Strategic Management Assessment: JD Sports PLC Case Study Report

This report provides a comprehensive strategic management analysis of JD Sports PLC, a British sport-fashion retail organization. The introduction outlines the importance of strategic management and sets the stage for examining JD Sports' business operations. The main body of the report includes an external environmental analysis using PESTEL and Porter's Five Forces, assessing political, economic, social, technological, environmental, and legal factors, as well as competitive forces. An internal environmental analysis employing the VRIO framework evaluates the company's resources and capabilities. The report then identifies competitive strategies and discusses strategic directions and methods of expansion. The analysis considers various challenges faced by JD Sports, such as competition, sales and profit margin reductions, and customer base fluctuations due to the COVID-19 pandemic. The conclusion summarizes the key findings and insights into JD Sports' strategic approach, offering a detailed overview of the company's strategic positioning and its ability to navigate the dynamic retail environment.

Strategic Management

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
External environmental analysis..................................................................................................1
Internal environmental analysis...................................................................................................4
Identification of competitive strategies.......................................................................................6
Strategic directions & methods of expansion..............................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Strategic management is the strategic use of a business resource to reach business enterprise aims
and goals. Strategic administration requires reflection on the processes and actions within the
enterprise and exterior aspects that may impact how the venture functions. It include
establishment of aims, analysing the rivalry environment, determining the interior analysis,
assessing strategy and assuring that ammonisation rolls out the strategies across the firm. To
make sure the decision making process, it is crucial that strategies in place to support the
business divisions and operation. For the completion of this assessment, JD Sports PLC is the
company which is considered. This venture more commonly acknowledged as JD Sports or JD
and it is a British sport- fashion retail organisation (Ansoff and et. al., 2018). This venture was
incorporated in 1981 and is headquartered in Bury, Greater Manchester, England. The particular
firm operate its business globally in different nations like UK, Europe, US, Australia and Asia.
There are approx 32,130 people are employed by the establishment and they contribute in
running the business of company in effective manner at global scale. There are diverse kinds of
challenges faced by the respected venture at global scale in term of competition, reduction in
sales and profit margins as well as customer base due to corona virus pandemic. This report will
consider information about the strategic techniques which are utilised through the management
of a company of firm. It will include the aspect of compare theory and activities to compare the
models that make their involvement in effective administration of organisation.
MAIN BODY
External environmental analysis
PESTEL analysis
It is a technique that is utilised and executed to analyse and monitor the macro
environmental aspects that may have a philosophical impact on a company’s performance and
business operations. This tool is especially beneficial to administrate and manage the business
actions and operations of an organisation when macro atmosphere components influence the
venture (Makadok, Burton and Barney, 2018). It is often used in compare to other analytical
business techniques such as VRIO analysis and Porter’s five forces to offer a clear
acknowledgement of a situation and liked external factors. By the execution of this framework,
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the administration of the firm likes JD Sports PLC can analyse the influence of external aspects
over its commerce. The explanation of it as under:
Political- This aspect include different factors such as administration intervation, political
stability or instability, trade restriction, taxation policy and many more. In context of JD sports,
the company operate its business internationally, it requiring keeping a tab on the changing
political situation, in all countries it operates (Hitt, Ireland and Hoskisson, 2016). Free trade is
one of the key and important factor which positively affect the firm in context of operating its
business in Thailand. This assist he firm in term of making running its business effectively.
Brexit is other aspect which create an unfavourable impact over its business expansion as the
national authority of country develop new rules and policy and make alteration in its existing
rule which might up and cause to maximise and minimise the sale.
Economical- It consider financial growth, interest rate, currency rate, inflation and
deflation, employment or unemployment rate and many more related to the economy. Brexit is
the key aspect due to which the business of JD Sports influences highly in negative form. Due to
which the suppliers and providers increase the cost of materials that create influence on the
financial system of particular venture. However in Thailand, in many cities say this low rate of
unemployment is mostly due to that act that there is no incentive for anyone to remain jobless for
long. This will create an opportunity for respective venture to hire skilled workers which make
contribution in running the business and make development in economy of firm.
Social- This factor of particular analysis include population trend such as population
development, age allocation, income distribution, safety emphasis, lifestyle attitudes, cultural
barriers and taste & preferences of consumers. Cause of several social changes, trends that
customers in the Thailand have moved towards brand and they are brand conscious (Meyer,
Neck and Meeks, 2017). Thus JD Sports has highly focused on the quality of products so that it
can retain its targeted people in more effective manner.
Technical- It consider to technical inducement, the level of innovation, automation,
advance technology, research and development process, technological changes, artificial
intelligence and technical awareness. JD has been experimenting with different factors of
retailing and has accomplished some quantity of development in a few demeanours. The online
shopping and social media advertisement etc. is all a section of influencing the customer, by
providing different technical advantages. In addition to this, the particular enterprise has also use
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effective technology in supplying products and services across the world. Thailand is also a
leading Southeast Asian nation in the utilisation of social media, Facebook, YouTube and many
more in context of its promotion activity.
Environmental- In it, environmental factors are included such as weather climate,
environmental offsets and weather change etc. In addition to this, it also considers ecological act,
pollution act and many more. In present time, the organisation has launched its remove,
minimise, reuse and recycle plan (Hanson and et. al., 2016). The establishment has commenced
diverse initiatives to take away and reduce all the non-recyclable material in its packaging. Also,
the firm work regarding sending messages to the consumers about weather change and make
them aware about their ecological friendly commodities.
Legal- It includes diverse laws and regulations that are devised and regulated by the
government of countries for efficient operating of business enterprises. Cause of present problem
of corona virus pandemic, there are different sort of modifications are made by government in
existing laws as well as developed new laws in context of it. Along with this, the administration
of JD Sports adequately consider equality, health & safety, discrimination and many more in
context of bias regarding age and gender that get overcome in the working environment culture.
Porters five force analysis- JD Sports also utilizing Porter’s five forces model to
make understand how their sales is affected by the five forces. The five forces of JD Sports are
as follows:
Threats of new entrants: Since JD Sports is in the Retail business, it is in continuous fear
of the latest competitor of the market. This fear is handled by comoany by continuous upgrading
its assistance and releasing new goods. The organization is also pleased by resources of level that
newcomers don’t enjoy. Respective enterprise has savings to pay out on investigation for new
invention of product and make better their standard.
Bargaining power of suppliers: The organization which provides raw stuff to the
company have taken a big part since if they proceed to realize about the organization’s leaning
on them then they can alter their desires in costs (Trigeorgis and Reuer, 2017). JD Sports handles
the contract ability of its providers by enhancing their list of providers, obtaining limited power
from providers to provide raw stuff to them and investigating new goods from various raw stuff.
Bargaining power of buyers: Purchasers require goods value more than what they are
paying. The ability of the purchaser depends upon the foundation of the consumer. JD Sports
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handles this issue by obtaining vast consumers from various sections and locations and by
expanding the goods specification so that purchasers have more choice to purchase. By doing
this, the organization improves its consumer support of vast reach and many goods handout to
them.
Threats of substitute products or services: Consumers will locate alternative goods, which
may satisfy their needs in the same procedure (Nickols, 2016). JD Sports reduces this warning by
shaping assistance more significantly than goods, by placing them in such a manner that
consumers may have to pay more if they go for an alternative item.
Rivalry among existing competitors: Competition between the corporate competitors often
shows in decrement in income. JD Sports can reduce this by pleased resources of scale, brand
equity and better consumer relationship management.
To tackle new entrants, Jd Sports Fashion Plc can give priority to innovation to transform its
items from that of its competitor. It can pay out on the marketplace to set up powerful brand
naming. This will assist it to keep its consumers rather than overlook them to existing
competitors. The respective firm can buy raw stuff from its providers at a lower price. If the
price or goods are not good for company, it can then make contact to its providers for tackling
the bargaining because switching costs are less. Establishment can take benefits of its resources
of scale to grow a cost benefit and put up for sale at less costs to the low-income purchases of the
corporate. This plan will be capable to attract a vast number of purchasers and tackle the
bargaining. The particular firm can concentrate on giving the best standard of its goods to tackle
substitute products. As a result, purchasers would select its goods, which give best quality at a
lower cost in comparison to alternate goods which give best quality but at a higher cost. Jd
Sports Fashion Plc requires it to concentrate on identifying its goods so that the activity of
opponents will have minimum effect on its consumers who search for its unique goods.
Internal environmental analysis
VRIO analysis- It is a capability analysis framework that verifies on what basis organisation
abilities might be the sources of sustainable competitive advantages and higher income execution
(Dvorský and et. al., 2020). The particular analysis o respective firm will look at each of its
internal assets one by one to assess whether these provide sustained competitive benefits. The
explanation of this model is as below in reference to JD Sports:
Resources Valuable Rare Inimitate Organisable
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Financial assets Yes No No No
Human resource Yes No No No
Distribution
network
Yes Yes No No
Patents Yes Yes Yes Yes
Valuable- JD Sports demonstrates that the financial assets of respective firm are highly
valuable as these assist in investing into external opportunities that arise. These also enable the
specific venture in combating exterior risks. Along with this the human resource of the company
are also valuable as they make their effective contribution in production of quality products of
JD Sports (Engert, Rauter and Baumgartner, 2016). They are also loyal and retention levels for
the company are high. Its patents are valuable assets as these permit the company to sell its
commodities without rivalry interference. These outcomes in greater profit for respective
venture. Distribution network of the company is also a valuable resource which assists in
reaching out to number of target audiences.
Rare- The monetary resource of JD sports are found to be rare as per to the particular
analysis of JD sports. Strong fiscal assets are only owned by a few organisations in the sector.
The patents are a rare asset as found out by the respective firm VRIO analysis. These patents are
nor accessible in easier manner are not hold by the rivals. The distribution network of respective
firm is a rare source as rivals would need a lot of investment and time to come up with an
effective distribution network.
Inimitate- The financial assets of JD Sports are hard to imitate as these resources have
been obtained by the establishment by extended earning over the years. Along with the
workforce and employees are also costly to imitate as each person has unique skills and abilities
along with the venture also provide training develop their competencies. The establishment also
recruit workers by providing better reimbursement packages, effective working environment,
advantages, development opportunities and many more (Ethiraj, Gambardella and Helfat, 2016).
Patents are also difficult to copy as it is not legitimately permitted to copy a patented good. Also,
distribution network is costly which also not imitate by small venture as it require huge amount if
they are to copy a similar distribution system.
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Organisable- The monetary assets are organised to capture values as these assets are
utilised to invest in the right place, making utilisation of opportunities and skirmishing risks. The
patents of JD sports are not well managed as the company is not utilising these patents to their
full potential. The unused rivalry benefit exits that can be modified into a sustainable competitive
benefit if the venture begins selling patented commodities before the patents expire (Bindra,
Parameswar and Dhir, 2019). The distribution network and human resource of respective firm
can be organised by using effective management plan and strategies to reach out consumers and
running the venture in effective manner respectively as well as sustained competitive benefits.
Identification of competitive strategies
Porter’s generic strategies- This model was developed and framed by Michael Porter in 1980.
The concept explains how the business organisations can pursue a competitive edge through
selecting the accurate plan of action. The concept centres on three main strategies such as cost
leadership, differentiation and focus. The brief description of these strategies in reference to JD
Sports is as under:
Cost leadership- This strategy considers earning competitive benefits through lowering the
cost. It is the main generic strategy that JD sports utilises in diverse customers markets. The
basic purpose of utilising this strategy is to protect the market leadership position by effective
value chain administration. This plan of action and tactics permits the respective firm to expand
the market share through targeting the middle class that makes the wide proportion of overall
customer market. In Thailand, the middle class customers basically place high significant to the
pricing aspect and cost leadership is the effective tool to cater the demand of this section of
target people. Along with this, the respective firm concentrates on affordability and easy
availability of its production crosswise the world that directs regarding high brand awareness and
high sales development and offers an immense rivalry benefit basis (Hitt and Duane Ireland,
2017). In addition to it, the respective firm can charge low costs by lowering manufacturing cost
and increasing supply chain effectiveness, JD sports can provide offers and discounts as well as
coupons to accomplish sales targets and deal the competitive pressure through its nearest
competitive.
Differentiation- It is another most ordinary utilised generic strategy to make a rivalry
benefits. The management of respective organisation uses differentiation in combination with the
cost leadership strategy to make development in the business. By adopting this strategy the
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respective venture can expand its number of customers by highlighting over the unique product
attributes. By implementing this tool, the firm can make innovation and address the customer’s
developing health concerns. For example, the management of firm of respective organisation has
enlarged its commodity line after examining customer’s changing perceptions and interests to
differentiate it from rivals and expand the scope of opportunities in the particular sector. This
will assist in retaining as well as building a strong and faithful consumer base (Bettis and et. al.,
2016). As having extensive experience, the old brand and strong presence in across the globe are
some differentiation factors that are underlined in the establishment’s marketing and
communication plans of action. The unique and distinctive logo of the company is another aspect
which differentiates the brand as well as assists in making a strong brand image in consumers
mind.
Focus strategy- It is the final and third generic competitive strategy that empower ventures
to make focus on their resources in term of expanding the scarcely targeted sections. When
organisations accept the focus strategy then they can serve specific market segments and base
their rivalry benefits on niche marketing. This strategy can be adopt and consider by venture in
both terms of cost and leadership focus. In JD sports, the venture can consider cost focus to fulfil
the demands of a niche market segment at lowest potential; cost. Whereas leadership focus is
adopted by highlighting over the taste, size and design of the commodity that could best match
the customer’s demand and necessities. JD Sports can changes its branding strategies and makes
constant modifications in the product designing and packaging to fulfil the psychological
expectations of consumes and increase value of finance.
From the defined information, it can be analyse that cost focus is an effective strategy
which can be considered by the management as it has outlined several advantages that are
provided by this generic strategy like, gaining quick brand recognition, increasing number of
consumers, empowering consumption and accomplishing sales targets through highlighting ver
commodity’ affordability and availability (Durand, Grant and Madsen, 2017). Although, the
determination of JD Sports competitive benefit plan of actions underline cost leadership as the
key strategy in context of earning more competitive edge, enhance customer base and improve
profitability in term of expanding business in particular nation.
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Strategic directions & methods of expansion
Markets- JD sport plc is a retail and garment sector firm which operate its business in this
particular market industry. JD Sports is sport fashion retail organisation based throughout the
UK. In context of market, the STP framework can be considered in context of it. In segmentation
phase, demographic segmentation can be used in JD sports in easier manner. The respective
venture identifies government reports in order to demographic segmentation of developing
nations. The will target the people and group of individual as per to their age, gender and life
cycle phase (Wan and et. al., 2019). The particular firm target people among the age of 11-40
years old, with high attention regarding teens in respect to make long term loyal consumers. In
term of targeting, JD sports will have a niche market to serve in Thailand. Establishment should
target professional athletes and people from upper middle class and elite class. As individual
from this social economic class are really distressed about their health and prefer to spend some
hours of the day in exercise. JD Sports should position itself in the market as the market leader of
sports equipment, offering sports apparels and shoes from top brand with high quality and
creative technology under one roof at reasonable and competitive price.
Products- JD sports is international retail sector organisation of fashionable branded and
own brand sports and casual wear considering international brands like Nike, Adidas, Puma and
The North Face with own brand labels like Pink Soda and Supply & Demands. The
establishment’s sports fashion brands consider JD, size. Chausport, Sprinter, Sports Zone, Perry
Sport and Aktiesport, Glue, JD Gyms and Finish Line. Its outdoor brands consider Blacks,
Millets, Tiso and Go. Under these brand company offer fashionable and casual sport wear,
footwear, outdoor apparel, children wear and equipment etc.
Services- The administration of respective company offer online shopping service to its
target audiences so that they can take the benefits of the products and services in effective
manner (Pozdnyakova and et. al., 2017). In context of it, the organisation use delivery services
through DPD, DHL, Skynet and DPEX depending in the weight and value.
Ways of business expansion
There are number of ways and methods which can be used and considered by the
administration of respective venture in context of expanding and operating its business in several
nations. The description of some of them is as under in context of JD Sports:
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Exporting- It is the instant sale of commodities and services in another nation. It is
potentially best understood way of entering in to an another nation and less risk (Ansoff and et.
al., 2018). It may also be cost effective as the particular venture will not require investing in
production services as all the goods are still manufactured in domestic nation then sent to foreign
nations for sale. Moreover, increasing transportation cost are likely to maximise the value of
trading in the near future.
Licensing- It permits other company in the target nation to utilise the resources. The assets
in question are basically intangible like trademarks, production tools and patents etc. It will pay a
free in context of to be permitted the authority to utilise resources. This way of business
expansion need very less investment and can offer a high return on investment. It will also take
care of any production and marketing value in other market.
Joint venture- It includes of two nations setting up an equally obtained business. One of the
owners will be a home to the aboard market (Makadok, Burton and Barney, 2018). The two
ventures would then offer the new business with the administration group or management of
joint venture.
In context of JD Sports, it can be suggested that, the management can consider exporting as
it offer key advantage that online promotion creates it cost effective and assists in establishing
direct customer relations and improving its profitability.
CONCLUSION
This has been summarised from the above defined data that strategic management is an
activity and procedure of setting up goals and establishing targets, analysing competitive
environment, determining internal administration, assessing plans and ensuing that management
roll out plan of action across the venture. By using effective framework like PESTEL, VRIO,
Porter’s five forces and generic strategies, the firm can determine external, internal and
competitive environment of business. Effective ways of expansion also assists in exploring the
business of venture in effective manner.
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