Strategic Evaluation: JD Sports PLC's Expansion Strategy Report

This strategic management report evaluates JD Sports PLC's potential expansion into Asian markets, specifically Singapore. The report uses frameworks like PESTEL for macro-environmental analysis, Porter's Five Forces for micro-environmental analysis, and the VRIO model for internal resource assessment. Key considerations include Singapore's political and economic stability, socio-cultural factors, technological advancements, legal and environmental regulations, and competitive rivalry. The analysis identifies the strengths and weaknesses of JD Sports PLC's resources, highlighting the importance of adapting strategies to address potential challenges and leverage opportunities in the new market. Desklib provides this report as a solved assignment to assist students, offering a platform with additional study tools and resources.

Individual Strategic
Management Report
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Executive Summary
Strategic management is becoming the most important concept in now-a-days. In these
days, it is found that the complexities as well as dynamic behaviour of business environment is
increasing which creates issues for organisation. In order to deal with all issues, it is necessary
for an organisation that they should use strategic management in order to combat with all issues.
This report is evaluating and analysing internal and external environment with the use of
frameworks and then use strategic management strategies.
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Table of Contents
Executive Summary.........................................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
External analysis.........................................................................................................................4
Internal analysis..........................................................................................................................8
Identification of Competitive Strategies...................................................................................10
Strategic directions....................................................................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES:.............................................................................................................................11
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INTRODUCTION
Strategic management is defined as the process in which an organisation is focusing on
planning to use the organisational resources optimally in order to achieve organisational goals
and objectives (Strategic Management: Definition, Purpose and Example, 2021). It requires an
ongoing evaluation of procedures and processes within an organisation. In changing business
environment, every day the complexities are increasing and that's why it becomes necessary to
use strategic management in order to manage the challenges as well as able to cope with them. In
this context, JD Sports PLC is undertaken which is the UK based organisation that run their
business in international markets. JD Sports PLC is found to be the British sports fashion retail
organisation that run their business in England. It is founded in 1981 in Bury, greater
Manchester. They are listed in London stock exchange and also have stores in Europe, United
States, New Zealand, Asia, and Australia. They are currently looking for the expansion of
business in Asian countries for more further opportunities. This report aims to analyse the
strategic management frameworks. In order to use strategic management framework, this report
also include external, internal analysis, and key issues of an organisation.
MAIN BODY
External analysis
JD sports is the UK based sports fashion retail organisation that run their business not
only in UK but also in many other countries such as United states, Asia, Australia, etc. Currently
they are planning for expansion of their business in Asian countries. So they are choosing
Singapore in order to expand their business. They choose this country because it is the hub of
businesses. It is found that Singapore is one of leading hubs in Asia. The reason for choosing this
country is that they have low tax policies as well as excellent talent development programs
which can be use by organisations while expansion of business. It is found that foreigners in
Singapore are allowed to own 100% company which they set up in the country (Top 5 countries
for doing business in Asia, 2020). in order to expand business in international market, it is crucial
for an organisation that they should firstly analyse the external environment. This will helps
them to identify and evaluate upcoming issues of eternal environment. It is found that every day
the business world is becoming more complex and that's why it is necessary to analyse the
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influence of external environment in order to run the business in other nations successfully. For
that purpose, macro and micro analysis of external environment is necessary.
Macro analysis
It is very important for an organisation that they should do macro analysis in order to
analyse the external environment (Fuertes and et.al., 2020). In macro analysis, it is including all
the factors which may be affect the organisational functions and operations directly or indirectly.
It is found that JD Sports PLC needs to use PESTEL analysis framework as it is helpful in
analysing the macro environmental factors. It consists of 6 factors which are mentioned below:
Political factors
Political factors are concerned with the polices and laws that formulated by government
of country such as tax policies, political stabilities, etc. It is important for JD Sports PLC that
they should analyse the political factors of Singapore as they are expanding their business in this
country (Bindra, Parameswar and Dhir, 2019). In the case of JD Sports PLC, it is found that they
ave a low risk in political factors as according to the report of Political and Economic Risk
Consultancy, Singapore is found to be the lowest political risk country.
Economical factors
Economic factors include type of economies, economic growth rate, inflation rate,
unemployment rates, etc. It is crucial for JD Sports PLC to analyse economic environment as
they are expanding their business in other country. Their economic factor influence on the
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organisational operations and functions. In the case of JD Sports PLC, they choose Singapore
which is the highest per capita income. They possess free economic market. There are some
factors which include shortages of labours, high costs of labours, and decrease in productivity
that could be provide negative impact on the organisational performance and success.
Social factors
Every day the consumers' tastes and preferences are increasingly change and due to this,
it is very important JD Sports PLC to identify all the factors which associated with the expansion
of business (Barbosa, Castañeda-Ayarza and Ferreira, 2020). There are many socio cultural
differences may be occur when JD Sports PLC is expand their business in different nations. It is
identified that daily changes of market trends creates complexities for organisation as they are
not able to understand the behaviour of customers. This is crucial to analyse social cultural
factors which also includes skills level of population.
Technological factors
It is becoming one of the important factors which needs to be analyse by organisation in
the process of external environment analysis. Technology is increasing every day which makes
pressure on the organisation that they should include the inclusion of technologies in the
workplaces so that they can gain competitive edge. In the case of expansion of business in other
nations, JD Sports PLC is in difficult situation as they need to adopt technologies which are
known by the employees of that country. If they are not know the use of high technologies then
how it is possible for organisation to use that technologies. Technological factors may also
impact on the organisational cost structure as they all are very expensive and not able to afford
by the organisation.
Legal factors
Legal factors include all the necessary laws such as Civil law which should be comply by
organisations in the expansion of business in different nations. Every nation has their own legal
laws and rules and that's why JD Sports PLC needs to comply all rules and regulations
accordingly.
Environmental factors
Environmental factors is considering some important factors such as weather, climate,
recycling, laws relating to environmental pollution, etc. These all factors should be considered by
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organisation in an effective way so that JD Sports PLC is able to modify their functions
accordingly.
Micro analysis
In addition to the macro analysis, JD Sports PLC needs to analyse the micro environment
analysis. In order to analyse micro environment, JD Sports PLC should use Porter's Five Forces
framework. It consists of 5 important forces which are discussed below: Bargaining power of suppliers: Bargaining power of suppliers is found to be high in the
case of JD Sports PLC as they are deal in sports fashion business in which the number of
suppliers are less as compared to other business (Wang and et.al., 2020). This will gives a
negative impact on JD Sports PLC as higher power of suppliers leads to lowers
profitability of organisation. Bargaining power of buyers: It is found that the bargaining power of buyers in JD Sports
PLC is low which becomes helpful for organisation as they are able to increase their
profits margin. The reason of low bargaining power of buyers is there are very less
number of organisation which provide quality and fashionable sports wear.
 Competitive rivalry: In the phase of competitive rivalry, it is identified that due to
globalisation the competition is increasing as there are many more companies available in
the market which provides same quality of products to the consumers (McKiernan, 2017).
Due to this, it is found that the profitability of JD Sports PLC may be get affected.
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 Threats of new entrants: Globalisation invites entrepreneurs to enter into market. But in
the case of sports fashion organisations, this is one of the organisations which have less
threat as there are less organisation as compared to other sectors which reduces the
threats of new entrants. It is not easy to enter in this market.
 Threats of substitute: In the case of substitute, there are less substitute available in the
market so that's why it is not necessary for JD Sports PLC to fear from substitutes but
still they need to prepare themselves as competition is increasing every day.
Internal analysis
Internal analysis is very important for an organisation so that they can make the strategies
accordingly (Pascuci, Meyer and Crubellate, 2017). They are able to know the internal resources
and capabilities which helps them to prepare that what resources they need to gain competitive
advantage in the market. It is very important for an organisation that they should make their
internal resources strong so that they can beat with the external environment influences. Internal
analysis can be done with the assistance of VRIO model which consists of four important
components are mentioned below:
Resources Valuable Rear Imitable Organised
Employees Yes Yes Yes Yes
Financial Yes Yes No Yes
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Resources
Research and
development
Yes Yes No No
Patents Yes No No No Valuable: In the case of JD Sports PLC, it is found that they are talented employees as
well as strong financial resources as they are run their business since 40 years. Due to
this, they have a successful business which creates strong financial resources. This will
helps them to invest in any activities which cannot stop them to get success (Sedevich-
Fons, 2018). Their employees are valuable for them as it is found that company is able to
gain competitive advantage because of their talented employees. Due to them, they have
innovative idea to run their business successfully. Rare: It is identified that employees, financial resources and research and development
department is found to be rare in the case of JD Sports PLC. Employees are rare as they
are the most important resources for the success and growth of any organisation and JD
Sports PLC have talented employees that's why they are rare for them. It is not easy for
any organisation to make the financial resources strong as it takes lots of time and efforts
which performed by JD Sports PLC in an effective way. It is found that financial
resources of JD Sports PLC is rare for them as they are not easily made by any other
organisation. Imitable: Employees of JD Sports PLC is imitable as any other organisation can imitate
their employees' strengths with the adoption of right training and development programs.
Their financial resources is not easy to imitate as it requires lots of efforts of an
organisation. It is found that research and development departments is also not easy to
imitate as it requires patience and market research which needs time (Carayannis, 2018).
Imitate of resources and capabilities of an organisation creates problems for them as they
are not able to achieve their goals and objectives effectively. They need to make
differentiated resources and capabilities which assist them to deal with the upcoming
challenges.
 Organised: In this component, it is found that employees and financial resources of JD
Sports PLC are found to be well organised which creates competitive advantage for them.
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The well organised of JD Sports PLC requires investments as well as training programs
which assists them to make employees talented and it leads to achieve organisational
goals and objectives. On the other hand, it is identified that research and development
department and patents of an organisation is found top be not organised and that's why it
becomes difficult for an organisation to expand their business in other nations.
Identification of Competitive Strategies
Bowman’s Strategy Clock
The Bowman's strategy clock is one of the important marketing model which helps a
company analyse the position in the market and what competitors have to offer. It focuses on
competitive advantage and how the product can manage to stand out in the market. This strategy
focuses mainly on product. Following are the eight elements of the Bowman's strategic clock:
 Low price: In this method of the strategy the main focus is on the low price of the
product. The company focuses on producing large quantities. By following this strategy
the company can generate high profits via high volume of output. Economies of scale
comes in handy while following this strategy as the fast and volume production.
 Low price and low added value: In this strategy the business focuses on providing low
priced good with some or no product differentiation in the eyes of customers.
 Hybrid: this focuses on using both, the product differentiation and also low price. This
strategy is effective in the market as the customers can be convinced. This strategy
convinces that the quality of the product is same with betterment in product.
 Differentiation: in this strategy the business focuses on product quality. The makes the
customer buy more good as the quality has gone better. The company focuses on more
and more advancement that can be done to the product that would make it stand out in the
business market.
 Focused Differentiation: In this strategy the main focus is on a particular segment of the
business which requires high quality products at high price. The competitiveness is high
here as any change in the price or quality leads to chain effect in the industry.
 Risky high margins: in this strategy the company charges high prices for those products
which are considered mediocre by the customers. The risk here is significant as the
customers can look for better quality product in the similar price range.
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 Monopoly Pricing: Monopoly business refers to those business units which offer the
product which is offered only by them and they face no competition in the market. Due
to this the business determines there own price and can keep the prices high. Mostly these
are regulated by the government in different countries.
 Loss of Market share: this is a bad stage for a company as in these the business is not able
to offer a product which is demanded by the customers. They find standard price for their
products to still be a little competitive in the market.
According to the case, JD Sports is taking up focused differentiation as a part of their strategic
planning. This is because they are focusing on the Asian markets and to have a competitive edge
in those markets they will come up with such advanced products that would cater to the demands
of customers in Asian market.
Strategic directions
To expand the business operations it becomes necessary to choose the right direction.
There is need of proper research and developments so that right direction can be selected. A
company must know about the requirements and options that are available so that they are able to
make right step (Brui, 2018). There are huge number off opportunities that are present in the
market. A company must analyse those opportunities and take advantage by grabbing the best
among them. A strategic manager needs to analyse both the pros and cons of all the options so
that goals and objectives of expansion can be achieved.
Ansoff Matrix
The model is being used to analysed the condition of market. It assists the organisation to
choose the right direction. There are various options of expansion that are available. The use of
Ansoff matrix helps the company to know about the best strategy that can be adopted by the
company. It is analysed that there are options that are available by using Ansoff matrix the
company will be able to choose best among them. The various quadrants are studies below:
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Market penetration: It is one of the strategy that is used under Ansoff matrix. It is the
strategy that is used by the business organisation to sell the existing product in existing market.
The company that is unable to attract new customers towards the organisation uses the same. It is
suggested that the organisation must enhance the expenditure of marketing so that they are able
top reach more customers (Duhaime, Hitt and Lyles, 2021). The company works to grab the
attention of their customers towards the company so that they are able to enhance the sales. It is
examined that JD sports is a big company and is earning good profits. The company can use
penetration strategy to enhance the sale of a particular product in the market and earn good
revenue.
Market development: In this strategy the company enters a new market for their
business and sell the existing product over there. It is seen that proper research is being
conducted in order to know about the needs and wants of customers in the new market. The
product has already attained a good image in market and it is easier for the company to enhance
the same (Voinea and Van Kranenburg, 2017). In relationship with JD sports the company is
enhancing the operations in Singapore. There is need to analyse the market of Singapore and
know about the preference of customers so that best products are provided to them. It will help
the company to achieve goals and objectives.
Product development: This quadrant works to provide new production by adding
features or innovation in the existing market. It is seen that they customers get bored with the
existing products and like to have changes in them (Gans and Ryall, 2017). It is important to
bring something new in market so that the needs and wants of existing customers are satisfied in
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an effective manner. In regard to JD sports the company keeps on adding features to their
products that keeps the customers highly satisfied.
Diversification: In this strategy, company launches new product in new market. It is seen
that there is need of saturating the market. The company has to indulge expenditure and provide
best to the customers (Gure and Karugu, 2018).
JD sports is enhancing the operations in Asian market. The company find scope for their
company is Singapore. It will help them to earn more revenue. There is need to conduct proper
research and find a best area to establish their business. They will start their own business in the
market. The task is to satisfy the customers by providing high quality good and services.
CONCLUSION
From the above report, it is concluded that strategic management plays a vital role in
success of the organisation. It is important to form effective strategies that can be used by
company in order to expand the business organisation. It is necessary to note that there are
various market situations that must be analysed by the company at the time of expanding the
business operations. PESTLE analysis I done to know about the impact of external factors in the
business organisation. Internal analysis is done to kn ow about the resources that will help the
company to operate effectively. There is competitive analysis also done in this report so that
company is able to prepare themselves. In the end best strategic option is examined so that they
are able to attain success in new market.
Recommendation
While expanding the business there is need of conducting proper research and
development and forming best strategy for the business (Vitolla, Rubino and Garzoni, 2017).
The following are the recommendation that will help JD sports to expand the business in an
appropriate manner:
 The company must first of all analyse the external market of the place of expansion. By
knowing about the conditions the company is able to make right decision. The needs and
wants of the customers must be analysed so that they are able provide best to the
customers.
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 They must know about their own strengths and weakness. A company must conduct
proper internal analysis so that they are able to work on the point of weakness. It is
important to expand the operations in new market with all the resources and capabilities.
The company must provide best quality to the customers so that they are attracted
towards the organisation
 It is important to know about the competitors and the strategies that are being used by the
company. It will help the company expand the operation effectively. They will also be
able to provide better then the competitors and attain success in the new market.
 The company must maintain high quality of products at the time entering new market. It
will help them to enhance the sales and attract the customers over there. The quality of
products is important in order to make the customers loyal towards the organisation.
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REFERENCES:
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Voinea, C.L. and Van Kranenburg, H., 2017. Nonmarket strategic management. Taylor &
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Online
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<https://www.acclime.com/insights/top-5-countries-for-doing-business-in-asia/>
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