International Market Expansion Strategy for JD Sports: Report

This report examines JD Sports' strategy for tapping into new and international markets. It begins with an introduction to international marketing and the global business environment, using JD Sports as a case study. The report includes a PESTLE analysis to assess the political, economic, social, technological, legal, and environmental factors influencing the company's expansion. It then explores the threats and opportunities facing SMEs in a competitive global environment, utilizing Porter's Diamond model. The report further analyzes the advantages of international trading blocs and agreements, as well as tariff and non-tariff barriers. It also delves into the advantages and disadvantages of importing and exporting, including how a business secures deals and the differences between merchandise and services. Finally, the report evaluates various methods for SMEs to enter international markets, comparing and contrasting the pros and cons of each approach to provide a comprehensive overview of international market expansion strategies for JD Sports.

Tapping into new and
international markets
Table of Contents
Table of Contents.............................................................................................................................1
INTRODUCTION...........................................................................................................................1
Task 1...............................................................................................................................................1
P1 Global business environment where small and entrepreneurial businesses operate..............1
Task 2...............................................................................................................................................5
P3 Advantages of international trading blocs and agreement.....................................................5
Task 3...............................................................................................................................................7
P5Advantages and disadvantages of importing and exporting how a business secures a deal. . .7
P6 Difference between merchandise and services import export................................................8
Task 4...............................................................................................................................................8
P7 Evaluate the various methods in which SMEs can tap into international markets.................8
P8 Compare and contrast the various ways SMEs can tap into international markets, assessing
the pros and cons of each method................................................................................................9
CONCLUSION..............................................................................................................................11
REFERENCE................................................................................................................................12

INTRODUCTION
Tapping in to international market meaning a small organisation which is going to establish
and expand its business in wider area and international market that helps to run a business and
increase profitability. Global marketing is consider as marketing area where different types of
organisations are running business and getting competitive advantages. This is a great
opportunity for companies to operate and increase their business profitability. The manager of
business organisation needs to understand current trend and bring products and services
accordingly so it can maintain the business activities properly (Steiner and Fan, 2019). While
running a business it is important to make planning, organising, directing and controlling the
activities properly. To understand about this, JD Sports has been taken that is large size retail
company that is selling different types of clothes and sportswear that attracts people and increase
organisational profitability. This organisation is going to expand its business in Europe and other
countries that is international market which helps to increase brand image. This report covers
opportunities and threats for firms, advantages of trading bloc firms, importing and exporting
process and how SME tap in to international markets.
Task 1
P1 Global business environment where small and entrepreneurial businesses operate
About company – JD Sports Fashion Plc is retailing company that is selling different
types of products and services that attracts customers and increase organizational productivity.
This company was founded in 1981 by John & David. This organization is selling different types
of products and services as per customer needs and wants which attracts customers in order to
increase organizational sale (Nordin and Lindbergh, 2019).
Concept of international marketing – International marketing is stated as those
geographically market that contains different area and market to establish a business and increase
the brand image. Every organization has a dream to expand their business and profitability by
involving in to international market and increasing sale. In other words, when a business is going
to establish across the border or territorial boundaries for the purpose of increasing productivity
is depicts as international market. Every organization has a dream to run their business and grow
continuously in competitive world. For instance, JD Sports is running its business in UK, Burry
and near by area, now it is planning to tap in to international market so it can run business and
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increase the organizational effectively. While expanding business and entering in to international
market there is need to analysis the global environment that states which factor can influence
their business and how it can control them effectively. To analyzing the global environment
management is required to focus on macro factors that involves political, social, economical,
social, technological and environmental that arises at the times of running business and
increasing productivity (Majid, 2019).
PESTLE Analysis – This is a framework which is required to analysis the current
marketing in relation to performing business activities in to other market such as global that can
help to improve the economy. Various factors are considered in such research that states how
some factors has impacted on business:
Political – This factors states stability of political system, tax rates, government regulation,
free trade practices etc. that are followed by a business in a nation. Europe is a developed and
powerful nation where JD Sports is going to operate a business in fashion industry by following
their political rules. This factor will help to gain and increase the foreign direct investment that
make strong economy and popularity of business. In case of instability of government in Europe
then it become difficult for JD Sports to enter its business in global environment.
Economical – The economical condition of Europe is highly good and maintained that
increases buying power of people who are living at there and completing their needs and wants.
It is strength for J.D. Sports that customer will spend money to buy the fashion and sports wear
that will helps to run a business in global environment. At the same time, increase in inflation
rate other nation such as Europe, limit the buying power of customers that reduces organization
productivity (Tolstoy, 2019).
Social – The needs and wants of people are not same where they are demanding different
types of products and services. The population rate of Europe is increasing which is impacting
good as increase in number of customers and sale. In case of having many competitors and lack
of trust of people on JD Sports then it become difficult to expand business across the boundaries.
Technological – The growth and development of any country depends on technology and
technical skills that can help to accept the challenges and increase business activities. JD Sports
is producing and providing best quality and design of clothes as per new trend in Europe and
other nation that increases brand opportunities. At the same time, Lack of technical skills and
employees in other country increases risk and maintenance expenses of business.
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Legal – JD Sports is sports retailing organization that is following all acts and rules which
are important to run a business. This helps to enter in to international market and run business
effectively so it can get high range of profits (Thakur-Wernz, Cantwell and Samant, 2019).
Environment – This means a business organization should follow all regulations which
are related to environment such as clean, reduce carbon emission, green plantation, minimum
wastages are following by chosen organization that helps to entering in to international market.
P2 Threats and opportunities that face SMEs in increasing competitive global environment
Small and medium organizations are those business who are running activities at small
areas and wants to compete with global business and large organization so it can take
competitive benefits. To entering in to international market there is need to analyze threats and
opportunities of their business so right decision can be taken in certain period of time. JD Sports
is international organization that is facing different threats and opportunities at the time of
running business in to global environment that are as stated:
Porter’s Diamond model - This is strategic economic model that uses by organization
to run a business and getting competitive benefits. JD Sports is using this model to get the
relative strength of such business against of other. This is explained below:
Factor condition – This factor is related to various sources which are important to run a
business that are capital, human resources, infrastructure natural and knowledge resources helps
to perform all activities and increase productivity. JD Sports is using this factor as it have skilled
workforce, marketing managers, foreign investors etc. can help to enter in to Europe that is
international market and helps to build competitive advantages. (Mitra and et. al., 2019).
Related and supporting Industries – It has been seen that success of any industry
depends on related industries and suppliers who sales raw material and finished goods to
organization to delivering best and designing products. JD Sports is having good relationships
with Europe and its suppliers that helps to purchase raw material at fixed rate and setting
competitive business.
Demand condition – The main factor of demand condition is home market demand that
helps businesses to take the competitive advantage and increase productivity. As JD Sports is
going to enter in to international market by innovating new products and services that attracts
customers and increase the brand image. The chosen organization is focusing on market size,
market sophistication, growth rate that increases brand popularity by taking competitive benefits.
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Strategy, structure and rivalry – This is another strategy which uses by organization at
the time of operating business and running it successfully. JD Sports is formulating strategy and
structure for the purpose of dealing with competitors and complete their business activities that
can help to increase the business profits and maintain competitiveness (Kim, 2019).
Critically implication of threat and opportunities
A business organisation is required to analysis the business environment that can help to
state the threat and opportunity of business. JD Sports is using SWOT analysis that is stating
opportunity and threats by entering in to international market that are as defined:
Strength Weakness
 It has a strong base of reliable supplier
of raw material thus enabling the
company to overcome any supply chain
bottlenecks.
 Good distributional network
 Superb performance in market
 Successful track record
 Better quality of products and services
 Limited success in international market
as having many competitors.
 Not high integration with different
work culture.
 Organisational structure is compatible
with present business model.
 Day inventory is higher than
competitors.
Opportunities Threats
 Focuses on international market and
needs of people.
 Using of new technology.
 Good transportation system.
 Faster delivery of products.
 Opening of new market because of
government agreement
 Low inflation rate.
 Seasonable products that reduced the
sale of organisation.
 Rising cost of raw material
 Demand of high profitable products.
 Imitation of counterfeit.
 Changing in needs and lifestyle of
people
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Task 2
P3 Advantages of international trading blocs and agreement
International trading bloc is consider as type of intergovernmental agreement that covers a
part of regional intergovernmental organization. Every organization wants to enter in to
international market that can help to maintain high productivity and profitability. Different types
of trade bloc and agreement are as defined:
Free trade area – In this, members of business agree to reduce and abolish trade barriers
such as quotas and tariffs between themselves (Park and Ungson, 2019).
Customs Union – This means a country that belongs to customs union that agree to
reduce trade barriers themselves and agree to establish common tariffs.
Common Market – This refers as customs union where members also agree to reduce
restrictions on the movement of factors of production such as people and finance.
JD Sports is sports wear company that is selling its products and services in domestic and
international country by establishing trade agreement and blocs which are helping to take the
competitive advantages . The advantages of trade blocs are as defined:
Size of Market – Trade blocs increases foreign direct investment that benefits JD Sports to
increase economies of participating nations. This also increases overall size of market such as
Europe.
Technology – Open trade leads to faster transfer of technology across the border. JD Sports
is using new technology at the time of using trade blocs.
Economic Leverage – This also increases economic leverage for trading blocs and increases
scale of economy (Advantages of Trade Blocs, 2020).
P4 Various tariff and non tariff barrier that exist in international trading environment
Trade blocs can be stand alone agreements between several that can helps to maintain the
organizational brand image. With the help of international trading a business has opportunities
and agreement to establish it business in other areas and maintain the good performance in
competitive business environment. In international trade tariff and non tariff barriers are imposed
that needed to follow:
Tariff Barriers:
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Tariff is a custom, taxes and duty that are imposed on products and services that can
move across borders. This is most common instrument which is used for controlling import and
export. Various trade tariffs barriers are as explained:
Import duty – This is custom duty which is imposed by importing country. Such as JD
Sports is importing raw material from other countries that helps to raise revenue and protects
domestic industries.
Export tariff – This duty levied on goods which buy by exporting country, cross another
and consigned to others. This also involves transit duties that are levied by country through
which goods are passes (Abraham, Cortina and Schmukler, 2019).
Specific duty – This is another type of tariff barrier that imposed on physical
characteristics of goods in a fixed amount that can crate a barriers for organization.
Non-tariff barriers – These are consider as non- restrictions and involving government
regulations and policies, government procedure etc. which are affected business. This also
involves different types of non-tariff barriers such as:
Quotas – The numerical limit on quantity of goods that imported and exported during a
specified period. This quantity many be stated in licence for organization and allowed to run a
business out of the border (Goff and et. al., 2020).
VER – This refer as voluntary export restraints that stated as quota on exports fixed by
exporting country on the request of importing country. This exporting country fixes a amount of
quantity that will be exported to other nation (Patel and Xia, 2019).
Subsidies – This is another barrier in which a business concern is required to make
payment to government and domestic producer so it can compete against competition. These
type of barriers can arise at the time of running business and reduces the productivity.
From the above it can defined that while entering in to international market by JD Sports
in Europe there many barriers can arises that can limit the business activities. Therefore, it is
important to follow all regulations and trade tariffs properly.
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Task 3
P5Advantages and disadvantages of importing and exporting how a business secures a deal
Importing – Importing can defined as trading activity in which goods are made and ready
in other country and brought to the home country. In other words, to buy something from
producer and home country is consider as import.
Advantages Disadvantages
 This give better quality of products and
services to customer by importing.
 This increases profit margin that helps
to increase the organisational
productivity.
 JD Sports may take competitive
advantages by importing cheap raw
material, low labour cost and lower
taxes that increases business
profitability.
 This can lead to erosion of domestic
market.
 This can be risky for organisation as
not proper specification of products.
 This can be risky for JD Sports to
import goods and services (Steiner and
Fan, 2019).
Exporting – This is a kind of international trade wherein products are sale to other
country by understanding their needs and wants for the purpose of expanding business. This can
be use JD Sports as it is entering in to international market (Advantages and disadvantages of
Exporting, 2020).
Advantages Disadvantages
 This helps JD Sports to expand their
market and business.
 This can lead to larger economies of
scale and better margins.
 This also helps in research and
development budget that states larger
market.
 Helps to earn the foreign exchange by
selling the products and services
 This can lose focuses on home markets
and existing customers.
 There is required to enter new market
which is difficult for organisation.
 Cost of organisation increases while
dealing with exporting regulations.
 There is required to maintain the
products and services properly.
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(Nordin and Lindbergh, 2019).
P6 Difference between merchandise and services import export
Merchandise export refers as tangible products which are sent out of a country where as
merchandise imports are consider as brought in to a country.
Service export are consider as generate non product international earnings. These are non
tangible goods and services that are provided to customers. For example, hotel room services
The difference between merchandise and services import export that are as defined:
Merchandise import and export Service import and export
This states as import and export of tangible
things which can be see by people.
This refers as import and export of intangible
things that be experienced only.
This has high transaction of less value (Majid,
2019).
In services of import and export have fewer
transaction of high value.
There are high number of firms who are
managing their selling activities that is higher.
The number of firms in import and export is
less that covers high risk and investment.
This mainly deals in products which can be
touched and consume.
Herein, non consumable services are provided
by management and business concerns in
international market.
Task 4
P7 Evaluate the various methods in which SMEs can tap into international markets.
In business environment, it is important for marketers to understand the requirement of
people who are living across the border and deliver kind of products and services. If organisation
is able to provide wanted products that means it is running business in global business
environment continuously. SME business are tapping in to international market by adopting
different methods and ways that can help to expand the business. For instance, JD Sports has
used one of the best method to enter in to international market that are as defined:
Assessing market – To enter in to international market there is need to assess the market
such as current trend, people needs, competitor etc. that can help organisation to enter in to
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competitive market. JD Sports is required to assess the market of Europe firstly as it is entering
in to international market.
Financial support – This method states that while entering in to international market there
is need to have financial support that can help JD Sports to run their business in Europe
effectively (Tolstoy, 2019).
Distribution and transportation channel- If there is good and effective distribution
channel then it can operate its business in international market. JD Sport is having good
relationship and distribution channel in competitive environment that helps to establish a
business and increase profitability.
Legal consideration – This is another method that states JD Sports is needed to follow the
legal consideration and regulations which are related to exporting and importing out of the
border (Thakur-Wernz, Cantwell and Samant, 2019).
International regulation – JD Sports is following international regulations at the time of
running business in Europe that increases organisational productivity and profitability in
competitive business environment.
P8 Compare and contrast the various ways SMEs can tap into international markets, assessing
the pros and cons of each method.
SME are small and medium business that are running business by providing different needs and
wants of people. JD Sports is tapping in to international market such as Europe by using different
ways that helps to maintain the productivity and profitability. JD Sports is using different ways
to tapping in to international market that are as defined:
Franchise – This a way of entering in to international market by acquiring and allowing
the business concerns to operate business in across the border. This can help JD Sports to tap in
to Europe by expanding business (Mitra and et. al., 2019).
Advantages Disadvantages
JD Sports can give franchise to other sport
wear brand in out of the domestic country that
can help to increase the organisational brand
image.
There is need to invest the money at high range
that is creating problems for JD sport to
arrange funds and take franchise.
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Licencing – This is a type of licence which is given by a business concern to other
businesses for using other’s right for operating business and increase the organisational
productivity. This is another option that can be taken by JD Sports to give licence to other
business and give them rights (Kim, 2019).
Advantages Disadvantages
JD Sports is giving licence to other for running
and growing business at international market
and get higher profits by managing the all
activities effectively.
This can be challenge for JD Sports to operate
their business by providing licence to others
(Patel and Xia, 2019).
Establishing connection and partnership with larger organisation – This means a
business scan be expand and establish in to international market by entering in to partnership and
selling the products to others.
Advantages Disadvantages
JD Sports can get advantages of expanding
business by establishing partnership with
others and increasing organisational
productivity.
This is disadvantages for organisation as there
is need to share profits and loss share. And
chances of conflicts between partners (Goff
and et. al., 2020).
Joint venture – This means if a business is joint to other business by involving another
products and services that can help to expand and enter in to international market. JD Sports can
use this way by involving with other business that can help in expansion of business (Park and
Ungson, 2019).
Advantages Disadvantages
By joining with other business it can operate
business successfully.
SME’s can facilitates new insights and operate
business at global business environment.
In Joint venture the flexibility of SME’s can be
restricted that cam limits to entering in to
international market (Abraham, Cortina and
Schmukler, 2019).
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CONCLUSION
From the above report it can be concluded that a small and medium business are entering
in to international market by analysing global market. This is important for organisation to focus
on current environment and deliver kind of products which are people demanding. To analysing
the environment PESTLE analysis uses by business concerns. There are different ways and
methods that are uses to enter in to international market and run a business appropriately. This
helps to evaluate the strength, weakness, opportunities and threats that is related to internal
activity. In business tariff and non tariff barriers are needed to remove so a business can be
operated across the border. Moreover, different ways that can be used to tapping the market by
getting opportunities and maintaining higher profits.
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