Competition is the measure of other leading companies selling similar products. It is seen as an advantage for customers as this is how prices drop as other retailers will fight to lower prices in order to engage customers, and as a result, this usually increases quality the of the product.
However for retailers it’s not seen as an advantage. JD sports have competitors to such as: JJB, Nike Town, Addidas, Footlocker and TK Maxx-these are only a few out of the very many.
Due to the credit crunch most shoppers are more likely to go to stores such as JJB, sports direct or TK Maxx as they sells brands at discounted prices. This will definitely affect JD as the more competition in a market, the lower the sales for a business involved. Also the level of competition would affect the businesses ability to achieve aims and objectives set.
In the sports market last year, £3bn was spent on clothes and £1.25bn on foot ware. JD alone made revenue of £300m; this shows that they own roughly 10% of the market.
The internet is another source of competition as; it allows customers to shop anywhere around the world, from the comfort of their home. Customers can also compare prices on websites such as www.moneysupermarket.com to see which is cheaper.
If competition increases JD will be forced apply heavy discounts as they will find it difficult to charge higher prices. To help JD has exclusive brands, such as K-Swiss and McKenzie which they feel confident about and feel that this aspect will indeed attract customers.
External Factors-Legal issues
When in a business legal issues need to be taken into consideration. JD has to comply by these laws and regulations and can be fined heavily if they are found to be breaking any. For example under the Trade Descriptions Act 1968, JD can not give out false or misleading information about their brands. However it may be the case that retailers are unaware of these situations and can commit an offence without intending to do so.
JD aims to ensure that:
- They set a standard rule for contracts in regards to employment
- Stop any type of discrimination from occurring
- JD workers are treated fairly
Health and Safety at Work Act 1974
According to the Health at Work Act 1974, JD must ensure that their employees are working in a safe environment; it protects them from work activities. JD will have Health and Safety officer who will inspect the working conditions regularly-this includes carrying out risk assessments. The officer will also aim to give feedback on where to improve if needed.
The Sex Discrimination Act 1975
JD quotes ‘The Group is a large equal opportunities employer and a large training organisation providing direct employment and career development to thousands of people across the UK and Republic of Ireland.’
The Group is committed to promoting policies which are designed to ensure that employees and those who seek to work for the Group are treated equally regardless of sex, marital status, creed, colour, race or ethnic origin.
Social and Ethical issues
Business ethics examines ethical principles and morals or ethical problems that arise in a business environment. Social and ethical value is the sense of right and wrong. Some people for instance may believe that it is wrong to buy products from a retailer that sells items produced in sweatshops.
According to the international labour organisation two hundred million children between 5-17 year olds go to work instead of school. In India alone the labour ministry revealed that 44 million children in the ages between 5-14 are in the labour force. With these insufficient wages workers are unable to meet their basic needs
The question then arises that despite knowing will customers still be willing to purchase from JD? To find out I carried out a questionnaire and asked JD’s target audience, who are teenagers.
Would you still purchase goods from JD despite knowing where they are made and in what conditions?
Please tick one of the following boxes.
Yes No
The following chart shows the response I received.
From this survey I found out that teenagers were not affected by this and that they will still purchase products. This shows that JD will not be affected by ethical issues therefore there sales and profits will not be affected.
Employment Standards for Suppliers
JD cares about the labour standards in its global supply chain and expects its suppliers to have similar ethical concerns. JD has to rely on their suppliers who are required to agree to JD’s policy on 'Employment Standards for Suppliers‘.
Although, JD tries to ensure that their buyers inspect working conditions regularly, it is not always possible.
Enterprise Skills
Enterprise skills allow people to apply their knowledge to deliver a better service or product. This could be to develop an existing product to match customer’s needs. Immense confidence, determination and motivation are needed in order to start up a business.
Enterprise skills consist of the following:
- Self confidence-to be able to have a belief in ones own ability, self starters
- Identifying and exploiting market activities-having the ability to identify market opportunities
- Risk taking- this is important as the business may not work out, entrepreneurs should not be afraid to make mistakes
- Ability to innovate-improvement is the key to success
- Ability to build teams and inspire- the ability to share your vision with other people is essential
This is exactly what John Wardle and David Makin had; they spotted a gap in the market which they felt needed filling. Due to the fact that there was not a designer driven market at the time as ‘de industrialisation’ was at its highest, they decided to take a risk and turn it into an advantage this is what people with exceptional enterprise skills do.
JD sports was founded in 1981 in John Wardle and David Makin’s home town in Bury. By 1983 the fledgling business was expanding into the Arndale Centre in Manchester. According to the ‘British Style Genius’ One of the main reasons why JD sports became so successful was because of the changing fashions in the 1980’s, people wanted to wear sports clothes for trend purposes instead of sport. Tennis players become iconic fashion symbols due to their clothing. Brand names became status symbols for sports gear and sportswear. The appearance of affluence was reinforced by access to designer label goods.
They identified and exploited marketing opportunities by providing sportswear that was unique. JD sports also started selling exclusive brands such as K-Swiss and McKenzie to maximise sales as they knew that these exclusive brands were unavailable elsewhere.
It all started in Liverpool where street fashion was picked up and put on the high street. Many famous brands such as Adidas originated in Germany, these were international companies, that thought Britain was unable to afford these luxury items of sportswear and accessorises. As Liverpool started becoming more and more involved into the trends that were put in place, it wasn’t long before other cities fell into place.
Another reason behind the success of JD sports was that its purpose was to sell sports clothing by sports brands; they didn’t really concentrate on selling sports equipment. This is what made them different to other sports stores.
Team work at JD sports
Why are teams important?
Teams are important in order to accomplish a set aim or task. It is where individuals come together with other people in order to fulfil a certain goal which requires more than one person. A team has a shared purpose which is why it is important that everyone inputs. People in a team are interdependent on their peers as they all need each other, if they are to achieve their aims. It is important that JD sports have effective teams in order to achieve its aims and objectives and increase profit.
Belbin’s view on team membership
Dr R Meredith Belbin describes particular styles of working within a team. He came up with nine different team roles which make a successful team.
Below are the 9 different team roles:
- Plant-creative, someone who solves problems well
- Co-ordinator-delegates well, good at seeing the overall picture and enforcing roles on others in order to achieve aim
- Monitor/evaluator-someone who evaluates well, is open to other options
- Implementer- someone who is well-organized and turns words into solid actions
- Completer/finisher- someone who finishes well and checks for any problems before hand so that work is not delayed
- Resource investigator- is the one who makes contacts in order to help the team investigate into areas that they are unsure of
- Shaper- has the drive to overcome difficult tasks, is challenging and self-motivated
- Team worker- is a good listener and negotiates well
- Specialist- dedicated someone who is able to apply exceptional knowledge and skill to the team
Although it is not necessary to have all of the above in one team, however one from each category is essential.
The team roles can be grouped into 3 categories:
- Active Roles- Shaper, Implementer and completer/finisher
- Peoples Roles- Co-ordinator, Team worker and Resources investigator
- Thinking Roles- Plant, Monitor/Evaluator and Specialist
There should be an even balance of the above if the team is gain success.
It is essential that a team has good leadership if it is to be successful. The team leader is the one who makes sure the team stays together and keeps track of each individual’s progress on their particular task in order to fulfil their part of the group effort. It
According to Fred Fiedler’s theory, there are two types of leaders:
- Relationship motivated leaders- these are people orientated and enjoy working with people
- Task motivated leaders- these leaders focus on the task and want to get it over and done with
Neither style is proper suited to every situation it all depends on the following:
- How much authority the team leader has
- How comprehensible and controlled the task is
- The relationship between the team leader and the team
Before a team becomes successful it is necessary that it goes through the following stages:
Forming- this is when the team has just been formed; it is the stage where team members are uncertain of what’s expected of them.
Storming- this is when the group has started to work together. Little groups can be formed and conflict can occur when personalities clash.
Norming- this is when the group settles down and starts to get along with each other, this is when they mould into a team. They know each others strong and weak points.
Performing- this is when the team is close to achieving its aims and objectives, because of its shared team work.
As JD sports has decided to expand its business into overseas markets, Peter Cowgill the chief executive of JD sports has to make sure that effective teams are built in order to achieve the task. In order to do this he will choose a team leader, who he feels, will be able to handle the pressure of communicating between him and team. The team leader in this situation will have to be task motivated as he will only be interested in accomplishing tasks set by JD’s sports head. In order to make sure the team works together, the team leader will arrange for the team to meet out of their usual work backgrounds in order to strengthen the team as a whole.
The team leader will form his team based on Belbin’s team roles. He will need at least one role from the three categories.
- Active Roles- Shaper, Implementer and completer/finisher
- Peoples Roles- Co-ordinator, Team worker and Resources investigator
- Thinking Roles- Plant, Monitor/Evaluator and Specialist
However I feel that the team leader will not necessarily need a plant as the idea to expand overseas has already been adopted.
One the other hand I feel that the team leader will benefit from the following roles:
A specialist, as JD would like to expand their businesses overseas it is essential that they have people who are able to speak a foreign language which is useful for negotiation purposes.
A resources investigator will be needed in order to form contacts, and find appropriate plots for the expansion.
The leader will need many specialists for various reasons such as legal. In order to deal with legal issues in other countries and make sure that JD sports are aware of them before they go any further.
JD sports Market Research
Primary market research
Primary market research is when an individual gathers information from potential customers directly.
The information may be collated in the following ways:
Questionnaires- this is usually a list of questions which will help businesses gather important information from customers. This could be for several reasons, one of which is improvement. The reply the businesses get through questionnaires help shape the business.
Consumer panels-Consumer panels are useful for fast short, surveys where a number of people meet to discuss how customers have reacted to a new product.
Observation- this is when businesses observe and how customers react to certain things, this could be shop displays, promotions and offers or prices. By doing this they are making changes which will benefit the customer and help them with their needs.
Test marketing- this is to test products prior to launch, this is usually expensive however helps with views on the product and how it may be improved to suit customers satisfaction.
Secondary market research
Secondary research is a summary or collection of existing data. It is when someone uses other people’s collected primary research. It could be government statistics, information from newspapers or the use of the internet.
As primary research for JD sports I handed a questionnaire to potential customers to identify strengths and weaknesses in current provision. The first few questions were about the customer, for example their gender and age and their spending figure and the others were based on their shopping experience.
Below are the responses I received:
Gender: Male or Female
Your age: 11-14 years 15-19 years 20-24 years
How much do you spend on clothes each month?
The most replies came from females aged 15-19. This shows that JD sports concentrates on the female side of the market as well as the sports and that it combines sports and fashion together. The typical spending figure per month was £21-£40 however with very little margin I would say the actual typical spending figure would be £20-£60. This means that JD sports will have to keep their prices relatively cheap in order to engage potential customers.
Below are the responses are received for the scaled questions that I asked.
Rating 1-5 (5 being you completely agree and 1 being if you disagree)
Is value for money important?
The graph shows that potential customers would prefer value for money. This means that JD sports will have to improve their products to their customer’s satisfaction and make sure they are charging reasonable prices for it.
Do you prefer to buy online?
Most of the replies I received for this particular question were that customers preferred to go to stores to purchase goods, rather than purchasing them online. The reason for may be because customers preferred to try on products before they purchased them to see if it suited them and fitted well. In order for JD sports to benefit from this and increase sales would be to make displays on shop floor look more attractive and appealing so that potential customers and make them female friendly to lure females who are their potential customers to come into JD sports’ stores as they will be able to see plenty of varieties and styles to choose from.
Is fashion important?
Most people agreed that fashion is important and that there should be an even balance between fashion and function. JD sports has already seen this gap in the market and therefore has started selling exclusive brands in order to attract customer, this will help them increase sales
Would you prefer to shop at shopping centres?
Most people also agreed that they preferred shopping at shopping centres than stand alone stores in not so popular places. JD sports has acted on this as they have stores in Surrey Quays, Westfield White city, and Oxford street which will help them achieve their targets as these places are always busy which make the stores even busier.
Conclusion
After distributing the questionnaires as a source of primary research, it was evident that JD sports are mostly aimed at females between the ages of 15 and 19. After I realised this I reflected on the appearance of JD sports which is not at all female orientated, fair enough it has a female section in there but the outside appearance is quite masculine. This may have not affected JD sports’ sales however if they were to change their appearance to a slight feminine feel this may encourage sales to grow also. Another aspect I realised is that JD sports have exclusive brands which can not be found elsewhere. Therefore JD sports can take advantage of this and introduce more exclusive deals in order to engage customers and increase sales. Opening stores in affluent areas where people are more likely to spend would also be a good idea.