Strategic Management: Analysis and Value Chain

Strategic Management
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
External environment analysis ...................................................................................................3
Value Chain Analysis .................................................................................................................7
Porter Generic Model .................................................................................................................8
Strategic Direction and methods of expansion..........................................................................10
CONCLUSION AND RECOMMENDATION ...........................................................................10
REFERENCES..............................................................................................................................13
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INTRODUCTION
Strategic management is planning, organizing and controlling the future plans of the
company and managing the resources to achieve the objectives. It involves analyses of the
market, the competitiveness and it is a set of decisions that the company takes for successful
implementation of the strategy framed by the company. By strategic management JD sports can
identify their current resources, frame out strategy and making provision for deploying the same.
JD sports PLC is a UK based sports and fashion retail company which was founded in 1983 and
has now expanded across many parts of the world. Also, the company has expanded in Asian
market starting with Malaysia and covering Lumpur and Cheras. Now it is planning to expand in
South Korea. JD sports plc is considered very innovative and visual merchandiser of sportswear
which are stylish. Retail industry has changed over the years it is not only limited to selling the
products from the manufacturer to the consumer but also involves various activities such as
advertising, inventory management and data processing. The retail industry has not become well
establishes and mature. Due to the pandemic hit, the company is facing challenges of reduces
sales and profits. Also, the growth rate and expansion are less as compared to its competitors.
Increasing competition threat is also a challenge for JD sports plc.
MAIN BODY
External environment analysis
External environment analysis is done to formulate strategy, make decisions and to
identify various opportunities which are present in the market and also identifying the threats. It
is assessing of the market in which the company is planning to deploy its resources.
Pestle Analysis
South Korea comes in the list of developed countries of the world and JD sports is
planning to expand in this country therefore Pestle analysis of South Korea is as follows:
Political factors
Factors which indicate the level of government intervention and the political situation of
the country and which can impact the working of JD sports such as tax policies, stability, trade
tariffs etc. South Korea is one of the developed countries of the world and also it is fully
democratic country (Perera, 2017). There is political stability in the country therefore JD sports
plc can expand into this market as also South Korea has good relations with other countries.
South Korea has a free- floating exchange rate (a rate ascertained by supply and demand). There
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have been various restrictions and regulations which have been imposed on foreign exchange
operations. These government-imposed measures were planned to assure the accessibility of
international currencies to South Korean enterprises and to keep the flight of assets from South
Korea. Under foreign pressure, the South Korean government began to modify the foreign
exchange market which saved package required by the country to give itself to changing all
facets of the foreign-exchange method.
The system has yet to become amply liberalized as the South Korean government has
introduced many new direct and indirect regulations in various forms, including limitations on
tax rules, monitoring regulations and certain transactions to assure its power over the fiscal
system. The impact of currency transfer has thus greatly impacted the South Korea people and
the government.
Economic factors
The factors which determine the performance of the economy and these factors can impact the
functioning of JD sports plc. Factors relating to inflation rate, interest rates etc. comes under this
category. South Korea has made great economic progress in some years and also it provides
funds to banks that supports poor countries. The country manufactures powerhouse and relies on
exports. The country has also done free trade agreements with many countries which will give
certain advantage to JD sports as well. These factors impacts the purchasing power of the
consumers and also changes the demand and supply model of JD sports plc.
Social factors
Social factors consist of the environment of the society such as the culture,
demographics, customs and values of the society of South Korea in which JD sports plc will be
operating. Food, sports and clothing are trends of South Korea society therefore it is profitable
for JD sports plc to expand into the markets of South Korea. The company should consider one
challenge which the country is facing, there is huge disparity between rich and poor which could
impact the sales and profits of the company.
Technological factors
Technological factors are the level of innovation done in the country which could impact
the working of JD sports plc. The research and development and the awareness of technology in
the South Korea impacts JD sports plc. As South Korea is digitally advanced country, and they
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