Unit 1: Exploring Business
THE EFFECT OF
EVIRONMENTS
ON A BUSINESS
Leilani Courtney
University College Birmingham
,Leilani Gabrielle
Exploring Business: Assignment 2
Table of Contents
Introduction to the Business......................................................................................................................... 3
Section 1: External, Internal Factors and Competitive Environment (P4)........................................................3
PESTLE Analysis....................................................................................................................................................3
Introduction....................................................................................................................................................4
Political............................................................................................................................................................4
Economical......................................................................................................................................................5
Social...............................................................................................................................................................7
Technological..................................................................................................................................................8
Environmental.................................................................................................................................................9
Legal..............................................................................................................................................................10
Internal Factors........................................................................................................................................... 11
Corporate Social Responsibility.........................................................................................................................11
The JD Foundation (CSR)...............................................................................................................................12
Ethics..................................................................................................................................................................12
Corporate Culture..............................................................................................................................................13
Competitive Environment..................................................................................................................................13
Factors Influencing Competitive Advantage......................................................................................................14
Differentiation...............................................................................................................................................14
Pricing Policies..............................................................................................................................................14
Market Leadership........................................................................................................................................14
Reputation....................................................................................................................................................14
Market Share................................................................................................................................................15
Cost Control..................................................................................................................................................15
The Importance of Establishing and Maintaining Competitive Advantage..................................................15
Assess the Effects of the Business Environment (M3).......................................................................................16
Section 2: Situational Analysis (P5).............................................................................................................. 19
SWOT Analysis...................................................................................................................................................19
Strengths.......................................................................................................................................................19
Weaknesses..................................................................................................................................................20
Opportunities................................................................................................................................................21
Threats..........................................................................................................................................................21
Porter’s 5 Forces Analysis..................................................................................................................................22
Threat of New Entrants................................................................................................................................22
Supplier Power..............................................................................................................................................22
Buyer Power..................................................................................................................................................22
Threat of Substitute Products.......................................................................................................................23
Rivalry Amongst Existing Competition..........................................................................................................23
Section 3: Market Structure and Influences on Supply, Demand and Pricing and Output Decisions (P6)........23
Different Market Structures...............................................................................................................................23
Oligopoly.......................................................................................................................................................24
Monopoly......................................................................................................................................................24
Perfect Competition......................................................................................................................................24
Imperfect Competition.................................................................................................................................24
,Leilani Gabrielle
Exploring Business: Assignment 2
JD Sports and Fashion...................................................................................................................................25
Relationship Between Supply, Demand and Price Elasticity..............................................................................26
Influences on Demand.......................................................................................................................................26
Affordability..................................................................................................................................................26
Competition- Other Brands Offering Similar Products.................................................................................27
Availability of Substitutes.............................................................................................................................27
Needs and Aspirations of Customers...........................................................................................................27
Influences on Supply..........................................................................................................................................28
Availability of Raw Materials/Labour...........................................................................................................28
Competition for Raw Materials....................................................................................................................28
Ability to produce profitably.........................................................................................................................28
Logistics.........................................................................................................................................................29
Price Elasticity of Demand (PED).......................................................................................................................29
Pricing and Output Decisions.............................................................................................................................30
What Prices Do They Charge?.......................................................................................................................30
Is There Brand Loyalty?.................................................................................................................................30
Are Prices Influenced By Competitors?........................................................................................................31
Are Prices Determined By Demand?............................................................................................................31
JD’s Pricing Strategies...................................................................................................................................31
Evaluate the extent to which the business environment affects a given business, using a variety of situational
analysis techniques (D2)....................................................................................................................................32
Evaluate how changes in the market have impacted on a given business and how this business may react to
future changes (D3)...........................................................................................................................................33
References.........................................................................................................................................................35
, Leilani Gabrielle
Exploring Business: Assignment 2
Introduction to the Business
In this assignment, I will be looking at how the environment surrounding a business can
affect the way that it is operated.
The business I will be looking at is JD Sports and Fashion plc. JD Sports is a private sector
British clothing, footwear and athleisure retailer based in Bury, Manchester. JD was founded
by John Wardle and David Mankin during the early 1980s. Both John and David opened up
their first retail store in 1981 and then eventually branched out into a nearby Shopping Centre
in Greater Manchester. Now just over 30 years on, JD Sports operates within different
continents and multiple countries all over the world with 56,678 employees and 781 stores
worldwide. Most of their stores based in Europe and Asia and a few stores are based in the
United States. JD is currently owned by parent organisation, Pentland Group which is a
privately-owned British company that primarily invests in sports and outdoor clothing
retailers such as Blacks, Ellesse, Speedo and JD.
JD is very successful and in 2019 JD Sports was valued at £4.7 billion and so far, this year
(2020) JD has made £6,110.8 million in revenue which is a 30% increase from the previous
year. JD appeals to a teenage/young adult (11-30) demographic and does this by continuing
to stay on top of the latest trends and communicates effectively with their audience through
social media campaigns, advertisements and even clothing sales to create demand
for their products. According to a BBC News article, the reasons behind JD success include a
massive rise in popularity in athleisure clothing and sportswear. It was clear that JD took
advantage of this because now JD is one of the biggest sportswear retailers within the UK.
Within the next section, I will be looking at different political, economic, social,
technological, legal and environmental factors can affect the way JD operates now and in the
future.
Section 1: External, Internal Factors and
Competitive Environment (P4)
PESTLE Analysis
THE EFFECT OF
EVIRONMENTS
ON A BUSINESS
Leilani Courtney
University College Birmingham
,Leilani Gabrielle
Exploring Business: Assignment 2
Table of Contents
Introduction to the Business......................................................................................................................... 3
Section 1: External, Internal Factors and Competitive Environment (P4)........................................................3
PESTLE Analysis....................................................................................................................................................3
Introduction....................................................................................................................................................4
Political............................................................................................................................................................4
Economical......................................................................................................................................................5
Social...............................................................................................................................................................7
Technological..................................................................................................................................................8
Environmental.................................................................................................................................................9
Legal..............................................................................................................................................................10
Internal Factors........................................................................................................................................... 11
Corporate Social Responsibility.........................................................................................................................11
The JD Foundation (CSR)...............................................................................................................................12
Ethics..................................................................................................................................................................12
Corporate Culture..............................................................................................................................................13
Competitive Environment..................................................................................................................................13
Factors Influencing Competitive Advantage......................................................................................................14
Differentiation...............................................................................................................................................14
Pricing Policies..............................................................................................................................................14
Market Leadership........................................................................................................................................14
Reputation....................................................................................................................................................14
Market Share................................................................................................................................................15
Cost Control..................................................................................................................................................15
The Importance of Establishing and Maintaining Competitive Advantage..................................................15
Assess the Effects of the Business Environment (M3).......................................................................................16
Section 2: Situational Analysis (P5).............................................................................................................. 19
SWOT Analysis...................................................................................................................................................19
Strengths.......................................................................................................................................................19
Weaknesses..................................................................................................................................................20
Opportunities................................................................................................................................................21
Threats..........................................................................................................................................................21
Porter’s 5 Forces Analysis..................................................................................................................................22
Threat of New Entrants................................................................................................................................22
Supplier Power..............................................................................................................................................22
Buyer Power..................................................................................................................................................22
Threat of Substitute Products.......................................................................................................................23
Rivalry Amongst Existing Competition..........................................................................................................23
Section 3: Market Structure and Influences on Supply, Demand and Pricing and Output Decisions (P6)........23
Different Market Structures...............................................................................................................................23
Oligopoly.......................................................................................................................................................24
Monopoly......................................................................................................................................................24
Perfect Competition......................................................................................................................................24
Imperfect Competition.................................................................................................................................24
,Leilani Gabrielle
Exploring Business: Assignment 2
JD Sports and Fashion...................................................................................................................................25
Relationship Between Supply, Demand and Price Elasticity..............................................................................26
Influences on Demand.......................................................................................................................................26
Affordability..................................................................................................................................................26
Competition- Other Brands Offering Similar Products.................................................................................27
Availability of Substitutes.............................................................................................................................27
Needs and Aspirations of Customers...........................................................................................................27
Influences on Supply..........................................................................................................................................28
Availability of Raw Materials/Labour...........................................................................................................28
Competition for Raw Materials....................................................................................................................28
Ability to produce profitably.........................................................................................................................28
Logistics.........................................................................................................................................................29
Price Elasticity of Demand (PED).......................................................................................................................29
Pricing and Output Decisions.............................................................................................................................30
What Prices Do They Charge?.......................................................................................................................30
Is There Brand Loyalty?.................................................................................................................................30
Are Prices Influenced By Competitors?........................................................................................................31
Are Prices Determined By Demand?............................................................................................................31
JD’s Pricing Strategies...................................................................................................................................31
Evaluate the extent to which the business environment affects a given business, using a variety of situational
analysis techniques (D2)....................................................................................................................................32
Evaluate how changes in the market have impacted on a given business and how this business may react to
future changes (D3)...........................................................................................................................................33
References.........................................................................................................................................................35
, Leilani Gabrielle
Exploring Business: Assignment 2
Introduction to the Business
In this assignment, I will be looking at how the environment surrounding a business can
affect the way that it is operated.
The business I will be looking at is JD Sports and Fashion plc. JD Sports is a private sector
British clothing, footwear and athleisure retailer based in Bury, Manchester. JD was founded
by John Wardle and David Mankin during the early 1980s. Both John and David opened up
their first retail store in 1981 and then eventually branched out into a nearby Shopping Centre
in Greater Manchester. Now just over 30 years on, JD Sports operates within different
continents and multiple countries all over the world with 56,678 employees and 781 stores
worldwide. Most of their stores based in Europe and Asia and a few stores are based in the
United States. JD is currently owned by parent organisation, Pentland Group which is a
privately-owned British company that primarily invests in sports and outdoor clothing
retailers such as Blacks, Ellesse, Speedo and JD.
JD is very successful and in 2019 JD Sports was valued at £4.7 billion and so far, this year
(2020) JD has made £6,110.8 million in revenue which is a 30% increase from the previous
year. JD appeals to a teenage/young adult (11-30) demographic and does this by continuing
to stay on top of the latest trends and communicates effectively with their audience through
social media campaigns, advertisements and even clothing sales to create demand
for their products. According to a BBC News article, the reasons behind JD success include a
massive rise in popularity in athleisure clothing and sportswear. It was clear that JD took
advantage of this because now JD is one of the biggest sportswear retailers within the UK.
Within the next section, I will be looking at different political, economic, social,
technological, legal and environmental factors can affect the way JD operates now and in the
future.
Section 1: External, Internal Factors and
Competitive Environment (P4)
PESTLE Analysis
