Strategic Analysis of JD Sports PLC for Philippines Market Expansion

This report provides a strategic management analysis of JD Sports PLC, focusing on its potential expansion into the Philippines market. It begins with an executive summary outlining key recommendations, followed by an introduction to strategic management principles. The main body of the report includes an external analysis using the PESTEL framework to assess political, economic, social, technological, environmental, and legal factors in the Philippines. It also applies Porter's Five Forces to evaluate the competitive landscape within the retail clothing industry. An internal analysis is then presented, examining JD Sports PLC's strengths and weaknesses. The report identifies a suitable business strategy, discusses strategic direction, and concludes with recommendations for successful market entry and sustainable growth in the Philippines. The analysis aims to provide JD Sports PLC with insights to navigate the market, capitalize on opportunities, and mitigate potential threats.

Strategic management

Table of Contents
EXECUTIVE SUMMARY ..........................................................................................................3
INTRODUCTION.........................................................................................................................4
EXTERNAL ANALYSIS .............................................................................................................4
INTERNAL ANALYSIS ............................................................................................................10
IDENTIFICATION OF BUSINESS STRATEGY .....................................................................13
STRATEGIC DIRECTION ........................................................................................................15
CONCLUSION AND RECOMMENDATION ..........................................................................16
REFERENCES ...........................................................................................................................17

EXECUTIVE SUMMARY
Strategic management is defined as the continuous process which is covering all the
adopted plans and approaches by the organisation in order to reach out to their objectives which
they have decided to accomplish. Strategic management is creating insight for the business in
such a way that appropriate path map can be prepared that is helping for attaining growth and
sustainability as well. JD Sports PLC is a sports retailer which is planning to expand their
business in the markets of Philippines and in this manner this is recommended that they analyse
market structure of Philippines in such a way that all the opportunities and threats can be
identified by them. Besides this another recommendation is that JD Sports PLC is required to
provide distinctive product and services portfolio to their customer so that to stay one step
ahead of their rivals.

INTRODUCTION
Strategic management is the continuous process of planning and managing the
company’s plans and roadmaps framed to accomplish the desired goals and objectives in
smooth manner and to sustain in competitive business environment. This framework is
prominent for organization as they are strictly injected in every business function to benefit the
business (Wheelen and et. al., 2017). Proper strategic management ensures high power and
market dominance for the business organization. This is vital for every organization to
accomplish the long-term goals effectively and attain business sustainability. This report is
prepared for importance of strategic management process and various concepts and theories
related to it with respect to JD Sports PLC, a retail chain of sports and casual wears based out of
UK and established in the year 1983 by Wardle and David Makin. At present, due to rise in
competition in their sector and industry company is facing downfall in their revenues and
profits and had a substantial loss of market share. Besides this the company is dealing with
challenge of changing trends and this is the reason that need of business expansion for JD sports
is high. On the other hand the company is inhaling intense competition with their rivals due to
which the company is dealing with various inspirational brands. The factors that gave JD Sports
PLC edge over their competitors are high aspect in fashion and quality of their offerings. Due to
this, the board of Directors of company had decided to expand their operations in international
market i.e. Asian Market of Philippines which is a growing economy. This report is intended to
cover various internal and external analyses for the business assisting JD Sports LLC in
grabbing most suitable opportunities.
MAIN BODY
EXTERNAL ANALYSIS
External analysis can be defined as process of analysing the external factors i.e. factors
that are outside of business organization and their effect and implications on the business. By
using the PESTEL framework all the external factors affecting the organization can be
identified and their impact can be analysed from both positive and negative effects. With the
context of JD Sports PLC, this tool is helpful as they are planning to expand their business

operations in Philippines and to make a right decision it is important for them to be aware of all
the relevant external factors. Below given is the detailed PESTEL analysis with respect to JD
Sports PLC:
Political factor: Philippines is the country with Presidential system is in place with President
being the head of country. They are members of various world organizations like WHO, UN
etc. which provides good amount of business stability however it has drawn a lot of
international criticism towards itself for various subjects like Nepotism, Drug Campaigns,
Judicial killings etc. JD Sports PLC is planning to expand their operations in Philippines market
as there are immense opportunities existing in this segment market and provides a certain
sustainability and opportunity to grow as well (Hitt, Ireland and Hoskisson, 2016).
Economic factors: Economic factors include various macro and external factors such as
exchange rates, business cycle, and economic growth rates. This analysis and consideration is
important for a business organization to evaluate impacts of economic measures and aspects
within business functions. Philippines is the 38th largest country in the terms of higher GDP. It
is a good destination for investment due to low business set-up cost, strategic location and top-
quality workforce. There is huge increase noticed in FDI in Philippines which boosts
confidence level of investors. For JD Sports PLC the country is providing huge opportunities in
terms of tax incentives, resources and interest rate relaxation. The per capita income over
Philippines is 3,511.94 U.S. Dollars which creates higher opportunities for JD sports to have
successful market expansion over market segment of Philippines. Besides this GDP growth of
the country is high due to this reason lesser barriers are faced by JD sports.
Social factors: These factors contain and are associated with beliefs, culture, demographics and
customer preferences. It is vital for any organization to be aware of all the social behaviours of
the market in which they are planning to operate their business. They should have relevant
understanding of ethical attitude of the citizens as well as their purchasing power and
preferences. In the context of Philippines, the country is a developing country therefore they
have vast opportunities existing. The people in Philippines are generally friendly and
hospitable. With respect to JD Sports PLC may face some of the country issues like corruption,
poverty, drug abuse etc. and along with that there are some positive things such as friendly
environment and vast opportunities to expand their business (Hanson and et. al., 2016). lifestyle

of Philippines is mixture of Indonesian, Chinese, Indian, Spanish and American which
acknowledge higher opportunities for JD sports to expand their business along with grabbing
attention of their diversified people.
Technological factors: These factors include usage of emerging technologies in the business in
order to provide technological advancement to the business. In current time, this is the vital
factor as every activity is moving towards automation. In the context of Philippines, country is
growing rapidly there has been a massive increase in demand for Tech products and services.
The population consists of young people loving technology and advancements. For JD Sports
PLC this aspect is important as it will provide them high edge over their competitors in terms of
opportunities and innovations by using advanced technology in their business functions which
is aligned with young customer generation’s needs of Philippines. However, there is an
argument by many experts to invest further by government in technology advancement.
Environmental factors: These aspects are associated with using sustainable and
environmentally friendly practices in the business to minimize negative impact to the
environment due to any business activity and to grab opportunities for business expansion by
enhancing goodwill. Philippines is surrounded by over 7640 Islands, beaches, water parks etc.
which makes it a country full of nature however it also faces various environmental challenges
such as Earthquake, Volcano, typhoons etc. With context of JD Sports PLC they are required to
use environmentally friendly business procedure such as recycling of resources and using paper
saving practices in their business. This could enhance their survival opportunities and goodwill
in Philippines (David and David, 2016).
Legal factors: The last factor part of this analysis is Legal factors which are related with
legislative and regulatory aspect of the country. For example, imposing of restrictions on
various policies related to merger and acquisition or liberalized FDI policies. In the context of
Philippines too there are several laws and regulations published by government that are
mandatorily required to be followed by every company carrying on any business activity over
there in a smooth manner. This policies are on various subjects such as Employment laws,
company laws etc. The country is providing various incentives for FDI Investments. This FDI
friendly policies and environment is providing immense opportunities to JD Sports PLC to
invest and expand in Philippines.

Porter's five forces
Porter’s model is helpful for any business to identify and evaluate attractiveness of the
relevant industry by analysing these five forces. These are frames to define industry’s structure
and the structure of competitive rivalry existed within industry. With this model’s assistance
profit potential of the industry can be identified which could lead in attaining edge over the
competitors for the organization. With context of JD Sports PLC as the company is planning to
expand their business in Philippines market they are required to carry on this analysis
effectively so that the most appropriate decision can be made for their future actions (Leskaj,
2017).
Competitive rivalry
Competitive rivalry force covers analysis of existence of number of competitions
existed in the markets that are selling homogeneous products. When the competitors existing in
the market are equally sized this may lead competitor dominance market. In the context of retail
clothing industry associated with JD Sports PLC, high competition exists as there are large
number of companies which are manufacturing high range of clothing products and accessories.
In context of JD Sports PLC as the company is planning to expand their business in Philippines
market so this threat is higher as there is existing high competition in this industry. There are
various competitors existed for JD sports within market of Philippines such as Zumeiz and
many more and this is threat for the company to deal with the same.
Threat of new entry
This threat is associated with measurement of ease of business carrying within industry
in order to influence overall market environment. This is one of the important aspects to sustain
within a market and this consists of various barriers such as governmental intervention, scale
and expected retaliation. With respect to Philippines market as it is encouraging FDI companies
can initiate their activities in smooth manner. For JD Sports PLC as the company is planning to
expand their business in Philippines market so this threat can have high impact over business
and should be taken into proper consideration due to highly liberal policies.
Threat of substitute
This threat includes threat for a business organization of its product being replaced by a
substitute product which is like the product offered by them and is having edge in terms of

innovation and benefits (Fitri and et. al., 2019). With the increasing competition and technology
advancement this threat is increased as every organization wants to get edge over their
competitors by offering innovative substitutes. In this context JD Sports PLC this challenge is
faced majorly as they are planning to invest in Philippines which is giving encouragement to
FDI investment therefore a lot of innovative businesses in the same industry might come up
with a better substitute. As in market of Philippines there are so many substitute available for
customer which are cheaper and may provide higher customer satisfaction as well so this factor
is creating higher threat for JD sports in their expansion over Philippines. In order to deal with
rivals JD Sports PLC is trying to provide distinctive services so that they can stay ahead of
their competitors.
The power of buyer
This threat is associated with Purchasing power of the consumers of the market. The
greater the power or dominance held by consumers the riskier it will get for companies as they
might have to offer their products to the dominant consumers at lower cost which may bring
down their profit ratio. Besides this if buyer's dominance is low this may lead to marketplace
which prices are driven by companies. In the context of Philippines market customer are having
moderate options to buy from therefor the power distribution also is moderate among
consumers and companies. With regards to JD Sports PLC, the company may or may not face
threat of high buying power therefore, it must be ready to mitigate the same with their varied
clothing range highly differential and laced with high quality (Peppard and Ward, 2016).
The power of suppliers
Suppliers or Vendors are parties or persons supplying various services and raw materials
required to the business organization. Retail industry have their own set of different suppliers
through which they are taking varied raw material and services for processing their business
activities (Vetrov, Vandina and Galustov, 2017). Philippines is having controlled labour cost
due to which every company is maintaining large portfolio of suppliers and this is the reason
that business functions are rarely impacted due to dominance of suppliers. In the context of JD
Sports PLC, the company has to face low dominance of suppliers as they have large portfolio of
suppliers for various resources and services in their business.

INTERNAL ANALYSIS
Internal analysis is a tool which can be used within business in order to analyse internal
capacities that can be used by the business for attaining business objectives in sufficient way.
For JD Sports PLC as the company is planning to expand their business in the markets of
Filipine so this is requisite for them that they analyse internal capabilities so that to acquire
need of modifications. JD Sports PLC is taking assistance of value chain analysis in order to
analyse their internal capabilities which is elaborated as under:
Value chain analysis
The value chain is defined as the bifurcation of various activities which are executed
within an organisation and with the help of these activities product and services can be
delivered to customer in better way. Successful business organisation tries to keep high value
within their organisation in order to manage prominent relationship with produced products or
rendered services (Abosede, Obasan and Alese, 2016).
There are various activities which are existed within an organisation and some of them
are keeping high value for the organisation. These essential activities are required to be
differentiated in such a way that organisational objectives can be aligned with these activities in
direct manner (Witek-Crabb, 2016). Value chain relates with examining those aspects for the
business through which market opportunities are easier to find out and ways to attain

sustainability can be adopted. For JD Sports PLC the company is planning to expand their
business in Filipine, so with the help of internal capabilities the can receive appropriate
competitive edge in the overall market and retain in the market for longer time duration.
Various dimension of this model are elaborated as under:
Primary activities
Inbound logistic
These activities are associated with storing, handling material stock and transportation
related with the same party. These functions are holding high degree of priority as they are
directly linked with desired output by the organisation. For JD Sports PLC, with the view to
expand business in Filipine the company is preparing strategic plans so that to attain efficacy.
The company is trying to manage their stock within this aspect as they are a retail chain in
which by effectively managing these activities stock out conditions can be avoided (Cescon,
Costantini and Grassetti, 2019).
Operations
These are defined as the aspects under which raw material gets converted into finished
goods. These are associated with packaging, testing and manufacturing process. For JD Sports
PLC as the company is managing retail stores so this dimension is keeping higher value for
them in order to get market prominence. JD Sports PLC is emphasised over enhancing their
operational efficiency so that to induce efficiency within business operations. Besides this
testing of final products are another aspect which is used by JD Sports PLC in order to manage
quality within their business.
Outbound logistics
These are defined as the method under which products and services are being distributed
to end consumer by using channels of distribution. For JD Sports PLC the company is having
prominent online presence due to which they undertake internet as mediator in order to deliver
products to their customers. Besides this the company is associated with dealing in retail stores
so by adopting prominent channels for distribution JD Sports PLC can attain market success in
the markets of Filipine. With the help of appropriate distribution channels JD Sports PLC can

deal with market competition faced by them in Filipine (Ethiraj, Gambardella and Helfat,
2018).
Marketing and sales
Marketing and sales are two different aspects which are assisting the business to sum up
more value to business operations in such a way that business objectives can be aligned as well.
Marketing is a concept which involves various activities that are used by the business in order
to spread awareness regarding products and services offered. For JD Sports PLC as they are
planning to expand their business in the markets of Filipine so in order to attain prominence this
is imperative that they use prominent methods of marketing. These activities can help the
company in order to add more value and to minimise arising challenges in Filipine market.
Service
These are related with maintenance of product and services in which higher value can be
given to customers. In the context of JD Sports PLC the company is managing retail stores in
which the major focus of the company is required to focus on providing customer satisfaction
and adopting such ways by which after sale services can be enhanced and customers can be
retained as well. In current time the company is planning to enter into markets of Filipine so in
order to attract more customers the company is focusing over after sales services in order to
retain their customers.
Support activities
Procurement
This is regarded as the process in which resources are acquired in such a manner that
business efficacy can be intensified (Garzella and aele Fiorentino, 2017). For JD Sports PLC
the company is emphasised over procuring resources in such a manner that they can attain
success within markets of Filipine. This activity is helpful in order to provide higher value to
organisational functions of the business and align their business objectives as well.
Technology development