Business Strategy Report: JD Sports' 5-Year Strategic Direction

This report provides a comprehensive strategic analysis of JD Sports, a major player in the retail sector. It begins with an introduction to the company, including its mission, vision, and objectives. The report then applies various frameworks to analyze the macro-environment (PESTEL analysis) and the internal environment using the McKinsey 7-S framework and TOWS matrix, evaluating the impact of political, economic, social, technological, environmental, and legal factors. Furthermore, it employs Porter's Five Forces model to assess the competitive forces within the market. Finally, the report interprets and devises strategic planning for JD Sports, offering insights into its future direction. The report concludes with a summary of findings and a list of references.

Report produced by a business
advisor that provides an outlook
for Jd Sports strategic direction
for the next 5 years
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Table of Contents
INTRODUCTION...........................................................................................................................3
P1 Applying appropriate frameworks analyse the impact and influence of the macro
environment on a given organisation and its strategies..........................................................3
P2 Analyse the internal environment and capabilities of a given organisation using appropriate
frameworks.............................................................................................................................7
P3 Applying Porter’s Five Forces model evaluate the competitive forces of a given market
sector for an organisation.....................................................................................................10
P4 Applying a range of theories, concepts and models, interpret and devise strategic planning
for a given organisation........................................................................................................15
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................17
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INTRODUCTION
It is crucial for organisation to develop better and effective plan that will lead to growth
and development of organisation (Needles and et.al., 2014). This is helpful in appropriate
functioning of business as well as accomplishment of set objectives. There are different factors
of internal and external business environment that will lead to have impact on performance of
organisation. It is essential to determine various factors for better decision and creating of
business strategies. Company chosen for this report in JD Sports. This is well established
organisation that was developed in 1981. JD Sports is dealing in retail sector and supplying its
products or services worldwide area. Headquarter of JD Sport organisation is located in Bury,
United Kingdom. This report includes mission, vision and objective of organisation as well as
different techniques for strategic planning. In different different frameworks is analysed for
determining macro and micro environment. Internal capabilities of business and several
analytical tools are analysed properly. Apart from this strategic choice and direction of company
is evaluated.
P1 Applying appropriate frameworks analyse the impact and influence of the macro environment
on a given organisation and its strategies.
It is crucial for organisation to develop effective and strong strategies for enhancing
business operation. There are different frameworks that will help respective company to analyse
impact on external environment on organisation. This will helps in determining the negative and
positive impact of macro environment of JD Sports company. This company is providing its
functions in different part of the world so macro environment will lead to have major influence
on performance of business (Rainey, 2013). JD Sports business is not manufacturing sport
product and it is dealing in retail sector. The main competitors of this organisation is Dechatlon
and Sport Direct. Mission – Mission of this company is to become the best known sports fashion retailer
company of UK. This company is focusing in producing high quality range of products to
meet with the needs to customer. Vision - Vision statement of JD Sport company to expand its business to all over the
globe and enhance its brand image by offering high quality products or services.
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 Objective – The main objective of JD Sport is to develop better and strong relationship
with its customers. This company is focusing of enhancing skills of employees so that
they can perform better (JD Group, 2019).
As per the analysis of mission, vision statement and goals of organisation it has been
determined that all of these aspects of business are linked with each other. Long term goals and
vision of JD sports company is to develop expand operations of business into several parts of the
world. For achieving vision, JD sports has developed its mission to provide high quality services
that lead to develop brand image of JD Sports fashion retailers with in current market area. This
helps in develop smart objective of business as well as strategies for accomplishing desired
goals. In order to become best sports fashion retailer as well as enhance business activities in
different parts of the world, JD sports objective is to increase the skills and capabilities of its
employees. Mission of respective company is to become the best known sport wear company and
this could be accomplished when objective of JD sports is full filled. In order to become the most
preferred company, respective organisation needs to develop strong relation with customers.
Macro environmental
There are different factors of macro business environment that is affecting performance
of organisation. This includes all those factors that have impact on performance of organisation
as well as influence its profitability. JD Sports company has no control over the factors of
external environment (Balmer and Wang, 2016). In order to analyse the impact of macro
environmental, PESTEL analysis will be appropriate tool. This includes influences of political,
economical, social, technological, environment and legal factors of business operations. PESTEL
analysis in context of JD Sports is mention below. Political factor – This factor can impact the survival and growth of organisation. Political
factor consist of several regulations and policies that will lead to influence survival of JD
sports company. It is crucial to analyse different political factors that can affect the
growth and development of organisation. There are different political factors that is
affecting business of JD sports. It has been analysed that stability of political and
government party in UK market area will lead to have positive impact on respective
organisation. UK government is focusing on developing strong and clear rule and
regulation that will enhance the companies dealing in retail sector, companies have
confident to invest. So stable and clear UK political party will lead to increase the
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opportunities for JD Sports company to perform business task in effective manner.
Respective company will be able to grow and develop business with the support of
political party. High trade restrictions will lead to have negative impact on business as
well as its sales. UK company has developed different trade policies that restrict the
easily import and export of products. JD sports company is offering its products and
services to different market area and trade restriction will lead to have direct impact on
sales and profitability of JD sports. Economical factor – This factor includes inflation rates, foreign rates, GDP rate and so
on. Economic condition of UK country is continuously growing which will influence the
purchasing power of customers. This will help in increasing the sales and profits of JD
Sports. JD sports is majorly performing its activities in UK market area and UK nation
has one of the strong economic condition. Highly increasing rates of economy and GDP
of country is very supportive for JD sports company. Due to this economical factor
respective company will be able to increase the sales as well as decrease the cost of
business operations. Exchange rate can be describe as the of value of currency of nation
as compare to others country currency. Exchange rate will have impact on business
envirnement as it will influence the level of import and export of goods and commodity.
This will lead to have direct impact on performance organisation as well impact sales or
profits of business. It has been analysed that UK market has very strong value of its
currency that will support JD sports company to conduct business activities in effective
manner. High exchange rate is a positive factor that will helps respective company.
Value of British Pound will be high as compare to other countries in the situation of
uncertainty. Social factor – This factor encompasses of culture, belief, attitudes and values of
population. Social factor will lead to have major impact on performance and sales of
organisation. It is important for JD sports company to consider preferences of customers
while developing products. UK customer habits and their buying pattern will lead to
have major impact on performance of retail sector and respective company. It has been
analysed that UK customers prefer to purchase treading and high quality products. This is
a positive factor as respective company is developing high quality sport wear products
that is as per requirements of customers. This will increase the sales of JD sports
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company and improve profits. Social factor will have positive impact on this company as
consumer habits of respective company will lead to attain objectives of JD Sports. Technological factor – Technological factor play crucial role in conducting business task
as well as production of products. JD Sports company needs to use emerging and recent
technology that will help in influencing overall performance of organisation (Schroeder,
2014). Improvement in technology will support in enhance productivity of business in
effective and efficient manner. UK market area has one of the advance technology in all
around the world. It is important for this company to take advantage of new and
innovative technology. Implementation of Artificial intelligence such as digital decision
management, AI optimized Hardware or Robotic process automation in business. This
will support JD sports company to conduct business task and activities in effective and
efficient manner. This will help in gaining competitive advantage over other rival
companies and enhance revenues of business. New and advance technology is very costly
and conducting business activities with thigh tools and technology such as robotic
automation process will lead to have direct impact in profitability of company. It is
essential for organisation to use appropriate artificial intelligence by considering cost of
business as well as its impact on increasing profitability. Environment factor – It is crucial for organisation to protect environment while
performance business practices. Environmental factor consist of climate changes, weather
condition, pollution, ecological environment and so on. All of these factors will lead to
influence manufacturing and delivery of JD sports products. Environmental factor will
lead to have major impact on business and its activities. It is crucial to identify these
factors in order to enhance performance of employees. JD Sports Company is developing
products which can be recycling and does not harm environmental. This company is not
using virgin fibres in development of clothing products. This helps in making products
recyclable. Recycling of products will support organisation to develop strong image in
market area as well as enhance business activities. Recycling products helps in reducing
negative impact of organisation on environment. JD Sports Company is conducting
different activities for managing waste as well as water management process. This is very
effective in enhancing environment in which business is conducting operation.
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 Legal factor – Intellectual property law, protection of data, discrimination law, safety and
security etc. All of these factors will lead to have impact on performance and profitability
of respective organisation. This company is considering health and safety of customers as
well as employees while developing its products. UK government has developed various
laws and produces related to safety and security of employees. It is crucial for JD Sports
company to follow to all employment laws and legislation for smooth functioning of
organisation. Changes in employment rules and legislation can have negative impact on
organisation. This type of changes will lead to increase in wages and salary of employees
due to employment law will lead affect profits and revenues of business. Changes in
employment act or wages act will lead to have direct impact on profitability of business.
It is crucial for this company to obey all legislation for growth and development of
business.
P2 Analyse the internal environment and capabilities of a given organisation using appropriate
frameworks.
Internal environment and capabilities of JD sports company will lead to have impact on
performance of organisation (Dess, 2013). By identifying internal environment and its factors
respective company will be able to conduct task and activities in better manner. There are
different models that will help in decision making such as Mckinsey’s 7 S frameworks and
TOWS matrix.
McKinsey’s 7 S framework
This framework is supportive in identifying changes within organisation, align
department as well as process. Mckinsey’s 7 s model includes different element that is classified
into hard and soft elements.
Hard element
This includes all those elements that are simple to identify and determine. Management
of respective company can influence hard element directly.
 Strategy – It includes plan of organisation that will support in gaining competitive
advantage over other rival companies (Channon and Caldart, 2015). For example strategy
of JD sports company to expand market share in order to develop strong market image.
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 Structure – This company is following functional organisational structure for performing
business activities. With the increase the JD sports company activities and operation. This
organisation has changes its business structure to matrix. For example matrix structure
will lead to effective communication and information flow as per the requirements of
respective business. Systems – This refers to the daily procedure of task that needs to be completed by
employees (Hanson and et.al., 2016). For example personnel business system that will be
very effective in managing employees and staff of organisation. This System of JD sports
organisation play crucial role in conducting task in better and effective manner. Now
which the changes in organisation process, business system of JD sport is also changes to
more electronic media. This organisation is using new and advance technology in its
business system.
Soft elements
It includes all those elements that is less tangible as compare to hard elements. Soft
elements will lead to have influence over culture of respective company. Shared values – This consist of core values and ethics of organisation that needs to be
consider while performing business activities. Shared value example includes
environmental friendly approaches. JD Sport Company has environmental friendly shared
values that are very effective in developing and enhancing performance of business. By
developing positive and friendly organisational culture JD sport can develop strong
relationship with customers. Shared values will lead to affect the corporate culture of
respective company. Skills – Skills refers to capabilities and potential of employees that will lead to have
influence on performance of business activities (Hanson, Melnyk and Calantone, 2017).
Skills of employees support in conducting task in effective manner. For example
technical and time management skills of JD sports company will help in conducting
different task and activities in correct manner. Style – This refers to the leadership style that is adopted by company to influences
employees as well as enhances their performance. For example JD Sports Company is
considering participative and supportive leadership style in its business process. This
business style will lead to perform organisation task smoothly.
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 Staff – Staff can be describing as the general capabilities of employees that is working
with in organisation. For example by hiring highly skilled and capable employees within
organisation JD Sports Company will be able to develop strong relationship with
customers. Well qualifies and knowledge staff of company will lead to achievement of
organisational objectives.
TOWS matrix
This is an effective tool that will help in organisation to analyse how organisation
strength and weakness will affect the external opportunities and threats. TOWS matrix model
will helps in taking better and effective decision for organisational growth.
Strengths Weakness
Opportunities This organisation have strong
brand image which will lead to
bring various opportunity for
business. Strong distribution
network support in garbing
various market opportunities.
This will lead to implementing
strategic plan in better manner.
JD sports company will be
able to expand and enhance its
market by providing its
products to different market
area. The strength of JD Sport
company of high distribution
network and image of
company will support in taking
advantage of opportunity by
conducting organisational
activities in new market area.
This company will be able to
Incapability of JD sports
company for using new and
innovative technology in its
business practices. JD sports
company has opportunity to
use recent tools and technology
in effective and efficient
manner. This will lead to deal
with this weakness. External
opportunities will helps this
organisation to meet with the
issues and weakness of
inventory management. It is
essential for organisation to
use new and advance method
in order to train employees so
that they can correctly use
innovative technology.
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attract more and more
customers towards business as
well as increase it revenues by
offering its products to new
market area.
Threats This organisation is following
all rules and regulation,
changes in government rules
will lead to have negative
impact on performance of
business. This is the major
threat to JD sports company
that can effect business and its
sales. Strength of respective
company will assist in
avoiding and dealing with the
changes in government rules
and regulations.
There are several rival
organisation that is providing
its products and services in
same market and high
performance of rival
companies are major threat to
business. Less capabilities of
employee will affect the
functioning of JD Sports
company. This will reduces
sales and profitability of
business.
P3 Applying Porter’s Five Forces model evaluate the competitive forces of a given market sector
for an organisation.
There are various models and theories that support organisation to take better and
effective decision for organisational growth. Different models in context of JD sports company is
mention below.
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Porter’s Five Forces
This model will support organisation to take better and effective decision-making by
analysing various competitive forces. Different forces of porters five force model and its impact
on business is mention below.
 Threat of new entrants – JD Sports company has developed strong image in market
environment (Harrison and John, 2013). This will lead to reduce the impact on new
entrant on fashion retail sector.
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Illustration 1: Porter's Five Forces
Source: Porter's Five Forces, 2020

As per the above analysis of data it has been determined that revenues of JD sports
company is continuously includes. So new entrant in respective sector will not have impact on
performance and sales of organisation (Revenue of Sports Direct's sports retail operations in the
United Kingdom (UK) and Europe from fiscal year 2013 to 2019, 2019). Threat of new entrant
force is very low and it does not affect business performance of fashion retail sector. Bargaining power of supplier - This company has strong supplier network which is very
helpful for this company. Companies of retail sector is collecting resources from different
supplies. For example, this company have different supplier for clothing products and
different supplier for sports equipments. So High number of suppliers will lead to reduce
the bargaining power of suppliers. In order to minimize the impact of bargaining power
of suppliers on business this organisation needs to develop strong relationship with
suppliers as this will help in timely delivery of raw materials. Bargaining power of buyers – Respective company is offering best products at minimum
cost to business. Customers are very demanding so that factors will have moderate impact
performance of organisation. Organisation in retail sector is providing its products and
services to different part of the world and this increase the customer base of respective
company. Bargaining power of buyers will lead to have moderate affect on business. For
example individual bargaining power will not have major impact on business where as
large number of bargaining power will affect business.
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Illustration 2: Revenue of Sports company
Source:Revenue of Sports Direct's sports retail operations in the
United Kingdom