Business Strategy Report: JD Sports' PESTLE, SWOT, VRIN Analysis

This report provides a comprehensive business strategy analysis of JD Sports, a prominent sports fashion brand. It begins with an introduction to business strategy and its importance, followed by a PESTLE analysis to examine the macro-environmental factors influencing JD Sports, including political, economic, social, technological, legal, and environmental aspects. The report then delves into internal capabilities using SWOT analysis, identifying strengths, weaknesses, opportunities, and threats. The VRIN framework is applied to assess internal resources and capabilities for competitive advantage. Further, the McKinsey's 7-S model is used to evaluate the company's strategy, structure, systems, shared values, style, skills, and staff. Finally, a TOWS analysis is presented to develop strategic recommendations based on the identified factors, and the report concludes with a summary of the findings and recommendations for JD Sports' strategic development.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
SECTION 1: Macro Environmental Analysis.................................................................................3
SECTION 2 Capability....................................................................................................................6
TOWS ANALYSIS.................................................................................................................8
SECTION 3: Competitive Analysis.................................................................................................9
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14
Books and Journal:...............................................................................................................14

INTRODUCTION
All the actions which are taken by a business in order to attract the customers, increase the
customer satisfaction, compete in the competitive market and has the performance and achieve
all its business objectives and goals is said to be a business strategy (Akter, Wamba, and et. al.,
2016). Business strategy acts as a roadmap for a business in order to take its future moves and
steps. In order to sustain in business for a long term this is required by every business firm. Such
strategies are usually made for a long-term objective by a business. Business strategy of JD
sports have been conducted in this report. It is a sports fashion brand based in England. It owns
stores all over UK, Europe, USA, Asia and Australia. In order to analyse this business strategy
various models are applied on JD sports. VRIN, SWOT, PESTLE, and a number of other
analysis are used in this report. All these strategies help in formulation of business strategy for
JD sports.
SECTION 1: Macro Environmental Analysis
PESTLE ANALYSIS
In order to analyse all the external factors which, impact on the business function and
operations PESTLE analysis is conducted on JD sports. Pestle analysis stands for political,
economic, social, technological, legal and environmental factors affecting the business. Below
mentioned is still analysis conducted on JD sports:
 Political factors: All the changes in an organisation due to factors which have a
government intervention in them are considered to be political factors (Bai and et. al.,
2020). There are a number of such factors such as foreign trade policies, government
policies et cetera. Some of such strategies affecting JD Sports are trade regulations and
tariff related services, taxation, industrial safety regulations, political stability, rules
regarding retail sector in an economy, work week regulations for retail sector, mandatory
benefits provided for employees et cetera.
Opportunity: The strong political condition of UK supports the growth of JD Sports and
facilitates it to ensure long term sustainability at market place.
 Economic factors: there are number of such factors which affect profit earning of a
business and is applicable on all of the economy such factors from economic factors for a
business. There are a number of such factors which includes inflation rate, foreign

exchange rate, savings rate, interest rate, demand and supply and market etc. In order for
JD sports to run its business smoothly in the market following are the economic factors
which company needs to analyse carefully. Interest-rate unemployment rate, education
level, exchange stability, infrastructure quality, Skill of labourers, discretionary income
etc.
Threat: BREXIT is one of the most adverse factors associated with the economy of
United Kingdom which has resulted in reduction in value of pound within the nation.
 Social factors: A way in which society, its culture and values impact on organisation is
included in social factors. It is believed that believes and values in a society deeply affect
working and operations of an organisation. There are a number of such social factors
which affect working in JD sports these factors include attitudes, leisure interest, culture,
demographics and skills in a population, education level et cetera.
Opportunity: The changing market trends and lifestyles within the confines of United
Kingdom tend to act as an opportunity for JD Sports to sustain in market for a long
period of time.
 Technological factors: It is often seen that advancement in technology have a great
impact on value of the business. Examples can be taken of transportation industry which
have seen a number of China changes due to change in technology. It is important for a
business to do a technological analysis of its industry in order to make sure there is no
disruption in its function due to these advancements. Following are some technological
factors which are important to be analysed by JD sports. These includes recent
developments It’s competitors, impact on value chain, impact on product offering,
technological diffusion et cetera.
Opportunity: The technologically progressed economy of UK tends to provide scope to
JD Sports to capitalise upon the infrastructural and other developments of the nation.
 Legal factors: in a number of nations there exists a legal framework which is not free
enough to let organisations do what they wish to do. Even before getting an Intellectual
right of any innovation or findings company needs to make sure that no one accept them
in market is aware about it. The number of factors required by JD sports to be analysed
carefully our data protection, copyrights, employment law, health and safety law etc.

Threat: An instance of non adherence to the laws and legislation of country would act as
a significant threat to the functioning of JD Sports in market.
 Environment Factors: there are a number of environmental standards and norms which
are required to be followed by every organization in order to sustain for a longer period in
market. In order to enter any new market it is important for business to study the existing
legal formalities of the nation (Balon and et. al., 2019). Some of these factors affecting
sports are weather, climatic changes, regulations regarding pollution in retail industry,
waste management, endangered species, green or ecological products, et cetera.
Threat: Excessive carbon emission on the part of JD Sports may act as a threat for the
organization in context of environmental factors. .
This is a list of all the external factors which might affect in formulation of strategy for next
zone this is a list of all the external factors which might affect in formulation of strategy.All
these factors in one way or the other have an impact on functioning of JD sports.
In order to analyses all the internal factors of JD sports SWOT analysis and VRIO has been
conducted on the given organization. Both of these analysis are excellent way to the judge
internal capabilities and characteristics of an organisation.
SWOT ANALYSIS:
Swot analysis is an analysis which comprises of strengths, weaknesses, opportunities and
threats of an organisation (Elias Mota and et. al., 2020). This is an analysis which helps the
business to understand all its future capabilities and come up with ideas to face all the problems
which might arise in future. Below mentioned is what analysis conducted on JD sports:
Strengths:
 JD sports has created a differentiation in its brand when compared to other such brands. It
has a huge brand name in the market which acts as one of its strength
 JD sports consist of a number of sports brand. It have managed to achieve support from all of
such brands in order to manage its business efficiently.
 JD sports have a net cash balance sheet which helps. It to run its business efficiently. It does
not take credit or give its products on credit which saves a lot of time of company.
Weaknesses

 It is noticed that outdoor businesses of JD sports are currently making some losses which has
been proven to be a great Weakness for the company.
 There is a dynamic change in trends of fashion in today’s world this change lead to regular
innovation by brands. Due to this JD sports requires a lot of investment from time to time and
more frequently in order to keep up with market.
 The areas in which JD sports deals are very weather sensitive. Due to this JD sports have to
face some losses a number of times.
Opportunities
 There are a number of overseas rollout present for JD sports. Expansion in international
market is a great option for JD sports through which it can easily venture into international
markets
 JD sports can acquire some of fashion brands which will help it in future to enhance its brand
name and increase its profitability.
 Online sales are a great opportunity for JD sports. It can easily earn a lot of profit from this.
It will also be convenient for customers to buy products online from JD sports.
Threats:
 It is been seen that interest rates are rising in the economy. This has led to Beer huge threat
for JD sports.
 It is been seen that there are a number of competitors of JD sports present in market. These
competitors actors threat for the company. They aim at gaining customers of JD sports as
well which might be dangerous for company in the coming period.
 It is been seen that a number of new promotion strategies are used by companies in order to
sell their products. In order to do this companies reduce their prices due to which it is
difficult to manage the profit margin of company this is the situation which JD sports is
facing right now.
SECTION 2 Capability
VRIN Framework
VRIN framework is effectively used by business organisations for determining their internal
capabilities as well as resources which ultimately helps them out in gaining competitive edge in

appropriate manner. With reference to JD sports, the respective manager of this company has
made use of VRIN analysis. This framework is specified below in the tabular form:
Factors Valuable Rarity Imitable Non-
substitutabilit
y
What is the
result?
Global
presence
Global Reach - - - Competitive
Disadvantage
Offerings Offerings Offerings - - Partially
competitive
Strong
distribution
network
Strong
distribution
network
Strong
distribution
network
Strong
distribution
network
- Competitive
advantage for
temporary
basis
Employees Employees Employees Employees Employees Competitive
advantage
On the basis of all the factors explained in the above table, it can be said that employees
are one of the important factor that would help JD Sports in gaining competitive edge. Thus, it is
highly important for this company to emphasise on retaining its employees longer within the
company by providing them best environment where they can work freely without facing any
sort of difficulty.
MCKINSEY’S SEVEN S MODEL:
This model consists of seven hard or soft elements. It is useful in examining that how
different parts in an organisation works together. Below mentioned is this model applied on JD
sports:
Strategy:
JD Sports focuses on strategies like market penetration, strategic pricing and competitive
pricing. Market penetration helps company to gain maximum share in the market. Whereas, other

two strategies related to pricing helps companies to lower its prices in order to gain maximum
customers.
Structure:
Structure of JD sports consist of directors at the executive levels. The structure of company
is divided on the basis of functions. These functions consist of IT, HR, Acquisition, Customer
relationship manager, Logistics, Finance, Production etc.
Systems:
The business system of JD Sports is well developed. This system was developed over the
time. It took a lot of efforts as well as investment in order to develop this business system.
Shared values:
JD Sports shows values which refer to commitment to quality. It focuses on customers
need. They try to make customer central part of their operations function. They are also very
careful about the quality of their products.
Style:
JD Sports have styled itself to be lifestyle company. The products provided by company
speak of fun, taste and class as well. They also sell functional items. These are bought by
customers to enhance their performance.
Skills:
JD Sports consists of a number of skilled people in various ranks. This has proved to be
one of the greatest strengths for company.
Staff:
The employee structure of JD sports includes both workers at headquarters as well as
those workers who are employed by contractors for certain works.
TOWS ANALYSIS
JD SPORTS
STRENGTHS (S) WEAKNESSES (W)
 Large and competent
Workforce
 Extensive international
presence
 Product differentiation
 Weather sensitive
offerings
 Brand Switching owing
to changing lifestyles of
people

OPPORTUNITIES
(O)
 Political
stability of
UK
 Changing
social trends
 Technological
progress of
UK
 Company can tap the social
trends and develop
differentiated offerings.
 The skilled workforce can
tap on the technological
progression of UK to sustain
in market for long time.
 Company can tap the
technological trends
prevailing within UK to
deal with weather
sensitiveness of products.
 Company can conduct
market research regularly
to deal with the issue of
brand switching.
THREATS (T)
 BREXIT
 Excessive
Carbon
Emissions
 Non
Adherence of
Laws
 Excessive market presence
makes it important for the
company to deal with excess
carbon emissions by
capitalising upon
technological trends.
 BREXIT is dealt by product
differentiation strategy to
tap the attention of people.
 Excessive carbon
emissions can lead to
brand switching.
 Further, the customers in
the present era do not
prefer to buy from the
organisations that do not
adhere to laws and thus
this may lead to brand
switching.
SECTION 3: Competitive Analysis
PORTER’S FIVE FORCES MODEL
Porter’s five forces model helps the company to find out how does the five competitive
forces in the market influence its profitability and help it to generate a strategy in order to gain
advantage and long-term profits in the industry. Porters five forces analysis of JD sports is
mentioned below:
Threats of new entrants

Threats of new entrants for JD sports is very high. New entrants in this industry come
with new innovation, bring new ways to promote their products, reduce cost, and provide more
valuable products as compare to the company. JD sports need to innovate their products and
services regularly, build economies of scale in order to lower their cost, and spend more in
research and development in order to fight its competitors who are new entrants for the industry.
Bargaining power of suppliers
Bargaining power of suppliers for JD sports is very low. This happens because there are a
number of suppliers for retail industry in the market. The suppliers do not have a dominant
position in the market. JD sports can easily take advantage of this by building efficient supply
chain networks with suppliers, experimenting with their designs in order to take supplies of raw
materials from a number of other suppliers and develop dedicated suppliers who will help JD
sports in its growth and JD sports can do similar for their suppliers.
Bargaining power of buyers
Bargaining power of buyers for JD sport is very high. Buyers are becoming very
demanding in today’s world. There are a number of companies providing similar products with
varied price range. JD sports need to put pressure on its profitability in long run. There are a
number of ways in which JD sports can reduce the effect of bargaining power of buyers on its
profitability which include building large base of customers who are loyal to them (Tardieu and
et. al., 2020). JD sports need to continuously bring innovation in its product in order to attract
customers and limit their bargaining power. Company also need to launch new products so that it
can reduce the defection of existing customers to its competitors.
Threats of substitute products or services
Threats of substitute products or services for JD sports is very high. Because there are a
number of competitors providing similar product with similar value to the customer. In order to
deal with this company needs to take following steps which include being service oriented rather
than just product oriented. Company needs to understand the core need of customer. Company
also needs to adjust its prices for the customers who are continuously switching between
companies in order to retain them with the company for a longer period of time.
Rivalry among the existing competitors
Rivalry among existing competitors in this industry is very high. JD sports need to take
control over its competitors and fight them in market into order to retain its customer with it

(Peng and et. al., 2017). JD sports need to build a sustainable differentiation, bring economies of
scale to reduce this cost, and also collaborate with a number of Competitors in order to gain
maximum share in the market.
ANSOFF’S MATRIX
In order to expand the business of JD sports at international level, firm conducted market
research in order to implement proper strategies. This research consisted of Ansoff’s Matrix
which is divided into four below mentioned strategies:
Market penetration
Market penetration refers to selling already existing products in already current market by
focusing on promotion as well as price of the products. JD sports can use this strategy by
effectively use market penetration strategy by distributing their products within the same market
only. Adoption of this strategy will definitely help the company in enhancing their market share
within the same area.
Market development
Market development refers to the strategy which emphasises on introducing existing
product as well as services at new geographical location or area. Here, with reference to JD
sports, it can be said that this company can enter into the new marketplace in which it is not
having its outlets. This will definitely help this company in attaining success in rapid manner as
they are able to attract more number of customers towards them.
Product development
Product development refers to introduction of new products for already existing
customers of the company. As per this product development strategy JD sports can add on few
more number of products in its product portfolio that will help them out in gaining competitive
edge within the existing market place.
Diversification
This is determined as most risky strategy which simply states that new product must be
launched at new marketplace for attracting maximum number of customers and attains success.
In order to adopt this JD sports could enter into music industry while launching Skullcandy in
South Africa. In this way diversification played an important role in growth of JD Sports.
On the basis of above specified strategies, it has been analysed that market development
would be best strategy for JD Sports which will directly help them out in attaining success at

new marketplace. The main advantage of acquiring this strategy is that it supports businesses in
grabbing attention of the more number of customers from new market zone.
Bowman's Extended Model of Strategy
Bowman’s model of strategy is determined as the effective model that supports
businesses in exploring various strategies which would help them out in attaining success. This
model is consisting of total 8 strategies that are adopted by adopted by different businesses for
different purpose or requirement of their respective business. With reference to JD Sports, it can
be said that respective manager of this company makes use of Bowman’s model with the motive
of determining best suitable strategy for effectively positioning their products as well as services
within the sector. Some of the main strategies that could be seen as suitable for JD Sports are
specified as below:
Differentiation
This strategy simply emphasizes on providing higher value added services to its clientele.
In this, businesses ensure that they serve higher quality of product and services to its customers
in appropriate manner.
Low Price
This positioning strategy emphasizes on offering new products and services to its
customers at low prices within the marketplace so that they can attract maximum number of
customers towards them. Here, they emphasizes on minimizing their cost of their product and
services so that it can enhance its sales performance that will maximize their profitability in
appropriate manner.
On the basis of above specified strategies, it can be said that JD sports could go for low
price strategy while positioning themselves at new marketplace in effective manner.
Strategic management plan
Aim-Company aims at increasing it productivity along with sustainable growth and
development.
Vision Statement- Vison of company is to increase its share in market and diversify
worldwide.).
Mission statement- Company’s mission is to spread brand awareness and increase its reputation
among customers.

Values- JD Sports follows ethical ways to conduct its business. It also makes sure that it attains
maximum employee satisfaction and provide them hood working condition.
Strategies and tactics- Company plans on using market penetration and market development in
order to grow (Pucheta‐Martínez and et. al., 2019).
Market research- Company uses primary research in order to gain first hand data from market.
CONCLUSION
From the above report all the important aspects for creating strategic plan for JD sports can
be drawn. Effects of internal as well as external factors are very well defined with the help of a
number of models. Using all these models a strategic plan is also devised for company. This will
help company to take further steps.

REFERENCES
Books and Journal:
Akter, S., Wamba, and et. al., 2016. How to improve firm performance using big data analytics
capability and business strategy alignment?. International Journal of Production
Economics,182, pp.113-131.
Bai, C. Aand et. al., 2020. Blockchain technology: Business, strategy, the environment, and
sustainability.Business Strategy and the Environment.29(1), pp.321-322.
Balon and et. al.,2019. BUSINESS STRATEGY & DEVELOPMENT.Navigation,2(3).
Elias Mota and et. al., 2020. Business strategy for sustainable development: Impact of life cycle
inventory and life cycle impact assessment steps in supply chain design and
planning.Business Strategy and the Environment, 29(1), pp.87-117.
Elias Mota, B. A., and et. al., 2020. Business strategy for sustainable development: Impact of life
cycle inventory and life cycle impact assessment steps in supply chain design and
planning. Business Strategy and the Environment, 29(1), pp.87-117.
Leonidou and et. al., 2017. Internal drivers and performance consequences of small firm green
business strategy: The moderating role of external forces.Journal of business
ethics,140(3), pp.585-606.
Peng, M. W and et. al., 2017. Cultures, institutions, and strategic choices: Toward an
institutional perspective on business strategy. The Blackwell handbook of cross‐cultural
management, pp.52-66.
Pucheta‐Martínez and et. al., 2019. What have we learnt about board gender diversity as a
business strategy? The appointment of board sub committees. Business Strategy and the
Environment,28(2), pp.301-315.
Tardieu and et. al., 2020. Organization Structure—Allocating Roles and Responsibilities to
Support Business Strategy. InDeliberately Digital(pp. 107-121). Springer, Cham.
Weng, W., 2020.Impact of Business Strategy on Big Data Analytics Adoption: The Mediating
Effect of Supply Chain Competence(No. 2719). EasyChair.