INDIVIDUAL STRATEGIC MANAGEMENT REPORT

Executive Summary
The primary goal of this report is to give the board of directors an in-depth understanding of why
JD Sports PLC, a UK-based retailer, must grow into the Asian market. It will concentrate on
offering the best strategic direction for the company's global expansion as well as developing
techniques to help them get a competitive edge and achieve its strategic objectives. It starts with
a review of external environmental analysis to identify opportunities and threats. Micro (PEST)
and Macro (PEST) (5 Forces Framework for analyzing industry structure and competitive
character). In order to determine strengths and weaknesses, the report includes an analysis of the
internal environment VRIO framework. Analysis of competitive strategies (Porter's Generic
Strategies) and why they are important for JD Sports' performance, as well as how they would
affect the company if they build a shop in the Hong Kong financial markets. Furthermore, the
business's strategic orientations (Markets, Products, Services) as well as methods of
development, as well as the existing tools it employs in its UK shops or what it would bring to its
Hong Kong stores if it chooses to establish a presence there. At the end of the report, it will
summarise significant findings from the study and make suggestions to ensure that the
company's decision to build a shop in Hong Kong is the appropriate one
Introduction
The strategic management process could be broken down into two parts: strategy formulation
and strategy implementation. Management must prepare ahead of time how a firm would be run,
laying forth a detailed business strategy that will boost profitability. Organizations that focus on
strategy have a better financial performance than companies that utilize it as a secondary way
and prioritize other things. In this study, I will discuss JD Sports PLC's expansion into the Asian
market, including its entry into Hong Kong, as well as the best strategic approach for JD Sports'
worldwide expansion. Developing strategies which will aid in the creation of competitive
advantages and the achievement of strategic goals. JD Sports, a retail enterprise that sells stylish
brands, sports as well as casual apparel, was started in Bury, Greater Manchester, in 1981
(JDPLC) by John Wardle and David Makin. JD Sports employs 48,852 people across 2,420
locations in 18 countries. JD Sports offers a variety of services, including apparel stores, internet
shopping, and a gym. Hong Kong is among the world's most densely inhabited places and the
world's third-largest international financial center, benefiting from cheap taxes and free trade to
have the highest per-capita income around the globe.
COVID-19 is one of JD Sports' most significant difficulties in 2020; shop closures are harming
the company's net earnings and also worker employment, which is impacting the retail apparel
industry. A fourth of JD Sports stores are negative, indicating that the company is receiving
negative feedback from its customers. Another of the customers has filed a county legal
judgment against the company for £144 (doing business), which would remain on the company's
record for six years, affecting their credit score as well as possibly risking their ability to obtain
additional credit or apply for new leasing.
External Analysis
PESTLE Analysis of JD Sports
Political Factors
The political factors which would have an influence on the profitability or chances of survival of
JD plc are numerous. Political hazards range from abrupt changes in current political systems to
civil unrest to key government choices. Political considerations that occur/affect not just the
home nation, as well as all nations that include commercial activities or may participate in
commerce with it, may be included in the case of probable multinationals.
Before making any investments in the foreign market by JD plc, the following elements must be
addressed to accurately assess the level of the overall systemic political risk which may be
revealed:
● Internal and foreign interactions are handled by Hong Kong. This could strengthen
external ties in sectors like communications, commerce, travel, and culture. China, on the
other hand, is in charge of its foreign affairs and defense. Since June 2019, Hong Kong
has been confronted with significant political issues. Protests against the administration
have erupted around the city, with rising violence and rage across all sides. This turmoil
has far-reaching consequences not just for Hong Kong and China, but also for
international trade and politics.
● Changes in policy
Changes in government policy are detrimental to company performance because they
increase environmental uncertainty. It is critical for Jd Sports Fashion Plc. to keep up
with current political developments in the nation, as changes in government might shift
the government's goals for the growth of various businesses.
Economic Factors
● Stage of the economic/business cycle
Organizational performance is directly influenced by a country's economic progress. Jd
Sports Fashion Plc can benefit from growing economies in a variety of ways. It's also
crucial to comprehend the stage of the industry lifecycle. Depending on market
saturation, entering established sectors might be more difficult than entering businesses in
the development stage. Furthermore, the amount of money invested on essential
infrastructure development by the host nation government seems to have an impact on the
performance of Jd Sports Fashion Plc
● The effectiveness of financial markets
Jd Sports Fashion Plcworldwide .'s expansion plans are impacted by financial market
efficiency, since operating in highly efficient financial markets results in increased
liquidity as well as a stronger capacity to penetrate new markets.
Social Factors
● Trends in Demography
 For multinational commercial companies like Jd Sports Fashion Plc, changes in
demographic patterns such as aging populations, migration trends, as well as socio-
economic factors are critical. Jd Sports Fashion Plc. can choose the correct market
segment/segments with strong development potential by studying demographic data.
● Shopping on the internet
Customers have been encouraged to purchase online as a result of the emergence of
social media as well as e-commerce. Younger clients are more likely to purchase online
than elderly users, thus Jd Sports Fashion Plc. needs to acknowledge online purchasing
behaviour by taking demographic disparities into account. When establishing marketing
and communication strategies, keep in mind the expanding usage of mobile phones as
well as social networking sites.
Technological Factors
JD Sports must evaluate the technological elements involved throughout the production process
and until the product is delivered. This may be accomplished by determining how new
technology could assist the organization in enhancing profitability and customer happiness, as
well as the financial impact it will have.
Environmental Factors
● Renewable energy sources
Subsidies are available in several countries to encourage investment in renewable
technology. Jd Sports Fashion Plc. could indeed take advantage of it by investing in
renewable techniques to enhance long-term viability. Due to the improved brand image,
this investment will help raise shareholder satisfaction and extend the client base.
● Climate and weather conditions
Weather, as well as climatic conditions, could have an impact on company efficiency.
Adverse weather conditions, for example, might raise operating costs and force Jd Sports
Fashion Plc. to create a value chain more adaptable. Consumer buying habits may be
affected as a result of these developments, prompting the company to alter its product and
marketing tactics.
Legal Factors
Different laws apply in different nations. To succeed in diverse markets, a corporation must
comprehend and analyze various legal elements such as employment law, labour law, copyrights,
and so on. All of these evaluations will assist the corporation in conducting business without fear
of legal repercussions.
Porter’s Five Forces
1. Threats of New Entrants
Because JD Sports is in the retail market, it is always threatened by newcomers. JD
Sports combats this challenge by continually enhancing its services and introducing new
items. The corporation also benefits from economies of scale that newcomers do not. JD
Sports has money to invest in product development and quality improvement research.
2. Bargaining Power of Suppliers
Suppliers of raw materials to the business play an important role since, if they find the
company is dependent on them, they could adjust their pricing demands. JD Sports
controls their suppliers' negotiating power by broadening their network of suppliers,
obtaining sole rights to provide raw materials from suppliers, and exploring new goods
made from various raw materials.
3. Bargaining Power of Buyers
Buyers require things that are worth as much as the price they are paying. The greater the
negotiating power of purchasers, the smaller the consumer base. JD Sports addresses this
issue by adding significant clients from various categories and geographies, as well as
expanding its product selection to provide purchasers with additional choices. By doing
so, the firm expands its consumer base and provides them with a diverse selection of
products.
4. Threats of Substitute Products or services
Customers are allowed to choose substitute products that will meet their needs in the
same way. JD Sports mitigates this risk by prioritizing service above goods and placing
them in such a manner that customers may be forced to pay more if they choose a
cheaper alternative.
5. Rivalry among existing competitors
Rivalry among company competitors frequently leads to a drop in income. JD Sports
could reduce this by making use of economies of scale, brand image, and improved
customer relationship management.
Internal Analysis
Value Chain Analysis of JD sports
● Primary activities: Jd Sports Fashion Plc's major value chain activities are primarily
involved in creating and marketing the product to targeted clients. Jd Sports Fashion Plc's
performance may be improved by analyzing primary value chain operations, as stated
below.
➔ Inbound Logistics
It's crucial to build excellent ties with suppliers since the company needs their
help to collect, hold, as well as distribute the product. Jd Sports Fashion Plc may
confront a variety of issues throughout the product development stage if it does
not examine inbound logistics. Inbound logistics analysis necessitates a
company's attention to every stage of conversion, from raw material to final item.
➔ Operations
When raw material comes, the necessity of analyzing operational activities rises,
and Jd Sports Fashion Plc is capable of transforming the raw material into the
finished product and releasing it on the marketplace. Machining, packaging,
assembling, as well as testing, are a few examples of operational activities.
➔ Outbound Logistics
Outbound logistics refers to the actions that convey a product to a consumer
through several middlemen. Material handling, storage, planning, order
processing, transportation, and distributing to the location are all examples of
outbound logistics operations. Jd Sports Fashion Plc can examine and improve
outbound logistics in order to identify sources of competitive advantage and fulfill
its company expansion goals.
➔ Sales and marketing
Jd Sports Fashion Plc would emphasize the benefits as well as points of
distinction of supplied items at this phase to persuade clients that its product is
superior than rivals. Jd Sports Fashion Plc cannot add value by creating a high-
quality product at a reasonable price with unique characteristics unless it engages
in marketing and sales operations. Here, salespeople and marketers play a crucial
role.
➔ Services
 Jd Sports Fashion Plc's pre-sale, as well as post-sale services, would play a
significant part in building consumer loyalty. Post-sale services are as crucial to
modern customers as advertising and sales efforts. In today's digitally-savvy
society, the impact of negative e-WOM owing to bad customer service cannot be
underestimated. To prevent undermining the firm's brand reputation, the company
should examine its support operations and instead utilize them as a vehicle to
promote positive word of mouth as a result of rapid, responsive, and effective
support services.
● Secondary Activities: The secondary activities assist in the coordination and facilitation
of the primary value chain operations. Jd Sports Fashion Plc could also gain from a
review of its secondary activities efforts, as described further down.
➔ Company infrastructure
Quality control, legal affairs accounting, management, planning, financing and
strategic management are all part of the corporate infrastructure. Jd Sports
Fashion Plc may be able to maximize the performance of the entire supply chain
with effective infrastructure management. Jd Sports Fashion Plc can better control
infrastructure expenses (also known as overhead costs) in order to improve its
market position.
➔ Management of human resources
Jd Sports Fashion Plc may assess human resource management by assessing
several HR components such as recruitment, hiring, training, rewarding,
performance appraisal, as well as other people management operations. Jd Sports
Fashion Plc may be able to lessen competitive pressure through good HR
management, which is based on the motivation, dedication, and abilities of its
personnel. The organization could also reach its cost-cutting goals by comparing
the expenses of recruiting and training to their respective returns. The relevance
of this value chain function within an organization would grow as Jd Sports
Fashion Plc's reliance on employee talent grows.
➔ Advancement of technology
Almost all value chain operations in today's technologically sophisticated period
rely on technology assistance. Jd Sports Fashion Plc must recognize the relevance
 of technological progress in its manufacturing, distribution, marketing, as well as
human resource activities. It may be separated into two categories: product and
process technical advancement. Automation software, technology-assisted
customer service, product development research, as well as database management
are just a few examples. This is where Jd Sports Fashion Plc's research and
development section is categorized.
➔ Procurement
The activities involved in obtaining inputs such as equipment, machinery, raw
material, services, as well as other items essential for creating the completed
product are referred to as procurement in the value chain. Jd Sports Fashion Plc
must carefully analyze its procurement activities to improve the inbound,
operations, and outbound business requirements because of its linkage with
different value chain activities.
VRIO

Valuable Rare
The Jd Sports Fashion Plc VRIO Analysis Jd Sports Fashion Plc's personnel is
reveals that the company's financial resources considered as rare, according to the VRIO
are extremely valuable since they enable it to Analysis of Jd Sports Fashion Plc. Employees
engage in external prospects. Jd Sports at this company are highly trained and
Fashion Plc can also use them to fight external experienced, which is not always the case at
threats. other companies. Because of the higher pay
and improved working conditions, these
employees are less likely to quit for other
companies.

Imitable Organization
According to Jd Sports Fashion Plc's VRIO Jd Sports Fashion Plc's distribution network is
Analysis, local food items are not that organized, according to the VRIO Analysis.
expensive to replicate. Competitors could also Jd Sports Fashion Plc makes advantage of this
obtain these if they spend a large amount in network to connect with its clients by
 research and development. As a result, Jd maintaining that items are available at most of
Sports Fashion Plc's local food goods provide its locations. As a result, these assets provide
it a transitory competitive edge that Jd Sports Fashion Plc with a long-term
competitors could gain in the long term. competitive edge.

Identification of Competitive Strategies

Porter’s Generic Strategy
● Cost Leadership
The goal of a cost leadership strategy is to achieve a competitive advantage through
cutting costs. Jd Sports Fashion Plc's principal generic approach in numerous consumer
segments is cost leadership. The major goal of employing this strategy is to maintain
market leadership through effective value chain management. Jd Sports Fashion Plc
places a high value on the availability and affordability of its products across the world,
resulting in increased brand recognition and sales growth, as well as a significant
competitive edge.
● Differentiation
Another often utilized generic method for gaining a competitive advantage is
differentiation. Jd Sports Fashion Plc achieves its growth goals by combining
distinctiveness with a cost-cutting approach. Jd Sports Fashion Plc can extend its
consumer base by highlighting unique product qualities by using differentiation as a
supplementary generic approach. The strategic goal of Jd Sports Fashion Plc's use of this
strategy is to differentiate by incorporating innovation and addressing customers' rising
health issues. Jd Sports Fashion Plc, for example, has expanded its product range in
response to changing customer demands in order to separate itself from rivals and
broaden the scope of prospects within the business. Jd Sports Fashion Plc has built a large
and loyal client base by combining distinctiveness and cost leadership.
● Focus Strategy
The third generic competitive strategy urges businesses to focus their resources on
increasing narrowly defined areas. When organizations use the focused approach, they
target certain market segments and use niche marketing to gain a competitive edge. Jd
Sports Fashion Plc has a focus strategy to keep costs down while providing the highest
 value. Serving the demands of a specialized market segment at the lowest feasible price is
the low-cost focus strategy. While the better deal focus strategy is used by stressing the
quality, size, as well as design of the product that best meets the demands and
expectations of the clients.
Bowman Clock Strategy
Strategic directions and Method of Expansion
Strategic Direction
The strategies that must be implemented in order for an organization to develop toward its goal
and achieve its objectives are referred to as strategic direction. It eventually supports a
corporation in realizing its vision and achieving the objectives of its organizational strategy. It
also improves in the alignment of a company's strategy and ensures greater long-term stability.
When a firm has a strategic direction, it can better decide its goals and how it aims to achieve
them, as well as the resources needed and how it should function in order to succeed. It
guarantees that owners and management could explain the value of workers' labour and
contributions to the company's goals. In the beginning, an entrepreneur's focus will almost
always be on developing their concept into an economically viable enterprise. This entails
developing a new or distinct product/service that caters to a certain market. It's a matter of
experimenting, testing, and producing new products to better meet the demands and desires of
customers. However, in many respects, it is not really a business approach! Entrepreneurs are
developing their businesses in this location. It's necessary to leave on to the next step of the
company lifecycle after the concept has been demonstrated to sell and earn money. It's time to
devise a strategy for increasing sales and, as a result, scaling company operations to match this
demand.
Growing any business means expanding significantly while safeguarding its intellectual property
from the competition. It appears to be straightforward, yet it is far from it. Strategic direction
generally involves a lot of thinking, preparation, and time. It must originate from the company,
as the owner, manager, and founder, or from a small group of individuals, including an executive
team. The development of a plan should include only a few people.
Method of Expansion
The various method of expansion available for JD plc are given below;
● Exporting
 Among the most typical strategies to get into an international market is to export. It's a
straightforward entry mode that motivates the company to explore that new market. The
first benefit of exporting goods would be that it saves the company money on the costs of
creating a branch in that country.
● Arrangements for Licensing
Licensing agreements could be a low-risk way to expand internationally. They're
contracts that allow other businesses to use their intellectual property. Licensing
agreements normally need the interested party to be a well-established firm in a certain
nation, which means they've analyzed the market and, presumably, have been functioning
in it for some time.
● Partnerships
Another technique of international expansion is to form strategic alliances with local
enterprises already established in a certain location. It's a means for two firms to work
together to accomplish a single aim or a set of mutually advantageous objectives.
Organizations start by analyzing if the partner would add value to their enterprise in
terms of both money and overall value. The local business will almost certainly have a
solid working grasp and understanding of the market, as well as awareness of the nation's
culture.
● Acquisitions and Mergers
Mergers and acquisitions, in which two companies merge or one merges another, are
another way to expand internationally. The frequency of cross-border mergers and
acquisitions has grown as firms expand as well as digital connection improves the ease of
movement from one location to the next. Because the company is either merging with or
taking over an existing company, this strategy allows the company to quickly enter a new
market. The company will take over the stakeholders, supply networks, and distribution
channels of the other company with whom it has been merged.

Conclusion and Recommendation

Strategic management is a continual process that is critical to the business survival.
Organizations must ensure that they operate in strategic management since the growth and
survival of the firm is dependent on it. The strategic management decision-making strategy has
both financial and non-financial advantages. It is vital for employees and managers to provide a
healthy connection in order for firms to realize the benefits of strategic management. The report
describes the relevant strategic management frameworks needed by JD plc to expand its
operation in Hong Kong. Moreover, the report also discusses the external analysis and internal
analysis of the organization by using various frameworks like PESTLE analysis, Porter’s five
forces, VRIO analysis, Value chain analysis, and many more. From the report, it can be
concluded that the company JD plc is able to expand its operation in Hong Kong.