Module: Strategic Management

Student Name: M H M ADHIL

Student Number: 21577106

Assignment Name: Individual Strategic Management

Report

Lecturer: Mr Crishain Jayalath

Word count: 3500

 ACKNOWLEDGEMENT

In performing my assignment, it is a success I had to take help and guidance from some
respected people. First, I’m grateful to my lord. Who gives me sound mind and sound health
to accomplish my assignment? And my special thanks to Mr Crishain Jayalath the lecture of
“STRATEGIC MANAGEMENT” of ANC for making the subject interesting and giving a
great support to make this report successful.

Also, I would like to thank my parents for gave me the valuable opportunity of building up
my future.

Further thanks to my colleagues who have been sharing knowledge and helping each other to
clear any doubts.
Table of Contents
ACKNOWLEDGEMENT...........................................................................................................................2
Executive summary................................................................................................................................5
Introduction...........................................................................................................................................6
SWOT ANALYSIS.................................................................................................................................8
...........................................................................................................................................................8
Task 1.....................................................................................................................................................9
Macro environmental analysis – PESTLE............................................................................................9
Political..........................................................................................................................................9
Economic.......................................................................................................................................9
Social...........................................................................................................................................10
Technological...............................................................................................................................10
Legal............................................................................................................................................10
Environmental.............................................................................................................................11
Micro Environmental analysis (External) – Porter’s 5 Forces...........................................................12
Porter’s 5 forces for the external analysis at JD Sports PLC.........................................................12
Micro Environmental analysis (Internal) – Porter's Value Chain / VRIO..........................................14
TASK 2..................................................................................................................................................16
Porter’s Generic Strategy.................................................................................................................16
Cost Leadership strategy.............................................................................................................16
Differentiation strategy...............................................................................................................16
Focus strategy..............................................................................................................................17
TASK 3..................................................................................................................................................18
Strategic Direction...........................................................................................................................18
Methods of expansion.....................................................................................................................18
TASK 4..................................................................................................................................................20
Conclusion.......................................................................................................................................20
References...........................................................................................................................................21

Figure 1 JD Sports Revenue.......................................................................................................6

Figure 2 SWOT analysis............................................................................................................7
 Executive summary

I have been appointed as the strategic consultant at JD sports PLC. Since we are planning to
expand into Asian markets I have selected INDIA as my choice of country. This report
examines the strategic management of JD Sports PLC. This report suggests that India will be
a better choice as India has more opportunity than any other Asian countries. This report will
analyze both Macro and Micro factors as well as internal factors. In this report VRIO will be
used to analyze the strategy for the new country. According to this report it would be
recommended that JD Sports needs to focus on cost leadership in India in order to gain
maximum output and profits.
 Introduction

The company was established by John Wardle and David Makin hence the name JD. JD is
a British sports-fashion retail company based in Bury, Greater Manchester, England,
established in 1981 with a single store in the North West of England, the JD Group is a
leading global retailer of Sports, Fashion and Outdoor brands. The Group now has
approximately 3,400 stores across 32 Countries, with a strong presence in the UK, Europe,
North America and Asia Pacific.Invalid source specified.

Vision, Mission and Values

 Vision: “Connect Globally, Inspire Locally, Empower Individually”

JD strives to inspire the upcoming generation of globally minded consumers through a

connection to the universal culture of sport, music and fashion.

 Mission:

Their mission includes in continuously setting the global standards for retail experience with
the best operations and services, which will lead to a connected consumer experience, and to
deliver the world’s most authentic brands to the market in a very unique way.
  Values: “Entrepreneurial, Competitive, Responsibility and Integrity”

JD believes in extending their entrepreneurial and competitive spirit beyond financial

performance to making the world around us a better place. They always strive to do the right
thing for their colleagues, their customers, and their communities.

JD Sports PLC has been widely recognized for a number of years as the leading Omni
channel retailer of branded and private label Sports Fashion apparel and footwear in the UK
and internationally, which provides customers with a seamless shopping experience with
multiple approach to sales. JD also offers category width, international reach, flexibility and
ability to broaden its appeal to a wider consumer base. (JD SportsFashion PLC, 2022)

Furthermore, the group is Building their position as the platform of choice for the
global sports fashion industry, providing unmatched access to the finest brands, with 3,402
stores, 67,831 average number of employees and 32 territories across the globe. Their
revenue channels consists of stores, In-store devices, Apps, Online and Wholesale.

Revenue: £8,563.0m (according to the annual report (JD SportsFashion PLC, 2022))

Revenue £m
9000

8000

7000

6000

5000
8563
4000

3000 6110.8 6167.3

4717.8
2000
3161.4
1000

0
2018 2019 2020 2021 2022
Figure 1 JD Sports Revenue
However JD Sports PLC had to face some challenges, mainly due to Covid-19. Workers and
customers safety and wellbeing has been, and continues to be, our number one priority.
Social distancing and safety measures were implemented according to the government
guidelines in the countries in which they operate. Further, COVID-19 has affected the supply
chain and expedited our requirement for additional long-term warehousing capacity in the
UK in order to fulfill online orders. COVID-19 remains a pressing issue, with each country
taking a different approach to managing the situation.

As a result, the Board, together with the risk committee is responsible for managing risk in
areas of focus such as Environmental, Social and Governance, Cyber and Health & Safety.
(JD SportsFashion PLC, 2022)

SWOT ANALYSIS

STRENGTHS
WEAKNESSES
trusted suppliers
not much succesfull
quality distribution ouutsiide the main
network business
dominating new new technology needed
markets poor financial planning

THREATS
OPPORTUNITIES
seasonal demands
follows the trend
high raw meterial
market of the costs
youth
new market
high turnover
separate laws

Figure 2 SWOT analysis

 Task 1

“Strategy is the pattern of objectives, purposes, or goals and the major policies and plans for
achieving these goals, stated in such a way to define what business the company is in or is to
be in and the kind of company it is or is to be” (Kenneth, 1980)

A strategy is a process utilized in a business to develop and implement actions and decisions
that will allow an organization to win. It involves planning and implementing strategies that
will help the organization achieve its goals.

Macro environmental analysis – PESTLE

Due to the rapid growth of its economy, India is becoming a major trade center for Asia. It
has the world's second-largest population and is also a developing nation. This makes it an
ideal location for multinational and domestic businesses. Numerous international brands have
started looking for opportunities in India.

Political
Due to the varying political environment in different countries, JD Sports PLC's profitability
can be affected by these factors. Since the company is already operating in multiple countries,
it is important that the company has a comprehensive understanding of the political risks that
are affecting its operations.

Economic
Various economic factors such as interest rates, foreign exchange rates, and labor market
conditions are also taken into account by JD Sports PLC when it comes to assessing the
country's potential. Having a good understanding of the country's environment can help the
company make informed decisions regarding its operations. The country's rapid growth is
expected to provide new opportunities for businesses.
Social
The way people behave and believe in a certain society can affect the culture of an
organization. Understanding this is very important for JD Sports as it allows them to identify
their potential customers and develop effective marketing strategies. Through environmental
and social analysis, the company can also increase the demand for its products.

In order to operate successfully in India, JD Sports has to be aware of the various cultural and
social factors that affect the country's business environment. Aside from the availability of
the labor force, the company also needs to know about the demand for its products and the
local market's acceptance.

The country's massive domestic market is one of the main reasons why multinational
companies are planning on expanding their operations in India. This will allow them to
increase their market share and improve the standard of living of the country's citizens.

Technological
In addition to the domestic market, technological factors are also affecting JD Sports. Some
of these include the availability of technology in certain areas and the disruption of the supply
chain due to technology. Due to the technological advancements that have occurred in the
world, it is very important that the company is aware of these factors during its strategic
planning process.

A comprehensive analysis of the country's technological landscape can help JD Sports

improve its operations and capture the latest trends. Doing so can allow the company to
enhance its innovation process and increase its operational efficiency.

India's information technology sector is expected to grow significantly due to the country's
strong technological capabilities. This will allow foreign companies to invest in the country
and help the country's economic growth.

Legal
The legal aspects of a company's operations are very important in order to develop its
business. In addition to the usual factors such as intellectual property rights and
discrimination laws, JD Sports should also take into account other legal issues such as time
taken to deliver justice and data protection laws.

JD Sports PLC must follow all applicable regulations and rules in every region or country
where they operate. Foreign brands such as JD Sports can benefit from flexible regulations in
these countries.
Environmental
Due to the increasing importance of sustainability, the government has started implementing
regulations and rules in order to ensure that businesses follow the environmental standards.
Some of these include establishing laws that regulate pollution, limiting carbon footprints,
and implementing insurance policies that are focused on sustainability.

The increasing number of eco-friendly products and the process involved in them have made
a huge difference in the supply and demand of goods in India. This has prompted companies
to rethink their strategies and adopt new methods. Also, the unpredictable weather patterns in
the country can affect the operations of their infrastructure.

Industrialization has been a concern for India due to the negative effects of industrialization
on the environment and human safety. This has led to the establishment of regulations that
encourage companies to adopt sustainable practices.

The PESTLE analysis is a tool that helps companies identify and improve their
environmental performance. It involves a detailed analysis of the various factors that affect
their business environment. Each of these factors has an impact on the company's strategic
decision-making process.

According to the PESTLE analysis, the Indian market has great potential for JD Sports. This
is because the company can adopt the country's external factors and improve its strategies.
Micro Environmental analysis (External) – Porter’s 5 Forces

Porter’s 5 forces for the external analysis at JD Sports PLC.

1. Threat of new entrants –

The entry of new retailers will lead to various changes in the retail industry, which will put
pressure on Jd Sports Plc. The company has to develop effective strategies and implement
new value propositions to maintain its competitive edge.

 The company has to spend a lot of money on research and development to

maintain its competitive edge. This will allow it to continue developing new
products and improve its customer service. New entrants are less likely to
succeed in a dynamic industry if the existing players keep setting high standards.
 New products not only bring new customers to the company, but they also
encourage old customers to buy JD Sports' products.
 By building economies of scale so that it can lower the fixed cost per unit.

2. Threat of substitute products and services –

When a new product or service meets the needs of a similar customer in a different way, it
can affect the profitability of the company. For instance, services such as Pepsi and Coke are
not only substitutes for traditional beverages, but they also pose a threat to the industry's
existing offerings.

 By understanding the core need of the customer rather than what the customer is
buying.
 By being service oriented rather than just product oriented.
 By increasing the switching cost for the customers.

3. Bargaining power of suppliers of JD Sports PLc –

Most companies in the Retail industry rely on suppliers for their raw materials. If the
dominant players in the market are able to gain a huge market share, they can reduce the
margins JD Sports PLC. Can earn. Powerful suppliers in the Consumer Services sector can
use their bargaining power to increase their prices, which lowers the profitability of the
company. Some ways JD Sports PLC. Can take advantage of this power.;
  By developing dedicated suppliers whose business depends upon JD Sport PLC.
 By building efficient supply chain with multiple suppliers.
 By experimenting with product designs using different materials so that if the prices
go up of one raw material then company can shift to another.

4. Bargaining power of buyers of JD Sports PLC –

Most buyers prefer to pay the lowest price possible in order to acquire the best products. This
can put pressure on JD Sports Plc.'s profitability. The company's smaller and more powerful
customer base is known as JD Sports Fashion Plc., and this group's customers are more likely
to seek out higher discounts and offers. Here are some ways the company can address this
issue.

 By building a large customer base, it can help the company reduce its bargaining
power with its potential buyers. It can also provide an opportunity to improve its
sales and production processes.
 By constantly developing new products, JD Sports can keep improving its offerings
and reducing the bargaining power of its customers. This strategy can help the
company attract more potential customers and keep its sales growing.
 New products will also reduce the defection of existing customers of JD Sports Plc. to
its competitors.

5. Rivalry among existing players –

An intense competition within an industry can lead to the reduction of prices and the overall
decline of the business. This can affect the long-term profitability of a company. JD Sports is
a part of a very competitive retail industry. The company can address this issue by
implementing various strategies.;

 By building a sustainable difference

 Building scale so that it can compete better
 By collaborating with competitors to increase the market size rather than just
competing for small markets.

Through an analysis of the five competitive forces of JD Sports Plc., the company's managers
can identify areas of their operations where they can improve their profitability. They can
also capitalize on the opportunities that are presented by the changing trends.
Micro Environmental analysis (Internal) – Porter's Value Chain / VRIO

The internal resources of JD Sports Plc. are analyzed in order to determine if they can sustain
their competitive advantage. The VRIO Analysis also explores the possibility of improving
these resources to increase their competitive advantage. The findings of the study are then
summarized to determine if these have an unused or temporary competitive advantage, a
competitive disadvantage, or a competitive parity.

The 4 key criteria for achieving competitive advantage (VRIO)

Valuable

 The VRIO Analysis found that the company's patents are valuable resources that can
be used to sell its products without facing competition. This helps JD Sports Plc.
increase its revenue.
 The findings of the VRIO Analysis reveal that the financial resources of JD Sports Plc
are very valuable. They can be used to invest in opportunities that are available to
the company. They can also help the company combat external threats.
Rarity

 The employees of JD Sports Plc are a rare resource that the company can rely on.
They are highly skilled and have the necessary skills and training to succeed in their
field. The company's favorable work environment and compensation also help
prevent these individuals from leaving.
 Unfortunately, the distribution network of JD Sports Plc is not as strong as that of its
competitors. This is because it takes a lot of time and investment to establish a
better network than those of other companies.
Imitable

 Jd Sports PLC's financial resources are expensive to imitate. These have been
acquired through years of profitable operations, which makes it difficult for new
entrants and competitors to copy.
 The lower cost of doing business compared to what other firms pay for the
employees of Jd Sports Plc is because other companies can train their workers to
improve their skills. These firms can also hire those from Jd Sports Plc by providing
them with better work environment, compensation packages, and benefits. In the
future, competition will likely be able to take advantage of these advantages.

Organization
  Jd Sports PLC's financial resources are strategically placed to capture value. They are
used to make acquisitions and invest in the areas where they can gain the
advantage. This ensures that they are able to sustain their competitive advantage.
 An organized distribution network is a vital part of Jd Sports PLC's operations. It
enables the company to reach out to its customers and provide them with the best
possible service. These resources allow it to maintain its competitive advantage.

The VRIO analysis of Jd Sports PLC revealed that its distribution network and financial
resources provide the company with a competitive advantage. However, its employees have a
temporary advantage due to the company's patents. Finally, the cost structure of the company
is a competitive disadvantage. (JD SportsFashion PLC, 2022)
 TASK 2

Porter’s Generic Strategy

Cost Leadership strategy

The cost leadership strategy of JD Sports PLC involves identifying and implementing cost-
cutting measures to increase its competitive advantage. This is the main generic approach
used by the company in its operations.

Through its distribution network and financial resources, JD Sports PLC can easily compete
against Cole Haan, a global company that manufactures and markets various products such as
shoes, bags, and wallets. According to the (anon, 2022) competitors of JD Sports Cole Haan
has the lowest cost of $359.4m (FY, 2019) whereas JD Sports has a cost of good of £3.8b
(FY, 2022)

Differentiation strategy

One of the most common generic strategies used to gain a competitive advantage is
differentiation. JD Sports PLC utilizes this approach by combining its extensive product
portfolio with a cost leadership strategy to achieve its goals.

JD Sports will be able to compete against companies such as Skechers, which makes and
markets various types of footwear for both men and women. These include performance and
lifestyle shoes. (anon, 2022)
Focus strategy

Another generic competitive strategy that is commonly used is focus. This allows companies
to focus their resources on expanding their market segments. When they adopt this strategy,
they establish a strong competitive advantage by focusing on niche marketing. For instance,
by focusing on premium taste and quality, JD Sports PLC can easily compete against other
companies.

Although it will be able to compete against other companies such as Nike, JD Sports PLC has
to use different strategies to overcome its competitors, such as those from the retailer,
Zumiez. This business mainly focuses on action sports such as snowboarding, skateboarding,
and motocross.
 TASK 3

Strategic Direction

It is very important that the company's strategy is carried out properly in order to ensure that
it can continue to provide its services and products to the Indian market. This will allow it to
align itself with the country's economic conditions. However, the Trade Administration of
India has warned that the company's sales may be affected due to various factors.

It is very important that a company provides its customers with the best possible service and
products. Doing so will allow them to become profitable and avoid experiencing rapid
growth. Another important factor that a company should consider is improving its sales in
India.

One of the most effective ways a company can do this is by implementing JD's practices in
the country. This will allow it to increase the level of comfort that its customers feel when it
comes to buying. In-depth studies should also be conducted on the various characteristics of
its potential customers. These include their age, gender, lifestyle, and an acceptable distance
from its stores.

By conducting these studies, a company can then be able to provide its customers with the
best possible products and services. This will allow them to have a more comfortable
shopping experience.

Methods of expansion

The success of JD’s entry into India's sportswear market depends on the various methods that
it uses to develop its offerings. According to an analysis of the company's strategy, the first
step is to establish a strong and differentiated product line that will cater to the varying needs
of the country's consumers. The company should also look for new partners and develop e-
commerce platforms.

E-commerce is becoming more prevalent in the country, which is very important for JD
Sports as it allows them to expand their reach and avoid potential risks.
One of the most important factors that JD Sports should consider when it comes to
establishing its presence in India is the establishment of a strong and differentiated e-
commerce platform. This will allow the company to create a competitive advantage and
expand its reach in the country. Besides this, the company should also look for other ways to
enhance its presence in the country. One of these is by partnering with local retail chains.
This will allow the company to establish a strong and differentiated brand presence.
 TASK 4
Conclusion

In order to conclude, through this acquisition, the company will be able to become a leader in
its new location. It will also increase its profitability and mitigate potential risks.

To effectively address the various issues that affect the operations of JD Sports in India, the
company should conduct a comprehensive market research study and look into the social
factors that affect its business. It should also find new partnerships that will help it grow its
online sales.

The entry of JD Sports into India's sportswear market is considered to be a highly profitable
project. Since the company has the necessary resources and distribution channels, it can
easily achieve a great success in this country. However, it will be very challenging to
establish a successful brand and address the country's needs while also developing a
diversified product line.

As a result, the company will become a leader in another location, which will also increase
profitability and mitigating potential risks from political or economic conditions.
 References
anon, 2022. craft. [Online]
Available at: https://craft.co/jd-sports/competitors
[Accessed 25 sep 2022].

JD SportsFashion PLC, 2022. annual report and accounts 2022, US: anon.

Kenneth, A., 1980. The Concept of Corparate Strategy.

Rajiv , L. & Shinoj, K., 2021. Practical Law. [Online]

Available at: https://uk.practicallaw.thomsonreuters.com/4-500-8980?
transitionType=Default&contextData=(sc.Default)&firstPage=true
[Accessed 1 October 2021].