Business Strategy Report: JD Sports Company Performance Analysis

This report provides a comprehensive analysis of JD Sports' business strategy. It begins with an introduction to the company and its strategic goals. The report then delves into the macro environment, utilizing PESTLE analysis to assess political, economic, social, technological, legal, and environmental factors impacting the business. The internal environment is examined through an analysis of strategic capabilities, including the use of McKinsey's 7S model and VRIO analysis to evaluate resources and competitive advantages. The report further applies Porter's Five Forces model to analyze the competitive landscape, including threats of new entry, bargaining power of buyers and suppliers, threat of substitutes, and rivalry among competitors. The conclusion summarizes the key findings, highlighting JD Sports' strategic approach to maintain its position in the market.

Business strategy
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Table of Contents
Table of Contents.............................................................................................................................3
INTRODUCTION...........................................................................................................................4
LO1..................................................................................................................................................4
P1 Macro environment which impacts on business organization................................................4
LO2..................................................................................................................................................6
P2 Internal environment and capabilities of an organization......................................................6
LO3..................................................................................................................................................8
P3 Uses of porter’s fires force model..........................................................................................8
LO4..................................................................................................................................................9
P4 Application of a range of theories, concepts and modals.......................................................9
CONCLUSION..............................................................................................................................10
REFERENCE................................................................................................................................11
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INTRODUCTION
Business strategy refer as planning which is important for success and attaining the business
goals. If a person is running their activities by using technology and skills then it should have
proper strategy which can be uses to run and increase the performance in competitive
environment (Kitsios and Kamariotou, 2019). This report is based on JD Sports Company which
was founded in 1981 providing different items of best quality which help to improve. This report
cover impact and influence on macro environment, internal environment, application of outcome
by using porter’s five forces model and models in relation to strategic directions.
LO1
P1 Macro environment which impacts on business organization.
About introduction – JD Sports is a retailing organisation that is selling kind of products
and services in competitive environment. The manager of such organisation is playing a vital
role as it make planning, organising, directing and controlling the activities which help to
increase the business profitability.
Mission: To attracts the number of customers by providing variety of products and
services with better quality.
Vision: To be UK’s best sports retailer company in UK.
Objectives:
To attracts the customers by providing range of products and services.
To capture market share up to 40% in competitive world.
To gain the profits more by offering kids, men , women products.
Macro environment – This is the condition which exist as a whole in economy rather
than particular region and sector. It involves GDP, inflation rate and fiscal policy in relation to a
country. JD Sports is analysing the macro environment as it is running business in UK that helps
to run a business effectively.
PESTLE Analysis: This is a framework which uses by organisation to analysis the external
environment. This involves some factors which are uncontrollable and have impacted on
business. The PESTLE analysis with positive and negative impacts on JD Sports are as defined:
Political factor: This factor states tax rates, fiscal policy, GDP rate, governmental stability,
political system etc. which has impacted on business. In UK, after Brexit the political system
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become stable and government is also stable that has support JD Sports to run its business
effectively and attracts the customers. This factor has impacted on chosen organisation positive
as it can operate its business in UK successfully (Pedersen, Gwozdz and Hvass, 2018).
Economical factor: This factor states inflation rate, interest rate, unemployment rate,
exchange rate and economic growth rate that arises while running a business. In UK,
unemployment rate is lower than other country and high economic growth rate which increases
buying power of customers. This factor also have impacted on JD Sports as they buy products
and services which they wants as they are able to spend the money due to having employment
opportunity.
Social factor: The culture of society, needs and wants, demographic and skills level of
people, attitude and health that can attracts the customers. As marketer of JD Sports understand
the share beliefs and attitudes of people, also understand how sustain in competitive market.
Therefore, products and services of better quality and range are provided by chosen organisation
that impacts on business good and help to increase the number of customers (Rivera and
Clement, 2019).
Technology factor: for business organisation it is important that to introduce from new
technology and innovation that can attracts customers easily and run business. JD Sports is
focusing on new technology and products according to new trend which is demand of customers.
This has affected JD Sports positively as it all booking, cancelling and deliver process of
products become easy. Moreover, it helps to save time and cost so all activities can be form
effectively.
Legal factor: This is related to rules and regulations, are important for business to run and
increase the brand image. This factor might impacts negatively as management are not following
equal opportunity and health & safety regulation which creates conflicts between employees and
they can make decision to leave. Therefore to overcoming this negative impacts there is need to
provide equal opportunity and motivate employees (Rivera and Clement, 2019).
Environmental factor: This factor is related to weather, climate change, laws, recycling,
endangered spices, waste management etc. are important to follow. JD Sports is operating
business in UK and other areas without following waste management that is creating problem for
business. Moreover, change in climate has impacted on such organisation negatively as low sale
and profitability of company.
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LO2
P2 Internal environment and capabilities of an organization.
Strategic capabilities and its components – This refers as organisation’s strength by
involving resources, human, skills and capacities that can help to take the competitive
advantages. This is important for business to analysis internal environment while running a
business and increase the organisational productivity. The key components of strategic
capabilities are tools, strategic purpose, vision, and values, key goals and action planning which
help organisation to run their business and increase the capabilities. JD Sports is focusing on
strategic capability considering all such component and complete the target in certain period of
time (Kamesh, 2019).
JD Sports is using McKinsey’s 7S model for increasing their capabilities and improving
business activities that are as defined:
Strategy: The strategy of JD Sports is to introduce new products and services by
analysing needs of their customers. Moreover, to provide training and development programme
to employees so they can accept the challenges effectively.
Structure: For this strategy, employees of JD Sports are responsible to report their
superior in different department such as marketing, finance, HRM, warehousing etc. that can
help to perform all activities effectively (Muller, 2018).
System: For focusing on daily activities of employees in JD Sports, managers are
following the MIS system that can help to record the data on daily basis.
Shared values: The management of JD Sport needs to focus on core values as
employees, goals, mission and strategy that can support to work more and maintain a good
relations with others.
Style: Supportive leadership is uses by leader in chosen organisation where it support
employees to work properly and accept the challenges effectively.
Staff: In such organisation employees are working collectively who understand goals,
perform activities by following appropriate system and structure and complete the task so each
activities can be perform on time.
Skills: For running a business and increasing capabilities skills are very important that can
help to perform all activities. The employees who are working in JD Sports are highly skilled
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and talented who perform their action and strategy effectively by accepting changes in their
performance (Brennan, Canning and McDowell, 2020).
VRIO Analysis – This is a business analysis framework that uses by business organisation
in order to run their business and increasing competitive advantages. This analysis states what
resources are valuable, rare, inimitable and organised. The description of VRIO analysis in
context to JD Sports are as defined:
Resources Valuable Rare Inimitable Organised
Financial
resources
Yes No No No
Brand image Yes Yes No No
Global presence Yes Yes Yes No
Channel of
distribution
Yes Yes Yes Yes
Valuable: This states how resources are valuable for organisation and can help to
increase the business performance. JD Sports is retailing company that has number of resources
such as finance, brand image, global presence and distribution channel which all are valuable and
helps to increase the business activities. For instance, Finance is uses in all activities where
purchasing raw material, marketing and others helps to complete the task. Brand image and
global presence are valuable as it helps to attracts customers and build their trust regarding
buying a products. Moreover, effective distribution channel are uses to provide information and
selling them sporting products as customer wants. These all resources helps to increase the
business performance (Geissdoerfer, Vladimirova and Evans, 2018).
Rare: This means resources which are not available easily for other business. In UK,
there are number of fashion retailing company that are selling the products and services but they
do have all brand image as JD Sports have. This organisation is taking the competitive
advantages by delivering best quality and design of clothes to customers which does not provide
by others that helps to increase the business performance.
Inimitable: This is important for organisation that their resources should be different
from others. The JD Sports is having global presence that is selling products at different places
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by providing better quality and range. This is taking competitive advantages by running business
in competitive environment and delivering better quality of sportswear (Primorac, Milković and
Kozina, 2018).
Organised: This means resources which are available in organisation should be properly
organised and managed so all activities can be performed smoothly. For instance, JD Sports is
organising is marking and distributing activity properly that help to increase the business
performance and profitability. This also helps to improve the business profits (Masih, Rajkumar,
Matharu and Sharma, 2019).
Therefore, VRIO Analysis and Mckinsey model is uses by JD Sports in order to deliver best
quality of products so it can increase the capabilities and getting the competitive advantages.
Managers analysis internal environment and strategies capabilities which help to increase
activities and business performance by delivering best quality of products.
LO3
P3 Uses of porter’s fires force model.
Porter’s five forces model – This is a model which is uses by organisation in order to
analysis the industry and competitor so a business can be operate easily and helps to maintain the
profitability. JD Sports is using Porter’s five forces model as strategic planners have ability to
use this model and make right decisions. the description of Porter’s five forces model are as
defined:
Threat of new entry: In UK, JD Sports is running business by selling the sportswear at
retail prices which helps to attracts customers and increase sales. In context to this, threat of new
entrants is high as any entrepreneur can enter in to fashion industry by introducing and creating
its brand image. This can be threat for JD Sports for this, it need to sale its products lower cost
then only it can retain customers and get competitive advantages (Maheshwari and Yadav,
2018).
Bargaining power of buyers: There are high range of population in UK, who wants tyo
buy branded products and services so JD Sports is taking the competitive advantages. The
bargaining power of buyers in market is weak force as they are ready to pay high amount for
branded products which are providing by JD Sports. This helps to increase the business
performance and make higher profits.
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Bargaining power of suppliers: In UK, there are many manufacturer from whom
organisation buys products and services. In context to JD Sports, threat of suppliers is weak
forces which is beneficial for chosen organisation as it buys products at fixed prices from
suppliers due to having good relation that help to sale the products at reasonable cost. This forces
helps organisation to sale its products at retail prices as it buys products at less rate from
suppliers which helps to improve the business.
Threat of substitutes: When people can use another products instead of needed then it is
known a substitutes that impacts on existing products as reducing sales. In context to JD Sports
there are strong threat of JD Sports wear as customers can select simple products in case of
increasing prices. Therefore, this factor can impacts negatively and reduces the sales.
Threat of rivals: This means competitor who are also selling branded products and services
with quality in order to take the competitive advantages. In context to JD Sports, this is strong
forces because direct sports, decathlon, Nike, ASICS etc. are main competitor of such
organisation who are selling the products. This can be threat for organisation and reduced the
profitability (Abugalia and Mehafdi, 2018).
Therefore JD Sports is using this model to increasing the business activities by selling
products at retail prices which influences customers. Managers are focusing on weak forces and
changes them strength so competition can be face easily.
LO4
P4 Application of a range of theories, concepts and modals.
All organisation are running their business by adopting best approaches and model so each task
can be complete on time and maintain the good performance. For this, managers are playing
important role who analysing the need of people and deliver kind of products so they feel good
and share the information effectively. JD Sports is using Ansoff’s Growth matrix for growing
the business and developing it. The descriptions of Ansoff’s growth matrix are as defined:
Cost leadership: This strategy is uses by organisation to become the lower cost seller so
customers get attracts and encourage to buy the products. In this strategy, JD Sports has to sale
its branded wear at lower prices than others then it can become a leading organisation in
competitive environment.
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Differentiation strategy: This strategy is related to differentiation where organisation
need to sale different products that can make happy and satisfied customers. This strategy can be
adopted by JD Sports for the purpose of growing business in existing and new place by providing
unique products. This can help to increase the business performance and can maintain high
profits (Melo and et. al., 2018).
Focus strategy: In this strategy, organisation need to focus on price and differentiation of
product that can attracts customers and satisfy them. JD Sports can adopt this strategy by
providing better quality of products at lower cost which help to grow the business in competitive
environment and get brand extension.
From the above, JD Sports is applying cost leadership theory that can help to take the
competitive advantages and growing business by providing products at retain cost. As customers
as price conscious who prefer this product and brand after getting the better quality of product at
low prices. So it will help to grow business and increase capabilities.
Hybrid strategy: This is a strategy which is uses by business organisation in order to
grow their business and taking the competitive advantages. This is uses by JD Sports as mit
provide different products at low prices which influences customers and making the buying
decisions. This helps to maintain the high productivity in competitive environment by delivering
branded wear.
CONCLUSION
For running business, growing and expanding the activities strategies are important that
helps to face the challenges and deliver best quality of products. In competitive business
environment there, are many organisation who are deciding goals and making plans that helps to
perform well and attaining the business goals. VRIO analysing and McKinsey model are uses to
analysis the internal environment for the purpose of know valuable, rare, inimitable and
organised resources that helps to perform all activities and increase business performance.
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REFERENCE
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Online
About JD Sports. 2020. [Online]. Available through:
< https://sites.google.com/view/dmlzvcxsze/Jd-Sports-Fashion-Plc-Mission-Statement>
(Kitsios and Kamariotou, 2019) (Pedersen, Gwozdz and Hvass, 2018)
(Rivera and Clement, 2019) (Rivera and Clement, 2019) (Kamesh, 2019)
(Muller, 2018) (Brennan, Canning and McDowell, 2020) (Geissdoerfer, Vladimirova and Evans,
2018) (Primorac, Milković and Kozina, 2018) (Masih, Rajkumar, Matharu and Sharma, 2019)
(Maheshwari and Yadav, 2018) (Abugalia and Mehafdi, 2018) (Melo and et. al., 2018)
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