Macro Environmental Analysis docx.

MANAGEMENT

Contents
Introduction.........................................................................................................................................2
Section 1: Macro Environmental Analysis........................................................................................2
Pestle analysis....................................................................................................................................3
Political factors-.............................................................................................................................3
Social factors-................................................................................................................................3
Economic factors-..........................................................................................................................4
Technological factors-...................................................................................................................4
Legal factors-.................................................................................................................................4
Environmental factors-..................................................................................................................5
Section-2: capability............................................................................................................................5
McKinsey framework........................................................................................................................5
TOWS Matrix....................................................................................................................................6
Section-3: competitive analysis...........................................................................................................8
Porter`s five forces model..................................................................................................................8
Porter generic strategies...................................................................................................................10
Section-4: strategic plan....................................................................................................................11
Conclusion..........................................................................................................................................12
References...........................................................................................................................................13

Introduction
With the changes in the business environment, financial performance is not the only criteria
to check the performance of the MNCs. For aggressive expansion, the company have to face
legal and economic impact of another country. Being a business advisor, I have received the
responsibility to create a strategic plan with its positioning with several strategic tools. The
report is based on strategic tools, which includes TOWS matrix to analyse the internal
environment, PESTLE analysis for analysing the macro-environmental analysis or external
environment. Section-3 analyses the competitive positioning of JD Sports by applying
porter`s five forces model. In order to analyse the current positioning, the report uses Ansoff
matrix and porter generic strategies to identify the potential expansion for the company. On
the concluding note, business advisor creates a strategic management plan, which directs
strategies, objectives, and tactical actions for upcoming five years.
Section 1: Macro Environmental Analysis
Mission-
Mission statement of JD Sports is to become UK`s well known sports retailer. The company
aims to avail customers with wide range of products by ensuring quality and service for
women, men and children`s footwear.
Objectives-
The marketing objective of JD Sports is to open new stores and expand at global level. JD
Sports must diversify the product range and further acquire new organisations. The company
often aims to provide desirable brands to the customers, which finally surpass its competitors
such as Foot Locker, Zumiez, Cole Haan, and rue21.
Vision-

The vision is to become most faithful and trustable organisation in world.
Pestle analysis
This tool is used to conduct the analysis of the business environment. Pestle analysis avail
insight in the operating challenges in the environment affecting JD Sports.
Political factors-
Overall systematic influence of political risks, which JD Sports is exposed to include that if
the political factors are stable then it will be able to expand its market in other nations. As it
present globally, which says that it has political pressures and tensions affecting growth
opportunities with JD Sports. The law enforcement in relation to business especially contract
law is compulsory to accomplish. For instance- prohibit alcohol and other conditions, which
must be fulfilled while conducting business. If the organisation is not able to do so then
inefficient amounts of the government regulations can discourage business. As the company`s
headquarter is situated in UK, London who already maintains appropriate relations with other
nations. This facilitates the company to open retail stores in other nations without any barriers
(Rastogi, and Trivedi, 2016).
Social factors-
Currently, it is seen that Asia pacific is quite likely to register as one of the largest market
because of increasing disposable income of customers. North America is likely to witness
growth because of adoption of advance technology and awareness of health and fitness
activities (QY Research, 2019). The JD sport`s product is not limited to sport persons, and
athletes. Increasing awareness of health and fitness centres in developing nations and
increased personal disposable income can make sportswear as centre of attraction.
Furthermore, the increasing participation of women in fitness industry has been increasing
(Lotayif, 2016).

The local market “UK” is a big consumer market with population of 66.4 million in 2018.
More than half of the UK`s populations is young, educated, and high cost of living. Most
importantly, healthcare sector is one of the most successful venture in world, which currently
focus on fitness (Rastogi, and Trivedi, 2016).
Economic factors-
As far the UK`s economy has been concerned, it is seen that. The demand of the JD Sports
products can be increased only when personal disposable income of people is higher. Most
importantly, the tax implication has been reduced to 18 percent.
Technological factors-
UK is the forefront of research and development centres. Further, the government will assist
to establish the environment conducive in the developing of new technology. As per market
line, it is seen that use of online and social platforms have been increasing, which suggests
the company to grow through online and create its website to sell its products and earn
profits. Establishing retail stores and outlets can be expensive as compared to engaging in
social media and online stores. Furthermore, technologies such as online shopping will have
to bear low costing for JD Sports, as they are needed to pay to staff, rent, leases, and
transportation. JD Sports can train the staff on the basis of keep the new technology and how
to work for them. It can also lead to increase in employment to the digital marketers, which
will be paid for their creativity (QY Research, 2019).
Legal factors-
This factor influences the company`s operations to large extent as new suppliers of JD Sports
to complete the organisation’s risk assessment form with an aim to ensure that the activities
are in the lining with Ethical Trade initiative base code. ETIBC includes the areas such as
working hours, fire procedures, and maternity pay provisions. UK has boosted strong

intellectual property laws, which is managed by (UK-IPO) that is responsible to maintain
registration of designs, patents, and trademarks. Business legislations motivate commercial
activities to attract the interest of investors (Mukabi, Kemunto, Mugo, and Kamau, 2017).
Environmental factors-
The company`s demand will be influenced by the environmental disasters such as air
pollution, CO2 emissions and water pollution which has severe impact on the human health
and doctors often suggest to engage in workout and sports activities, which directly increase
the sales (Izquierdo, Rodríguez, and Ribes, 2016). Government has to implement several
policies leading to control the pollutants. The integration of pollution control has been laid
down in EPA, which are necessary to follow. This progress forces in reshaping of economy
and finally strengthening the UK`s environmental policies (Kibria, Amin, and Rifat, 2017).
Section-2: capability
McKinsey framework
It is the tool, which will analyse strategic alignment of company with seven “S”-
Strategy
Basic
strategy is to
market the
products as
the
manufacturer
of standard
lifestyle
items
System
s
JD
Sports
already
has
well
known
busines
s
Structure
It has
centralisatio
n-based
structure.
The model
works well
to monitor
the supply
chain and
Styles
JD
Sports
items
has
become
an
integral
part of
active
Skills
The
leaders are
quite
skilful
resulting
into
maximum
profits and
nomination
Shared
values
It
includes
focusing
on
commit
ment and
customer
needs.
Staff
The portfolio
covers both
workers as
well as
contractors.

(Awino,
Njeru, and
Adwet,
2017).
systems
.
distribution
network.
lifestyle
, as it is
quite
useful
for
runners,
and
athletics
(QYR
Researc
h,
2018).
for
business of
the year.
TOWS Matrix
This tool helps in identifying the threats, opportunities, strengths, and weaknesses of the JD
Sports. After identifying, TOWS will match the external opportunities and threats will be
associated with strengths and weaknesses, so that company can use strength to overcome and
reduce the threat. Opportunities will be identified and associated with the strength so that
company can grab them and make strategies to expand.
TOWS strategic Matrix
External opportunities External threats
Increase in number of internet users in
world, JD Sports can expand presence
online.
Increasing competition have been leading to
price pressure, which will lead to reduced
revenues (Adwet, 2016).

JD sports lead to dilution of the
competitor`s advantage, which has enabled
to enhance the competitiveness while
comparing it to the competitors (Adwet,
2016).
Technological developments need the
workforce to become trained as the inability
to maintain changes.
Internal strengths Strength opportunity
Maxi-maxi strategy
The company holds differentiation
regarding its brand.
JD Sports have large number of outlets
in every state supported by strong
networking for distribution.
JD Sports can access its strengths to
maximise its opportunities.
Being a differentiated and well-known
brand, it is seen that it is trustable brand.
Therefore, it can expand its online stores
also (Dandage, Mantha, and Rane, 2019).
Internal weaknesses Weakness opportunity
Mini-Maxi strategy
The fashion trends are quite
vulnerable.
The company has high employee
turnover rate as compared to its
competitors, which increase the cost of
training and development (Viltard,
2017).
JD Sports can minimise fashion
vulnerability by remaining competitive to
its competitors.

Section-3: competitive analysis
Porter`s five forces model
It is a strategic tool, which helps to determine the competitiveness in the industry. The
purpose of the organisation is to derive five forces, which analyse the competitive rivalry,
evaluate the bargaining force of buyers and suppliers, and examine threats from substitutes
and new entrants (Izquierdo, Rodríguez, and Ribes, 2016)..
Bargaining power of buyers-
Bargaining power of customers have been becoming lower where JD Sports already maintain
a large customer base. Furthermore, more people have been approaching to products, as they
want exclusive and differentiation in their wear. As far as the product brands are concerned,
bargaining power of customers can be higher due to homogeneity feature of product with its
competitors such as Nike and Adidas (QYR Research, 2018).
Bargaining power of suppliers-
With the wide range of JD Sports products from different brands, it is seen that the company
creates strong relationship between suppliers. They avail competitively priced sport items,
footwear, leisure clothing, and the accessories with mix of brands but the bargaining power of
supplier is low as compared to bargaining power of JD Sports (Sarma, 2014). Wide range of
suppliers can make it easy for JD Sports to select the raw material on the basis of prices and
products being offered. JD Sports can acquire brands and retailers through which it can
develop through exploitation of product offerings when the company needs to uniquely
appeal to customers (Gottfried et al., 2018).
Threat of new entrants-

The potential threat of new entrants is quite low because of high capital requirement. The
access to the distribution network is easy for the new entrants because of few retail outlets
with huge brand name. JD Sports can easily take advantage of economies of scale as it is
already established in several places and it can fight off other new entrants with the help of
cost advantage. The company can focus on innovation and differentiate its products, which
already has a brand name that means customers trust JD Sports for its products (Sarma,
2014).
Threat of substitutes-
JD Sports has very few substitutes in the industry for its products. There is almost no ceiling
on the extent of profits, which it can earn. Few substitutes also avail high quality goods at
low price while comparing it to the other substitutions. This means that the buyers are less
likely to switch the products (Clark, 2019). In order to focus on availing high quality, which
are more expensive. To foresee the menace of the replacement merchandise, it is seen that
there is an alteration in the monetary value of the substitute goods. Due to alternative
manufacturing, it has been bettering the goods by cutting down the costs differentiating from
the company`s operations (Gottfried et al., 2018).
Threat of competitive rivalry-
JD Sports have been out spacing its competitors by knowing its customers and place in
market. One can double revenues when sales of competitors have flattened. JD Sports has a
good mix of brands, which has opened its right markets and avail a great experience in retail
store (Islami, Mustafa, and Latkovikj, 2020). JD Sports has higher and right influence on
board especially male and female. For example- adidas and Nike also maintains competitive
relations. Underpinning JD`s continued growth outrun the existing competitors in the
industry. There is a space of new competition where set up costing does not include

specialised technology, distribution channels, and large infrastructure that are easily
accessible. The competition is intense, which has the advantage of low entry barriers (Clark,
2019).
Porter generic strategies
Porter generic strategies is considered with an aim to competitive advantage. These strategies
are connected with scope overall operations to emphasise on differentiating the products and
leadership with the selected features. The steps covered in the analysis will include cost
leadership, differentiation, cost focus, and focused differentiation (Rugman, and Verbeke,
2017). The porter generic strategies-
Cost leadership-
Cost leadership is the strategies used by the company to access several consumer markets. JD
Sports can apply strategies with an aim to create a market position and effective value chain
system. The strategy is to expand among consumer market by targeting the middle class
people that make most of the larger proportion in the overall consumer market. This class
places and exert pressure on cost leadership and cost focus strategy (JD Sports, 2019).
Differentiation-
It has remained one of the most common strategy to create the competitive advantage. JD
Sports will use differentiation with aim to expand the customer base by focusing on unique
product features. It`s objective is to differentiate the product by innovating and addressing the
health concerns of the consumers. For instance- JD Sports will increase and extend the
product line after analysing the changing behavioural attributes of the consumers (Nandonde,
2019).
Focus strategy-

It is an important to foresee the generic competitive strategy, which will concentrate on
resources to expand targeted segments and base the competitive advantage on the niche
marketing. On focusing on features of the products, it is seen that designing and packaging
can satisfy the expectations of consumers while maximising value for money (Izquierdo,
Rodríguez, and Ribes, 2016).
Section-4: strategic plan
Strategic direction:
The strategic direction can be achieved through strategic objectives such as long-term goals
of the company, which will assist to accomplish mission and vision statement by indulging
and engaging into strategic plans. Currently, JD Sports can increase the sales by 47 percent
by using the elevated multinational strategy (Chloe, 2019). In 2019, the company had
presented itself as sports and fashion premium store, which are offered in a vibrant retail store
with innovative digital technologies (Rigby, 2019). After being nominated for “business of
the year” award, the company has to continue stable profits for upcoming 50 years.
Objectives:
 The company focuses on accomplishing SMART goals, which will include-
Closing down of the retail stores, which are not generating higher and normal profits
Bringing those places on online platforms and introduce wide range of products to get loyal
customers. This can attract potential customers by issuing them store cards, which will lead to
points offerings, which can be redeemed and spend in stores (JD Sports, 2019).
Tactical actions-

As a tactical action, it is seen that company will have to apply premium positioning. It can
achieve that by slashing prices to increase the sales but premium positioning must be
achieved by go to destination for the tag price (Rigby, 2019).
This tactic can lead to elevation of multichannel proposition as being unique and evolved
premium branding offers. It will surely improve conversion rates reflecting increasing
customers (Pandey, 2017).
Conclusion
From the above discussion, it is seen that external and internal analysis are quite important to
derive effective strategy to look forward to manoeuvre maximum profitable opportunities for
JD Sports. For porter’s generic strategies, it will focus on accessibility and affordability while
producing across the globe that will create brand awareness and lead to high sales growth.
The generic strategies will include emphasising on the affordability and accessibility of the
products in order to gain brand recognition, expanding the customer base, achieving sales
targets and finally becoming cost leader to use the cost leadership strategy and differentiation
strategy. As far as competition is concerned, the power can affect the industry rules by taking
advantage as compared to the competitors to reach market portion and competitive power.

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