Strategic Management: Analysis of JD Sports & Recommendations

This report provides a strategic management analysis of JD Sports, a UK-based retailer, focusing on its expansion into Asian markets like Vietnam. It includes an evaluation of external factors using PESTLE analysis and Porter's Five Forces, assessing the company's internal strengths and weaknesses through VRIO framework, and identifying competitive strategies with Porter's generic strategies. The report highlights the importance of political and economic conditions in Vietnam, social factors influencing customer preferences, technological advancements driving online sales, and legal and environmental considerations. It also examines the threats of new entrants and substitutes, the bargaining power of suppliers and buyers, and the intensity of market competition. The VRIO analysis assesses brand value, products, and machineries, emphasizing the need for JD Sports to monitor market trends and expand its geographic reach while managing political instabilities in the target market. Desklib offers this and many other solved assignments to aid students in their studies.

Strategic Management

Executive Summary
Strategic management for JD sports has been done in this report in which analysis of
external factors on company's performance has been done in this report, with the evaluation of
company's internal strength and weaknesses in terms of achieving its target. With that evaluation
of company's competitive strategy has also been evaluated with the implementation of Porter
generic strategies. The report has made with the understanding of PESTLE analysis, porter five
force analysis of competitive advantage and has led with the understanding of Ans off's growth
matrix.

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
PESTLE Analysis & Porter 5 forces............................................................................................4
VRIO............................................................................................................................................7
Identification of Competitive strategies ......................................................................................9
Strategic directions and recommendation..................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Strategic management refers to process of ongoing planning , analysis, monitoring and
assessment of all necessities a company need to meet its objectives and goals. It is the field of
management that involves implementation and formulation of major goals and initiatives takes
by top authority on behalf of its key managerial personnel, based on consideration of various
resources and assessment of various internal and external environment in which the company
operates. It provides the overall directions to the organisation and involves specifying the
objectives of the company. JD sports is a UK based retailer of casual wear and fashionable
branded sports which was being established in the year 1983. which is expanding its business on
constant pace and trying to acquire and expand its business in Asian markets such as Vietnam as
well where it looks with progressive developments. Present report will address to various
knowledge of relevant strategic management framework where it will take into consideration
various internal and external factors affecting business& identify key issues, evaluate various
alternatives and make conclusions based on the same.
MAIN BODY
PESTLE Analysis & Porter 5 forces
Political-
JD sports is one of the largest sports based multinational organizations of UK which it
tries to extent its geographic reach in Asian market like Vietnam due to which it has to make sure
that UK must be having a efficient friendly relationship with the Vietnam (Charro and Schaefer,
2018). This is important because if political instabilities arises then company's market will also
be affected. This becomes more important because Asian market is facing tensions between two
of the biggest markets like India and China and therefore JD sports has to choose wise market in
terms of past and future relationship with UK (Cable, 2020).
Economical-
Economic condition of the host country plays an important role in organizational sales
because it describes the buying capabilities of customers and their expenditures in their lifestyle
(O'Brien and et.al, 2019). This is the base for establishing product pricing because if the buyers
are not able to buy products then company has to reduce pricing such that organizational sales

can be increased. Thus company has to effectively analyse the economy of Vietnam by which
premium pricing can be established for high profit margin.
Social-
Social factors consist of elements like current market trends customers requirements
majority of population, this is important because if company fails to provide products on the
basis of customer needs then it will not be able to attract majority of the customers (Terol
Monreal, 2017). JD sports provide fashioned sports products due to which its targeted market
segment will be young generation due to which it will choose host country with most young
generation. Company must also effectively choose a market which is a showing high chances of
efficient growth because high growth of Vietnam will also increase buyer's expenditures, this
will enhance company's organizational sales.
Technological-
Technological advancement has motivated customers to change the way of buying
products due to which customers are showing high interest in buying products through online
options. This has become even more important in case of COVID-19 when physical travelling is
limited due to which customers can safely buy products from the comforts of their home. Thus
company is also forced to increase its engagement in online websites such that high sales can be
achieved. This becomes even more important in when company is trying to extend its geographic
reach in Vietnam because it can effectively advertise itself through the means of social media
marketing which is cost efficient and also much more effective than tradition marketing.
Legal-
Organization like JD sports is liable to follow the international law and the lawsuit of the
Vietnam because if company is not able to work according to the law then it has to pay penalties.
This becomes important because company is trying to increase its geographic reach o other
country and thus in order to work in Asian market company has to work as per the law (Helmold,
2020). This becomes more challenging for organization because each country is having its own
unique culture and due to which it has restricted the product availabilities in the marketplace,
thus company has to change its product's placement and manufacturing in such a way that sales
can be improved.
Environmental-

Company has to make sure that it is able to implement some steps by which
environmental conditions of Vietnam can be improved like steps for reducing carbon footprints,
etc. Through this company will be able to develop its positive image in front of its customers due
to which it will increase customers engagement in organizational activities (Mir and Mir, 2019).
This happens because customers are aware that company is also taking steps for improving the
environment and thus there are high chances that they will increase their engagement in
organizational activities.
Porter Five Forces
Threat of new entrance (HIGH)
Threat of new entrance is high for JD sports because the company provide fashioned sorts
products at low pricing and if a new entry arises in the market then in that case company has to
reduce its pricing which will decrease the profit margin of the organization. Thus company can
improve its grip over market of Vietnam and its customers such that it can reduce the chances of
brand switching. Company can use its geographic and demographic reach for implementing
products which are the best suitable for attracting customers by which there will be reduced
probabilities of brand switching.
Threat of substitute (LOW)
Threat of substitute is low for JD sports because it provides high quality and latest
fashioned products at an affordable pricing due to which it is able to wide range of customers
towards the organization and also at the same time it implements customer loyalty schemes to
maintain customer engagement (Macdonald, Johnson and Feber, 2020). Due to these customer
loyalty schemes organizational expenditures are increasing and resulting negative impact on its
economic growth, but still if the organization is not implementing these type of schemes then in
that case there are high chances of brand switching for customers. Therefore, by increasing
company's geographic reach in Vietnam it is also increased its customer count and at the same
time achieve high sales due to which threat of substitute is low.
Bargaining power of supplier (HIGH)
Bargaining power of suppliers is high for JD sports because company is increasing its
geographical reach in Vietnam and the existing organizations may use their relations with
suppliers such that company's working can be affected negatively. With that Asian market is

already filled with other competitors and thus suppliers may take high prices because of
alternative availabilities. Thus organization has to manage efficient relationship with its suppliers
in such a way that it is able to achieve best in quality products at low pricing, however it must
also search for alternatives, such that company can switch for better option.
Bargaining power of buyer (LOW)
Vietnam market is one of the largest market in the world which is having pre-existing
sportswear companies due to which customers are well aware of their alternatives and already
are used to those products (Curuksu, 2018). Due to which JD sports has to concentrate efforts in
such a way that customers switch their brand towards the organization and for which low pricing
has to be established. But in order to get a economic background company has to implement
creative schemes for attracting customers towards the organization in such a way that customer
count is increase with increment in their loyalty.
Market competition (HIGH)
Market competition is high because various organizations are also increasing their
engagement in social media marketing due to which customers can efficiently choose the better
alternatives. With that company's competitors are also having their loyal customers and high
brand awareness due to which JD sports to put more efforts in increasing brand awareness in
home location as well as inVietnam . But still since company is a well-established multinational
organization therefore it is having a competitor edge over other organizations due to which a
tough competition can be seen on the consumer side.
VRIO
Valuable Rare Imitable Organization Impact on organization
Brand value Yes Yes No Yes High brand awareness is
spread
Products Yes No Yes Yes High quality at low price
attract customers
Machineries Yes No Yes Yes Uniform and fast delivery of
products

Brand Value-
This is one of the most important asset of the organization in which it tend to sell
products in such a way that high brand awareness is spread this is important because if the
customers are not aware of the brand value then their buying will only be limited to specific and
limited products. But on the other hand if product are sold with brand name then it will also work
as an advertisement for the product which is done on the customer side, which is more effective
than compared to any other marking (Onyusheva and Seenalasataporn, 2018). Through high
brand value company also advertise itself in such a way that it is able to attract wide range of
customers in home country and in Vietnam and also at the same time maintain the loyalty of
existing customers.
Products-
JD sports is well-established for its fashioned sports wear product due to which products
are an important asset for the organization and therefore it pays a high concentration on
providing high quality product to its customers in such a way that product is able to reach
augmented level in customer satisfaction. This stage arises when the product is having the
features which are beyond customer expectations, resulting a better performance on ground level.
However due to tough market competition the developed product is not rare in the market and
also easily replicated. But still the quality of product is not easily replicated and due to which
chances for brand switching at customer side is less, thus through this JD sports can achieve high
customer count in Vietnam.
Machineries-
Company provide sportswear options to customers on the basis of their requirements and
due to which JD sports has implemented machineries in such a way that the developed product is
able to fulfil every required criteria which is required for developing efficient product (Bell and
Rochford, 2016.). With that company also provide its products to customers all across the globe
and due to which product has to be provided within a shortest span of time and thus it is having
customized machineries which is as per its requirements in such a way that work efficiency is
increased in minimum expenditures, due to which efficient economic growth in Vietnam can be
achieved.
Critical analysis-

JD sports provide fashioned sports products to its wide range of customers and due to
which it has to monitor the changing market trends such that it is able to products on the basis of
customer requirements. This is important because if the organization fails to provide trendy
products then in that case it will make a negative impact on company's sales and economic
growth. Thus, in order to increase its customer count organization has to increase its geographic
reach in other countries as well such that wide range of customers can be attracted towards the
organization. However, in order to increase its geographic reach in Vietnam company has to
closely monitor the political instabilities of that region because if the political instabilities
increases with UK then the trade will be affected due to which company may face heavy losses.
But on the other hand JD sports can enter into host country such as India in which government is
providing tax relaxations to attract companies like JD sports and also at the same time UK and
India have efficient diplomatic relationship (Hindustan Times, 2020). With that country is having
majority of younger generation which is the targetted audience for the organization.
Since JD sports is increasing its geographic reach therefore it has to consider several
factors in its strategy development such as obeying the international trade laws and developing
working strategy as per host country lawsuits. Through this company will be able to maintain a
efficient relationship with the customers because they are following the law which will develop a
positive image of organization and also at the same time advertise company as an positive
alternative for buying products (Pessima and Dietz, 2019). But since company is increasing its
geographic reach therefore it has to taxes in Vietnam and its home country which will increase
organizational expenditures resulting negative impact on company's economic growth. This
organizational expenditure is not only limited to paying taxes but also company has to make
expenditures in marketing to spread high brand awareness and also at that same time it has to
recruit new employee. Through this company will be able to develop a effective marketing
strategy which will benefit it with increment in sales, thus organizational strategies must be made
in such a way that high output is achieved in minimum expenditures.
Identification of Competitive strategies
There are various competitive strategies but one used to identify above case study is
mentioned as below-

Porter Generic strategy- It states that Porter has identified 3 generic strategy as mentioned
below:
Cost leadership- This strategy of JD sports involves winning market share in new emerging
Asian markets such as Vietnam where it dose not have its stores by appealing to price sensitive
and cost – conscious customers. This is being achieved by the company by having cheap and
lowest prices in market of Vietnam which its wishes to target or can be said as prices which are
affordable for its customers. To succeed by offering its fashionable branded products at the
lowest prices while still achieving high rate of return on investment and profitability, the
company is required to operate at a lower cost than its competitors in UK as well emerging Asian
Markets of Vietnam . JD sports can achieve this strategy by achieving low direct and indirect
operating costs which is being achieved by offering huge quantity of volume its product that are
highly standardised where it limits to customisation and personalisation of its products and
services (Islami, Mustafa, Latkovikj, 2020). This could also be achieved by controlling over
the value chain of JD sports by encompassing its various functional groups such as supply,
procurement, marketing, IT and various others to ensure low cost and winning in maketplace.
Differentiation- It refers to the strategy of JD sports to differentiate its products and services in
order to compete in marketplace and to face various business dynamics in Asian markets such as
Vietnam where it does not have its store which can be prevailing for the company. This strategy
of differentiation is suitable when JD sports potential customers or customer segment is not
sensitive towards the price, market is saturated and competitive and where customer have
specific needs which are being not served properly and can be said as underserved where firms
like JD sports has unique capabilities and resources which enables company to satisfy the needs
accordingly where its competitors find it hard to copy the same which serves as part of its
differentiation strategy and which could help the same to win in various emerging marketplace of
Vietnam (Kabure, Ragui, 2020). This could involve on the part of company to patent,
copyright and various others to protect its intellectual property which could also helps in
protecting its various innovation process. It could be displayed by the company when company
either accounts to premium prices in its products and services which serves and build image in
minds of customers that company accounts and deliver quality products and services or can be
by building brand loyalty which helps in generating customer loyalty to purchase company
products all across globe (Firoz Suleman, Rashidirad, Firoz Suleman, 2019).

Focus- This strategy rest on choice of a narrow competitive scope within the industry in which
JD sports operates. The company set as segment of group of segment and tailors the strategy
accordingly to serve them the best which no other competitor can do wherein cost focus
company seeks to have cost advantage and in differentiation focus a firm seeks differentiation in
its target markets of Vietnam (Hales, Mclarney, 2017). Both variants of focus strategy that is it
cost and differentiation rest with company between it target segment and other segment in
industry in which company operates. It states that segments that are targeted must be the buyers
with unusual needs or else can be its delivery and delivery and production system that best serves
the potential customers and must be differentiated with that of its competitors. Cost focus
exploits differences in cost behaviours whereas differentiation focus exploits special needs of
buyers in target market of Vietnam
Strategic directions and recommendation
This refers to the guide and direction of company which helps the company to achieve its
desired goal and objectives by optimum utilisation of resources more productively that ensure
smooth functioning of business operations and serves as support as getting an edge over the
competition and winning in the marketplace of emerging Asian markets of Vietnam. This could
be better understood with the help of below mentioned theory
Ansoff's Matrix Analysis- This is also known as market and product expansion grid which
mentions four strategies that suggest how JD sports can grow its business in various existing and
emerging markets and also denotes various risks associated with the same to guide towards the
growth of the company. Four strategies of this analysis includes
Market penetration- This includes increasing sales of company existing product and services in
existing market where the company uses its products in existing markets. In simple and layman
language it could be understood as company aiming to increase its market share by market
penetration strategy. This strategy can be executed by JD sports in many ways such as decreasing
and offering low price products and service to attract huge customer base and increase the
market share. Increasing its promotional and mark ting efforts to cover huge customer base that
will help company in faster reach of its products and services to the end customer which can be
strengthen by its efficiency in distribution channel and can be means of acquiring a competitor in
the marketplace in Vietnam (Loredana,2017).

Product development – It refers to the strategy of JD sports of focusing of introduction of new
product to an existing marketplace in emerging Asian market such as Vietnam, which in simple
words can be understood as introduction of new products that cater to serve the needs of existing
market. It is done by extensive research and development of market which helps the company to
expand its product range. It is being used by JD sports as it has strong understanding of current
market needs that provide solution that are innovative and serves in meeting needs of existing
market. Company can acquire competitor products and merge the resources that creates new
products and meets the needs of existing market more productively (Yin, 2016).
Market development- This is strategy of company when it enters new market using its existing
products where JD sports is trying to expand its business in Asian markets of Vietnam by its
existing products. It could be by entering into new geographical regions and also serving new
customer segments (Martins, 2020). It is useful for the company where technology can be
leveraged to new markets and which helps in benefiting its potential customers. This involves
following approaches such as catering into different customer segment which helps in getting
insight about various needs and wants of customers at Vietnam and satisfy the same by providing
valuable existing products. It could be also by entering into domestic markets which refers to JD
sports expanding its business regionally in areas of UK and by entering into international
markets where the company is expanding its business in Asian markets.
Diversification- it refers to strategy of company in launching entirely new product in entirely
new market such as emerging markets of Vietnam . This is the riskiest strategy of all as its is
highly uncertain that it will success or not and can lead to situation which can lead to adverse
effect on smooth functioning of business operation, but on the contrary it could also serve as
increased revenues as it opens entirely new stream for company to generate higher profits. This
can be related as well as unrelated as there are potential synergies to be realised between existing
business and new market and products and unrelated when there is no synergies between
existing business and new market and product development (Cleberg,2019).
CONCLUSION AND RECOMMENDATIONS
From the above report it is being understood that strategic management in the company is
very importance as it helps company in reaching and achieving desired common goals of the
business. It laid to the understanding of various external factors or environment analysis that