Strategic Analysis and Recommendations for JP Sports Plc Expansion

This report provides a strategic management analysis of JP Sports Plc, a leading UK-based fashionable sportswear company. The report begins with an executive summary and table of contents, followed by an introduction outlining the scope of the study. The main body of the report includes an external environmental analysis using PESTEL and Porter's Five Forces frameworks, identifying potential threats and opportunities for JP Sports Plc, particularly in the context of entering the Russian market. An internal analysis, utilizing value chain analysis, assesses the company's strengths and weaknesses. The report then identifies competitive tactics and proposes strategic directions for growth and expansion, offering recommendations based on the overall analysis. The report concludes with a summary of findings and a list of references.

STRATEGIC
MANAGEMENT
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Executive summary-
Strategic management activity means define a company tactic that help to gain several
benefits and achieve aims. The current study has been based on JP Sports Plc who is able to
satisfy their consumers and managed business activities in systematic manner. Organization
overcomes negative impact of different external factors by taking right judgment. This report
explained external and internal analysis in context of chosen firm and also define strategic
directions that help gained competitive edge.
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Table of Contents
Executive summary-........................................................................................................................2
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
External environmental analysis to determine threats and opportunities in context of JP sports
PLC.........................................................................................................................................3
Internal analysis for determining weaknesses and strengths of chosen company..................7
Identification of competitive tactics.......................................................................................9
Strategic directions in regards to growth of JP sports Plc and approaches of expansion.....12
CONCLUSION..............................................................................................................................13
RECOMMENDATIONS...............................................................................................................13
REFERENCES..............................................................................................................................14
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INTRODUCTION
Strategic management is continuous planning, operating, examining and monitoring
procedure in context of organizations to assure that they meet set goals and businesses objectives
in effective manner. It includes setting objectives, analysing competitive business environment,
determining internal abilities of firms, evaluating tactics and assuring that manager rolls out
strategies across ventures. The current assignment will be based on JD sports PLC, which falls
under category of leading fashionable branded casual and sportswear companies in the United
Kingdom. The industry in which company operated their business has quite impressive presence
in nation. While operating venture in this sector, firm faced a lot of challenges sometimes due to
political reason and consumers needs.
This study will explain external environmental analysis in context of chosen company to
determine chances and threats. It will also define competitive and internal environmental
analysis by using appropriate frameworks. Furthermore, this report will justify competitive
tactics for organization by using Porter’s generic strategies and strategic directions in regard to
chosen brand. It will describe ways to business expansion and suggestions based on overall
analysis.
MAIN BODY
External environmental analysis to determine threats and opportunities in context of JP sports
PLC
PESTEL analysis-
External analysis is an objective practice of changing the world in which an company
operated their business and managed organizational operations in order to have early warning
process for determining potential opportunities & threats. There are ranges of models and
frameworks accessible in the world of business that can be used to conduct external environment
analysis in context of well known companies like JP Sports Plc. PESTEL is one of the strategic
tools that here can be utilized to determine factors which directly impact strategies, plans and
practices of firm. It can be considered as most appropriate techniques that help company to
understand different external elements influence on its ventures.
Political factor-
Political stability, trade policies & regulations, tax rate, instability in governmental
practices etc are all political factors that affect any organization and its management activities. JP
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Sports Plc wants to enter into specific Asian country like Russia and any political element can
put negative or positive impact on this decision. For instance, changes in tax rate put negative
influence on expansion procedure of chosen brand as it require more money to pay by company
side while they trade products or services from home town to target market (Yildiz and Eroğlu,
2020). It is quite tough to enter into this market because of discussed political factor.
Economic factor-
Interest rates, inflation, unemployment ratio, education level, current stage of business
cycle and infrastructure quality are different points of economic factors that firms need to
consider while making plan for further growth and taking decision to enter into new place
(Zakhvatkina, 2020). For examples, unemployment rate in Russia as compare to other Asian
countries were low that give JP sports Plc excellent chance to take their workforce at new place
where they would not need to hire other people. Because of low degree of this force,
organization effectively operated their venture in the future successfully that is quite beneficial
for its success.
Social factor-
Culture, interest in sports, life style changes, attitude towards health and environment are
the examples of social factors that can affect any business or sector. Interest level of people
towards sports activity and events was high in Russia; Russian seeks to purchase quality
sportswear for specific tournament which is quite beneficial for JP sports Plc when it enter into
this market (Harte, 2020). It gives organization the best opportunity to attract those people and
retain them for longer period of time by providing services and delivering products according to
his or her taste or preference.
Technology factor-
All the factors impact on expansion and other tactics of companies. Development of
digital marketing channels and platforms also influence businesses and their marketing attempts
positively. This factor impact JP sports Plc business and success in positive manner because it
give great opportunity to marketing department of firm in context of reaching at target market
and gaining attention of new buyers towards purchase of sportswear offered by chosen brand
(Kim and Chiu, 2019). With advanced technology company can create attractive content which
management can use to drive their sales high and increase profitability. They can design unique
website where people can get all information about business and its products.
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Environmental factor-
Because JP sports Plc is fashion and sports retailer it has to consider into all
environmental elements in all their market and especially that one where they want to enter such
as Russia. Forces like pollution, awareness of waste management, climate change, weather etc.
Customers and government demand to reduce carbon footprint put positive impact on success
and growth drivers of company because firm already manufacture environmental friendly goods
which make them able to gain attention of new buyers and obtain competitive advantages in
effective manner. It can be considered as opportunity in regard to firm that management can grab
and take its benefits for long period of time.
Legal factor-
All the nations have their own laws and regulations which government has been created
and developed. Labour law, employment law, copyrights and data protection act are included in
list of legal factors that affect existing plans and practices of companies. Here, changes in
employment law can be recognize as one of the legal elements that can put positive impact on
employment policies and activities of JP sports Plc because firm comply all principles of
regulations and follow it while entering into Russian market.
Porter’s five forces-
It is another tool that helps to analyse competitive environment and identify components
that also aid companies to gain competitive benefits available in industry where firms operated
their operations and managed functions in systematic manner (Isabelle and et.al., 2020). It
comprises key five forces that affect products production, supply activities, price setting decision
and strategy development.
Bargaining power of suppliers-
The extent of this force is low because number of suppliers within retail industry is much
than consumers. Availability of suppliers lowers the bargaining power of JP Sports Organization
raw material distributors. It gives firm opportunity to set products or services prices according to
management decision, not accordant to suppliers. Without making changes within pricing
structure, company can sustain its business in systematic manner and get success in context of
expansion procedure, which is quite beneficial in term of increasing profitability, productivity
and generate revenue even better than last few years or months. Overall impact of low supplier
bargaining strength is that is increase entire profits margin of firm.
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Bargaining power of buyers-
Degree of this element is high because accessibility of sportswear production companies
is higher as it gives people chance to switch to other brand when he or she not obtain quality
products from their favourite brands. It put negative impact on JP sports firm production process
and expansion strategy, as it can drive their management to consider this factor and develop
effective tactics and take decision which is profitable for business growth in target market. It
leads to decrease customer base and sales of firm that is not appropriate for current and further
plans success. It can influence marketing, finance, and other business units’ practices negatively.
Threat of new entrances-
Degree of this force is low because market in which JP sports Plc operated its business
requires a lot of investment to set up new venture, establish new brand and company. In order to
start ventures in new market firms has to make a huge investment which is not possible for every
brand to do (García-Fernández and et.al., 2018). Chosen company and its competitors have
already developed their strong image in retail industry, which make new organizations unable to
sells their products successfully. This force could not threaten JP Sports Company as it gives its
management a chance to strengthen their venture even better and plan for further expansion at
global level.
Threat of substitute services and goods-
Threat of this component is low because all organizations in industry where JP sports plc
operated produce similar products or offer services that could not give consumers chance to
consider substitute items (Ge and Li, 2019). This force can put positive impact on operational
efficiency of company and increase their effectiveness even better than business rivals who are
sustained their ventures in similar sector with skilled workforce. Very few substitutes that are
accessible are also manufactured by low profit earning sector that means there is less selling on
high profit that organizations can earn in retail industry in which chosen company operates.
Competitive rivalry between existing organizations-
Within retail sports industry competitive level is high that could impact JP Sports Plc
business expansion strategy negatively and also influence its management practices in same
manner. Due to intense competition, firm experience a lot of stress and pressure to perform even
better than other companies who has strong brand image, good market share, customer base and
talented people who are ready to work with brands for longer period of time by performing better
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than before. This factor force company to think creatively and innovate something new that
attract people and business investors who can invest in success of select organization exchange
of different things that may be beneficial for progress of JP Sports Plc.
Internal analysis for determining weaknesses and strengths of chosen company
Value chain analysis-
This model is designed in order to enhance performance of companies and improve their
profitability by manufacturing a good or service that is appropriate according to buyers and for
which they pay more than cost to produce it. This strategic analytical tool highlights bases where
JP Sports Plc can add value for their new and existing consumers (Antimiani, Fusacchia and
Salvatici, 2018).
Primary activities-
Inbound Logistics-
This activity refer to procedure of storing and obtaining raw material and their usage in
production as the importance arises for example when people demand for sportswear especially
during tournament period. JP Sports Plc successfully managed their inbound logistic activities
because they have wide warehouses where workers can store things which production
department can use of manufacture quality items for target buyers who love sportswear and seek
to purchase it from well known brand like chosen one.
Operations-
It refers to procedure of converting raw materials into quality products that people like
and feel attraction towards those item purchases. JP sports collect environmental friendly raw
material from supplier and then transform it into sportswear which turn profitability and
productivity of organization even better. Along with production operation, chosen brand is
capable to manage and handle other ones as well in effective manner which increase their ability
to satisfy target market for longer period of time.
Outbound logistics-
It is associated with distribution of manufactured sportswear and warehousing procedure,
upon which JP sports Plc has to focus in systematic manner because it directly impact on brand
image and profitability of company (Allen and et.al., 2018). Firm is able to deliver their products
on time at specific location or destination where they want, which in return increase their profits
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margin, sales and market share more than other players or companies who are not able to manage
this activity in ethical manner.
Figure 1 Value Chain Model
(Source: Value Chain Analysis, 2020)
Marketing and sales-
This activity plays vital in regard to global expansion strategy success and further
opportunities which JP Sports Plc wants to grab. Organization with the support of their
marketing teams and workers is enabling to generate brand awareness at international level
especially those in Russia where firm want to expand their business in the future. Applicants to
build strong brand image can develop effective marketing tactics and plans that help to drive
people or each buyer towards taking buying decision for JP sports company.
Service-
The weak point of this company is its additional and valuable service and that is after
sale. JP Sports Plc does not provide after purchase services to its consumers which can decrease
their sales and profitability as well as put negative impact on brand image in market. Because of
this weakness organization could not get success in their current strategy as it leads to reduce
chance for successfully expansion into Russian market, where potential buyers are accessible.
Secondary activities-
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Firm infrastructure-
Infrastructure of any organization comprised their departments, functional and
operational units as well as organizational culture that impact performance, productivity and
work efficiency of applicants and business. JP Sports Plc infrastructure is quite good because
each department communicate and collaborate with each other that enhance productivity level
even better. Furthermore, it has a lot of space where manager and leaders with their employees
conduct meeting about further plans, which is quite helpful and important for firm.
Human resources-
JP Sports Plc has experienced and knowledgeable human resource department who are
able to hire and select skilled applicants after identify their abilities, skills level and talent which
in return provide a lot of benefits to company. With this strength organization can recruit new
workers into Russian market who are more talented and able to understand local people needs
and preferences that existing workers could not be capable to do because they are new at that
place.
Technology development-
This activity includes utilize of technology at workplace to increase primary activities
effectiveness in term of value development. JP Sports Plc is not much interested in technological
investment; they invest more in products quality which is also important along with this one as
well. It can be considered as weakness of firm that impact in future on business growth and
success in negative manner. It could not make company able to add value for their buyers.
Procurement-
It relate to buying activities of tools, raw materials and equipment that can enhance
productivity and performance level of companies in ethical manner. JP Sports Plc is able to
purchase quality raw material that is one of its strength, but still it has some weakness that can
impact on its business negatively that is lack of investment in technology development and
implementation. It can also put negative impact on existing plan of firm.
Identification of competitive tactics
Porter’s generic strategies-
The two basic forms of competitive benefits combined with scope of practices and
actions for which a company seeks to gain advantages and achieve set objectives & goals, lead to
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three different genetic tactics. Michael Porter’s generic tactics are a helpful and beneficial
framework that can here use in context of JP Sports Plc.
Cost leadership-
This tactic usually consist of companies efforts to gain excellent market share by
appealing to cost restricted or conscious customers (Kharub, Mor and Sharma, 2019). So, it is the
goal of firms to become low cost provide in its chosen market like Russia. JP Sports Plc can use
this strategy through which they can become global leader by providing low or affordable cost of
products to target consumers. This approach will permit company to sell their items for below or
around average cost for its sector.
Cost focus-
This refers to a company who want to develop low cost benefit, but only within small
market segment. These items can usually be common, vaguely less to average market leading
goods and can be expectable to enough number of buyers to make profitability even better. JP
sports Company will use this strategy because it provide several benefits to firm in term of
gaining competitive edge like increase market share and size as well as profitability rather than
before.
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Figure 2: Porter's Generic (Competitive) Strategies
(Source: Porter’s Generic Tactics, 2020)
Differentiation leadership-
With strategy allow an organization to look to produce product differentiation, but only
within smaller number of market segments. As these firms have determined a small customer
group to concentrate on, they can more effectively appeal to wants and demand of those people
that can companies which is attempt to differentiate for huge population (Li, Zhang and Sun,
2019). JP Sports Plc can consider this method as well which make them able to attract individual
buyer and strengthen firm to retain exiting consumers.
Differentiation focus-
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