Strategic Analysis of JD Sports: Macro Environment, Capability, and Competitive Analysis

This report provides a strategic analysis of JD Sports, including macro environment analysis, assessment of internal capability using McKinsey's 7S framework, evaluation of strategic capabilities using TOWS matrix, and competitive analysis using Porter's Five Forces model and Ansoff's matrix.

Business Strategy

Table of Contents
Table of Contents.............................................................................................................................2
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Section 1 Macro environment analysis............................................................................................1
Strategic positioning of organisation by assessing their mission statement and long term goals
–...................................................................................................................................................1
Current macro environment for JD sports and interpretation......................................................2
Section 2 Capability.........................................................................................................................3
Assess the internal capability of an organisation by using McKinsey’s 7 S frameworks...........3
2. Critically evaluate the strategic capabilities of JD Sports, utilising a TOWS matrix...........3
Section 3 Competitive analysis........................................................................................................5
Apply the Porter’s Five Forces model and evaluate the competitive positioning for JD Sports.5
Critically analyse the current and potential strategic positioning for JD Sports by using
Ansoff’s matrix and porter generic strategy................................................................................6
Section 4 Strategic plan...................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business strategy means long term plans and ideas which is developed by people in order
to run their business and get competitive advantages. In other words, business strategy involves
implementation and formulation of policies by top management which processes to
accomplishment of objectives (Aluchna, 2018). To increase knowledge about planning and
strategy J.D. Sports has been taken that stands for sports fashion retail company operating
business in Bury, Lancashire and England, UK. This was founded by John& David in 1981. This
organisation is providing different types of sports products to customers. This report covers
macro environment, capability and competitive analysis that helps make higher profits.
Moreover, strategic plan is prepared by managers that help to take right actions.
TASK 1
Section 1 Macro environment analysis
Strategic positioning of organisation by assessing their mission statement and long term goals –
Strategic positioning is concerned as a way through which a business distinguishes from
others. This states what the position of their business in market is and how it can bring
improvements. In other words, it reflects a distinctive value chain that contains all key business
processes and operations that helps to compete with others. JD Sports is retail sports company
that offers different types of products and services to their customers and maintain their business
effectively. The management of such organisation formulates policies and strategies to run their
business and increase organisational profits. The mission statement and goals of JD sports are as
defined:
Mission statement – “To be UK best known sports fashion retailer company”. To
provide customers with huge range of products and secure shopping experience that helps to run
a business effectively (Cross, 2019).
Aims and objectives – The aim of JD Sports is to make profits by setting smart targets
and attaining them effectively. The object of organisation is to increase number of customers
continuously by offering better quality of sports products (Gibe and Kalling, 2019) .
1

Current macro environment for JD sports and interpretation
Macro environment is the combination of various factors which involves elements and
factors that can affected to their business and environment. This is important for organisation to
focus on such factors and know how these affects business. The current environments of J.D.
sports are as defined:
Political: In UK and other nation the political system is stable due to which operation
and distribution of products become easy that has impacted on J.D. Sports positively. This is
related with political system that states with the help of government support a business can be
grow and limits their activities (Johnson, 2016).
Economical: This current trend states economic condition of a nation. The management
of J.D. sports focuses on current situation of their nation which helps to provide products. In this,
management focuses on inflation rate, interest rate and economical growth rate, unemployment
etc. which helped to run a business (Eaton and Kilby, 2015).
Social: This factor involves lifestyle, needs of society, culture, attitudes, leisure interest
which helped to run a business. The marketers of J.D. Sports Fashion understand their customers
of given market and how they design the marketing message for retail industry consumers.
Technological: This is fast disrupting factors that needed to adopt by organisation across
abroad. J.D. Sports has been transforming really fast since 5 years that have given a chance to
management to cope up with changes. This organisation is moving fast by leading technology
that helped to run business effectively (Anwar and Hasnu, 2016).
Legal: According to this factor, legal factors are not robust enough which protects the
intellectual property rights of organisation. J.D. Sports evaluate before entering in to new market
in which it follows employment law, health and safety law, discrimination law and data
protection law which help to run a business positively.
Environmental: This is related with norms and environmental standard that impacts on
profitability of organisation in markets. Considering various factors such as weather, law
regulations, climate change and waste management that impacts on business. J.D. Sports is
focusing and evaluating climate and environmental regulation in order to reduce wastages which
impacted on business positively (Marín, 2019).
2

Section 2 Capability
Assess the internal capability of an organisation by using McKinsey’s 7 S frameworks.
Internal capability of organisation should be analysis by management which helps to state
that how it can get profits and maintaining business activities. To analysis the internal
capabilities of J.D. Sports are as defined:
McKinsey 7S model – This is a model which is used by organisation to analysis their
internal capability and improving their organisational performance. J.D. Sports is applying Mc
Kinsey 7S model to increase their effectiveness that are as defined:
Strategy – This is organisation’s plans where management build plans to build and
maintain competitive advantages. The management of J.D. Sports make plans to build brand
image more by offering better quality of sports wear at retail prices (Hadid, 2019).
Structure – This structure states how a organisation organising their activities. Such as
the marketing executive of J.D. sports are reporting their head and other department also reports
their head which help to manage the business activities.
System –In J.D. Sports management are using daily updating system that covers daily
activities and procedure where employees get the job done.
Shared values – This is core values of organisation that uses to show corporate culture
and general work ethic. Management focuses on this strategy and make right decision which help
to accept the changes (Foss and Saebi, 2018).
Style – Directive leadership is used by J.D. Sports where leaders shows a right path to
their employees, how to accept the changes and can deal with problems effectively.
Staff – In chosen organisation staff are evaluating their capabilities which helps to know
how they can face the problems and accept changes effectively (Linder and Williander, 2017).
Skills – Employees who are working in J.D. Sports company have competency and
ability to accept the changes and new technology that helps to increase the capabilities and
organisational performance.
2. Critically evaluate the strategic capabilities of JD Sports, utilising a TOWS matrix.
TWOS Matrix – This is a tool which uses by organisation to changes the threats and
weakness in to strength. By using this too management analysis threats of a business and
3

introduce new ideas and technology that can helps to run a business and maintaining profits. The
TWOS matrix of J.D sports are as defined:
Threats:
 The liability laws in different countries are different and JD sports fashion many be
exposed to various liability in market due to which it faces changes.
 Demand of high profitable products in season that means peak season its impacts on
profits negatively.
 Shortage of skilled workers in global markets that states slow growth of JD Sports
fashion (Maheshwari and Yadav, 2018).
 Imitation of counterfeit and low quality of products can create challenges and lose of
customer trust.
 Changing in political regulations and policies which can limits the organisational
productivity and profitability.
Weakness:
 Limited success outside core business that may be weakness for JD. Sports because this
is leading organization which faces challenges in moving to another product segment
with present culture.
 JD. Sports is required more investment and technology that is not easily possible for such
organisation.
 The structure of organisation is compatible with present business model so it is limiting
in expansion of product segments.
 Not highly successful in integrating the firms with different work culture which fails to
merge the different culture.
 Day inventory is high compare to the competitors that makes JD Sports to raise more
capital to invest more capital on channel. This has impacted long term growth of JD
fashion.
 Financial planning is not done properly by management that has impacted on business
and reduced profits.
Opportunities:
 The lower inflation rate in the UK that helped JD Sports to bring more stability in the
market and increase their capabilities.
4

 Stable free cash flow that provides an opportunities to JD Sports to invest in adjacent
products segment.
 Decreasing cost of transportation due to low shipping prices that helps JD sports to boost
their productivity and profitability.
 Green drives by government that opens an opportunity for chosen organisation to run its
business effectively.
 Economic uptick and increasing spending power of customers which become an chance
for chosen company to maintain their profits (Pramanik, Maiti and Maiti, 2018).
Strength:
 JD Sports has strong basis of reliable suppliers of raw material that enabling the
organisation to overcome any supply chain bottlenecks.
 This organisation is having strong distribution network that build potential market and
customers in order to make profits.
 Superb performance in a new market that builds high revenue and new product range.
 Strong free cash flow of JD Sports that provides resources by expanding markets.
 High level of satisfaction that make able to employees to achieve organisational goals
and objectives effectively.
Section 3 Competitive analysis
Apply the Porter’s Five Forces model and evaluate the competitive positioning for JD Sports
Porter’s five forces model – This is a model which is used by organisation to evaluate their
forces which they have and get the competitive advantages. In JD Sports, management are using
five forces to know about competitors and get the chances by improving organisational
productivity. The Porter’s five forces model in context to JD Sports are as defined:
Threats of new entrants – A market is full of different types of business where retail
sectors and other can enter in to market by establishing their business and maintaining profits. In
context to JD Sports, threat of entrants is high because other retail sector can enter by bringing
innovation and new ways of doing business that put pressure on such organisation to reduce cost,
low pricing strategy and providing new value proposition to customers. This can be threat for
organisation to enter in to new market by establishing their business.
5

Bargaining power of suppliers – All retailing companies are buying raw material from
suppliers who have dominant position that can decrease the margins of JD Sports company. In
context to JD sports, the bargaining power of suppliers is high which has impacted on business
negatively as it reduce the productivity and profitability because suppliers sale their material at
high prices ( Marx, 2015).
Bargaining power of buyers – Buyers are those who buys products and services from
different organisation by evaluating cost and features from others. In UK, there are large
population and they are brand aware which has impacted on business positively. JD Sports is
taking competitive advantages by swelling their branded sports wear at their decided prices
which helped to run a business and get competitive benefits.
Industry rivalry – This states competition among organisation who are selling similar
products but different quality. The competitor of JD Sports are Nike, Adidas, Hibbett, ASICS
etc. who are also providing sports wear and other products to customers that influences them and
make decision to but the products and services. In other words, there is high industry rivalry
competition which is facing by chosen organisation and it is impacting on business negatively
(Sellitto and Hawking, 2019).
Threat of substitutes – This means new products and services that have substitution
reduces sales and productivity of organisation. JD sports is providing branded sports wear that
have substitution in market which attracts customers and encourages them to buy such products
at less prices which increases competition effectively (Perez-Franco and Phadnis, 2018).
Therefore, JD Sports company is analysing the com-petition which is running in UK and this
is impacting on business whether positively or negatively. Managers are running their business
by formulating plans and changing all weakness in to strength which helps to improve the
organisational productivity and maintaining profits.
Critically analyse the current and potential strategic positioning for JD Sports by using Ansoff’s
matrix and porter generic strategy
Ansoff Growth matrix – This matrix is used by JD Sports in order to identifying their strategic
positioning and capabilities that are as defined:
Market penetration – In this strategy JD Sport management need to sale its old and
existing products in prevailing market that is already established by reducing the prices and using
promotional channel more which can help to increase the organisational sale.
6

Market development – In case of adopting this strategy, manager of JD Sports need to
introduce its high branded products in new market that can help to retain existing and add new
one which helps to get more benefits (Thompson, Strickland and Gamble, 2015).
Product development – This strategy is required to introduce new products by J.D
Sports that can attracts customers and increase organisational productivity and profitability. New
products should be different and unique that can convenience customers easily and make
decision to buy them effectively.
Diversification- This is another strategy which also can be adopted by J.D. Sports by
introducing new product in new market which is highly risky strategy and can affect business. In
case of adopting this manager need to identify new product and new market for introducing its
products effectively.
From the above, JD Sports is adopting market development strategy that is appropriate
can help to get competitive benefits by introducing its branded products in new markets.
Porter’s generic model:
Cost leadership: This strategy states organisation can be leading company by setting
lower cost of their products. In case of adopting this strategy, JD Sport need to reduce cost of its
products and require to be low cost retailer that can influence customers.
Differentiation: Organisation when uses this then it require to offer different type of
products and services. If JD Sports adopt this, then it should introduce different or unique design
and quality of wear that can attracts and convenience customers easily.
Cost differentiation: in his, JD sports, is require to provide unique and low cost products
that can satisfy customers and attracts them to buy it effectively (Sanders and Wood, 2019).
From the above, JD Sports is adopting cost leadership strategy that is competitive
strategy will help to attracts customers and increase organisational productivity by keeping prices
low of their branded products.
Section 4 Strategic plan
Strategic management plan is written documents that states a whole summary of business
and maintain business effectively. The Strategic management plan in context to JD Sports
company is stated as it is adopting cost leadership strategy in which it reduces cost of sports
wear.
Vision & mission To become leading organisation in retailing sector by providing better
7

quality of products (Vom Brocke and Mendling, 2018).
Objectives To increase profitability up to 60% within 2021.
To increase the 40% market share in competitive market.
Get increase product and services range by using new technology.
To satisfy their customers and manage high distribution channel.
Strategy JD sports has adopted cost leadership strategy where it provides
products and services at low cost which helps to increase the
customers base and productivity. Moreover, Pricing strategy will to
attracts people and encourage them to enjoy branded products.
Tactics The management of JD Sport make five year plans by using such
tactics.
 Low cost and high quality of products and services.
 Evaluating competition and setting the prices of sports wear
accordingly.
 To capture high market share as compare to other retail sector
within 2025.
 KPI tool will help to evaluate performance and organisational
activities (Yoffie and Cusumano, 2015).
Monitor and control The manager of JD Sports will focus on all activities and give efforts
to manage business performance by running them effectively.
CONCLUSION
From the report it can be concluded that if organisation is having effective strategies and
plans then it can attain the business goals and objectives. PESTLE research allows the
organization to assess the effect of external factors on corporate practices and operations. With
the aid of the SWOT study, strengths, disadvantages, risks and opportunities are analysed, which
enable businesses develop effective plans to leverage opportunities and resolve challenges. This
is important for organisation to evaluate their internal capabilities that can help to increase the
productivity and profitability.
8

REFERENCES
Books and journal
Aluchna, M., 2018. Corporate Social Responsibility vs. Business Strategy. Upravlenec. 9(4).
Cross, B., 2019. BCBSF 2001-2005 Health Business Strategy.
Gibe, J. and Kalling, T., 2019. Business Models and Strategy.
Johnson, G., 2016. Exploring strategy: text and cases. Pearson Education.
Eaton, D. and Kilby, G., 2015. Does Your Organizational Culture Support Your Business
Strategy?. The Journal for Quality and Participation. 37(4). p.4.
Anwar, J. and Hasnu, S. A. F., 2016. Business strategy and firm performance: a multi-industry
analysis. Journal of Strategy and Management. 9(3). pp.361-382.
Marín, J., 2019. An Employee Communications Strategy to Support the Launch of a New
Business Strategy. In Strategic Employee Communication (pp. 295-303). Palgrave
Macmillan, Cham.
Hadid, W., 2019. Lean service, business strategy and ABC and their impact on firm
performance. Production Planning & Control, pp.1-15.
Foss, N. J. and Saebi, T., 2018. Business models and business model innovation: Between
wicked and paradigmatic problems. Long Range Planning. 51(1). pp.9-21.
Linder, M. and Williander, M., 2017. Circular business model innovation: inherent
uncertainties. Business strategy and the environment. 26(2). pp.182-196.
Maheshwari, S. K. and Yadav, J., 2018. Leadership development strategy: The missing
links. Development and Learning in Organizations: An International Journal. 32(1).
pp.11-14.
Pramanik, P., Maiti, M. K. and Maiti, M., 2018. An appropriate business strategy for a sale
item. Opsearch. 55(1). pp.85-106.
Marx, T. G., 2015. The impact of business strategy on leadership. Journal of Strategy and
Management. 8(2). pp.110-126.
Thompson, A., Strickland, A. J. and Gamble, J., 2015. Crafting and executing strategy: Concepts
and readings. McGraw-Hill Education.
Perez-Franco, R. J. and Phadnis, S., 2018. Eliciting and representing the supply chain strategy of
a business unit. The International Journal of Logistics Management. 29(4). pp.1401-
1423.
Sanders, N. R. and Wood, J. D., 2019. Foundations of sustainable business: Theory, function,
and strategy. John Wiley & Sons Incorporated.
Sellitto, C. C. and Hawking, P., 2019. A Study of Business Intelligence Strategy Development
by Large Organizations. In Applying Business Intelligence Initiatives in Healthcare and
Organizational Settings (pp. 326-339). IGI Global.
Vom Brocke, J. and Mendling, J., 2018. Business process management cases. Digital Innovation
and Business Transformation in Practice. Berlin et al.: Springer.
Yoffie, D. B. and Cusumano, M. A., 2015. Strategy Rules: Five Timeless Lessons from Bill
Gates, Andy Grove, and Steve Jobs. Harper Business.
Sutrisno, P. and Rossieta, H., 2019. CEO OVERCONFIDENCE, BUSINESS STRATEGY AND
EARNINGS. Jurnal Akuntansi dan Keuangan Indonesia. 16(1). pp.18-35.
9