Strategic Management: Analysis of JD Sports and Expansion Strategy

This report offers a comprehensive analysis of strategic management principles applied to JD Sports, a prominent retailer of sports and casual wear. It employs various strategic tools, including PESTLE analysis to assess the macro-environmental factors impacting the company's operations in potential new markets like Asia. Porter's Five Forces model is used to evaluate the competitive intensity within the retail industry, identifying threats from new entrants, supplier and buyer power, substitutes, and competitive rivalry. Internal analysis is conducted using the VRIO framework to assess JD Sports' resources and capabilities, focusing on value, rarity, imitability, and organization. The report also discusses Porter's generic strategies and recommends strategic directions for market expansion, including collaboration, licensing, and franchising. Ultimately, the report aims to provide actionable recommendations for JD Sports to achieve a competitive advantage and successfully expand its market presence.

Strategic Management

Executive summary
The report has presented an understanding about strategic management. It is a vital
process which focus on setting plans and strategies to fulfil goals and objectives. The report has
outlined all the factors which could impact on the internal and external functioning of the
organisation. It has identified through pestle, porter's, VRIO models. These models are effective
in taking strategic decision which will focus on bringing out competitive advantage of the
company. Also, porter's generic strategy has also been helpful to make strategies for product
service, price activities. The company could make expansion through collaborating, licensing,
franchising ways.

Table of Contents
Executive summary.........................................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY..................................................................................................................................4
TASK...............................................................................................................................................4
External analysis..........................................................................................................................4
Porter’s 5 forces...........................................................................................................................6
Internal analysis...........................................................................................................................7
VRIO frameworks.......................................................................................................................7
Competitive strategies.................................................................................................................8
Strategic direction........................................................................................................................9
Recommendations..........................................................................................................................11
CONCLUSION..............................................................................................................................11
REFERNCES:................................................................................................................................13
Books and Journals:...................................................................................................................13

INTRODUCTION
The report aims to understand about the significance of strategic management. A business
works along with a strategy which shows a whole plan and process to carry out workplace
activities. Strategic management leads to achieve business aims and objective as per the set
standards. It carries out function of planning, setting mission, collect resources and make
employees aware about strategies which needs to be taken into consideration before work
implementation. The strategic decision depends on large business environment and the impact it
creates on organisation functioning (Dzwigol, 2020). The report will carry out the current impact
on this environment on JD sports, a large company which sells high quality luxurious sports as
well as casual wear, accessories in UK and other worldwide countries. The company was
established in 1983 first in UK and now expanded in many other European countries. Therefore,
the report is going to analyse the impact on both external and internal environment through
applying relevant models and theories such as pestle, VRIO and porter's five forces. This analyse
will lead to make strategic direction in order to take competitive advantage. This will be done
through competitive strategies of porter's generic framework. In order to achieve market
expansion in Asian countries, there will be presentation of ways for expansion with appropriate
recommendation.
MAIN BODY
TASK
External analysis
This analyse helps in gaining knowledge about macro environment. It has wide scope and
much impact on business functioning so that, JD sports needs to be aware about what factors
would become barriers and what could work as strength for company.
Pestle:
This analysis will help in identify the regulations and factors of New Market. It will help
in gaining knowledge about uncertainty and challenges which may come in extension and
growth of company. Therefore, in order to expand in Asian countries, JD sports needs to have a
look on macro environment factors which are discussed below:
Political: as per this factor, the organisation needs to have focus on government
restrictions in regulation for coming into new market. It is all about taking governmental and

political concern before entering into their country. JD Sports need to take many laws about L
military, regulation of price, important export in many more. Therefore, they need to grant
permission from political parties to enter in Asian countries. The company have positive impact
of this factor due to having a global presence from past years.
Economic factor: in order to survive in a large business market, organisation needs to contribute
in economic development. There must be a balance between demand and supply making rates,
inflation and money supply in the country (Makadok,Burton, and Barney, 2018). It will be only
in the hands of organisation and how they practice to boost their revenue. JD Sports has high
operations at worldwide level due to which it has positive impact to contribute in sports industry.
After the covid-19 , the company somehow getting affected with economic crisis due to which
people become more of quality focused and want product at low prices. This is due to low
income power regulating in economy of UK.
Social factor: as per this factor, the organisation needs to make a customer their priority
and the demands are the top necessity of organisation. That put industry is relatively focusing on
current trends in order to support people comfort and necessity. DD Sport also has positive
impact as they have large variety of clothing and accessories which satisfy customers at global
level. Their products serve across nations in range high revenue due to which the company
shows a potential to enter in New Market with existing product.
Technological factor: this factor focus on bringing technological improvements in
organisation. It is a must concern for every business in sports industry to have digital presence. It
is necessary to provide relevant and convenient services to the customers. Therefore Sports has
negative impact of this factor due to having less digital presence which this not creates a
competitive advantage in market.
Legal factor: as per the UK law, every business organisation is required to regulate each
and every legal obligation in order to involve employees and other individuals toward
organisation (Bryson,and George, 2020). JD Sports needs to look for further regulations over
new laws for sports industry such as health and safety accessories control so that they could enter
in New Market effectively. Also the company maintains employee’s right and diversity to run
smooth functioning at workplace.
Environmental factor: the Spectre highly create influence on Sustainable practices stop
it will give a positive impact to the company in order to support present and future resources.

Sports industry is known for highly going sector which is required to reduce energy consumption
and support ecological environment (Agha, and Dixon, 2021). JD sports are one of the
concerned organisation in which they avoid plastic usage and zero level carbon emission which
gives a high quality products at sustainable edge.
It has evaluated from the above pestle analysis, JD sports has much potential to capture
large market buy mainly focusing on economical common technological and legal factors which
good impact in the upcoming market.
Porter’s 5 forces
This five forces model is a highly strategic management tool which reflect on the industry
situation will stop it will help in analysing how industry is facing a large impact of internal
surroundings. In order to gain market share and profitability, JD sports fashion company needs to
have a look on the five competitive forces which are described below:
Threat of new entrants: this market forces influence on impact from new entrants on the
industry. There are a lot of businesses arising with innovation, low price in strategy, high value
products and attractive promotional campaigns which may become barriers for Retail Industry.
This industry does not regulate any restrictions for new entrants which may give tough
competition to the existing organisation (Teece,2019). JD Sports has High capital, huge customer
base, great quality products and penetration pricing strategy which impact on any new player in
the market. As they required having this much potential to attain large market share as JD Sports
already exploring market from its best Strategies.
Bargaining power of supplier’s: as per this market forces, the organization must have
control on supplier power. Retail industry has enough number of suppliers which serve materials
and equipments. Due to having large number of suppliers Retail Industry has low impact of this
tractor so as JD sports also need not to worry about suppliers burning power. The company has a
lot of options to choose which control the cost of supplies into market.
Bargaining power of buyer’s: as per this market forces, the buyers could have high
bargaining power due to getting similar range of products across all over the market. Retail
Industry is known for this similarity due to which buyers hold an extensive power to exploit the
organisations. JD Sports have medium threat of this factor due to having a unique and luxurious
range of products which are not easily identifiable in market. Therefore the company needs to

maintain Innovation and adding new values every time launching new products so that
consumers will not been much power lower down profit margins of company.
Threat of substitute: availability of substitute is one of the major threats for Retail
Industry. Customer has vast varieties of options through which they can satisfy their needs when
other organisations could not (Anatolievna,and Anatolievna, 2018). This impact highly on retail
and sports industry of UK as there is a lot of organisation dealing in fashionable and sports
clothing and accessories. DD Sports also have high threat of substitutes due to which they need
to look for product features, design and Outlook. This will make differentiation strategies to
achieve large market share.
Competitive rivalry: it is one of the major threats in every business industry due to
having large Complex environment. Rivals are the major threat for Retail Industry due to which
they could capture large market before the other firm take any action. JD Sports highly impacted
with its major competition buy Nike Puma and other Sports organisations that provide best brand
quality product. the company needs to be prepared with good strategies to leave the competition
behind.
It has evaluated from the Porter five forces model that the company needs to look for
their internal surroundings which might impact on strategic formulation. JD sports comes under
Retail Industry which is facing regular competition, uncertainty is and ever changing Trends and
wants of customers. Therefore they need to highly influence on availability of substitute and
competitive rivalry which might create obstacles in achieving long term goals.
Internal analysis
VRIO frameworks
This analysis is an effective framework to analyse competitiveness of Organisation in
order to survive in dynamic market(Morrison, and Misener, 2021). This analysis focus on the
internal resources and capabilities of company which are necessary to be improved or revised
whenever required. Therefore, JD sports PLC has to analyse their potential unique factors which
they serve in to market so that they could make necessary improvements in the internal
functioning which might not impact in expansion strategy. The four areas of analysis are
described below:
Value: it is the first and foremost question which an organisation needs to ask about their
internal surroundings. It focuses on what company is delivering into market and what resources

they are using to produced the same to satisfy customers needs. Resources must be valuable so
that it can gain customer attention and make them able to differentiate in different organisation
products. JD sports have strong financial resources due to which they invest in many
opportunities. The company provide value in the product quality as there pots Where are found
to be very comfortable and durable for customers. They provide money worth value due to which
they have less impact of market forces.
Rare: this factor focus on organisation resources which they used in making product or
service to serve in society. It analyse whether the company has rare or unique resources which is
not easily identifiable. In order to gain competitive opportunities, being there is the most vital
need for Retail Industry (Symeonides, Loizia, and Zorpas, 2019). JD sports does not have any
rear resource as all the products related to fashion footwear and accessories are serve across all
the retail sector. Therefore, it is necessary to look on maintaining a rare image which will add
more satisfaction to customers purchase.
Imitability: as per this factor, the organisation means to look on resources and products
whether they could get copied easily. Imitability refers to a common any simple designs for
Outlook which can easily copy by others. DD Sports does not have much imitable resources and
products due to having unique quality as well as designs. When organisation trying to copy their
products it will not get with the same finishing and the outlook which the company is providing
into market.
Organisation: it is the last but the most important factor of this analysis. All of the above
discussed elements depend on the organisation process structure and how the resources get
managed. Organisation people play an important role in achieving all the value rarity and
inimitability by working in coordination and under the supervision and control. Therefore, JD
Sports is known for highly professional staff which support the organisation functioning and
regulate divisional structure. Through which the company provide diversify to employee and
keep them motivated.
This analysis helps in identifying the most important factors that must be under
consideration to make strategies. As JD sports needs to currently look for rare and imitable factor
so that they could capture use market and avoid competition as much as possible.
Competitive strategies
Porter's generic strategy

This strategic can approach is very well versed to take competitive advantage into
market. This strategy is applicable for all the industry and organization in order to look on price
and product of company. This helps in taking decision for be competitive in the market and 18
large growth for long term success. Therefore, JD sports needs to use this strategy which is
necessary to fulfil their objective for expansion in new countries.
Cost leadership strategy: As per these criteria , the company needs to be a market leader
for that instance the company needs to first be a cost effective leader within their organisation.
The main aim of this study is to earn higher profits by lowering down the cost of production and
procurement. The much organisation will attend less cost efficiency the more it will gain high
number of sales and achieve customer satisfaction (Mir, and Mir, 2019). Every individual wants
good products in such reasonable prices which will be more than their expectation. This strategy
is a gem for JD sports to enter in new emerging markets. They need to be price leader by
lowering the cost which could be done through taking supplies and resources from different parts
of the world.
The differentiation strategy: this strategy focus on thinking a difference between one
organisations product to another. It needs to be unique and rare from the competitors so that the
consumers will likely to spend more money in company’s product and services. It is obvious that
one same industry will involve similar kind of products but it could be differ in terms of size,
durability features and functions (Dyck, 2020). JD sports good avail this opportunity by
conducting a good research and involving innovation into an organisation. It will lead to to gain
a competitive advantage over the main Rivals.
The focus strategy: the term focus involves concentration of organisation towards a
particular market and its customer. The company and taken its market strategy in which they
identify the potential demand of for most customers by analysing the Trends and their
preferences. This Strategies also quite effective for JD sports as a need to identify those
customers who are interested in sportswear and make the product as according to their wants.
This appropriate market will lead to be difficult for the competitors to exploit. As one potential
customer will provide benefit of ten other non potential ones.
It has evaluated from this strategy that the organisation needs to first focus on reducing
cost and enhancing profits which will lead to make strong financial position as well as

organisation will be able to invest in other activities. Also there is requirement of differentiation
due to a large number of competition is upholding in the market.
Strategic direction
The organisation has market opportunities and various strategies to enter in new market. In order
to get the right and specific strategic direction for JD Sports . the company needs to focus on the
following statistical approach and methods of expansion:
Ansoff matrix:
Market penetration: strategy focus on taking growth in the existing market with the old product.
The company needs to look for various promotion and innovation ways to capture large market
which has still left out from the reach of JD Sports.
Product development: the organisation needs to have potential to develop new product
but into existing market (Sibiya, 2018). This strategy could be undertaken by DD Sports in order
to provide their customers use variety of products with the existing brand name. It requires a lot
of market research as well as competitive Positioning.
Market development: as per this strategy, the company needs to enter into new market
but with existing product. The company e would create objectives to to take their products in
New Market so that the customers will experience their quality standard . it is the best strategic
direction to create expansion and growth into market first of JD sports will require proper
knowledge about the countries in which they are entering and they must add some value in
products so that they could maintain trust in the eyes of customer of New Market. This will bring
a large profitability and brand name for JD Sports.
Diversification: this strategy is quite Complex for organization is it required a lot of
potential, Market research, financial funding and effective management. It refers to to opt a new
market with a whole new product. It is a quite risky here as the company could face severe losses
and lead to bankruptcy. JD sports need to think before investing in this expansion strategy as the
company does not have much good records in economic and financial strong activity.
It has evaluated from the ends of strategy that the company needs to make decisions after
analysing their potential and capabilities to take advantage over competitors. JD sports good
invest in market penetration and development which will be effective for their success and
growth.
Ways for expansion:

 JD sports could expand its company though taking acquisition form other firms. It is most
quite effective way to enter in large market. The company could sell companies
ownership to other investor so that they can run company with existing name (AYDIN,
2017).
 The company could give franchisee in order to expand in Asian countries. But this way
would become time taking and set responsibilities also.
 Partnership is also another way to get in partners with other investors so that it would
contribute large capital at global locations.
Recommendations
After the identification on current position of the organisation, there is serious need to
overcome with all the threats and competition. Therefore, JD sports require working for
improvements as well as adopting new ways to enter into market. Some relevant
recommendations are provided below:
 JD sports needs to firstly look on legal obligations and constants which may arise while
entering to new country. the need to make good relations with political parties through to
making society welfare and focusing on more recognisable brand name.
 The company needs to adopt market development strategy as it has valuable products
with can attract customers and provide them satisfactory experience.
 The company needs to ascertain motivational Strategies and sustainable practices so that
it could trust among customers and gain trust among customers so that they could freely
run their practices in new countries (Utama, Siti, and Teguh, 2020).
 JD sports must have technological presence in order to capture large market
simultaneously from host countries. This includes social media interference and
promotion through these platforms.
 Digitalization must be the foremost activity done by DD Sports in order to look forward
for growth and expansion. Digital technology is serving what opportunities in global
market analyzing current trends, get to know customers and make communication. It
leads to save cost and efforts of the company by eliminating traditional ways of
promotion.

 The company needs to avail omni channel marketing through which they could provide a
large service experience to customer. Through which the company could sell their
product and service across various platforms as per the suitability of consumers.
CONCLUSION
The report has concluded that strategic decisions require much concentration and
effectiveness to perform best functions. These strategic management will focus on regulating
plans and implement it with the support of management team and its members. Therefore, it
maintains control over organisation practices as the goals must be achieve as per set plans. The
report has identified that organisation has much impact of Pestle factors mainly in political,
economical and social issues. Porters, five forces models has helped In analysing internal
competition which could be done through analysing competition, suppliers and buyers power,
availability of substitutes.