Business and managing environment: A case study on JD sports fashion PLC
Managing business is a complex task for the leaders and the managers of the organisation where environmental analysis and stakeholder’s analysis is necessary which in turn helps the leaders and managers of the company to develop effective strategic planning for successful expansion of the business as well as securing sustainable development in near future (Sharma, 2017; Hill, 2017). The aim of the study is to analyse the internal and external environment of the company JD sports fashion PLC as well as evaluate stakeholder’s analysis in order to understand the position of the business so that it is possible to recommend some suitable suggestions for the business so that they can meet their business goals and pre-specified objectives of the company.
JD sports fashion PLC is a sports fashion retail public limited company based on the UK and the company is successful in expanding their business through establishing different shops across the UK. Total revenue of the company is the last years was approximately ₤ 2378.7 million as well as net income was ₤ 184.6 million where the brand is successful in retaining customers in the UK market by delivering high quality products and efficient services which can meet the customer’s preferences (JD sports fashion PLC, 2018). The products of the company are mainly clothing and sportswear accessories which inspire the athletes as well as sport lovers to perform better and achieve their aims in near future. The company focuses at,
- Delivering high quality sportswear accessories to the customers
- Meeting customer’s preferences
- Improving customer’s experience
- Continuing investment in sportswear
- Serving the customers in a better way
- Establishing the brand in the market
- Creating values for all the stakeholders
Stakeholder and environmental analysis
Stakeholder analysis is helpful for the company to understand the strategic planning of JD sports fashion PLC through which the organisational leaders and the managers can handle their stakeholders who are the important people in the company (Baumann-Pauly, Scherer, & Palazzo, 2016). As per the figure, the main stakeholders of the company JD sports fashion PLC are employees, staff members, managers, shareholders, customers, government, distributors and the suppliers which are the major people who are running the operational activities of JD sports fashion PLC.
The CEO of the company and the leaders try to manage all the stakeholders of the company by creating values for them through providing hem high incentive and encouraging their creativity to run the business efficiently. The stakeholders are the main player of the business and in this regard the company JD sports fashion PLC tries to meet their needs and preferences in the company by providing proper return on investment to the shareholders, employees as well as the customers.
As per the internal environmental analysis, it is necessary to identify the strengths and weaknesses of the company JD sports fashion PLC so that it is possible to understand the potential of the company to achieve success.
As per the above figure, the major strengths of the company are strong brand reputation, brand loyalty and quality products which are effective for the company to operate in the market and retain more customer in long run. The quality of the products is good which helps to meet the customer’s expectations as well as strong brand image and reputation are effective and contributing to develop market share in the competitive sportswear market. On the other hand, there are some weaknesses for which the company may face difficulties in future to operate in the global market. The weaknesses are high price, low market share and low variety of products which deteriorate the brand reputation and for which the company cannot attract more audiences in the market (Ethiraj, Gambardella, & Helfat, 2018).
As per the external environmental analysis, it can be seen that, there is stable political environment for which the company JD sports fashion PLC can operate smoothly in the UK market. As per the economic factors, there is high income growth which helps the company to influence the purchase decision of the customers in the market. As per the social factors, the society is well developed and the demand for sportswear is increasing with changing life style in the UK market. Technological upgradation and integrated technology are also beneficial for the company JD sports fashion PLC to operate in the market efficiently by strengthening their customers through digital media. As per the legal and environmental factors, the company tries to make the brand sustainable by managing environmental footprint and legal framework of doing business in the UK.
Key opportunities and threats of the company
The opportunities and threats of the company are discussed below which helps to identify the upcoming risk of the business as well as further scope of the company JD sports fashion PLC through which they can fulfil their aims and objectives (Doz, 2017).
There are several opportunities for the company JD sports fashion PLC due to high market growth in the fashion sport industry where the customers try to find different sport apparels. The main opportunity is research and development through which the company can expand their varieties of products and services in the market as well as minimise the cost of the products by conducting in depth research (Hitt, & Duane Ireland, 2017). Additionally, sport market expansion and global market growth further provide a scope to the organisation JD sports fashion PLC to expand their business across the international market which in turn helps to diversify their risk factors as well as improve brand reputation and brand image in the international sport market. Moreover, new categories in sport market as well as diversified products provide an opportunity to the company to improve the product range of JD sports fashion PLC and attract more customers in the market by targeting the sport lovers and athletes.
The company JD sports fashion PLC also face some threats in operating their activities in the sport apparel market such as high competition where the company have high competitive threats due to reputed brand such as Nike, Rebook, Adidas and Puma. Additionally, the company also has the threat of brand reputation and image due to the repeated brands, already exist in the market. customer spending on the sport apparel is also decreasing year to year for which the company face threats of improving their revenues and net income in the market. It is difficult for the company JD sports fashion PLC to retain the customers in the market due to low customer’s demand for the products of the company which is risky for the organisation to operate in the sport apparel market and gain high competitive advantage in future. Existence of duplicate products is another threat for which the brand reputation and brand image can be hampered in the market (Hill, Jones, & Schilling, 2014). These are the main threats in the market which create risks for the company JD sports fashion PLC ad in order to imporve the operational activities ad gain high competitive advantage, it is necessary for the company to mitigate the threats and utilise the above mentioned opportunities so that the pre-specified aims ad objectives of JD sports fashion PLC can be fulfilled.
Conclusion and recommendations
It can be seen that; the company JD sports fashion PLC is efficient to operate in the sportwear market and strengthen their customer’s base. in order to mitigate the upcoming threats of high competition, the company needs to conduct more research and development which further helps to increase product line where the organisation can offer a huge variety of sportswear products to the customers. Moreover, managing business through digital media and improving communication and engagement through social media is necessary where the company can build strong relationship with the customers which in turn helps to build loyalty and trust as well as provides a scope to improve their market share by strengthening its customer’s base. Additionally, the company needs to utilise capital and invest more on research and development for more innovation and creativity which helps to target the right customers in the market mainly the athletes and influence their purchase intention for their creative and quality sportswear products. These are the main suggestions through which it is possible to utilise the upcoming opportunities of the company JD sports fashion PLC and meet the objective of the company by creating values for all the stakeholders of JD sports fashion PLC.