JD Sports Plc Strategic Management: Market Analysis & Expansion Plan

This report provides a strategic analysis of JD Sports Plc, a British sports fashion retail company. It covers key challenges and opportunities the company faces in expanding its operations, utilizing both micro and macro environmental analyses, including PEST and Porter's Five Forces. An internal VRIO analysis identifies valuable, rare, and imitable resources. The report also explores competitive strategies based on Porter's generic strategies and suggests strategic directions and expansion methods. Recommendations are made to improve the company's performance and strategic decision-making. Desklib offers this and other solved assignments to aid students in their studies.

Strategic Management:
JD Sports Plc

Executive Summary
The overall report is based on JD Sports Plc organisation which is a British sports fashion retail
company based in Bury, Greater Manchester, England. The report has cover discussion about
key challenges faced by the company in expanding its operations and identifies opportunities as
threats in order to improve its performance. Moreover, in this various micro and macro factors
are studied to get in depth knowledge of business concern. This will also help in formation for
future corporate strategy. The report also highlights internal analysis which will help to improve
inefficient areas. This report showcases strategic directions and also recommendations about it.

Table of Contents
Executive Summary.........................................................................................................................2
INTRODUCTION ..........................................................................................................................5
MAIN BODY...................................................................................................................................5
External environmental analysis for identifying threats and opportunities: Macro and micro
analysis........................................................................................................................................5
Internal Analysis(VRIO Analysis)..............................................................................................7
Identification of competitive strategies(Porter's generic strategies)...........................................8
Strategic Directions and methods of expansion........................................................................11
Recommendation ......................................................................................................................13
CONCLUSION .............................................................................................................................13
REFERENCES..............................................................................................................................15

INTRODUCTION
Strategic management involves two terms which includes Strategy and management. of
all necessities a company which is required in order to meet the aims. An organisation is
required that changes in business environment needs to assess constantly their strategies in terms
of success.In this report, the organisation chosen is JD Sports Plc which is basically a British
Sports fashion retail organisation based in England. The company was established by David
making and john Wardle. The organisation also expanded its operations with around 56 stores
and also planning to expand its operations for the objective to achieve to advantage in the
competition. The report will cover discussion about key challenges faced by the company and
about its external analysis. SWOT analysis means identifying the strength, weaknesses,
opportunities and threats of the organisation. It helps to analyse the current business performance
and to devise a successful corporate strategy for future purposes. In relation to JD sports, is
sports company who wants to expand its horizons in various other fields, one such field is real
state. For this company is identifying its strength, weakness, opportunities and threats in order to
widen its horizons smoothly and make profits. Strength of company is its dominant UK market,
as it has grown exponentially by spreading its products information across European union. This
has recognized it as most innovative merchandiser of sports wear with stylish range. So,
ultimately this gives and opportunity to management to expand its horizons across globe. On the
other hand threats identified of JD sports are its competitors, it becomes really challenging for
the organisation to provide the qualitative products at affordable prices. In addition to this, the
report will cover analysis about internal analysis and also about identification of competitive
strategies. Moreover, the report will cover discussion about strategic directions and also about
recommendations as well.
MAIN BODY
External environmental analysis for identifying threats and opportunities: Macro and micro
analysis
Macro Environmental analysis(PEST Analysis)
 Political Factors: There are government policies that have affect on the price and
demand and legislation can also have a considerable effect on the price and demand of
property. It gives a temporary boost in the demand for real estate by government

influence through tax credits, subsidies and deductions (Nik Abdullah, 2018).JD Sports
Plc company currently present in various continents and each one country having their
own supporting tension. Likewise, firstly they start their operations in UK and later
started to expand into other countries. So, if government is cooperative enough and grant
funds for infrastructure purposes, this will allow markets to grow exponentially. All of
these factors will allow JD sports to expand its operations to various other countries. On
the other hand, every country has bureaucratic tapes which makes it a challenging process
to establish operations. It has been observed that frequent changes in government
policies can harm the business performance by increasing environmental uncertainty.It is
necessary to learning the existing trend in the country's opinionated set-up as change in
administration may alter the government's priority towards growth of diverse industry.
Company has to analyse the protests from pressure groups, worker unions as they play an
important role in terms of policy making process( Janaki, Mirzazadeh and Janaki, 2019).
 Economic Factors: The supply of money tends to be more become restrictive when the
economy gets slow down so it affects the real estate market. Well, coming to real state
business it majorly got impacted due to economic status, interest rates of economy , real
income and various other factors which has a direct impact on housing business. In
relation to JD sports, interest rates of the country will impact its overall growth. For the
purpose of expansion they need funds, which companies borrows from external sources
such as banks and other financial institutions which ultimately increases the cost of
company. Company's performance has majorly subjective by the scope of host country
administration spent on its centre communications growth. JD Sports Plc have to
carefully analyse the availability of skilled human capital as shortage in this spectrum can
affect the business efficiency and make talent attraction and retention very challenging.
The ability of company will be determined through the health and efficiency of financial
markets as it raises the capital at fair prices.
 Social Factors: The change in demography of country or the target segment may impact
the performance level of the real estate market because accordingly decisions has been
taken for production of products and services. Social factors includes lifestyle, buying
habits, education level, religion and beliefs, income level of the customers and other
factors. These factors of customers beliefs will directly impact the housing business. So ,

company has to firstly identify the needs of society and accordingly come up with the
products and services of their wants. Accordingly, JD Sports Plc has to study the
demographic characteristics in appropriate manner so that they can choose the correct
marketplace part with towering growth budding While ingoing into market with high or
low power remoteness then company has to adjust its business management
practices.Company is required to learn usually assign gender roles so that they align its
communication and marketing practice as a result.
 Technological Factors: The technology in real estate sector reduces the truck load of
manual labour in the whole process of transaction and also shines the spotlight on the real
estate person. In addition to this, advanced technology includes internet connectivity ,
wireless charging, automation and others. Well this gives an opportunity to spread
awareness about business by using various social platforms. JD Sports Plc can improve
its business performance through leveraging the opportunities offered by the social media
marketing. For remaining ahead into the competition, company has to carefully consider
the ongoing technological innovations. Company has to also take initiative towards
investing in disruptive technologies in order to maximise the profits and re-invest the
profits for future disruptive technologies.
Micro environment analysis(Porter's five forces)
 Threat of new entrants: New entrants in real estate market brings innovation but also
put pressure on it existing competitors to lower cost and provide new value proposition
to the customers. So, in this new competitors will give tough competition to existing
players in marketplace. In housing businesses, there are so many players who already
deal in purchasing and selling of houses. Therefore, it will be a challenge for JD sports to
create brand image by providing better value to customers. If the barriers to enter the
business will be low down and if the business will be profitable then it will be a focus for
more company and hence the risk of new entrant will be high.There are some factors that
will contribute in terms of reducing the threat of new entrants which includes
psychological switching cost for consumers is high, restriction in terms of distribution
channels, requirement of substantial capital and resource investment.
 Threat of substitutes: When there is availability of substitutes are higher in the market
of real estate then consumers switch towards it and sales performance gets reduced of

this market. The accessibility of substitute goods and services make the ready for action
environment demanding for JD Sports Plc and other alive players as well so, they have to
plan their strategy well in order to make profits. There are various factors which
determine the intensity of this threat which includes cheaper substitute products and
services available in another industry, psychological switching cost of moving from
industry to substitute products are low.
 Rivalry amongst existing firms: In the real estate when there are lots of competitors into
the market then real estate market can’t earn large level of profits and it is challenging for
them to stand strongly. Accordingly, JD sports has to firstly give deep insight into the
current competition before putting feet into the market place. This will help it to stand
apart and make more profits. There are number of competitors which gives tough
competition to the company as they can face intense pressure from rival firms that limits
the growth potential as well.In this industry, profitability is low down because as they
accept destructive target and price strategy alongside each other. challenge among active
firm will be near to the ground for the company if there is clear market leader, exit
barriers are low and industry growth is at faster rate.
 Bargaining power of suppliers: When bargaining power of suppliers in the real estate
market then it is difficult to maintain positive relationship with their suppliers. In the
same way, JD sports can manages their bargaining power of suppliers by diversifying its
list of suppliers. They can also manage through exclusive rights from suppliers to supply
raw materials to them and research new products from different raw materials.
 Bargaining power of buyers: When bargaining power of buyers is high in the real
estate market then it is a challenging task to earn into profitable manner. So according to
this, JD sports has to tackle their problems through acquiring large number of customers
from different segments and geography. It can be also done through increasing the
product portfolio so that buyers have more options to buy.
Internal Analysis(VRIO Analysis)
 Valuable: According to this analysis, the valuable factors for the company are its
employees, patents, distribution network as well. It has been observed that cost structure
and research and development are not its valuable resource for the company. There are
significant portion of workforce which are highly trained and it leads towards higher

productivity for the organisation. Patents are valuable resource as this will allow the firm
to sell its products without competitive interference. Distribution network are also
valuable for the company as it will support in terms of reaching out to more and more
customers as well.
Resources Valuable Rare Inimitable Organised
Brand image YES YES YES YES
Financial
resources
YES YES YES -
Human resource YES YES -
Supply chain YES - - -
 Rare: There are certain factors which are rare for the company which includes financial
resources, employees, patents and distribution network as well. According to this
analysis, financial resources are rare because they are only possessed through few
companies in the industry. Employees are also rare because they are highly trained and
skilled as well. Patents are also rare for the company because these are not with no
trouble accessible and not obsessed by their competitor. Allocation system is also
exceptional for the business because competitor require lot of savings and time to come
up with new division system than that of JD Sports plc. These are only overcome by few
firms into the market.
 Imitable: There are certain factors which are imitable for the company which includes
financial resources, patents and distribution network. Financial resources are costly to
imitate for JD Sports plc company. As these income have been acquired by the business
through long-lasting income over the years. Workers are not costly to reproduce because
there are other firm who can also guide their workers to look up their skill into positive
manner.The patents of the company are also very difficult to imitate which is identified
through this analysis. It is because as they are not legally allowed to imitate the patented
product. It is challenging to develop similar kind of resources and getting a patent from
them is also a very difficult process. The distribution network of the company is also very
costly to imitate by competition as identified through the analysis of JD Sports plc.

Competitors would have to imitate an important amount if they are to imitate a similar
distribution system.
 Organisation: There are certain factors which are organised into proper manner and
some of them are not organised into well mannered way. The financial income of the JD
Sports plc are organised to capture worth which has been identified through this analysis.
The patents are not organised in well mannered way as identified according to this
analysis. It means that administration is not with the patents up to their full potential. An
unused competitive advantage exists that can be changed into sustainable competitive
advantage if JD S ports plc starts selling their patented products before the patents
expire. It has been identified through this analysis that allocation network of the business
is organised as they uses this complex to reach out its clients by ensure that goods are
accessible on all of its outlet(Hiriyappa, 2018).
It has been observed from the above analysis that internal analysis plays a very important role in
terms of achieving goals and objectives of an organisation.These factors of this analysis also
determines the growth and development of an organisation into positive manner. When these
factors contribute into appropriate manner then it is easier for an organisation to perform into
well manned way and also face challenges with a positive approach as well.
Identification of competitive strategies(Porter's generic strategies)
Porter's generic strategies basically focused on three parameters which include cost
leadership, differentiation and focus as well. Porters generic strategies basically describes about
in which manner a company pursues competitive advantage across its chosen market scope. A
company basically chooses to pursue on of the two kinds of competitive advantage either
through lower costs than its competition or by differentiating itself along dimensions valued by
customers to command a higher price.
 Cost Leadership: Under this head, in its industry a firm set out to become the low cost
producer. The structure of the industry and source of cost advantage are varied on
different bases as well. It includes proprietor technology, preferential access to raw
materials, economies of scale and other factors as well. The companies who considered
under above average performer in their industry have achieved the firm and sustain
overall cost leadership as well.With reference to JD Sports plc, they have used this

technique for preserving the leadership position through value chain management.
Company is required to provide affordable and easy accessible products for their
customers (Poister and Streib, 2018).
 Differentiation: Under this kind of strategy, a firm seeks to be unique in their industry
along with dimensions which are widely valued by their buyers. There are some attributes
that needs to be selected by many buyers in an industry that perceive as very important
and this is uniquely positions itself to meet those needs. It is rewarded for the purpose of
its uniqueness with a premium price. In context to JD Sports plc, they have used
differentiation strategy for purpose of expanding its customer base and increases the sales
as well. This kind of strategy supports the company in terms of applying innovative ideas
and understanding the needs of customers so that they can provide customers what they
want. The company has used investment for purpose of marketing, advertising and
Illustration : Porter's Generic Strategies
Source : Generic strategies Michael Porter

promotion in order to prove that company is different from other brands into the market
(Sutton, 2019)It is basically an old brand so they can use this differentiation strategy
without any fear.
 Focus strategy: Within an industry, the generic strategy of focus basically depends on
the choice of narrow competitive scope. Under this strategy, a particular segment or
group of segment has been selected in the industry and tailors its strategy to serve them to
the exclusion of others. Basically focus strategy has two variants which includes under
cost focus where a firm seek to advantage in its target segment. In addition to this, under
differentiation focus a firm seeks differentiation in its target segment. In context to JD
Sports plc, it provides better product and lower cost by using the focus strategy. Every
kind of customer always want product on lower cost so that company works on it into
positive manner( Braet, Spek and Pauwels, 2018).
It has been concluded that this analysis are helpful in terms of gaining competitive advantage and
also contribute in terms of developing an edge that gets an individual about the sales and takes
away from the competitors as well. Through support of this strategy, market share can be
increased through charging lower prices. Profits can also be made on every kind of sale because
costs have been reduced up to certain parameter. This framework is also helpful in terms of
identifying a potential niche where JD Sports plc can gain competitive advantage in any kind of
industry. So these kind of strategies are helpful in terms of identifying competitive strategies into
positive manner (Chowdhury, 2019).
Strategic Directions and methods of expansion
Strategic direction refers to those plans that needs to be implemented for an organisation
to fulfil its goals and progress towards its vision as well. It also ensures that management and
owners can communicate the significance of employees work and their contribution to achieve
its business objectives. To set a strategic direction it is important to consider the vision of the
company and then it should be reflected on its mission of the company. Then they have to
develop a plan for it and set periodic goals towards it and in the further step it is necessary to set
quantifiable goals as well. In the context of JD Sports plc, their market has expanded into
different countries and continents such as United Kingdom, Europe, United States, Asia, New
Zealand and Australia as well. JD Sports plc provides products and services in various kinds of
ranges and segments like apparels, accessories, foot wears and recreational products as well.

In the context of JD Sports plc, strategic direction will allow the management to gain support
while expanding into the market of India and also allow management to improve its performance
along with productivity. In order to expand into country of India given below is the strategic plan
of JD Sports plc which has been described into following manner: The company is a well
established and has positive brand image into the market. The vision statement of the company
is to have sustainable business operation and move towards the growth and expansion as well. Its
mission statement is to provide high quality products to their customers at least cost and keep
their employees motivated towards their performance in terms of productivity. The objective of
an organisation is to increase the sales revenue by 15% by the end of year through market
expansion into the Indian market( Marques, 2018).
STP Analysis
This kind of analysis allows an organisation to develop particular and actionable
marketing strategies. STP analysis has been described into following manner:
Segmentation: In context to JD Sports plc, the management has to segment its market on the
basis of price points of their products and through understanding of preference of customers in
the Indian market.
Targeting: The company has targeted those customers who are mainly inclined towards sports
in order to achieve competitive advantage in the Indian market.
Positioning: The company has used its well established brand image in order to gain optimal
position in the Indian market as it will support in terms of gaining competitive advantage.
Ansoff Matrix
This kind of matrix is helpful in terms of analysing and plan the effective strategies for growth
and this framework is also supportive in terms of expanding its business operations.
Market penetration: Company has achieved the penetration factor through increasing sales of
products into the existing market. It can be also done through decreasing price of products and
increases promotional and distribution efforts along with acquiring a competitor in the same
market.

Product development: This kind of strategy can be utilised through investing in research and
development for new products along with formation of strategic partnership with other
organisation in the market (Kushkhova and Petrova, 2019).
Market Development: This kind of strategy pays major emphasis on entering into new market
through existing products.
Diversification: This particular strategy is focused towards entering into new market through
introduction of new products. This can also be implemented through development of new line of
products in order to attract large number of customers for the business.It has been concluded that
JD Sports plc have to focus on market development strategy for effective expansion into the
Indian market. This kind of strategy will allow an organisation to attain growth and increase the
profitability as well.
Methods of expansion
JD sports plc can use various kinds of methods for entering into market of India and can
also expand their business operations as well. Following are some of the methods to expand its
business:
Merger and acquisition
Under this kind of method they have to expand themselves into new market which
involves an organisation to acquire and merge with an existing organisation in the present market
(Morais-Storz, Platou and Norheim, 2018).
Franchisee
Under this kind of method, an organisation grant an individual or group of individuals the
rights to run a business and sell products and services under the brand name of business. This
will allow an organisation to have effective expansion of business at minimum risk.
Exporting
Under this kind of method of expansion they sell their products into the international
market.It is the most convenient method to enter into a new international market and allows the
organisation to directly sell their products in the market along with elimination of any form of
intermediaries.

From the above method it has been observed that exporting is one of the best method to
enter into a new international market. This method enable an organisation to enter into the Indian
market in an effective manner at minimum cost and allow them to expand their business
operations without any involvement of intermediaries (Desmidt, Meyfroodt and George, 2019).
Recommendations
In context to JD sports the organisation need to apply porter’s five forces and pestle in order
to evaluate the company into deeper manner. Moreover the company need to focus on
innovative ideas and introduction of new technology for the purpose to gain advantage in the
competition. In context to organisation, it is important to understand and implement the
desired changes according to the various factors of the external environment. In addition to
that it is important for the organisation to use various effective strategies in order to expand
its operations and to deal with various problems in a well mannered way.
CONCLUSION
The above stated report concludes that strategic management plays a very important role
in terms of expanding the business operations into well mannered way. It has been concluded
that internal and external analysis plays a significant role in terms of making the decisions into
result oriented manner. It has been determined that macro and micro environment analysis
contribute in terms of analysing about an organisation strength and weakness points as well.
These frameworks are also helpful in terms of identifying competitive strategies into appropriate
manner. In order to enter into new international market, an organisation has to use certain market
entry strategies through which they can easily assess the market into successful manner. For
providing a strategic direction to an organisation it is necessary that to analyse the market into
deeper manner and to have proper planning and research towards it so that result oriented work
can be achieved within a set period of time.

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