Macro Environment and Capabilities of John Lewis Ltd

Business Strategy TABLE OF CONTENTS INTRODUCTION 3 P1 Apply an appropriate frameworks analyse the impact and influence of macro environment on the John Lewis Ltd and its strategies.3 P2 Analyse the internal environment and capabilities of John Lewis by using framework. 5 VRIO of John Lewis 8 P3 Apply porter’s five forces model evaluates the competitive forces of given market for John Lewis Ltd. Political Factor-This factor include the change in the governing power of country, political factor impact on the business

Business Strategy

TABLE OF CONTENTS
INTRODUCTION..........................................................................................................................3
P1 Apply an appropriate frameworks analyse the impact and influence of macro environment
on the John Lewis Ltd and its strategies......................................................................................3
P2 Analyse the internal environment and capabilities of John Lewis by using framework........5
VRIO of John Lewis...................................................................................................................8
P3 Apply porter’s five forces model evaluates the competitive forces of given market for John
Lewis Ltd.....................................................................................................................................8
P4 Discuss about the theories, concepts and models or device strategic planning....................11
2. Justify and recommend the most appropriate growth platform and strategies.......................14
CONCLUSION............................................................................................................................14
REFERENCES.............................................................................................................................16

INTRODUCTION
Business strategy is basically an approach that can perform action or set specific decision
which assists the entrepreneurs in achieving the enterprises goals and objectives. Enterprise
strategy is basically implementing in the organization which are working under the macro and
micro environment factors that control the overall performance of business activities. This
assignment will discuss about the PESTLE and SWOT analytical framework for identifying the
opportunities and threats of organization. It will describe Analytical framework the impact or
influence the culture and environment of business and its strategies. Furthermore, This report
will describe the Porter’s five forces model which evaluates the competitive environment of the
global market. At last, it will cover the theories, concepts and models help for strategic planning
of business.
P1 Apply an appropriate frameworks analyse the impact and influence of macro environment on
the John Lewis Ltd and its strategies.
Pestle analysis is providing a frame work to investigate the John Lewis non controllable
external factors that have potential impact on the business operations, it is the better position that
considered likely minimise the risk in the future. Macro environmental factors refer to all the
external uncontrollable forces that impact in both negatively and positively in decision making.
Political Factor-This factor include the change in the governing power of country, political
factor impact on the business environment and changes of government policies as well
(González Rodríguez and et.al., 2018). John Lewis is the fastest growing organization that has
many departmental store which may considered the political factor while formulating the
marketing and selling approach or strategies. So if there is certain and rapid changes in the
political factor it will be creating problem for company. John Lewis has faced the political issues
of the business which are affected by the government policies, regulation impact on the
economy, customer buying habits and international trade laws. Regulation affects the products
that can import, export and sold the item in stores.
Economic Factor- This factor influence or impact on the business due to exchange rate,
inflation rate of currency and interest rate etc. John Lewis can be formulating the price strategy
related the product and services. In this way, it considers the changed in terms of economic

forces. If there is rapid changes in the inflation and deflation rate of company then there will be
challenges for company to handle it properly. In John Lewis, The economic is facing the
recession and very sensitive to change in terms of interest rates. There are rigid competition with
the Lewis business that has lead to the retailer provide a lot of incentive from the consumer. It
will influence the John Lewis as the price that have driven down most of time.
Social Factor- in John Lewis, Social factor may affect the demand and supply of function in the
organization. It includes preferences, trends, taste and fashion because customer may give more
presences and changes in values, attitude and belief of public. In this way, Social factor is main
concept that need for organization to identify the requirement of people on the basis of trends in
marketplace. In John Lewis, The customer shifting preference and lifestyle has corresponded to
the opportunities for enterprise. It has created a new opportunities in market by customer which
causes by the society. It is becoming more important that should be introduced as more branded
in departmental stores.
Technological Factor- Technology environment has supported the Lewis enterprise to increase
the shopping experience of customer. They are directly influence the sales approach to increase
productivity and profitability in marketplace. John Lewis are carrying out IT system which help
to access through the secure server and make flexible. It is an advancement of modern method
which include change in the development, knowledge etc. John Lewis Company has targeted to
the new customer in market while formulating the market strategy for promoting an effective
services in marketplace. Sometimes, technology may increase the risk threats regarding the data
security and privacy.
Environmental Factor- John Lewis must ensure that it has sufficient amount of resources need
for product development. In case, if the organization does not considered that effect on the
business production and supply functions. Lewis can use the renewable resources for the
production such as wool and cotton. It may include the natural resources which are required as
a raw material, non-renewal natural resources etc. The threats are in term of legal aspects,
penalty for health and safety. There are increasing the energy efficiency and reducing the carbon
footprints.
Legal Factor- This factor may involve the change in their legal and regulatory framework, it has
changed in the legal rules that affect the organization in positive and negative ways. John Lewis

is applied the rules and regulation in the business culture where every employee can do their
work in proper manner. The opportunities of John Lewis is that when the rate of taxation and
duties has been decreases and than increases the productivity or profitability in marketplace.
The threat is the national legislation that has been stiffen for both safety and health in
both ways of customer rights and production. On the other hand, the BREXIT policy and its
implementation will be requiring to have very much and huge impact on business operations in
UK.
P2 Analyse the internal environment and capabilities of John Lewis by using framework.
Internal analysis environment and capabilities of business is depth goal of business
objectives that have determined the capabilities on the basis of resources of firm. SWOT analysis
is the framework that identify the internal environment and capabilities of John Lewis. It is
relation to the business and effective strategic analytical tool for analyse the company
capabilities, performance and its internal environment.
Strength:
Robust growth strategy- John Lewis is a leading organization which consistent
performer in terms of revenue with operating income in 20 billion pound in 2018. The sales
growth was noted with including the exceptional items and other bonus. The company’s profit
growth has been increased by 21.2 %. This organization has launched the new product and their
services with innovation or partner service, competitive pricing (PriemWenzel and Koch, 2018 ).
These are the main strategic factor which has grown the customer base and also increasing the
market share.
Strong online presence- John Lewis has overall global presence and strong reputation,
brand image across the countries. It has led to brand development over the year. It is major
player when it comes to the finance and home cares. The main value of John Lewis to maintain
the performance, innovation and growth. It also diversify the brand across the different segments
on the based on applications.
Weakness:

In John Lewis, there are range of product and services are limited so that they were
offered limited services as compare to other super markets. In this way, consumer can choose
another brand those who were providing many options. It include the lack of capabilities in
organization to face many problems, threats regarding the market situations. In this way, John
Lewis always try to improve their weakness.
The price of products are higher than the super market and grocery stores which might
be limited to the target group. Pricing is an important weakness in market because many
consumer belief to buy the best quality of product at cheap price but sometimes which it is not
possible due to the competition level in marketplace.

Opportunity:
Positive growth for healthy product industry- Many consumer in Australia always
ready to pay a premium for the products they are more perceive as healthy alternatives. There are
increasing the chronic diseases that directly affect the human body so that consumer may choose
the healthier alternative. In this way, John Lewis has entered in market to offer various type
services and product to the stores.
Enter new markets- John Lewis is mainly following the expansion strategy by creating
new product in multiple countries. They are trying to expand their branch in global market and
exploring the products. The company has widened its offering by the partnering with food
delivery British corner shop which really helps to explore new territories. The John Lewis is also
planning to open new outlet in Dubai for selling different type of product such as living room
items, textiles, furniture, nursery products etc.
Threat:
There are different type of threats exist in John Lewis firm that affect the business
activities. It involves Robbery, security etc. these are the important threats the lead to high
priority security concern for property loss. It also another safety of employee working at late
night. It has required for organization to concern about threats and implements new idea for
managing or controlling in proper manner. In global market, there are many intense competition
increases in corner shops, stores, grocery stores and super market etc. John Lewis has provided
the good convenience of consumer those who wanted to buy the products. There is another
threats of competition laws which have a lack of large scale development.

Figure 1 SWOT Analysis
(Source: SWOT Analysis Framework. 2018)
VRIO of John Lewis
Valuable- John Lewis has analysis to represent the financial resource of company that are highly
valuable for helping the investing into the external opportunities. It help to the John Lewis in
combating the external threats. In John Lewis, Local products are valuable resources which are
highly differentiated in proper manner. This organization shows the employee which are
valuable resources to the firm. It also patents which are valuable resources that allow the
company to sell their products in market without competitive interference.
Rare- The financial resources of John Lewis are found to be very much rare as they are having
financial resources which are only possessed by few companies. As per John Lewis, the local
products are found that not to be rare as determined by the John Lewis. It can easily provided in
the market to other competitors. Alternative competitors are used the other resources in same
ways according to John Lewis.
Imitable- The patents of John Lewis is very much difficult to imitate as identified by company
as others are not legally allowed to imitate a patented products. The financial resources of John
Lewis are the costly to the imitated as determined by the VRIO analysis. The resources have
acquired through the company over the gain profitability and productivity. The other new
entrants and competitors would be required which similar profits for long terms plans. As per
analysis, John Lewis is determined that the cost of products is not imitate.

Organisation- The distribution network of company is very well organised as this reach out to
customers by ensuring that products can be available to all customers through their outlets. In
John Lewis, The organization is used the strategically to invest in the right place where they are
making use of opportunities and combatting the threats. This company will not use the patent and
unused competitive advantages can change into the sustainable competitive advantage of John
Lewis.
P3 Apply porter’s five forces model evaluates the competitive forces of given market for John
Lewis Ltd.
Porter’s five forces are based on the holistic strategy framework that looks strategic
decision away from analysing the present competition level. This type of model focus on the
John Lewis that can build a sustainable competitive advantage in the product industry (Ansoff
and et.al., 2019). Manager can also use the Porter’s five forces model to develop the strategic
position with the home care goods and service. It can explore the profitable opportunities to
increase the productivity and profitability in marketplace.

Threats of New Entrants-(High)
The new entrants in the personal and household products bring innovation, new manner of doing
things but John Lewis has faced many pressure due to the lower pricing strategy, reducing the
cost and providing the new value proposition to the consumer. Lewis John has managed all type
of challenges and build an effective barrier as a safe guard to protect the competition level. This
organization has tackled the threats of new entrants by innovating new product and service which
only bring the customer to fold and increase the demand. It has building capabilities and
spending money on the research and development to identify the requirement of customer.
The power of threats of new entrants is high in the John Lewis o(Ansoff and et.al.,
2019)rganization because the firm has used an appropriate rules and regulation to manage the
task in proper manner. (Ansoff and et.al., 2019)

Bargaining Power of Supplier (Moderate)-
There are many different companies buy the raw materials from the different suppliers. In
this way, Suppliers in the dominant position can decrease the margin level of John Lewis of can
earn in marketplace. In this way, the overall impact of higher supplier bargaining power is lower
than the overall productivity and profitability of good and services. John Lewis can tackle the
bargaining power of supplier by building a strong supply chain with the multiple supplier.
The bargaining power of Supplier is moderate because The strong and powerful supplier in the
consumer use their negotiating power to extract the higher prices from the organization.
Bargaining Power of Buyer (High)-
The buyers are demanding a lot when John Lewis offering the best services and products
to the consumer. They offering the service by paying the less price as possible. It has developed
the pressure on the John Lewis Company in long terms. On the other hand, The Smaller and
more powerful consumer base is John Lewis which higher bargaining power of customer (Ansoff
and et.al., 2019). It has increases the ability to seek discounts and offers. This organization has
building a large base of customer which help to reduce the bargaining power of buyer. The
bargaining power of buyer is high because it has increased the opportunity in the company
streamline sales and production process. John Lewis has rapidly innovating the products and
provide many discounts to the customer. New products always reduce the defection of existing
customer and its competitors.
Threat of Substitute (Low)-
Threat of substitute is comparably low despite the trend of online market because many
consumer prefer to buy the product through shops, stores having physical interaction. (Anwar,
Bingley and Burges, 2018). They can use for the purpose of storage. The threat of substitute
product is high if it offers more value proposition that uniquely in different from the present
services. Nowadays, there are no such substitutes to the cloths and food items. It makes the
threats of substitutes relatively lower (Anwar, Bingley and Burges, 2018).

Rivalry among the existing competitors (High)-
The rivalry among the existing industry is an intense then it will drive the prices and also
decrease the overall productivity and profitability. John Lewis has operates in the competitive
household and personal goods but it does not take the overall long term profit in the
organization. The Rivalry among the existing competitor is high because it has managed the long
term product services in marketplace. There are many competitor in marketplace such as eclerx,
Rosary bay, Next etc.
P4 Discuss about the theories, concepts and models or device strategic planning.
Strategic planning is a type of process that create or develop the strategy to manage the
business operations and functions (Holmes and et.al.,2018). There is different type of theories
implemented in the organization to manage the competitive level in global marketplace.
Porter’s generic strategies-
The John Lewis is relative position within the industry determine whether the
profitability is above or below on the basis of average. This type of strategy is mainly divided
into the different manner on the basis of performance such as cost leadership, focus and
differentiation etc.
Cost and price leadership strategy
John Lewis has a set out become the low cost producer in the marketplace. In this way,
the sources of cost advantages are varied and depend on the particular structure. It may include
the preferential access to raw materials, economies scale and proprietary technology etc. the low
cost producer has finds and exploits all type of sources therefore, John Lewis can achieve and
sustain the overall cost leadership. This type of strategy allow the competitive edge by
manipulating the production costs in two ways. It has changing the lower prices to increase the
share and also reduced the costs to increases the profits. John Lewis has been implementing the
cost leadership strategy to improve the quality of product and their services.
For Example- The cost leadership strategy is used by John Lewis firm that can decrease the
price of products that should be provided by Lewis in marketplace. They are using the strategy to
give the product at low price and offer many discounts, vouchers etc.

Figure 2 Porter Generic
(Source: Porter’s Generic Mix. 2018.)
Differentiation strategy
This strategy is basically looks to develop the unique products and attractiveness to
engage with the consumers. John Lewis has applied the differentiation strategy to meet the
specific goals and objective of customer. They are rewarded with the premium prices (Bryson,
2018). The organization has needed to maintain the proper promotions team and marketing that
help to define a brand and its uniqueness. They also delivering the high quality of products to
maintain the customer loyalty in proper manner. Ongoing research and development is another
factor that possible only because of differentiation strategy to easily identify the requirements.
It has justified that the Lewis can use the differentiation strategy where it has considered
as a price is another factor where John Lewis has supported the system for the services and
products that provided by the organization. There is notion of brand image which creating an
appropriate connection with the consumer for long terms loyalty.

FocusStrategy
Focus strategy generally employed where the company know about the segments and have
products to the competitive satisfying its needs. This type of strategy is one of the three generic
strategy.
 Differentiation strategy
 Low cost strategy
The strategy or approach appeal instead layering the efforts towards the small market. John
Lewis has to choose the approach and adopt for taking the deliberate risk. By engaging with the
specific demographic so that many of them are underserved. The organization is able to build a
loyalty and trust among the consumers. Unfortunately, researcher has shown that there are many
consumer might unattractive to the services thus, the organization become almost dependent on
the spending habits of small percentage of people. John Lewis is looking to find the cost
advantage in their market segments.
For example- Marriott hotel has mainly focused on the budget and minded travellers which
required for identifying all the overall budget in proper manner.
2. Justify and recommend the most appropriate growth platform and strategies.
John Lewis should be using differentiation strategy so that they could be able to provide
highest level of perceived value to client and brand image will be playing important role in
developing strategy. This will be creating opportunities for company and helping to gain higher
profits for them as well. With the help of differentiation John Lewis can be able to grow and
develop into market.
The John Lewis has selected the Cost leadership strategy that help for managing and
controlling the overall cost of organization in proper manner. They providing many offers to
their consumer at minimum price. This organisation is used this strategy to handle the overall
enterprise in proper manner.

Strategic plan
Purpose
The purpose of John Lewis organization to use the cost leadership strategy that help to manage
the customer need and requirement. They also providing the best facilities and services to
increase the productivity and profitability
key objective
The key objective is to happiness all the employee through their worthwhile, satisfying the
employment in the business success. It has measure the ability to sustain or enhance the
position in both growth and development.
initiative
John Lewis has initiatives to launch the product and service for long term benefits. The
company has exists to make global production which better for the people to produce the best
quality of products in marketplace.
Strength
The strength of John Lewis firm to their innovative idea in the product development they
always try to provide better facilities and services to consumers. In this way, they easily
targeted to their potential customer towards the product and services.

CONCLUSION
As above discussion, Business strategy is a process to plan a strategy for managing and
controlling the organization in proper manner. It is an approach that can perform action or set
specific decision which assists the entrepreneurs in achieving the enterprises goals and
objectives. It summarised that discuss about the PESTLE and SWOT analysis framework for
applying in the organization. It impact or influence the culture and environment of business and
its strategies. Furthermore, this report describes the Porter’s five forces model which evaluates
the competitive environment of the global market. Moreover, there are different theories,
concepts and models help for strategic planning of business.

REFERENCES
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business owners in developing countries: Linking social media use, business strategy and
well-being. ACIS2018 Proceedings.
Bryson, J.M., 2018. Strategic planning for public and nonprofit organizations: A guide to
strengthening and sustaining organizational achievement. John Wiley & Sons.
González-Rodríguez, M.R. and et.al., 2018. Revisiting the link between business strategy and
performance: Evidence from hotels. International Journal of Hospitality Management. 72.
pp.21-31.
Holmes Jr, R.M. and et.al., 2018. International strategy and business groups: A review and
future research agenda. Journal of World Business. 53(2). pp.134-150.
Kerzner, H., 2019. Using the project management maturity model: strategic planning for project
management. Wiley.
Olson, E.M. and et.al., 2018. The application of human resource management policies within the
marketing organization: The impact on business and marketing strategy
implementation. Industrial Marketing Management. 69. pp.62-73.
Priem, R.L., Wenzel, M. and Koch, J., 2018. Demand-side strategy and business models: Putting
value creation for consumers center stage. Long range planning. 51(1). pp.22-31.
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