Strategic Analysis Of Jd Sports

Introduction

This report addresses the internal operating environment as well as the external operating environment of chosen retail organization JD sports in the UK. This organization has been effectively marking its presence in the market for 40 years. This organization has excelled in selling sportswear accessories with annual revenue of 6110.8 million pounds (Global.jdsports.com, 2021). It comes with a net income of 250.7 million pounds in 2020 (Global.jdsports.com, 2021). The employee base has exceeded numbers of 34885 in this case. Strategic analysis of this organization is going to be presented in the report that will contain SWOT, TOWS analysis as well as micro and macro environment information of this organization. There are highlights presented on the target customers, age groups, and megatrends associated with the strategic development of this company. Frameworks such as deeplist and market analysis have been essentially addressed in this discussion. The appropriate uses of strategies for engulfing the 40% market share of the fashion retail industry can be analyzed here, which may also assist those seeking marketing dissertation help in understanding practical applications of theoretical concepts.

Internal operating environment

SWOT analysis can be conducted for understanding the internal operating environment of this organization. There are highlights on strengths and weaknesses for this case of JD sports [Refer to appendix 4]. The swot table is:

External operating environment

TOWS summary

Use of analytical framework

1. Megatrend

Deeplist framework

Demographics

The main focus of this organization is associated with people of the UK that are typically the youth, who follows the latest trend of sports and activewear along with celebrity-inspired clothing (Alford, and Greve, 2017). These are people of age 11 to 40 years and most of them are employed or they are students. Competitive pricing was kept for both men's and women's clothing.

Economic

Inflation, banking rates, and unemployment rates are fluctuating in the UK. 1.74%, 0.1%, 5.52% are the current values respectively. The exchange rate of the country is 1 pound equals 1.425 USD. These factors are international (Johnson et al. 2017). However, the instability in currency and current norms of investment are discouraging the investors

Environmental

The UK is engaged in several environmental safety acts such as environmental law 1974 and controls waste management. Hence, the organization JD sports have to take a pledge to at least reduce their packaging wastage up to 5% by the year 2021.

Political

The Brexit laws of the UK are tremendously leaving an impact on the GDP of the country. This prevents many business ventures with organizations like JD sports in this country. Effects of Brexit have caused a reduction of 2.5% of the GDP (Johnson et al. 2017). Brexit results have lowered the income of the UK by 0.6% and 1.3%, which impacts the overall sales of the organization as during recession people will not spend money on unnecessary clothing purchase.

Legal

Stricter implementation of intellectual property laws are affecting the business of this organization, institutions like JD sports are failing to protect their customer privacy with age-old infrastructure and they are losing their customer base and the government is taking stricter actions against them which hamper s business.

Informational

Selling online of products engages in overall information gathering of customers in terms of email, credit card information, and CVV. As per the rules of GDPR, these should be strictly protected and the data should only be used as a part of purchasing by customers (Lynch, 2018).

Social

Corporate social responsibilities are carefully connected with market improvisation and becoming aware of distribution standards. The target market's interest and priorities are judged by JD sports, in this case, these are the youth of the nation that is practicing social media trending fashion [Refer to appendix 1.

Technological

Most people are using electronic devices and to avoid a queue people are looking forward to online shopping and payment options. Hence, JD sports have to develop strategies to give competition as their virtual try it on modes available on some websites (Wauters, 2019). These features are making it a great choice for youth and degrading the chosen organization’s competitive advantage.s

2. Macro-Environment

PESTLE

3. Microenvironment

Market analysis is identified as an essential medium of conducting the strategic analysis of chosen organization JD sports.

Wealth of people

After a pandemic situation, there is not much cash in hand for people to spend on unnecessary clothing. Most youths are targeted that are either students or self-employed. Hence, it is clear that JD sports are practically not focusing on higher income groups. However, the average product range starts from $11 to ensure affordability [Refer to appendix 3].

Age of target customers

Most of the target customers are of the age of 11 to 40 years (Global.jdsports.com, 2021). This age group likes to experiment with their clothing and activewear. Sportswear has never been fashionable before like this era. Celebrity influence is leaving an impact on this age group to work out and maximize their wardrobe goals.

Competitors

Some competitors are Sports direct, Decathlon group, Academy Sports, outdoors, footlocker, Under Armour, and Zumiez. However, JS sports have managed to generate a revenue of $8.6Billion. JD sports believe in the reinvestment of profit for disruptive technologies. Engaging in recycling and waste management is expected to give strategic improvement to this company.

Local regulations

Local regulations are associated with business optimization and economic output was 97.0 billion in 2020, which is 5.2% of the UK’s total sales in lockdown situations (Global.jdsports.com, 2021). Non-essential retail stores are found out as selling less than the essential ones as per the norms of quarantine. Delivery restrictions during the pandemic situation had become a major cause of sales reduction for JD sports.

Performance training

Performance training has become essential in terms of managing the customers on a quick note and addressing the customer concerns by 24*7 through technical support. Uses of new HRM software and total quality management software will require the hiring of IT experts and training should be given to existing staff for managing all these changes.

Key findings

This organization has an operating income of 516.9 million pounds as per the data of 2020. Market share in the UK in 2018 was gained by 25.6% by JD sport, which is massive [Refer to appendix 2]. In 2019, this was marked to 40% in UK in terms of market presence (Wauters, 2019). Hence, the growth of this organization is clear with their vision statement of “Smoother shopping experience with a mobile point of sale” is adjusted. This is quite an example of online sales growth as well as offline sales. The brick mortar presence of this is quite improved and global acknowledgment is identified in Australia and Singapore. The target consumers are teens for creating long-term loyalty and this is quite an improved strategic direction.

Conclusion and strategic recommendations

This study has focused on the alignment of strategic behavioral analysis of JS sports. All this process is conducted with competitive analysis factors categorized in internal and external formats. Some strategic recommendations for JD sports are:

JD sports should focus on business outside the core ones and invest ineffective management of the business as clothing is business hit hard during a pandemic

Going for omni-channel business can be advantageous for organizations like JD sports

The elevated marketplace is built for a long term collaboration creation in the international market is seen

Engaging in strategic employee management and workplace cultural diversities should be considered

Consideration of agile methodologies for production and delivery is essential

Taxation considerations and rethinking financial policies can help improve JD their performance as 475 million pounds profit was generated before tax

References

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Johnson, G., Whittington R., Scholes, K., Angwin, D. & Regnér, P. (2017), Fundamentals of Strategy (4th ed) Harlow: Pearson

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Lynch, R. (2018) Strategic Management (8th ed) Harlow: FT Prentice-Hall.

Wauters, R. (2019) Strategic Management in the Public Sector and Policy Making: Friend or Foe? Brussels: European Commission Publications.

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