The JD Sports Firm’s Innovation Strategy

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Table of Contents

Executive Summary
Organizational and Strategic Aspects of Innovation
Research, Analysis and Application of Innovation to JD Sports
The Business Argument for Socially Responsible Business
Research, Analysis, and Application of Carroll’s Pyramid to JD Sports
Recommendations
References
Appendix

Executive Summary

Innovation plays an essential part in performing operations within an organization. This enables the organization to save time, resources, and money while gaining an advantage over its competitors (Needle and Burns, 2019). From an organizational perspective, the ability of an organization depends on size, structure, and culture. Large organizations are more innovative because they have the resources to fund research. From a strategic point of view, embracing strategies such as first-mover, followers, open innovation, partnering and licensing helps increase the extent of innovation in an organization. Apart from this, sustainability improves the performance of a firm because it attracts customers and employees. JD Sports has been able to innovate continuously due to its ability to lure and retain talented employees. Therefore, innovation is a practice that increases an organization’s performance in the market.

Innovation and sustainable operations are important concepts that drive success in an organization. JD Sports is a British clothing and footwear retailer that operates online and in physical stores (Singh, 2022). After conducting research on the organization, it was found that JD Sports has effective innovation strategies that have positively influenced its performance. The other finding is that there is a strong relationship between innovation, social responsibility, and sustainability. This is an indication that the success of an organization depends on how it integrates innovation and sustainable operation. Thus, JD Sports should strive to maintain a positive relationship with its relevant stakeholders using sustainability. It should ensure that its intrapreneurs are constantly motivated to develop new ideas.

Organizational and Strategic Aspects of Innovation

Importance of Innovation

Innovation has become a key and fundamental process for business success and growth. Innovation is a set of steps to find new ways for business performance (Cooper, 2019). The main goal of the innovation approach is to develop effective ways to meet new and unidentified customer’s needs. Innovation is the key to the strategic success of a business, as this path helps it to stand out from the competition in the market. Technology uses knowledge, materials and tools to help people perform better and solve problems (Needle and Burns, 2019). This approach allows businesses to develop products that meet customer expectations, increasing sales and productivity. Innovativeness is essential for the productivity of an enterprise, because it allows, for example, to reduce the risk of human errors. New products that are not yet familiar to the consumer, such as environmentally friendly modes of transport, allow an organization to capture a large market share. The combination of innovation strategy factors can significantly increase profitability.

Organizational Innovation Perspective

Organizational size, culture, structure, and goals impact innovation. According to Bendak, Shikhli, and Abdel-Razek (2020), the size of an organization determines the resources used to enhance research and development. Organizational culture is commitments, traditions, and values that everyone shares (Khan et al., 2020). Having an open and decentralized organizational structure positively impacts invention because employees are free to make their own decisions. Additionally, innovation has led to increased productivity, market share, and profitability by attracting more customers. For example, JD Sports’ innovation led to a market share of about 10% and a revenue of %11.47 billion in 2022 (Companies Marketcap, 2022). Thus, innovation is crucial for the success of an organization.

Strategic Innovation Perspective

There is a relationship between management strategies and innovation. First-mover advantage is among the strategies that thrive in a creative environment (Chen and Vanhaverbeke, 2019). An organization that adopts this intervention relies on innovation to attain its objectives. For example, JD Sports has increased its market share, performance, and profitability through a rise in sales and revenue in the market. Open innovation is an approach used to enhance innovation by sourcing ideas from within and outside an organization (Bogers et al., 2019). This business strategy involves sourcing ideas and solutions from a broad diversity of individuals and organizations to drive innovation.

The management approaches to promote innovation are follower strategies, follower advantages, licensing, and partnering. A follower strategy enables an organization to remain informed about industry trends and evaluate the flow of investment (Morrison, 2020). It learns from the mistakes of first movers and develops products that satisfy consumer needs. Licensing increases an organization to innovate in areas where competitors have exerted pressure (Yun et al., 2020). Finally, partnering is an intervention to access important resources to undertake operations effectively. For example, by partnering with Nike, JD Sports was able to innovate, which helped increase its market share and profitability. This enabled the customers to access Nike-based products through its stores.

Constraints to Innovation

The constraints to effective innovation strategy are inadequate resources, the inability to act on signals, and organizational cultural issues. The stigma of failure can slow down or even halt a company’s ability to develop new ideas (Boddy, 2019). The other barrier to innovation is not being able to act on changes in the market that have already been signalled (Hvolkova et al., 2019). This comes when the organization focuses more on its current strategy. Inadequate funds are another constraint to effective innovation strategy since it impacts the development and implementation of ideas.

Research, Analysis and Application of Innovation to JD Sports

JD Sports Fashion PLC’s innovation strategy is based on multi-channel approach, which includes selling its products online and in physical stores. Its main goal is to set global standards for retail (JD Sports PLC, 2022). They have effectively provided a solution where customers from all over the world can shop online in a way that is most convenient for their individual requirements using the latest technology. This was made possible by the introduction of new ideas and innovations. JD Sports Fashion PLC technology solutions for its consumers to make their shopping experience more convenient and personalized, respectively (JD Sports PLC, 2022). The organization has greatly improved due to its innovative nature, expanding its activities in different countries of the world.

The constant use of innovation has enabled JD Sports Fashion PLC to create a strategic vision that helps them grow and follow current trends. A focus on innovation efforts has helped the organization increase the number of retailers around the world, helping them find their place in the online space and offer related solutions (JD Sports PLC, 2022). In addition, it allows the organization to build good relationships with its customers and earn more money. JD Sports Fashion PLC is interested in actively exploring the many ways their patented technologies can be used in grocery stores (2022). Introducing new ideas and being creative is good for a firm because it helps them find new opportunities, making the company more competitive.

Innovation allows JD Sports Fashion PLC to increase its profitability in the industry. According to Rigby (2022), a 47% increase in sales indicates high customer satisfaction due to an omnichannel strategy. Consumers responded enthusiastically to this approach, increasing the sales in the market. Continued investment in its stores, digital platforms and creative marketing has enabled the company to offer high-end brands. It had placed money directly into these brands by buying them, like when it paid £1.5 million to buy the Pretty Green brand (Robinson, 2022). The purchase of these brands has helped the organization enhance its performance in the market.

Despite the challenges posed by the pandemic, JD Sports Fashion PLC has made significant progress to stand out from its competitors. An organization can easily communicate with many people through its customer feedback technology (JD Sports PLC, 2022). Its ability to spread brand awareness across a wide area can improve the effectiveness of promotion and customer service. In addition, it has a unique and attractive design, which greatly increases the use of a certain advantage. JD Sports customers are reporting a deeper connection to the brand through the company’s collaborative initiative. The company’s strategy is the most profitable in the long run, but the downside is the high cost of implementation. Despite this shortcoming, the innovation strategy paid off completely in the long-term perspective.

The Business Argument for Socially Responsible Business

Social responsibility implies that enterprises, in addition to earning profits, benefit society. It is becoming more and more important for buyers and shareholders to invest in organizations that will not only bring profit, but be useful to the community. Social responsibility is an important component of success, since society is also a stakeholder that any organization needs to consider (Park et al., 2020). Socially responsible companies must pursue policies that reduce their negative impact on the environment. Companies can choose different strategies, emphasizing the sustainability of production, encouraging volunteering or arranging charitable events (Park et al., 2020). Ethical treatment of employees of the organization can also be considered part of a socially responsible policy.

The socially beneficial actions of a company may seem to contradict the main reason why a business exists: to make a profit. When applied to business, social responsibility is known as corporate social responsibility (CSR) and is an increasingly prominent area of focus in companies (Park et al., 2020). Charitable actions and encouragement of volunteering can be expensive, and not all organizations see this as a long-term benefit. However, public utility plays a significant role in securing economic benefits, sustainable competitive advantage, and market success.

For a socially responsible policy to be profitable, a company needs to find a balance between the pursuit of profitability and potential benefits. Policies that respond to the protection of society can be both active and inactive – for example, respect for the environmental friendliness of production. Many green companies have made social responsibility an integral part of their business models, and they have done so without sacrificing profitability (Park et al., 2020). Since many consumers and investors consider a company’s commitment to socially responsible practices before committing their funds (Park et al., 2020). Thus, the adoption of social responsibility can benefit the main goal of business: maximizing economic benefits.

When introducing socially responsible policies, it is necessary to take into account the moral importance of such an approach. Social responsibility is a beneficial business practice, and failure to comply with it can be detrimental to a business (Park et al., 2020). Employees of the organization can use a useful contribution to society as an additional means of motivation. Motivated employees work better and bring more profit to the company. Moreover, this type of motivation does not bring additional costs to the organization.

Social responsibility as a business practice is more effective if the company takes it on voluntarily. Key ways in which the company takes on social responsibility include philanthropy, encouraging volunteering, ethical labor relations, and contributing to environmental change (Park et al., 2020). For example, companies that think about their environmental impact can limit the amount of waste they produce. Thus, an organization that cares about society secures a competitive advantage. Investors and buyers will be more willing to be part of the process of positive change.

The main contribution that the commitment to social responsibility for business makes is to enhance the image and reputation of the company. It is important for modern business to be aware of the potential contribution that the company can make to positive social change (Park et al., 2020). Consumers are increasingly eager to buy goods from companies that will invest the money they earn in the development of society (Park et al., 2020). Social responsibility programs can have a positive impact on employee morale by increasing their productivity. By investing in positive changes in society, the company ensures a positive reputation and long-term profitability.

Research, Analysis, and Application of Carroll’s Pyramid to JD Sports

Economic Responsibility

The economic strategy of JD Sports is to maximize not only its own profit, but also the profit of its investors. This is an excellent approach that contributes to the company’s reputation without incurring heavy financial costs (Singh, 2022). The company intends to offer a higher final dividend of 0.35% per share this year (Singh, 2022). This policy was chosen to show how well the organization performs in the market. The company does a lot to keep its employees and find new ones. It wants to improve people’s lives by giving them more choices. The main goal is to make more money every year by using resources, developing new products and services, while using good marketing methods. The goal of the organization is to stay in the fashion business as long as possible and help local communities.

Environmental Responsibility

JD Sports’ environmental responsibility is to recycle, dispose of waste, use resources based on demand. The environmental responsibility of the company is reflected in the Carroll pyramid in the appendix (Lu et al., 2020). As part of its efforts to combat climate change, JD Sports is placing more emphasis on reducing the damage its waste causes to the environment (2022). In addition, the company is acting ethically by developing new ways of doing things in the industry and making progress in reducing carbon emissions. Being environmentally responsible allows a company to gain a competitive advantage (Lu et al., 2020). The organization builds on its history of research and stays true to its mission by pushing the boundaries, setting high standards, and coming up with new ideas that help change the entire system (JD Sports PLC, 2022). The chosen strategy is profitable because it attracts responsible consumers who care about the contribution to environmental protection.

Legal Responsibility

The organization’s strategy is based on the full fulfillment of all legal obligations to the government, the state, consumers and employees. The company’s operations are legal as long as they follow the rules. Consumers are more likely to trust how a business works when standards and principles are followed. If the organization fails to follow the rules in the industry, it can be shut down (JD Sports PLC, 2022).

JD Sports attempts to inform customers about all relevant laws and rules when they work in the sector (2022). The organization follows all labor laws, including health and safety, equal opportunity, and data security (JD Sports PLC, 2022). For example, it asserts safety measures in the workplace to ensure that customers and staff are healthy and safe. During the hiring and selection process, candidates are not discriminated against based on age, race, or gender. Compliance with legal standards provides the company with a strong reputation and the trust of large investors.

Philanthropic Responsibility

JD Sports is focused on giving back to society through different interventions. JD Foundation has made it a goal to bring together social resources for doing good in the community, with a focus on poverty help with poverty, disasters, education, and the environment (JD Sports PLC, 2022). It is committed to building partnerships and giving personalized help. The JD Group has opportunities for mentoring, and JD employees play a big role in helping young people reach their goals and succeed. Through 2021 and 2022, they have expanded their careers program within the JD business and brought it to their charities (JD Sports PLC, 2022). This gives young people opportunities and growth that are often hard to find. Society favors companies that make a significant contribution to the future.

Recommendations

The organization’s operations should be sustainable by making them more open and responsive to the community’s needs. Furthermore, the corporation should maintain positive connections with its customers and business partners by catering to their requirements and contributing to the general welfare of society due to establishing a code of business ethics. It will enable them to increase their firm’s performance, maintain a greater number of employees, and provide a brighter future for their workforce. In addition, transparency must be incorporated in their sustainable programs that are already in progress. Therefore, it is essential to be transparent about the recipients of the financial support and the criteria used to make the selections to improve its social responsibility.

Despite having innovation strategies, the organization should consider improving its performance. First, they should focus on finding and encouraging intrapreneurs to get people to think of new ways to solve problems. Intrapreneurs are people who work for your company and have the mindset and skills to come up with new ideas. The organization should perceive them as business owners who work for them. The organization needs to be willing to experiment and explore different options to be truly innovative. This can be done through customer co-creation, discovering market adjacencies, and engaging in an innovation hub. Finally, the organization should strive to demonstrate its passion for embracing new ways of doing things. Therefore, the company should create a conducive environment for innovative culture to thrive.

References

Bendak, S., Shikhli, A.M. and Abdel-Razek, R.H. (2020) ‘How changing organizational culture can enhance innovation: Development of the innovative culture enhancement framework’, Cogent Business & Management, 7(1), p.1712125.

Boddy, D. (2019) Management: using practice and theory to develop skill (8^th ed.). Harlow, England: Pearson.

Bogers, M., Chesbrough, H., Heaton, S., & Teece, D. J. (2019). Strategic management of open innovation: A dynamic capabilities perspective. California Management Review, 62(1), 77-94. Web.

Companies Marketcap (2022) Revenue for JD Sports Fashion (JD. L). Web.

Chen, Y. and Vanhaverbeke, W. (2019) The Routledge Companion to Innovation Management. Routledge.

Cooper, R.G. (2019) The drivers of success in new-product development. Industrial Marketing Management, 76, pp.36-47.

JD Sports PLC (2022) JD Groups. Web.

Hvolkova, L., Klement, L., Klementova, V., & Kovalova, M. (2019). Barriers Hindering Innovations in Small and Medium-Sized Enterprises. Journal of Competitiveness, 11(2), 51–67. Web.

Khan, M. A., Ismail, F. B., Hussain, A., & Alghazali, B. (2020). The interplay of leadership styles, innovative work behavior, organizational culture, and organizational citizenship behavior. Sage Open, 10(1), 1-15. Web.

Lu, J., Ren, L., Zhang, C., Rong, D., Ahmed, R. R., & Streimikis, J. (2020). Modified Carroll’s pyramid of corporate social responsibility to enhance organizational performance of SMEs industry. Journal of Cleaner Production, 271, 1-20. Web.

Morrison, J. (2020) The Global Business Environment: Towards Sustainability? London: Macmillan Education UK.

Needle, D, and Burns, J. (2019) Business in Context. Cengage Learning.

Park, H., Kim, Y., & Popelish, B. (2021). Corporate social responsibility and stakeholder engagement: a content analysis of PRSA silver anvil award-winning CSR campaigns. Journal of Sustainability Research, 3(3), 1-29. Web.

Rigby, C. (2022) JD Sports says 47% sales boost shows how much customers like its ‘elevated multichannel’ strategy. Web.

Robinson, J. (2022) Liam Gallagher’s Pretty Green fashion brand is being revived. Web.

Singh, P. (2022) JD Sports profit doubles, revenues up 38 percent. Web.

Yun, J. J., Zhao, X., Jung, K., & Yigitcanlar, T. (2020). The culture for open innovation dynamics. Sustainability, 12(12), 5076-5096. Web.

Appendix

*Figure 1: Carroll’s Pyramid. (Carroll’s Pyramid, cited in Lu et al. (2020).*

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