Impact of Macro Environment on JD Sports: A Business Strategy Analysis

BUSINESS
STRATEGY
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INTRODUCTION...........................................................................................................................4
SECTION 1.....................................................................................................................................4
Impact and influence of macro environment on a given organization and its strategies.............4
SECTION 2.....................................................................................................................................8
Internal environment and capabilities of a given organisation using appropriate frameworks...8
SECTION 3...................................................................................................................................10
Porter Five Force model to evaluate..........................................................................................10
Strategic planning......................................................................................................................14
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................18
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INTRODUCTION
Business strategy is defined as a long term plan of competitive action that assist business
organizations to fulfill corporate goals in a well define manner. In order to develop formative
business strategy it is essential for an entity to evaluate different type of measures and techniques
as to fulfill business objectives and goals (Burlton, 2015). Present report has been made on JD
Sports; entity was founded in the year 1981 and conducts their operations in retail industry. With
having it’s headquartered in United Kingdom this company offer sportswear and clothing
accessories. In this report discussion has been conducted on pestle evaluation. With the help of
this entity can effectively able to evaluate factors that can affect organization operation and can
further develop strategies and measure against it. Along with this report include, McKinsey 7s
framework, TOWS matrix, and Porter’s five Force model and porter generic strategies. All these
models and strategic frameworks allow entity to develop successful measures to gain maximum
opportunity in order to accomplish business objectives. Lastly this report include, business
strategy plan.
SECTION 1
Impact and influence of macro environment on a given organization and its strategies
It has been identified that a business operates its functioning in a business environment that
involve different type of factors and have capability to affect internal and external operations. JD
sports in order to analyze macro environmental factors that can affect business functioning is
required to undertake use of pestle analysis (Teh and Corbitt, 2015). This will benefit company
to gain critical overview of different aspects of pestle like political, social, economical,
environmental, technical and legal in a well-defined manner and develop strong strategies in
order to ensure competitive edge in respective industrial sector.
Mission: Having a mission statement to, be United Kingdom best known sports fashion
retailer this company aim into towards offering consumers with wide range of products in order
to enhance the shopping experience by offering them high quality of product and services.
Vision: Company conduct their business operations with having an ultimate vision which
is to deliver long term sustainable earning growth as to maximize shareholders total return
through share price performance and evidence.
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It has been evaluated from company Vision and Mission statement that by providing high
quality of services and product to consumer this company effectively set a standard for online
shopping by offering authenticity, quality and vast product commitment to fulfill need of
maximum number of individuals. This company is one of the most trusted company around the
globe and value gratitude, integrity, consumer first, collaboration, team sprit to enhance their
business performance efficiency. Company values innovation, fair play in order to ensure their
continuous development as to conduct their business operations in strong work ethic. Company
is having one of the most important visions which is become a leading Sports Company in
respective industrial sector by offering more and more product and services range with the use of
high technology in order to serve their customers at best.
Ilustration 1: PESTEL Analysis
(Source: PESTEL Analysis, 2019)
Political Factors:
This factor demonstrates the influence of politics upon business organization. It mainly
includes elements like foreign trade policy, political stability, regulations, governmental policies,
taxation rules and labor laws (Schaltegger, Hansen and Lüdeke-Freund, 2016). JD sports operate
their functioning in retail sector and conduct business in Sports segment which is largely affected
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by political decisions. This makes entity essential to conduct their operations by staying aligned
with present ruling government.
Positive: In United Kingdom there are different type of policies and taxation reliefs that
are being offered by government to industries in retailing sector. Along with this organization
those who conduct their business functioning in sports sector are provided with more tariff
relaxes. With the advantage of this opportunity JD sports can increase their profitability at great
extent.
Negative: Due to brexit retail Industry in UK get severely affected, as it decreases
purchasing power of buyers (Hart, Sharma and Halme, 2016). This political instability can
critically impact upon profit earning capability of JD Sports. In order to overcome this entity is
required to develop strategies through which they can attract customers towards that products
and services by offering them in affordable price range.
Economic Factors:
This factor of pestle analysis include elements that are related to extent of unemployment,
inflation rate, disposable income, economic growth, exchange rate and per capita income of
individual in a country (Scholes, 2015). It is important for JD sports to have understanding of all
the economic factors as to take advantage of economic opportunities that are prevailing in United
Kingdom.
Positive: UK is economically developed nation which is having excellent infrastructure
facilities and offer different type of economic opportunities to entities retailing sector. Retail
industry is most important aspect in United Kingdom as it remarkably contributes in overall GDP
of country. Thus, by taking advantage of economic opportunities that is prevailing within UK,
JD sports can maximize their existing share price in a well define manner.
Negative: This has been identify that brexit increases unemployment rate in United
Kingdom which is acknowledged to be 3.8% as of the quarter July - Sept 2019 (Why is UK
unemployment still low? We are working longer hours, 2019). This can affect JD sports
workforce requirement that makes entity to offer higher wages in order to attract skilled and
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