. To study that VRIO has been used that will be useful in the management operations. VRIO analysis-This is useful tool that helps in providing the major analytical technique that evaluate the company's resources and facilitate in providing the competitive advantages. In the selected company this framework helps in understanding the different types of resources and beneficial in knowing the external and internal process of the management. Following are the ways through which it enables the firm- ResourcesValueRareInimitableOrganisation
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Trust of costumerYesNoNoNo Distribution network YesYesNoNo Brand imageYesYesYesNo Productand services YesYesYesYes Valuable-The important thing to note that every resources must be valuable and must be provided the benefits to the company(Dary and James Jr, 2019). For the JD Sports, all the resources must be essential to address and it is important to monitor and identify the essential resources. In this trust among the costumer is very valuable and must be attained for longer period to sustain the position in the market. Distribution network is also very useful resources that need to be strengthen as per the time and situation in the market. Maintaining the brand image is very important as it gives lots of advantages in long term to achieve its objectives. Product and services are also valuable asset as it decide the success and failure of the company. Rare-This concern with low availability of resources in the management and rarely possessed by the company. In the chosen company, trust of costumer is not rare as this could be acquire by anyone. Distribution network is rare resources for the company as this requires lots of efforts to be implemented and it to develop the effective distribution network many departments are involved to execute it properly(Hofman and Aalbers, 2019). Brand image is also rare resources as it need lots of handwork and money to achieve this level and also become necessary to maintain it. Product and services are always been rare for every organisation as every company has their own identified products which they deliver to their costumer. Inimitable-This refers to strategy or resources which cannot be pursue by any other firm due to lack of relevant resources. Trust of costumer can be fulfil by any other company and distribution network is also not be copy by any other firm as everyone has their different networks and strategy. Brand image is inimitable as this is common to attain it through proper execution and operational strategies(Mulier, Schoors and Merlevede, 2016). To execute the different image of any organisation it needs lots of policies and tactics to achieve the market
position. Product and services are also inimitable that it could be follow by any company as it easy to adopt same kind of product and services. Organised-Ineverycompanyitbecomenecessarytoorganisedtheresources accordingly to fulfil the needs and requirement of organisation. In the chosen company the trust of costumer is not organises properly as it need to be developed more to reach the level. Distribution network is also not organised in the firm as it require certain changes in the different channel has to be developed more to improve the efficiency. Brand image is also not organised in proper way as it need more changes and development in the firm and become important to maintained the brand image in the market to increase the profit and sustainability. Assessing the competitive strategies for the company Portersgenericmodels:Thismodelareaboutmakingpricingstrategiesfor the company's goods, services which makes its goods different for its competitors. In context to JD sports, the company use this model for its pricing strategies which helps its for higher profitability for the business(Husni, 2020). The strategies which are includes for this model are focus, differentiation, cost leadership which helps for the higher profitability for the JD sports business. In context to JD sports, company deals for China market which makes impacts for its pricing strategies. Cost Leadership:It means the firm sets out to become a low cost manufacturer in the industry. The cost also depends on the structure of the industry, this may include economies of scale, raw materials, technology etc. In context to JD sports, the company with the lower costs would earn the highest profits when the competing products are different. It aims to become a lower cost producer and target a broadChina market. The company makes goods, services for lower price which helps it for better performance which helps for higher profitability for the businesses. Differentiation:When a firm differentiate its products, it is rarely able to charge a premium price for its products and services. It include better service, better product performance as compare to other competitors, superior product, branding etc in China market . In context to JD sports,Business target the larger markets and aims to achieve the competitive advantage across the whole of an industry. Differentiation can be achieved by the way of brand image and packaging.The company has unique goods, services for higher prices which helps it for higher profitability for the businesses.
Focus:JD sports use their strategy where there is a least amount of competition. It focus on the niche market and offering the products for that niche only(Ibrahim and Alagidede, 2018). Therefore, competitive advantage can be achieved only in the company's target section by employing the focus strategy. In context to JD sports, the company using the strategy only for the targetsegmentonly,ifcompanyisusingdifferentiationfocusapproach,itwouldaim differentiation in its target segment only, not for the overall China market. The company has goods, services for niche market for lower costs for better performance which helps it for higher profitability for the businesses. Differentiation Focus:This strategy is used for the segment or small number of target market segments. It also helps in implementing premium price for the China market. The target segments must either a buyers or else the production that serves the best target segment must be different from the other industry. Many small businesses are able to establish in using niche market segment strategy achieving a higher prices than undifferentiated products. In context to JD sports, the company makes unique products which it sales for higher prices which helps company for higher profitability for the businesses. The company has premium prices for unique goods, services which helps its for better performance which helps for higher profitability for the businesses. Identification the strategic direction to use in the management Ansoff Matrix Ansoff matrix is essential mode in doing strategic market planning. These growth strategies helpsorganisations look upon those opportunities where they can generate more revenue. It focuses mainly on product so it is also called Product market mix. It provides full knowledge about what will be presented in which market to sustain in long run(Karolyi, 2016). JD Sports is a leading sports store of UK, it requires market research so that they can implement change to beat competition and increase profit and sales inChina Market. Ansoff matrix is sub divided into four stages that are discuss as under- Market Penetration-It focuses on promotion and price of existing product in existing market in order to increase companies sales. This could be done by- reducing prices of products, acquiring competitors, increasing distribution and promotion. JD Sports can increase its market share in China market with help of market penetration.
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Market Development-In market development entities enters in new market with their exiting product. They can enter foreign market, new domestic market and can cater different segment of customers. This can be useful for those products whose not competing in other market. JD Sports can expand its businessChinaand can open new storesin order to attract customers of China Product Development-In product development organisations introduce new product in existing market. This strategy can be implemented by doing research and development, forming partnershipwithotherentities,andbyacquiringproductofcompetitorstotransformit completely. JD Sports can expand its business through product development and can earn more customerswhich will help them to build a brand image in China market. Diversification-In this strategy companies enter new market with their new products. For companies diversification can be related and unrelated. In related, companies stays within the market with which they are familiar. Unrelated diversification implies companies enters in those markets or industries with whom they are not familiar with. This diversification is completely strategy of high risk. JD Sports with this strategy can in crease its revenue and can enjoy the benefits of exchange currency rateswith the Chinese currency renminbi. JD Sports by considering all the above stages should opt for diversification as it will expand its growth of salesin Asia market and can build more customers force(Lissovolik and Vinokurov, 2019). It should introduce portable music system range inChinaas these days players are using music as their stress buster. Company can provide information regarding their product via emails, social media and through advertisement to theirChinesebuyers.In China peopleare more celebrity conscious these days. They follow their sports stars blindly. It will help company to draw attention of customers ofthisnew market as they can hire famousfilmstars of Chinato endorse their product. Portable music system range will help JD Sports to expand its business and earn revenues. It will be easy for them to open new stores acrossChinaand to move furtheras exchange rates, cost of trade are competitively low. This is mainly because street stores sale are less expensive in China as compare to many other parts ofAsian region. With the increase in JD Sports bing supply chain, it become difficult for new entrants to enter and capture market or industry. They can completely rule in market with diversification strategy.
Recommendation In the analysis of many concept and method the organisation is implementing few after identifying the appropriate one. It is recommended that to monitor all operational strategies and different policies it is important to properly define them in order to achieve the effective tool and techniques for the growth of companyas well as its expansion in Asia market. In the chosen company, to analyse the external environment that impact the overall working of organisation than PESTEL analysis could be use monitor the changes. To evaluate the internal strategies the techniques which is suitable is VRIO analysis to asses the strength and weakness. To evaluate the competitive advantage the tool that is beneficial is Porter's generic strategies which will help in determining the certain ways through which company can use in order to define and regulate the essential strategies. For the selected company it will be important to define the relatable problems that could be use to achieve the objectives and goals. To determine the marketing strategy the suitable strategic techniques will be Ansoff Matrix as it contain some useful marketing tactics which could be identify by the companyin its expansion in China market. CONCLUSION From the above report it is concluded that Strategic management is referd as basic of organisation as it facilitates in understanding the vision of future and will guide that what action needs to be taken to fulfil the objectives and goals. In this report some methods and tools are evaluated to implement in their management operation to fulfil the efficiency. To determine the external environment and way they influence the whole condition of company then PESTEL Analysisisusedtomonitortheallfactors.Tounderstandtheinternalcapabilitiesand weaknesses the analysis which is suitable is VRIO analysis as this will help in understanding the certain strength and opportunities for the company. Porters generic strategy is helpful in understanding the various factors which impact the competitive potential of the company. Ansoff Matrix is marketing techniques which has some strategies that tells the organisation that what to follow to maximise the profit and growth of organisation in future period of time.
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