Strategic Management Report: Sports Direct, Strategic Processes

This report provides a comprehensive analysis of the strategic management practices of Sports Direct, a UK-based retail group. It begins by defining strategic management and its importance for achieving a competitive edge. The main body of the report critically assesses the processes needed for a company to acknowledge its organizational strategy, including external and internal analysis, highlighting their strengths, weaknesses, and applicability to Sports Direct. It then evaluates critical models and tools, such as PESTLE and SWOT frameworks, demonstrating their application in the context of the company. The report further examines the application of strategic tools, particularly PESTLE, in relation to Sports Direct's operations, considering political, economic, social, technological, legal, and environmental factors. Finally, it critically appraises change management within the context of transformation processes, including its sustainability, associated risks, and potential costs for Sports Direct. The report concludes with a summary of key findings and recommendations for effective strategic management.

STRATEGIC
MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Critical assessment and analysis of the processes needed by a company to acknowledge their
organisational strategy............................................................................................................1
Analysis and evaluation of critical models and tools required by a company to determine their
strategy ..................................................................................................................................3
Application of strategic tools in context with selected organisation and their working .......4
Critical appraisal of change management in context with the transformation processes along
with its sustainability, risks and costs.....................................................................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Strategic management is defined as the techniques, tools, frameworks and the processes
that is needed by a company to implement and adopt so that tough competition can be given to
rivals. This helps a company in achieving competitive edge in marketplace. This is an essential
procedure that involves the adoption of management aspects so that organisational sustainability
and high growth in market can be assured (Aguinis, Edwards and Bradley, 2017). This report is
prepared in context with Sports Direct which is a UK based retailing group, founded in 1982.
This company is one of the biggest organisation in terms of sports good and operates their work
in global manner. This assignment is going to discuss the way in which a company adopts its
strategy. Along with this, it is going to mention about analysis of critical models that are required
by a firm to acknowledge their strategies along with application of these tools in context with
Sports Direct. At last, importance associated with change management in terms of transformation
processes are discussed.
MAIN BODY
Critical assessment and analysis of the processes needed by a company to acknowledge their
organisational strategy
To assure the efficiency and effectiveness of business performance in market place, there
exist different kind of procedures that are adopted by an organisation so that right business
strategies can be formulated. These procedures are needed to be adopted, implemented and
maintained in a critical manner so that their appropriateness in strategy formulation can not be
compromised in any manner (Barca, 2017). Below are mentioned some of the processes which
are usually used by a firm so that their organisational strategy can be framed in an productive
manner. These processes are discussed below:
External Analysis:
This is considered as one of the important procedures to acknowledge the strategies
which are associated to the analysis and evaluation of external business environment. It is
referred as the evaluation of all external factors which can either have positive or negative
impact on the working and decision making of a company. Main elements which are critically
analysed in external analysis are the social trends in which a company is operating, political
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factors, technological aspects, economic scenario, legal frameworks along with environmental
situations in which a firm is operation their activities and procedures.
According to the perception of Baumgartner, R. J. and Rauter, R., 2017, it is identified
that external process of analysing business includes a deep analysis of industrial performance
and position of a business firm in respect with the suppliers, customers new entrants, rivals and
substitutes. By this, organisation such as Sports Direct can identify their competitive edge in
respect to the competitors. All of the above mentioned forces have a considerable influence on a
company along with their decision and working behaviour. This strongly concludes that external
analysis process is an efficient way to formulate organisational strategies as it will benefits the
concerned organisations in gaining reputable position in market (Baumgartner and Rauter,
2017). But along with all the advantages, there are some disadvantages which are associated with
external process. These limitations reduce the effectiveness of this procedure to formulate right
organisational strategies. On contrary basis, viewpoints of Bromiley, P., Rau, D. and McShane,
M. K., 2016, states that this tactics is able to acknowledge the external forces which can impacts
a business but it is not capable to evaluate those competencies which are existing in a company.
Other than it, this process do not considers multiple facts which are in favour of an organisation
and overpass the influences of external procedures due to their greater efficiency.
For example, In case of Sports direct, this analysis will helps in determining the external
forces and its impact on the company but it fails to evaluate the competencies which are likely to
be present within the organisation. In addition to this, external analysis processes does not take
several facts into consideration, that whether exclusivity is present within the firm's offerings,
which might overpower the external forces due to its uniqueness.
Internal Analysis:
Other than external analysis, there is one more process which is used by business
organisations to formulate their strategies in a proper manner. This process is called as internal
process. With the help of this process, organisations like Sports Direct can identify right strategy
along with evaluating their weaknesses and internal competences in a proper way. By
considering the opinions of Ferlie, E. and Ongaro, E., 2015, it can be acknowledged that by
using this kind of analysis, a firm can also find their organisational capabilities so that required
modifications can be carried out in an organisation without any problem. For example, In context
with Sports Direct, this process will benefits the manager of organisation to analyse their
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strengths and opportunities in marketplace so that high revenues can be earned. Also,
weaknesses and threats are also identified by this process due to which organisation like Sports
Direct became capable to identify potential measures to convert them into opportunities.
Internal analysis is very important as it assists an organisation in deciding those strategies
that will be able to remove their weaknesses and threats. By this, a sustainable position can be
gained in marketplace against rivals. Positive aspect of this analysis is that organisational
competences are analysed and acknowledged in a proper way due to which overall performance
of company can be raised. On contrary basis, in this analysis less emphasis is given to the
external aspects which can hinder the growth and success of company. Due to which, finalising
business strategies according to only this process is full of threat (Goldfarb and King, 2016).
Thus, it can be said that both external and internal analysis is needed by a firm to adopt
right kind of business strategies. Adoption of both the processes will helps the manager of a
company to view wider preselective. Internal analysis is more suitable for those firms which
have innovative and unique products to give to customers and external analysis is useful for a
situation in every condition as it helps in deciding if operating in a region is beneficial or not. In
respect to Sports Direct, manager of company is recommended to adopt both of the processes so
that external factors can be analysed along with identifying the weaknesses and strength of an
organisation.
Analysis and evaluation of critical models and tools required by a company to determine their
strategy
There exist multiple models and tools which are used by the employers of a company so
that right organisational and business strategy can be created. This will help the concerned
company in achieving expected results prior deadlines. In this context, main tools are PESTLE
and SWOT framework. Critical evaluation about these tools is mentioned below:
PESTLE framework
This model is used by an organisation to analyse external aspects and factors which can
impacts the working of company. It is important for a firm to acknowledge their performance in
market, changing perception of customers, emerging technologies, legal laws and political
scenario so that right business decisions can be taken. Other than it, this model is useful in
analysing benefits and limitations of identified factors so that estimated advantages can be
acknowledged (Henri, Boiral and Roy, 2016). Due to this, formulating beneficial strategies will
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be easier. But, this framework do not give information about organisational competition due to
which organisations like Sports Direct may not be able to achieve advantage against rivals. Due
to this, sustainability of company can be compromised.
SWOT framework
This model is needed by an organisation when they are eager to acknowledge their
weaknesses and strengths along with potential threats and opportunities which can influence
business and its activities in a considerable way. It is a basic model which helps a company in
analysing and evaluating their internal working procedures. Opinion given by Hitt, M. and
Duane Ireland, R., 2017, denotes that this framework can be considered as an universal theory in
terms of business management as it assist in identifying capabilities and competences of a
company in proper manner. But according to the perception of Kasemsap, K., 2017, there are
some limitations associated to this process like this model is able to identify weaknesses in terms
of a company not an entire industry. Due to this, threats from overall industry is overseen. This
reduce effectiveness of this model and can limit the growth of company.
Source:(SWOT analysis, 2019)
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Illustration 1: SWOT analysis, 2019

Application of strategic tools in context with selected organisation and their working
There are different strategic tools that are usually selected by a company to formulate
right strategies. Out of all the strategic tool, PESTLE framework is discussed here in context to
the Sports Direct. Aspects of PESTLE model is stated below:
 Political factors: These factors are related to the government stability of a region and
their inference in the working of business organisation. UK is a stable country where
large organisations are not bounded to follow strict policies and procedures. This factor is
in favour of Sports Direct. Brexit has impact UK politics in considerable way. As, sports
Love is operating at global level, Post-Brexit can impact working of company in negative
way. For example, due to Brexit, large organisation are negatively impacted and
government is supporting SMEs, this can reduce the effectiveness of Sports Direct in UK.
 Economic factors: People in UK have disposable income due to which they are capable
to purchase products and services as per their demand. People in UK are enthusiastic
about supports. This will assists Sports Direct in earning high sales. Great depression of
2018 has led to Inflation which can impacts the sales and revenues of company in non
profitable manner (Honggowati and et. al., 2017).
 Social factors: These aspects are concerned with the opinion, preference, value and
perception of people. UK population is modern and they prefer to play sports to maintain
their health and business. This factor favours the company but as preference of people
change at fast pace, change in opinion of people about sports can impact organisation in
negative manner.
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Source: (PESTLE analysis, 2018)
 Technological factors: These factors are related to the technological advancements and
innovation. UK is one of the technologically advanced nations where people prefer to do
online shopping rather than physically visiting a place to shop commodities. Sports
Direct is needed to increase their presence on Social media and digital platforms so that
maximum number can acknowledge and purchase their products (Rothaermel, 2017).
 Legal factors: It is related with the legal laws and norms which are needed to be
followed by a firm to operate their business in certain region. Manager in Sports Direct is
needed to follow all laws related to business, employees and customers so that company
can perform their activities properly. In case of non-compliance, victim can file case
which will leads to payment of high fines and penalties (Jenkins and Williamson, 2015).
 Environmental factors: These factors are related to the ecology and environmental
protection. In order to operate business in UK, each organisation is needed to prepare
environmental sustainability report to show their business operations are not harming
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Illustration 2: PESTLE analysis, 2018

environment. If Sports direct will not formulate this report then they will be restricted to
operate in UK and their reputation in market place can fell down.
Critical appraisal of change management in context with the transformation processes along with
its sustainability, risks and costs
In context with the PESLTE analysis of Sports Direct, it can be said that concerned
company needs some changes in their organisational working so that varying environmental
condition and changing needs of customers can be complied properly. One example in this
context is that organisation have efficiently adopted structural changes on timely basis to
increase their productivity. These changes helps them in dealing with external factors and
enhancing their organisational competences due to which there is hike in overall profits. In case
of Sports Direct, some aspects related with change management are stated beneath: Complexity: It is an essential aspects in terms of change management. As restructuring
leads to changes in each level and function of a company, change management is
regraded as complex process. For example, in Sports Direct, at first employees will
resists and avoid the change. In that situation, manager of company is needed to
communicate them about the benefits of change. This will helps the employees in
adopting change and overall complexities will be reduced. Cost: It is important for a company to predict the cost related to change management. In
case of structural change, there are certain costs which needs to be considered by
organisation. for instance, While changing structure of an organisation, manager in Sports
Direct is needed to train their employees for which cost is needed. Also, promotion and
advertising of new organisational structure in front of investors and customers needs
finance. Hence, cost estimation is very essential (Meyer, Neck and Meeks, 2017). Risk: In case of structural changes, there are various risks which can reduce effectiveness
of change. For instance, if company is not able to adopt change, then organisational plans
will fail and this will impacts working of a firm in negative manner. Thus, this factor is
very critical for the company while change implementation. For example, to prevent the
company from risks of change management, manager in Sports Direct can formulate a
risk management plan so that emerging risks can be resolved and eliminated in proper
way.
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 Sustainability: Each activity performed by a company is required to assure sustainability
so that advantageous business outcomes can be gained. For example, in Sports Direct,
manager of company is needed to analyse each process before adopting it so that
sustainable outcomes can be gained. This aspect demotes that change management is
important for a company so that desired success and growth can be attained (Moutinho
and Vargas-Sanchez, 2018).
Hence, it is very important for business organisations like Sports Direct, to carry out
change in their organisational processes. Also, structure of firms is needed to be adaptable with
environmental conditions. In case of costs and risks, good strategies will helps in minimising
them. Also, implementing sustainability and associated practices must be carried out by manager
of firm so that change management can be adopted properly.
CONCLUSION
As per the above given report, this can be comprehended that strategic management is
very essential for a company to achieve competitive edge against their rivals. Also, before
selecting a process, it is important for a company to evaluate them so that their potential in
framing strategies can be acknowledged. Popular tools to formulate business strategies are
SWOT, PESTLE, VROI etc. These tools helps in analysis about internal and external business
factors. Applications associated with these tools helps in giving right direction to a concerned
organisation. Also, change management procedures are needed to be appraised so that dynamic
business environment can be sustained.
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REFERENCES
Books and Journals
Aguinis, H., Edwards, J. R. and Bradley, K. J., 2017. Improving our understanding of
moderation and mediation in strategic management research. Organizational Research
Methods. 20(4). pp.665-685.
Barca, M., 2017. Economic foundations of strategic management. Routledge.
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management to develop a sustainable organization. Journal of Cleaner Production. 140.
pp.81-92.
Bromiley, P., Rau, D. and McShane, M. K., 2016. Can strategic risk management contribute to
enterprise risk management? A strategic management perspective. A Strategic
Management Perspective (October 20, 2014). Forthcoming: Bromiley, P., Rau, D., and
Mcshane, M. pp.140-156.
Ferlie, E. and Ongaro, E., 2015. Strategic management in public services organizations:
Concepts, schools and contemporary issues. Routledge.
Goldfarb, B. and King, A. A., 2016. Scientific apophenia in strategic management research:
Significance tests & mistaken inference. Strategic Management Journal. 37(1). pp.167-
176.
Henri, J. F., Boiral, O. and Roy, M. J., 2016. Strategic cost management and performance: The
case of environmental costs. The British Accounting Review. 48(2). pp.269-282.
Hitt, M. and Duane Ireland, R., 2017. The intersection of entrepreneurship and strategic
management research. The Blackwell handbook of entrepreneurship, pp.45-63.
Honggowati, S. and et. al., 2017. Corporate governance and strategic management accounting
disclosure. Indonesian Journal of Sustainability Accounting and Management. 1(1).
pp.23-30.
Jenkins, W. and Williamson, D., 2015. Strategic management and business analysis. Routledge.
Kasemsap, K., 2017. Strategic innovation management: An integrative framework and causal
model of knowledge management, strategic orientation, organizational innovation, and
organizational performance. In Organizational Culture and Behavior: Concepts,
Methodologies, Tools, and Applications(pp. 86-101). IGI Global.
Meyer, G. D., Neck, H. M. and Meeks, M. D., 2017. The entrepreneurship‐strategic management
interface. Strategic entrepreneurship: Creating a new mindset, pp.17-44.
Moutinho, L. and Vargas-Sanchez, A. eds., 2018. Strategic Management in Tourism, CABI
Tourism Texts. Cabi.
Rothaermel, F. T., 2017. Strategic management. New York, NY: McGraw-Hill Education.
Online
Examples of Organizational Change: A Tech Giant Showcase. 2019. [Online] Available
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