Strategic Management Report: JD Sports Expansion in the Philippines

This report provides a strategic analysis of JD Sports' planned expansion into the Philippines. It begins with an executive summary and an introduction to the company's objectives. The main body of the report includes an external environmental analysis using PESTLE and Porter's Five Forces models to identify opportunities and threats. An internal environmental analysis, employing the VRIO framework, assesses the company's strengths and weaknesses. The report then identifies potential competitive strategies and discusses business expansion methods. The analysis considers political, economic, social, technological, environmental, and legal factors impacting the expansion. Furthermore, it explores the competitive landscape within the retail industry in the Philippines. The VRIO framework evaluates JD Sports' resources, emphasizing valuable, rare, inimitable, and organized aspects. The report concludes with strategic recommendations for successful international expansion, and includes references to relevant literature.

Strategic Management- JD
Sports

EXECUTIVE SUMMARY
The report is based on the factors that impact a business while expanding. JD Sports is JD
Sports is a top UK company for sports , casual wear, and many more. The company is planning
to expand in Philippines. The report deals discusses the challenges that can be faced by
company. External and internal factors are discussed along with the impact they create on the
organisation. In the end of the report various methods that can b used by organisation to expand
the business are also mentioned.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION ..........................................................................................................................4
MAIN BODY .................................................................................................................................4
External environmental analysis for identifying opportunities and threats................................5
Internal environmental analysis for identifying strengths and weaknesses................................7
Identification of Competitive Strategies...................................................................................11
Bowman’s Clock Strategy.........................................................................................................11
Business expansion method......................................................................................................12
CONCLUSION .............................................................................................................................13
REFRENCES.................................................................................................................................14
Books and Journal.....................................................................................................................14

INTRODUCTION
Strategic formulation is a concept of management under which strategy is formulate and
implemented according to the goals and objectives of the organisation. As the environment is
dynamic a company needs to plan and formulate strategies in such a way that helps the
organisation to grow and become successful. In this report JD Sports is taken into consideration
and the company is planning to expand its operations in Asian countries. JD Sports PLC is a UK
based company that deals in fashionable branded sports and casual wear (Velikorossov and et.
al., 2020). The company is leading UK retailer and was established in 1983. The report shows
the external factors and analysis of internal factors. Macro and micro environmental factors that
are important for company to study are also discussed. JD Sports PLC is expanding its operation
and planning to establish a unit in the Philippines. Also, there is discussion about the factors that
have negative and positive impact on the company. There are methods of expansion that can be
used by company to expand its operations. This report is based on use if appropriate strategic
management in order to achieve business objectives and perform task in effective way this helps
in evaluating JD sports.
MAIN BODY
JD Sports is a British-sports-fashion retail company based in Bury, England. The company was
founded by David Makin and John Wardle in 1983.
Aim of the company: To earn and make more money that helps the company in expanding
their business to most popular and reputed places.
Vision: To obtain more strategic tools and equipment that will help the company to
achieve their goals and objectives.
Values: Their first value is towards the customers so they value the needs and desires of
custo0mers and fulfil them to gain loyal customer base. Also, their values include teamwork,
appreciation, ownership, honesty (Teece, 2019).
Challenges faced by company
 There is a lot of competition faced by company as there are players that offer same
product and services.
 The needs and wants of customers are ever changing so they have to make updates in
products served by them.

External environmental analysis for identifying opportunities and threats
Pestle analysis
Pestle analysis helps the company to know about factors that impacts the company. JD
sports is planning to expand its operations Philippines, which is a small nation. So, below
mentioned are the external factors that can affect the company while expanding. Political Factors: The policies that are formed by government, environmental law,
labour law, trade restriction comes under political factors. These factors have direct
impact on the organisation. It is prominent for an organisation to follow those rules and
regulation. In respect to JP Sports the company is expanding in Philippines so there is
need to understand the policies and the political conditions of the nation. There is
opportunity to start the operations there and will get support of government that will lead
to economic growth of the nation. Economic Factors: Economic factors have significant impact on the organisation and the
profit made by the business. This includes inflation rate, economic stability, interest rate,
exchange rate and etc. There is economic enhancement in the system of Philippines and
due to economic stability business will able to establish and operate smoothly in the
nation (Moutinho and Vargas-Sanchez, 2018). Also by establishing a new unit there the
employment rate of the nation would also increase. Social Factors: It is also called socio-cultural factors and includes the beliefs and
perception of the population of the nation. This factor is important as it is important to
know about the needs and desires of people at the place where a company wants to
expand its operations. In relation to Philippines the company focuses on the education of
the population and also on the sports that would help JP Sports to attract more customers
and gain success over there. Technological Factors: Technological factor as the name suggest deals in the technology
inundation of a place. It is prominent to update the technology and use innovative
methods to attract customers. In Philippines the nation supports new ideas and tools that
can help JD Sports to successful expand there. The advancement in technology is
important for every business and desired in today's time.

 Environmental Factors: All the factors related to environment are studies under this
factor. The resources are scarce and there is need to optimally use the resources as they
are provided by environment. JD Sports is a retailer and deals in sports and casual clothes
it is important to know about the environmental factors (Meyer, Neck and Meeks, 2017).
In Philippines there is no problem of cleanliness and the place is is settled in the west
pacific ocean.
 Legal Factors: Legal factors include health and safety, advertising standards, equal
opportunities, product labelling and product safety consumer rights and laws. It is vital
for all the companies to follow all the laws and regulations that are desirable. Every
country have different laws and Philippines there are norms related to minimum wages,
amenities of wellness and education, working hour. So JD Sports needs to take care of all
these factors to perform its operations smoothly and establish at Philippines successfully.
Porter's five forces model
Porter five forces model helps a company to form strategies and make plans that will help
them to know about the competition in the industry. By studying about the five forces company
is able to make strategies that would help them operate effectively. JD Sports is planning to
expand in Philippines so the five forces model in relation to company is discussed below: Threat of new entrants: Power of company is also impacted by the new entrants. The
industry that is seen as profitable normally faces the fear of new entrants. In relation to
JD Sports the company is in retail industry and company is able to make profits
(Georgiev, 2017). The new players also want to make profits and can enter the industry.
So, JD Sports has fear of new entrants for which the company should establish good
brand value that new players can not affect the positions of the company. Rivalry among existing competitors: This is also an important factor that impacts the
business. Competitive reduces the profits and it is easy for customers to switch if there is
direct competitor of the business that is offering same products and services. In relation
to JD Sports there are many competitors of the company. They are planning to establish
at a new place where they have to make policies in such way that helps them to achieve
success and attract more and more competitors. They have make pricing strategies in
such a way that they can gain competitive advantage.

 Bargaining Power of Power of Suppliers: This factor talks about the number of
suppliers that the company has. If there are less number of suppliers then this will
increase the power of suppliers (Bromiley and Rau, 2019). But if the company has large
number of suppliers than the company has power and can switch the suppliers if there is
problem. JD Sports have good relations with the suppliers that helps them to get quality
raw material and provide customers quality products. So, the company do not have threat
of substitutes. Bargaining power of buyers: The company makes products to satisfy the needs and
wants of the customers. When the customers have options to switch, it shows that
customers have high bargaining power and if there is no substitute available then the
buyers low bargaining power. In respect to JD Sports the company is understanding the
needs and wants of customers and providing them goods and services accordingly.
 Threats of substitute products or services: This is related to competition, if a company
has many competitors there is chance that company has threat of substitutes. In context of
JD Sports, the company has many competitors that provide similar goods and services.
This shows that there is threat of substitute products and services to the company. The
organisation should build such a image that customers do not switch the brand and do not
buy substitutes (Ferlie and Parrado, 2018).
Internal environmental analysis for identifying strengths and weaknesses
VRIO Frameworks
This framework helps company to find out the internal and external factors of the
company. The strength and weakness of company is also studied in this framework. This helps a
company to gain sustained competitive advantage. VRIO framework in relation to JD Sports is
discussed below:
VRIO Model
Resources Valuable Rare Imitable Organised
Products Yes - - -
Employees Yes Yes Yes -
Financial Sources Yes Yes Yes Yes
Patents Yes Yes Yes -

Valuable – The resources of the organisation are helping ton increase the value of the
organisation and gain advantage. If the customer perceived value is increased by resources
than also it can be said that the resources are valuable. Products : Products are valuable for the company as the goods offered by the
organisation influence the customers and helps the company to create profits. The main
thing that a company offers to its customers are its products and they should be valuable a
it helps to attract more and more customers (Lado Gonzalez and Calvo Dopico, 2017). Financial Sources : Financial sources helps the company to provide funds for
accomplishment of several stages. The company JD sports use this function that helps
them to execute the other functions smoothly. Employees : Workers are important part of the organisation as they carry out the
functions and helps to achieve aims and targets for development of the organisation.
Patents: Patent is important in relation to JD Sports as it helps to sell the products without
competitive interference. Also the patent help them in gaining license revenue when they give
these patents to other manufactures.
Rare – The resources that are used by small number of companies are called rare. As if all the
organisations use same resources it gives rise to competition. The organisation that uses rare
resources are successful and able top gain competitive edge. Financial Sources : As per VRIO Analysis the financial resources of JD Sports are rare
as these are possessed by few companies in the industry. Every organisation uses
different methods to finance the organisation. Employees : The employees of JD Sports are highly skilled and have got proper training,
that is not in the case of competitors. They also provide proper compensation to
employees so that they do not leave the organisation. This shows the employees of JD
Sports are rare and contributes to success of organisation.
 Patents : The patents are rare resources of JD Sports. As the patents are not easily
available and are not possessed by competitors. This help the company to use them
without any interference. The rare resources helps the company to take advantage and
make more profits.

Imitable – The resources of the company can not be copied by others. The organisation that uses
unique resources are able to make more profits and gain advantage. The organisations should
take care the resources used by them are not copied b y others. Financial sources: The financial resources of JD Sports are acquired in many years and
they are costly to imitate according to VRIO Analysis. New entrants and organisation
need a lot of time and gain this much profit to accumulate the financial resources. It is
difficult to imitate the financial resources of JD Sports (Sundiman, 2018). Employees : JD Sports provide proper training and development to its employees. It is
costly to imitate the employees of the company. There are chances if an organisation
offer them better compensation and good working environment there are chances that the
employee switch and this builds competition.
 Patents : According to VRIO Analysis is is difficult to imitate the patent of JD Sports. As
it is ethically and legally not desirable to copy the patent of any organisation. Also it is
costly to use similar resources and develop similar patent.
Organised – The company has management to organise the re4sources and make profits for the
organisation.
 Financial Resources- The financial resources of JD Sports are organised and helps the
company achieve success. They invest money at right place and gain advantage by
making more profitability. This has also helped company to gain competitive advantage.
According the VRIO Analysis of JD Sports that the financial resources of the company has
helped to gain competitive advantage. The employees are giving temporary competitive
advantage.
SWOT analysis
It is the most essential tool to analyse impact of internal aspects on organisation functioning.
This analyse is useful for the company to ascertain their strength, weakness, opportunity and
threat in a systematic manner through which organisation move to make new strategies.
Swot analysis of JD sports is mentioned below:
Strength:
 The company has reputed image into market which is beneficial to make possible sale by
their quality goods and services also to gain competitive advantage.

 The organisation creates a good brand image and relation with their employees through
which it enables pools of productivity and offers wide range of product substituted to
provide better choices for their customers (Novikov, 2018).
 Another strength of the company is their creative and innovative product aspects as per
market trends. Due to which company could hold an attractive position for the customers
by being dynamic and innovative.
 Large reach and number of outlets of the company make their product globally
distributed without making any extra efforts.
 The company has become the online seller from past years which has enable the
opportunity to grab left out area from their reach and gain much profits by satisfying
needs of consumers.
Weaknesses:
 JD sports has wide range of product but has not commenced with modern trends and
fashionable outcomes due to which many customers did not get insights of making their
purchase (Tekin and Konina, 2017). This impact negatively on their productivity and
growth and needs to analyse fashion sense.
 JD sports performs their operation into complex manner by using extra ordinary tools and
application which leads to rise in the cost of the production. These weakness eventually
affects on its rivalry which using effective systems to operate and gain competitive edge.
Opportunities:
 JD sports has their global significance and reach to other countries which make them
able to opt new advantages and technologies to develop their franchise stores and
collaborate with other brands.
 JD sports could influence their customers by establishing products through segments of
their choices and wants. As they have large customer base and technological
advancement (Marland, 2017). So that could be utilise for better customer experience.
Online outlets could provide home delivery facilities to the customers through their
convenient sources.
Threats:
 The company facing main threat of high market competition because of other rival firms
who operate on global level and make use of available resources.

 The company thought of making new changes into overall process of production for that
it has been inactive into the market. The company plan to make new strategies and
implement it with unique aspects which aims to come up with something new and
innovative. Which will positively impact and overcome with threats.
Above mentioned are the strengths that the company should use to achieve success and
the weakness on which the company should work and improve. It is important to know the
opportunities and grab them. Also the threats should also be known to organisation and should
make strategies that would help them to overcome those threats.
Identification of Competitive Strategies
Bowman’s Clock Strategy
Under this strategy, organisations find their way of strategic planning which
examine the methods of product distribution and distribution segment so that products
would take good competitive edge into marketplace. The main purpose of this clock strategy
is moving in clockwise to various strategy which mainly focus on two prospectuses i.e. price
and prescribed value. It has six factors in context of JD sports are described below:
 Low price: This factor involves low cost and low price strategy. Through which a
company could not be competitive in market but could attract large number of customer
by setting up the lowest price so that no company would be able to differentiate into their
price. This strategy only focus on price differentiation rather than product. As they will
remain same but with different prices (Mamatova and Pavliuk, 2020).
 Hybrid: This position implies the aspect of both concerns regarding price and product
differentiation. Into which product would be slight different but with, low price so that
chances of getting competitive advantage could be raised as it provides something
different from the other firms. This factor implies value and price both components but at
minimum level.
 Differentiation: this position is highly influenced on standardised products as they
maintain quality and price to the top. This position has high concerned on value and
price. Many customers want to maintain their standard of living so that they only prefer
standard quality product with good brand name. So that this strategy is the best to make
their segments into lower class area with high profit margins.

 Focused Differentiation: This strategy focused on long term goal which influence on
total different product and with are input production. This involve luxurious products
with high quality services and quality. Through this company gain its right of unique
gesture into market. JD sports has its brand loyalty with superior prices and products.
They open their franchise into global market and differentiate their products through
them in order to gain maximum profit.
 Risky High Margin: According to this strategy, companies set high prices without
offering worthy product (Baškarada and Hanlon, 2017). Customer look at money worth
satisfaction. Through these prices companies could earn high profit but for a less period
of time until the customer would find the next best alternative into low price. So that
products should charge prices according to its relevance and quality for better growth.
 Monopoly Pricing: Into monopolistic concerns, products are run into monopoly which
defines there will be no alternative of the same products and customers are entitled to
make their purchase from one company. These organisation enjoys high level of price
discrimination as they are free to charge whatever price they want. Into long run, these
organisations acquire heavy profit margins.
 Loss of market share: the situation of loss of market shares arises when customers have
better alternatives which gives more money worth rather than the organisation inferior
goods into superior prices. People easily shift their demand to their next options which
gives benefits to their competitors. Setting low price for superior goods is the best way to
get success over competition and market goodwill.
By analysing this strategy JD sports needs to decide their positioning segments for their
new strategy which ensure success into upcoming future in order overcome their weakness and
threats.
Business expansion method
There are various methods through which an organisation can expand its business. Below
is the discussion related to those methods:
 Partnerships- Joining hands with others to perform the business operations is called
partnership. There is a agreement according to which two or more parties comer together,
invest capital and share profits. This strategy can be used by JD Sports to expand its