Strategic Management Report: JD Sports, Market Analysis & Strategy

This strategic management report focuses on JD Sports, a leading UK retailer of sportswear and fashion brands. The report employs various strategic tools and techniques to assess the company's external and internal environments. It utilizes PESTEL analysis to evaluate political, economic, social, technological, environmental, and legal factors impacting JD Sports' operations, particularly in the Chinese market. Porter's Five Forces framework is applied to understand the competitive intensity within the retail industry, considering the threat of new entrants, bargaining power of suppliers and buyers, the threat of substitute products, and rivalry among existing competitors. Furthermore, VRIO analysis is conducted to determine the company's internal strengths and weaknesses, focusing on resources like customer trust, distribution networks, brand image, and product services. The report also identifies suitable competitive strategies and strategic directions for JD Sports to enhance its market position and achieve its objectives, concluding with key recommendations for the company's strategic management.

Strategic Management

Executive summary
Strategic Management concern with essential to identify the management's mission and
vision and facilitates in knowing the future plans that required to be adopt by organisation to
fulfil their objectives. In this report the chosen company is JD Sports, which is established as
leading fashionable brand, sportswear and casual wear that is operated in 56 stores. The
challenges was faced by the firm is tough competition with other companies. In this report some
methods and concept are used to identify the suitable tools and techniques that could be used in
the organisation.

Table of Contents
Executive summary..........................................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
Evaluating external environment analysis to identify the opportunities......................................4
Determining the internal environmental analysis of organisation...............................................7
Assessing the competitive strategies for the company................................................................9
Identification the strategic direction to use in the management................................................10
Recommendation...........................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Strategic Management refers to planning, monitoring the organisational needs and
necessity to meet the goal of objectives. This is ensure the changes that require in achieving the
success and helps in process the certain strategies management (Alexander and Eberly, 2018).
In this report the company which is taken is JD Sports which is established as leading UK
specialist retailer of fashionable brands, sportswear and casual wear. In this report the external
environment analysis of opportunities and threats to identify the industry structure and
competition is used. To identify the internal strength and weakness of company is used to
evaluate the capabilities and opportunities for the organisation to achieve their goals. Apart from
that competitive advantages strategies is identify to assess their overall position of company and
to give major policies that could be used in the management. The kind of strategic direction
concept has been determined to implement them in their organisation to deliver best output to the
company.
MAIN BODY
Evaluating external environment analysis to identify the opportunities
To identify the major competitive advantages there are some tools and techniques that
used in company to provide the adequate analysis of dynamic environment that exist outside the
workplace and that gives benefit to the company in many ways (Alstadsæter, Jacob and
Michaely, 2017). This is important to identify the opportunities and threats that usually present in
the market. To monitor that PESTEL analysis is used to find the external factors.
PESTEL analysis is useful tool which is used in the company to analyse the external
factors and that helps in achieving goals and objectives that is beneficial for long term growth.
For the company JD Sports is important to understand the need and requirement of analysing the
external environment. Following are the factors that impact the company are as follows-
 Political Factor- This factor concern with political policies that include tax policy,
political stability and corruption that exist in the country (Yao and Whalley, 2016). For
the company JD Sports, this factor impact the various policies and rules that is
formulated by them and influence the major condition. This will be positive impact as
China, government has favourable laws and rules that will be useful for future. It might

impact negatively on the organisation if there were imposing high interest rate and
unstable economy.
 Economical Factor- This factor include the exchange rate, interest rate and disposable
income that impact the working condition of organisation (Beeson and Li, 2016). In the
chosen company, this factor impact the long term on the company and will influence the
demand and supply. This might impact positively on the management as China, there is
strong economy and will facilitates in better functioning of company. After the trade war
issue it creates the negative changes in the country and because of that it impact the
strategies and policies formulated by the organisation.
 Social Factors- This is refers to the taste and preferences, norms and customs of the
costumer that exist in the organisation. For the JD sports, this factor is essential to be
consider as their major business is depend on the taste and behaviour of costumer. This
factor impact positively as in the Asian market like China, there is large number of
customer who prefer to wear the fashionable brands and casual wear It might influence
the organisation negatively if they are not fulfilling the demands of people of China and
will impact the business of their company.
 Technological factor- This factor refers to the innovation in the technology and new
creative operations in the management to compete in the market. For the JD Sports, this
factor is very useful in taking the innovative concept or technology in the management to
improve their effectiveness. It might impact the organisation in positive manner if
technology is proper use and implemented by them because it increases the overall
effectiveness. This might put negative impact when company is not using new innovation
in their management and that will reduce the market base of company in the market.
 Environmental factor- This factor concern with the ecological and environmental aspect
that affect the industries in different ways. For JD Sports, this factor increase the
awareness of environmental friendly practices in the organisation (Boot and Ratnovski,
2016). It might impact the chosen company in positive way if they were properly
following the rules and policies of environment. It might impact the negatively when
company is not adhere with the defined rules and does not involve the practices such as
corporate social responsibilities and sustainability.

 Legal factor- This factor includes some laws, employment laws, consumer protection
laws and health and safety laws. In the selected company, this factor is important to
consider as this will facilitates in successful trade globally. This factor influences the firm
positively when they are aware about the laws, rules and regulation and follow them. This
is will be negatively impact when China has strict legal laws and regulation will impact
their working conditions. This will be positive if china has comfortable rules regarding
trade business.
Porters five forces: Porters five forces is the framework for analysing the company's
competitive environment (Bottazzi, Da Rin and Hellmann, 2016). It includes power for buyers,
suppliers, competition rivals, new market entrants, substitute goods, services for the market
which makes higher profitability for the businesses. In context to JD sports, the company use
this model for know about the market which helps its for its better performance which helps for
higher profitability for the businesses.
 Threat for new entrants: It is about when the new company's enters for the market it
influence the activities for the existing company's. In context to JD sports, new entrants
for the retail brings innovation for the businesses which makes pressure for JD sports
fashion Plc for lower pricing strategy. JD sports for managing its sales it has manage its
pricing strategies for its business. It helps company for better performance which helps
for higher profitability for the businesses. The company has high moderate power for its
lower pricing strategy for its business. Thus, there is high threat of new entrance at the
selected organisation to face the high level of competitors. When the company which are
new for the china market enters for the market it influence the power for the company for
sales which helps for the better performance for higher profitability for the businesses.
 Bargaining power for the suppliers: It is about when the suppliers has high power for
its buyers they sets their pricing. Suppliers for dominant position for the company
decreases the margins which the company earns for the market (Tursunbaevich and
Mamatovich, 2019). The higher power for suppliers for retail sector makes lower
profitability for the company. The company has high moderate for its margins. The
company has makes various pricing strategies which helps it for higher profitability for
the businesses. This makes impact for the China’s economy as customers has less power
to negotiate.

 Bargaining power for the buyers: It is about when the power for company, its buyers
are compare, when the buyers has higher power for its goods, services. The company has
various buyers for the China market for this buyers makes pressure for company for
lower pricing strategies. The company has high moderate for its price for the buyers.
Company makes its pricing strategy lower for its buyers for higher sales which helps for
higher profitability for the businesses.
 Threat for substitute goods, services: It is about when the competitors has substitute
goods for company's goods it influence the company's sales (Obstfeld and Taylor,
2017). The company has high moderate for its substitute goods it use lower pricing
strategy which helps its for higher profitability in China market. The company's lower
pricing strategy makes its performance better for the substitute goods for its competitors
which helps its for higher sales which helps for higher profitability for the businesses.
 Rivalry among the existing competitors: It is about the businesses which are already
exist for the market these are the competitors for the JD sports at China market (Busch,
Bauer and Orlitzky, 2016). The company has high moderate for this its has lower its
pricing strategy which helps for higher profitability for the businesses. The competitors
makes their prices for lower price which helps them for higher profits which influence
costs for JD sports, the company has makes its pricing strategy lower for the higher sales
which helps for higher profitability for the businesses.
Determining the internal environmental analysis of organisation
This is necessary to properly execute the internal strength and capabilities that leads to
identification of certain ways through which help the organisation to asses its resources. To
improve the performance of organisation it is important to undertake the following the methods
and tools that will help in enhancing the overall effectiveness. To study that VRIO has been used
that will be useful in the management operations.
VRIO analysis- This is useful tool that helps in providing the major analytical technique
that evaluate the company's resources and facilitate in providing the competitive advantages. In
the selected company this framework helps in understanding the different types of resources and
beneficial in knowing the external and internal process of the management. Following are the
ways through which it enables the firm-
Resources Value Rare Inimitable Organisation

Trust of costumer Yes No No No
Distribution
network
Yes Yes No No
Brand image Yes Yes Yes No
Product and
services
Yes Yes Yes Yes
Valuable- The important thing to note that every resources must be valuable and must be
provided the benefits to the company (Dary and James Jr, 2019). For the JD Sports, all the
resources must be essential to address and it is important to monitor and identify the essential
resources. In this trust among the costumer is very valuable and must be attained for longer
period to sustain the position in the market. Distribution network is also very useful resources
that need to be strengthen as per the time and situation in the market. Maintaining the brand
image is very important as it gives lots of advantages in long term to achieve its objectives.
Product and services are also valuable asset as it decide the success and failure of the company.
Rare- This concern with low availability of resources in the management and rarely
possessed by the company. In the chosen company, trust of costumer is not rare as this could be
acquire by anyone. Distribution network is rare resources for the company as this requires lots of
efforts to be implemented and it to develop the effective distribution network many departments
are involved to execute it properly (Hofman and Aalbers, 2019). Brand image is also rare
resources as it need lots of handwork and money to achieve this level and also become necessary
to maintain it. Product and services are always been rare for every organisation as every
company has their own identified products which they deliver to their costumer.
Inimitable- This refers to strategy or resources which cannot be pursue by any other firm
due to lack of relevant resources. Trust of costumer can be fulfil by any other company and
distribution network is also not be copy by any other firm as everyone has their different
networks and strategy. Brand image is inimitable as this is common to attain it through proper
execution and operational strategies (Mulier, Schoors and Merlevede, 2016). To execute the
different image of any organisation it needs lots of policies and tactics to achieve the market

position. Product and services are also inimitable that it could be follow by any company as it
easy to adopt same kind of product and services.
Organised- In every company it become necessary to organised the resources
accordingly to fulfil the needs and requirement of organisation. In the chosen company the trust
of costumer is not organises properly as it need to be developed more to reach the level.
Distribution network is also not organised in the firm as it require certain changes in the different
channel has to be developed more to improve the efficiency. Brand image is also not organised
in proper way as it need more changes and development in the firm and become important to
maintained the brand image in the market to increase the profit and sustainability.
Assessing the competitive strategies for the company
Porters generic models: This model are about making pricing strategies for the
company's goods, services which makes its goods different for its competitors. In context to JD
sports, the company use this model for its pricing strategies which helps its for higher
profitability for the business (Husni, 2020). The strategies which are includes for this model are
focus, differentiation, cost leadership which helps for the higher profitability for the JD sports
business. In context to JD sports, company deals for China market which makes impacts for its
pricing strategies.
Cost Leadership: It means the firm sets out to become a low cost manufacturer in the
industry. The cost also depends on the structure of the industry, this may include economies of
scale, raw materials, technology etc. In context to JD sports, the company with the lower costs
would earn the highest profits when the competing products are different. It aims to become a
lower cost producer and target a broad China market. The company makes goods, services for
lower price which helps it for better performance which helps for higher profitability for the
businesses.
Differentiation: When a firm differentiate its products, it is rarely able to charge a
premium price for its products and services. It include better service, better product performance
as compare to other competitors, superior product, branding etc in China market . In context to
JD sports, Business target the larger markets and aims to achieve the competitive advantage
across the whole of an industry. Differentiation can be achieved by the way of brand image and
packaging. The company has unique goods, services for higher prices which helps it for
higher profitability for the businesses.

Focus: JD sports use their strategy where there is a least amount of competition. It focus
on the niche market and offering the products for that niche only (Ibrahim and Alagidede, 2018).
Therefore, competitive advantage can be achieved only in the company's target section by
employing the focus strategy. In context to JD sports, the company using the strategy only for the
target segment only, if company is using differentiation focus approach, it would aim
differentiation in its target segment only, not for the overall China market. The company has
goods, services for niche market for lower costs for better performance which helps it for higher
profitability for the businesses.
Differentiation Focus: This strategy is used for the segment or small number of target
market segments. It also helps in implementing premium price for the China market. The target
segments must either a buyers or else the production that serves the best target segment must be
different from the other industry. Many small businesses are able to establish in using niche
market segment strategy achieving a higher prices than undifferentiated products. In context to
JD sports, the company makes unique products which it sales for higher prices which helps
company for higher profitability for the businesses. The company has premium prices for unique
goods, services which helps its for better performance which helps for higher profitability for the
businesses.
Identification the strategic direction to use in the management
Ansoff Matrix
Ansoff matrix is essential mode in doing strategic market planning. These growth
strategies helps organisations look upon those opportunities where they can generate more
revenue. It focuses mainly on product so it is also called Product market mix. It provides full
knowledge about what will be presented in which market to sustain in long run (Karolyi, 2016).
JD Sports is a leading sports store of UK, it requires market research so that they can implement
change to beat competition and increase profit and sales in China Market. Ansoff matrix is sub
divided into four stages that are discuss as under-
Market Penetration- It focuses on promotion and price of existing product in existing
market in order to increase companies sales. This could be done by- reducing prices of products,
acquiring competitors, increasing distribution and promotion. JD Sports can increase its market
share in China market with help of market penetration.

Market Development- In market development entities enters in new market with their
exiting product. They can enter foreign market, new domestic market and can cater different
segment of customers. This can be useful for those products whose not competing in other
market. JD Sports can expand its business China and can open new stores in order to attract
customers of China
Product Development- In product development organisations introduce new product in
existing market. This strategy can be implemented by doing research and development, forming
partnership with other entities, and by acquiring product of competitors to transform it
completely. JD Sports can expand its business through product development and can earn more
customers which will help them to build a brand image in China market.
Diversification- In this strategy companies enter new market with their new products.
For companies diversification can be related and unrelated. In related, companies stays within
the market with which they are familiar. Unrelated diversification implies companies enters in
those markets or industries with whom they are not familiar with. This diversification is
completely strategy of high risk. JD Sports with this strategy can in crease its revenue and can
enjoy the benefits of exchange currency rates with the Chinese currency renminbi.
JD Sports by considering all the above stages should opt for diversification as it will
expand its growth of sales in Asia market and can build more customers force (Lissovolik and
Vinokurov, 2019). It should introduce portable music system range in China as these days
players are using music as their stress buster. Company can provide information regarding their
product via emails, social media and through advertisement to their Chinese buyers. In China
people are more celebrity conscious these days. They follow their sports stars blindly. It will help
company to draw attention of customers of this new market as they can hire famous film stars of
China to endorse their product. Portable music system range will help JD Sports to expand its
business and earn revenues. It will be easy for them to open new stores across China and to move
further as exchange rates, cost of trade are competitively low. This is mainly because street
stores sale are less expensive in China as compare to many other parts of Asian region. With the
increase in JD Sports bing supply chain, it become difficult for new entrants to enter and capture
market or industry. They can completely rule in market with diversification strategy.

Recommendation
In the analysis of many concept and method the organisation is implementing few after
identifying the appropriate one. It is recommended that to monitor all operational strategies and
different policies it is important to properly define them in order to achieve the effective tool and
techniques for the growth of company as well as its expansion in Asia market. In the chosen
company, to analyse the external environment that impact the overall working of organisation
than PESTEL analysis could be use monitor the changes. To evaluate the internal strategies the
techniques which is suitable is VRIO analysis to asses the strength and weakness. To evaluate
the competitive advantage the tool that is beneficial is Porter's generic strategies which will help
in determining the certain ways through which company can use in order to define and regulate
the essential strategies. For the selected company it will be important to define the relatable
problems that could be use to achieve the objectives and goals. To determine the marketing
strategy the suitable strategic techniques will be Ansoff Matrix as it contain some useful
marketing tactics which could be identify by the company in its expansion in China market.
CONCLUSION
From the above report it is concluded that Strategic management is referd as basic of
organisation as it facilitates in understanding the vision of future and will guide that what action
needs to be taken to fulfil the objectives and goals. In this report some methods and tools are
evaluated to implement in their management operation to fulfil the efficiency. To determine the
external environment and way they influence the whole condition of company then PESTEL
Analysis is used to monitor the all factors. To understand the internal capabilities and
weaknesses the analysis which is suitable is VRIO analysis as this will help in understanding the
certain strength and opportunities for the company. Porters generic strategy is helpful in
understanding the various factors which impact the competitive potential of the company.
Ansoff Matrix is marketing techniques which has some strategies that tells the organisation that
what to follow to maximise the profit and growth of organisation in future period of time.