Jd Sports Fashion Plc SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

SWOT analysis is a strategic planning tool that can be used by Jd Sports Fashion Plc managers to do a situational analysis of the company . It is a useful technique to evalauate the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Jd Sports Fashion Plc is facing in its current business environment.

The Jd Sports Fashion Plc is one of the leading organizatations in its industry. Jd Sports Fashion Plc maintains its dominant position in market by carefully analyzing and reviewing the SWOT analysis. SWOT analysis a highly interactive process and requires effective coordination among various departments within the company such as – marketing, finance, operations, management information systems and strategic planning.

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The SWOT Analysis framework helps an organization to identify the internal strategic factors such as -strengths and weaknesses, & external strategic factors such as - opportunities and threats. It leads to a 2X2 matrix – also known as SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix helps the managers of the Jd Sports Fashion Plc to develop four types of strategies:

SO (strengths-opportunities) Strategies
WO (weaknesses-opportunities) Strategies
ST (strengths-threats) Strategies
WT (weaknesses-threats) Strategies

Jd Sports Fashion Plc swot analysis / matrix

SWOT Matrix Strategies Objective

The main purpose of SWOT matrix is to identify the strategies that a firm can utilize to exploit external opportunities, counter threats, and build on & protect Jd Sports Fashion Plc strengths, and eradicate its weaknesses.

Step by Step Guide to Jd Sports Fashion Plc SWOT Analysis

Strengths of Jd Sports Fashion Plc – Internal Strategic Factors

As one of the leading companies in its industry, Jd Sports Fashion Plc has numerous strengths that enable it to thrive in the market place. These strengths not only help it to protect the market share in existing markets but also help in penetrating new markets. Based on Fern Fort University extensive research – some of the strengths of Jd Sports Fashion Plc are –

Read - Jd Sports Fashion Plc Porter 5 Forces Analysis & Industry Analysis
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Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
Automation of activities brought consistency of quality to Jd Sports Fashion Plc products and has enabled the company to scale up and scale down based on the demand conditions in the market.
Strong distribution network – Over the years Jd Sports Fashion Plc has built a reliable distribution network that can reach majority of its potential market.
Strong Brand Portfolio – Over the years Jd Sports Fashion Plc has invested in building a strong brand portfolio. The SWOT analysis of Jd Sports Fashion Plc just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
Superb Performance in New Markets – Jd Sports Fashion Plc has built expertise at entering new markets and making success of them. The expansion has helped the organization to build new revenue stream and diversify the economic cycle risk in the markets it operates in.
Successful track record of integrating complimentary firms through mergers & acquisition. It has successfully integrated number of technology companies in the past few years to streamline its operations and to build a reliable supply chain.
Strong Free Cash Flow – Jd Sports Fashion Plc has strong free cash flows that provide resources in the hand of the company to expand into new projects.
High level of customer satisfaction – the company with its dedicated customer relationship management department has able to achieve a high level of customer satisfaction among present customers and good brand equity among the potential customers.

Weakness of Jd Sports Fashion Plc – Internal Strategic Factors

Weakness are the areas where Jd Sports Fashion Plc can improve upon. Strategy is about making choices and weakness are the areas where a firm can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

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Limited success outside core business – Even though Jd Sports Fashion Plc is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Jd Sports Fashion Plc needs to put more money in technology to integrate the processes across the board. Right now the investment in technologies is not at par with the vision of the company.
Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
Financial planning is not done properly and efficiently. The current asset ratio and liquid asset ratios suggest that the company can use the cash more efficiently than what it is doing at present.
Not highly successful at integrating firms with different work culture. As mentioned earlier even though Jd Sports Fashion Plc is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
Days inventory is high compare to the competitors – making the company raise more capital to invest in the channel. This can impact the long term growth of Jd Sports Fashion Plc
The profitability ratio and Net Contribution % of Jd Sports Fashion Plc are below the industry average.

Opportunities for Jd Sports Fashion Plc – External Strategic Factors

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Stable free cash flow provides opportunities to invest in adjacent product segments. With more cash in bank the company can invest in new technologies as well as in new products segments. This should open a window of opportunity for Jd Sports Fashion Plc in other product categories.
Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Jd Sports Fashion Plc’s products thus providing an opportunity to the company - either to boost its profitability or pass on the benefits to the customers to gain market share.
Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Jd Sports Fashion Plc.
The market development will lead to dilution of competitor’s advantage and enable Jd Sports Fashion Plc to increase its competitiveness compare to the other competitors.
Government green drive also opens an opportunity for procurement of Jd Sports Fashion Plc products by the state as well as federal government contractors.
The new technology provides an opportunity to Jd Sports Fashion Plc to practices differentiated pricing strategy in the new market. It will enable the firm to maintain its loyal customers with great service and lure new customers through other value oriented propositions.
Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Jd Sports Fashion Plc an opportunity to enter a new emerging market.
Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Jd Sports Fashion Plc to capture new customers and increase its market share.

Threats Jd Sports Fashion Plc Facing - External Strategic Factors

Liability laws in different countries are different and Jd Sports Fashion Plc may be exposed to various liability claims given change in policies in those markets.
Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Jd Sports Fashion Plc in those markets.
The demand of the highly profitable products is seasonal in nature and any unlikely event during the peak season may impact the profitability of the company in short to medium term.
The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
Intense competition – Stable profitability has increased the number of players in the industry over last two years which has put downward pressure on not only profitability but also on overall sales.
Rising raw material can pose a threat to the Jd Sports Fashion Plc profitability.
Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
Imitation of the counterfeit and low quality product is also a threat to Jd Sports Fashion Plc’s product especially in the emerging markets and low income markets.

Limitations of SWOT Analysis for Jd Sports Fashion Plc

Although the SWOT analysis is widely used as a strategic planning tool, the analysis does have its share of limitations.

Certain capabilities or factors of an organization can be both a strength and weakness at the same time. This is one of the major limitations of SWOT analysis . For example changing environmental regulations can be both a threat to company it can also be an opportunity in a sense that it will enable the company to be on a level playing field or at advantage to competitors if it able to develop the products faster than the competitors.
SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself.
The matrix is only a starting point for a discussion on how proposed strategies could be implemented. It provided an evaluation window but not an implementation plan based on strategic competitiveness of Jd Sports Fashion Plc
SWOT is a static assessment - analysis of status quo with few prospective changes. As circumstances, capabilities, threats, and strategies change, the dynamics of a competitive environment may not be revealed in a single matrix.
SWOT analysis may lead the firm to overemphasize a single internal or external factor in formulating strategies. There are interrelationships among the key internal and external factors that SWOT does not reveal that may be important in devising strategies.

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Weighted SWOT Analysis of Jd Sports Fashion Plc

In light of the above mentioned limitations of the SWOT analysis / matrix, corporate managers decided to provide weightage to each internal strength and weakness of the firm. Organizations also assess the likelihood of events taking place in the coming future and how strong their impact could be on company's performance.

This method is called Weighted SWOT analysis. It is better than doing simplistic SWOT analysis because with Weighted SWOT Analysis Jd Sports Fashion Plc managers can focus on the most critical factors and discount the non-important one. It also solves the long list problem where organizations ends up making a long list but none of the factors deemed too critical.

Limitation of Weighted SWOT analysis of Jd Sports Fashion Plc

This approach also suffers from one major drawback - it focus on individual importance of factor rather than how they are collectively important and impact the business holistically.

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Example of Weighted SWOT Analysis

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SWOT Worksheet & Template

If you like to do your own SWOT analysis or want to make your own Weighted SWOT SWOT matrix then feel free to download Fern Fort University SWOT Analysis Template.

References / Citations & Bibliography

M. E. Porter, Competitive Strategy(New York: Free Press, 1980)
A. D. Chandler, Strategy and Structure (Cambridge, Mass.: MIT Press, 1962)
O. E. Williamson, Markets and Hierarchies(New York: Free Press, 1975);
L. Wrigley, Divisional Autonomy and Diversification (PhD, Harvard Business School, 1970)
R. E. White, Generic Business Strategies, Organizational Context and Performance: An Empirical Investigation, Strategic Management Journal7 (1986)