JD
(Jingdong group) is a company that is in the environment of China’s e-commerce
and macro environment. The external strategic environment involves China’s e-commerce
and macro environment. For such purpose, PEST analysis would be used in order
to determine the macro environment of JD and the influence of such environment
on the JD group.
Political Factors
Political
stability is one of the most crucial factors for any firm. High political
stability supports developing a strong and friendly business environment with
expected market trends that help in the growth of the business (Mark, 2022).
While the political issues discourage the investors and create a problem for
the shareholder in trusting the economic and consequential organisation
performance. Whereas, the JD Group is the firm that is represented in many
countries including the political issues as well. The increase in political
issues especially in the global atmosphere would affect the growth of the JD
Group and restrict its opportunities.
In current years, it has been observed that Groundhog Day in China for sports activities, referred to as international sports activities have increased in the country only to become knotted in the political affairs of China and also face many problems. Many athletes and leagues are repeatedly challenged by the political requirements while conducting business in the country (Hannah, 2022). Many recent cases that involve the (National Basketball League) NBA, (Women’s Tennis Association) WTA explains the strictness of potential problems for talking out against China. By observing such cases the companies and firms know how to involve with China and get advantage from its growing market. However, China has revealed its need to control the market of international sports as well which supports the country in promoting the sports and fitness among the people of the country and also improves the sports industry of china to more than 4 trillion approx. more than 650 dollars by the year 2025. Such acts influence sports programs and teams
Economic Factors
Economic
factors of the company involve a country’s economic structure, system,
development level, economic trends for the future, the status of resources, and
industrial layout. These factors have a huge impact on the development of the
firm and are also directly related to the future development space, process,
cost, and effectiveness of the JD group which is considered the most dominant
member in the competitive industry (Chris, 2018). According to recent news,
there are more than 400 stores of JD in the UK, and owns more than 1500 outlets
globally.
Whereas,
recently JD made the biggest achievement by paying more than 550 dollars for
United state footwear retailer and has more than 500 stores and 300 businesses
in the department of Macy’s stores. In the year 2018 JD has reported an
increase in net revenue of about 21 percent. Which was considered the slowest
development record and hit about 17 billion dollars and a net income of 1.1
billion dollars that barely defeat the expectations of the analyst (Danielle,
2019). Whereas, the yearly active consumers reached more than 300 million at the
start of the year and approx. However, according to the results of the past year
of retail powerhouse is now reorganising its operations and laying off
employees. For the development of the company in a competitive market.
Social Factors
Social
factors are the values, customs, cultural traditions, beliefs, and some other
components of the participants in the area where the company is located. Social
factors are referred to as a significant method and have a huge influence on
people's purchases and patterns preferences. Social factors also play an
important for making business decisions concerning the JD group. According to a
statistical report on China the internet penetration rate has risen to more
than 50 percent due to the growing usage of computers and smartphones. Currently, the china informational sector is stable that integrated
with several departments of society and the economy frequently plays a
significant contribution to the country’s consumption that upgrades the social
and economic changes. With the increase in the methods of China’s sports
market, the management of the government has progressively standardized, and
many methods are improved such as the logistics related to the delivery of the
products and the payments methods could be realized quickly with safety.
However, in the last few years the ratio of online shopping customers has
increased. Now the online market has a wide vision. In the
year 2017, the ratio of online shopping is more than 500 million in China. As
there’s an increase in the online shopping user, more advancements are required
to upgrade the online shopping applications.
However,
according to some reports, the total sales of national customer’s goods were
more than 35 trillion Yuan in the year 2017 in China. The online retail sector
is growing in importance in the promotion of consumption. The rise in the
e-commerce market has developed new trends and concepts. To achieve new
developing trends in the industry the JD group needs to modify the positioning
of the products in an accurate time according to the requirements of the users
to improve the service level that including improving the quality of the
product, after-sale service, logistics distribution, sustain its competitive
benefits.
Technical Factors
The concept
of e-commerce was invented based on internet technology. Rapid growth has been
observed in the last few years in the informational technology sector of China
including internet plus service such as broadband networks, and the growth of
digital technology applications and websites that increases the scale of
china’s internet service level and technology. However, the rapid change in the
progress of the internet has also enhanced the development method of the
electronic payment industry and solved the issue regarding capital circulation
for the online platforms.
JD groups
involve various payment methods such as WeChat payment, online banking payment,
Alipay, etc that have been represented by the Banks like payment and delivery.
In addition to being able to help raise the frontal efficiency of distribution
logistics, the application of the Internet of things can also be reflected in
smart homes, mobile flash sales, and other electricity projects, not only
improving the utilization efficiency of social resources, and improve the level
of the social productive forces, also makes the electric business platform with
more intelligent, for consumers to increase more convenient and personalized
online shopping experience.
JD groups
have made some advanced inventions in smart projects. For the delivery purpose,
it has the world first sorting robot that delivers the product using high
technologies services which has enhanced the delivery time and the operational
effectiveness of logistics. Such innovations have made the company more unique
in the competitive market.
Swot analysis
Strengths
JD
Group is one of the leading companies and has various strengths that help it to
succeed in the competitive market.
·
Achieves customer
satisfaction: The Company has a stable connection with its customers and has
been able to accomplish customer satisfaction on the basis of their
requirements in order to attain high customer satisfaction and effective brand
equity among the consumers.
·
The cash flow
service: the website of JD provides cash
flow services that deliver resources to the company’s hands in order to
increase its new projects.
·
Deals with the
community properly: The Company has developed a service that provides its
dealers the service where they can invest in training as well in order to
explain to the client how they can get benefit by the purchase of such product.
·
Proper track records
of new and developing products (Guan
et al., 2018).
Weakness
- Involvement in the research and development is slow as compared to
other companies in the market. However, the company is spending more on
research and development but cannot compete with other players in the
market.
- The company needs to adopt new technologies. JD group requires to
invest more amount in the technology in order to expand its services
technically.
- The challenges faced by new entrants cannot be tackled by the
company and due to this has lost some market share as well. The company
needs to develop an internal mechanism based on the feedback
Opportunities
- New technology acts as an opportunity for the company in order to
practice different strategies based on pricing in the new market. It will
support the company in order to sustain the customer satisfaction by
including efficient services.
- The company has invested a lot in the online platform and new
customers will be achieved through such platforms. The online platform has
increased the sales network of JD Company. In the future, a company can
get control its customers and could serve their needs with the help of
such opportunities.
Threats
- The new trend towards the concept of isolationism in the economic
system of America, this trend could be followed by other governments which
could have a bad impact on international sales as well.
- New market demands related to raw materials could impact the
company’s profitability
- As the company is operating in many areas of the world, it could
face the lawsuits in the given market due to different rules and laws and
rapid changes related to the standard of the product in such market (Fan
et al., 2021)