Business Strategy: JD Sports Strategic Analysis Report

This report provides a detailed strategic analysis of JD Sports, a leading UK-based sports-fashion retailer. It begins by examining the macro environment, including JD Sports' vision, mission, and objectives, followed by a PESTLE analysis to assess political, economic, social, technological, legal, and environmental factors. The report then evaluates JD Sports' internal capabilities using McKinsey's 7-S model and a TOWS analysis. Furthermore, it applies Porter's five forces model to analyze the competitive landscape and strategic positioning of the organization. The analysis culminates in the creation of a strategic management plan designed to enhance the company's profitability and growth. The report covers various aspects of the business strategy, including market analysis and competitor analysis.

Strategic positioning of JD

Table of Contents
INTRODUCTION.......................................................................................................................................3
Critically analyze the macro environment of the organization including vision, mission and objectives
of JD sports..............................................................................................................................................3
Assess the internal capability and strategic capabilities of an organization.............................................6
Apply Porter’s five forces model and analyze the strategic positioning in the organization....................8
Produce a strategic management plan based on above analysis.............................................................11
CONCLUSION.........................................................................................................................................13
REFERENCES..........................................................................................................................................14

INTRODUCTION
Business strategy refers to a long term plan that is used to design the strategy plan to
achieve a specific goal or a task within the organization. It is a management plan that is helpful
in strengthen the performance and productivity of a company. It is a master plan that is used by
the manager and implement in the business activities that helps in gaining the competitive
advantage in the market place. This report is based on the JD Sports which is an leading retail
company that is based on the sports-fashion in the UK. This project is deals in analysis of macro
and internal factors and showing the capabilities of the organization in an appropriate manner.
Hence it also includes the porter’s five forces model to the given environment. At last make a
strategic plan for a company that helps in enhancing the profits and growth (Akter and et. al.,
2016).
Critically analyze the macro environment of the organization including vision, mission
and objectives of JD sports
VISION
The main vision of the JD Sports is to become a most trusted and successful company in the
domestic and international level.
MISSION
The main mission of JD Sports is to make a best fashion–sports company in the UK and
provide a wide range of products to the customers, good quality products, securing shopping
experience and the wide range of women’s kids trainers, footwear’s and a men’s ware so that
they will earn more and more profits (Thompson, Strickland and Gamble, 2015).
OBJECTIVES
The main objective of JD sports is to set the smart targets and achieves the goals in a
specified time. There objective is to satisfy the customer and make loyal consumers of the
organization.

Strategy
It refers to a plan that is designed by a manager of a company to achieve the overall
objectives that is based on long term. It is followed to see a general direction that helps in
earning a high results in the future and helps in maintaining the overall market growth. To
determine this firm is able to decide what is to be perform so that they will gain the competitive
advantage and the sales and profits which is very useful for a successful business
enterprise(Martinez-Simarro, Devece and Llopis-Albert, 2015).
Various analytical frameworks of analyzing macro environment
PESTLE Analysis
It defines as a strategic tool that is used by the companies to examine the external
environment and the market place in an appropriate manner. In context of JD sports, PESTLE
analysis can be described below.
 Political factor – It is a factor that includes tax policies, trade tariffs, fiscal policy etc. In
UK political condition is stable and the tax rates for the companies is less. In context of
JD sports, operates the business is beneficial (Soltanizadeh and et. al., 2016).
o Positive – it will create a positive impact on the JD sports because of the stable
condition and the good income of the person.
o Negative - This factor have a negative impact on the company as well as economy
of a country because of more restriction on trade tariff other European countries. Economical factor – It is that factor which includes inflation rate, interest rate, foreign
rates, saving rates and the demand and supply in the economy. In context of JD sports the
growth rate of GDP in the nation affects the business in growing in the future. Because of
unemployment in the country JD sports take advantage of this as they hire employees at a
low wage. That will increase the productivity and proficiency of the company.
o Positive - This factor has the positive impact on the JD sports as they hire a
number of employees on a minimum wage because there are many peoples who
are unemployed so they get ready on small amount of wage.

o Negative – It also have the negative impact on the organization because of high
inflation rate in the country many people do not spend more on buying the
products of firm. Social factor – This factor depends on the culture, beliefs, custom, attitudes and values
that was present in the society and there peoples. In context of JD sports, the properly
follows the rules that is demanded by the society and provides a goods and services as per
the customer demands. Helps in earning more revenues. In this they mostly target the
women’s because of beauty products and cloths. This helps in enhancing the sales
(Moseley III, 2017).
o Positive- Because of satisfying customer demand by following the rules and
procedure that was decided by the society company can earn more profits.
o Negative – If they do not follow the proper guidelines then it will not succeed in
earning profit. Technological factor – In today’s environment for successful business organization use
of advanced technology is very beneficial. In context of JD sports, company is famous for
using new technology as they gain popularity by promote their products and services
through social media. In enhancing the sales and profits but at the same time it consumes
lots of cost at the time of installing(Thompson, Strickland and Gamble, 2015).
o Positive – Technological factor create a positive impact on the JD Sports as they
helpful in promoting the goods and services to the wide area and also attracts
large number of customers.
o Negative - It will create a negative impact on the company expenses as it higher
the cost and it also spending more on providing training about the use of these
techniques. Legal factor – It includes the various rules and regulations that were imposed by the
government that is made for the employees and the customers. In context of JD sports,
manager can adopt the employment law that suggests paying equally every employee as
per their abilities and capabilities. This helps in improve the efficiency of workers and
helps in earning more and more profits.

o Positive – It will create a good impact on achieving the task on time with
employee supports because they are motivated to work well as they are equally
pay according to their work.
o Negative – If firm cannot give their employees a fair remuneration then they
cannot work properly and this will decrease the proficiency of the business.
 Environmental factor – It includes the various factors that is included climate and
weather. It can set some standard on the basis of which every firm works. In context of
JD sports, because of current weather condition in UK is not so good, this affect the sales
of the company and creates a problem in transporting the resources and the goods. This
will affect the sales and revenues of the business enterprise.
o Positive – If the country climate is good then it will positively impact the
organization sales as they higher there sales and profits.
o Negative – Because of bad climate in the UK the sales and profit of the company
is affected negatively.
Assess the internal capability and strategic capabilities of an organization
McKinsey’s model
This model is proposed by Robert H. Waterman in 1980s. It refers to frameworks that
help the firm to analyze and examine the internal elements by focusing on to the seven key
components that are as follows. In context of JD Sports, manager can implement this McKinsey
model so they analyze their internal strength and capabilities. These 7 key components are
described below (Yuliansyah, Gurd and Mohamed, 2017).
 Strategy – It is a stage where company developed a plan to achieve the competitive
advantage and successful establishment in the market place. In JD Sports, if they cannot
make the good and proper strategy plan than it will reduce the sales and profit of the firm.
If they make a robust strategy than they will not face any issue regarding the
sustainability and its customer base(Grayson and Hodges, 2017).

 Structure – It refers to a business chart that an organization follow in this company make
divisions and units to organized and manage the information and work and recognize
who is accountable to whom. In JD Sports, if they cannot make a appropriate structure
that it will face issues in the productivity and many competitors take advantage of this. If
they follow the right structure and divides each task as per the ability and skills then no
rival firm can take advantage of it and it also increases its proficiency and performance. Systems – It is the next step of this model where every company reveal their daily
activities and make processes and procedure on the basis of which decisions are to be
made. JD Sports, if manager can implement all the processes and procedure effectively
then it will benefit the manager to implement the change smoothly and efficiently as per
the business environment demands(Moseley III, 2017). Skills – It refers to the abilities and capabilities of employees to perform a specific task
and earns more revenues. In context of the JD Sports, manager can assign the task to the
capable employees than they will deal the situation in a very proficient manner that gives
the fruitful results. Style – It refers to the management style of the organization leaders in this they take
actions and valuable decisions in a symbolic way in which they will interact with their
employees. In JD Sports, manager can take decisions and actions after the discussion of
their employees as they follow democratic style. Because of this every employee
performance is increasing (Chen, Eshleman and Soileau, 2017). Staff – This model suggest the number and type of employees who are working the
company JD Sports. In this they include the strategy related to recruiting, training,
motivating and rewarding their staff members. Shared value – In this JD Sports follows some standard rules and regulations that was
follow by the employees. It is the foundation of a business enterprise to make the
standards that will easily and effectively guide the staff members’ behaviors.
TOWS Analysis
Internal factors

External
factors
Strengths weaknesses
Opportunities Strength/opportunities
(S/O)
 The major strength of
JD Sports is strong
brand portfolio and it
will create
opportunities too as
they provides
permission of opening
new stores by the
government
agreement and this
will increase the sales
and the profit.
Weaknesses/opportunities
(W/O)
 Using more
advanced
technology
consumes more cost
this is the major
drawback of the
company but the
same time by using
advanced
technology it will
helps in attracting
more and more
customers by
advertise their
product using social
media.
Threats Strength/ threats(S/T)
 the strength of JD
Sports is automation
of activities and
enable to consistency
in quality, it will a
threat also as in this
they require more
financial resources
this will charge the
high price on
products.
Weaknesses / threats
(W/T)
 Shortage of
experience
workforce affect the
productivity and
sales and revenues
og the company.
this is both a
weakness and a
threat.
Apply Porter’s five forces model and analyze the strategic positioning in the organization
It refers to a comprehensive framework that helps in analyzing the current competitors
and according to that they also help in taking the strategic decisions for the company. in context
of the JD Sports, manager wants to builds a strong customer base and reduce the competition in

the market. For this they need to analyze the industry competitiveness by using porter’s five
forces model that can be mentioned below.
 Bargaining power of buyers- Customers play an important role as they purchase the god
quality products on a minimum spending. It will not create a good impact on the
compnay sales because of their high power they are the price decider due to this many
time firm can sales its products at loss. This will create a pressure on the JD Sports
company profitability and sales. Because of small consumer base they contains lots of
bargaining power. Therefore, firm can seek to increasing the discounts and provides
special offers. To reduce the bargaining power of customer they timely innovate the new
products and builds a large customer base that helps in increasing the profits on their
company price(Leischnig, Woelfl and Ivens, 2016). Bargaining power of suppliers – In retail sector industry there is numerous suppliers
present in the market who sell the raw materials to the company. High bargaining power
of the suppliers create a negative impact on the organization sales. In JD Sports, suppliers
are dominant and because of this the margin set on the goods are high and it will decrease
the profits. To reduce the high power of suppliers they need to make a contract to those
suppliers who charged the low price of the inputs. Threat of new entrants- In this new entry of a firm in the same industry is present in the
market with more new innovation. This puts the pressure on the JD Sports to set the price
at low cost so the customers are not switch to the other company. To reduce the new
entry they timely research on the market and innovating the products at low cost margins.
This will increase the profits(Linder and Williander, 2017). Threat of a substitute – It is the major threat for many companies in this there is a
substitute of goods are present in the market and consumers buy those goods whose price
are low. In this strategy of porters models there are few substitutes are present in the
market that produced the substitute goods in which JD Sports established. And those
substitute are present are present on the low profits earning. Because of this many
customers are not shifting their shop as they are very loyal towards the organization
products and its presence. This will helps in earning more and more profits in the market. Rivalry among the existing competitors- If there are many competitors are present in the
market place than it will reduce the profits and growth of the firm. In context of the JD

Sports, there are many competitors present in the market and if affects the sales and
profits of the firm. So it will majorly effect the company’s image and its market share. To
overcome this problem they build a sustainable differentiation in their products so that
they will grow their market share and profits.
Ansoff’s matrix
It refers to a strategic tool that is used by the senior managers of the company to know
and analyze the future growth. It is proposed by the Russian American Igor Ansoff.
 Market penetration - It refers to that strategy in which firm sales its existing product in
the existing market to increase the profits. This strategy contains no risk. If a manager of
JD Sports could allpy this strategy than their main aim to increase the market share with
their current products in the existing market. In this they increase their advertising and
distribution efforts so that they will attract more and more customers in the same market.
 Market development- This strategy suggested that the company can sell its existing
product in the new market. It is risky for the JD sports because the market is not known
for the firm and they don’t know the customer taste and preferences. But it also enhance
the growth of the business by operating in the new market.
 Product development- This strategy shows when the enterprise enters in the existing
market with some innovative and modified product offering. It is less risky as compare to
market development. If JD sports use this strategy than it spend more in the research and
development so they can investigate the target customers needs and wants after that
organization make their goods.
 Diversification – This step shows when the firm enters into the new market with the new
product offering. It is more risky plan that a manager of the company can take. In JD
Sports if manager can apply this strategy it will face large amount of loss if they cannot
examine the market and its customers properly. But at the same time it gives more and
more profits to the business.
From the above mentioned strategy JD sports should choose the market penetration strategy
where they can sell their existing good offerings in the existing market, by decreasing their prices

of the products, increase the promotions and acquiring a rival firm in the current market. It
contains no risk as they attracts large number of customers.
Porter’s generic strategy
This model is adopted by the company to gain the competitive advantage. It includes four
strategy i.e. cost leadership, differentiation, focus cost strategy and focus differentiation strategy.
In context of JD Sports, manager can make and analyze strategy and follows a best one that gives
the more profits and sales and longer sustainability in the market place.
 Cost leadership - The major objective of this strategy is produce low cost production in
the industry. In context of the JD Sports, manager can adopts the strategy to sell their
products at low price. Therefore, they also provide some offers and special discounts to
the people so that they will not switch the firm and they are loyal towards the company.
at the same time they also offers industry products to their family and their close ones so
that it will increase the sales and profits to the long run(Bentley-Goode, Newton and
Thompson,2017). Differentiation - The quadrant of this model suggest the strategy related to the
differentiation in their products offerings. They produce a goods and services in an
innovative way, it will helps in enhancing the sales and revenues of the company. in JD
Sports, they offers innovative products and creative services to their customers so that it
will enhancing the sales and the market growth in a long run. Focus – This strategy contains two strategies- i.e. cost focus and differentiation focus. In
context of JD Sports, in cost leadership strategy they offers the goods and services at
reasonable price that attracts more and more people to purchase the products. In
differentiation focus, company offers innovative and creative offerings to their customers
to attract many other peoples and retain the old one(Grayson and Hodges, 2017).
From the above strategies, JD Sports should adopt the cost leadership strategy so that they attract
more and more people to buy the products. It also helps in gaining the competitive advantage in
the market place in which they operates their business. In this company offers discounts and
rebates on the offerings, so that the customers are attracted and they also refer to their friends and

family members to buy the same. It will helps in enhancing the sales and profits and also
sustainability in the current market place.
Produce a strategic management plan based on above analysis
JD Sports is one of the leading and the famous retailing firm of sports and fashion in the United
Kingdom. A manager of the company can increase the sales and profits by selling their products
and services to the customers. For this they make a strategy where they should decided to sale
their existing products in the existing market with the approach of cost leadership style that is
generated from the porter’s generic model. It helps in enhancing the market share and also
attracting the more and more customers at the same time by using their effective promotion.
VISION
The vision of the JD Sports is to make powerful and most trusted company in all over the
world. To make customer loyalty and engagement with the organization lifelong.
MISSION
the mission of the JD Sports is to shapes the technology that make the life better of the
people who uses the products(Sanden, 2016).
STRATEGIES
The strategy that was used by the JD Sports is market penetration where they can apply
the cost leadership to attract more other users and for covers the wide area all over the world.
This will help the customers to engage with the company and its products. In this firm will
produce the goods at low production cost that will help in earning more profit margin and sales
the offerings at low price (Hamilton, Cruz and Jack, 2017).
OBJECTIVES
The main objective of the firm JD Sports is to increase the sales and customer base by
15% by entering into the new market with their low price products and this will increase the
profit margin by 10% within 10 months.
TACTICS