External Factors-Competition

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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, i?? 3bn was spent on clothes and i?? 1. 25bn on foot ware. JD alone made revenue of i?? 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.

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