Business Strategies and Management Accounting Analysis

The assignment provided is a compilation of research papers and articles on business strategies and management accounting. It includes topics such as cooperative strategies in international business, product design and business model strategies for a circular economy, and the impact of IS-business alignment practices on organizational choice. The document also includes case studies on John Lewis, a British retail company, analyzing its PESTEL analysis, SWOT analysis, and Porter's Five Force analysis. This document is suitable for students in business, management, and accounting courses, providing them with a valuable resource for research and learning.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Impact and influence of the macro environment on the firm ...............................................1
TASK 2............................................................................................................................................3
P2. Analysis of the internal environment and capabilities of a company...................................3
TASK 3............................................................................................................................................5
P3. Implementation of Porter's Five Force model to evaluate the competitive forces................5
TASK 4............................................................................................................................................6
P4. Use of different theories, models and concepts to interpret strategic planning for the firm.6
CONSLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business strategy refers to those plans and activities which are designed and developed
for efficient running of the business of the firm. These plans and acts are beneficial for the firm
because they help in making decisions so that the organisation can attain its aims and objectives
in an effective manner. Business strategies are useful for the effective management of the firm so
that the firm can manage business activities ans operations of the organisation (Aithal, 2016).
This assignment is related to John Lewis Partnership which is an employee owned UK retail
firm. This organisation was founded in 1929 by John Spedan Lewis and headquartered in
London, England, UK. This company manufacture various products like clothing, watches &
Jewellery, giftware, cosmetics, home products, accessories, food direct product and financial
services. This report will be discussed about the impact and influence of macro and micro
environment and capabilities of the firm. Further will define about the outcomes by using
Porter's Five Forces model to a market and use numerous models, theories and concepts to
analysing and interpreting strategic directions available to the firm.
TASK 1
P1. Impact and influence of the macro environment on the firm
Macro environment refers to those external factors which create impact on the business
strategies and actions of the firm. In context of John Lewis, it can a set of external condition
which affect a business development efforts in both aspect positive as well as negative. To
monitor the impact of macro environment, the management of this firm can use PESTEL
analysis which is as following:
PESTEL Analysis- It is a tool and technique which is used by the management of company to
determine the macro environment factors which create impact on the firm. It involves various
factors such as political, social, economical and others that affect the business operations and
activities. The impact of these factors are as following:
Political- This factor consists political stability, level of corruption, bureaucracy,
Taxation policy, wage legislations and others. In UK, the government of this country make
decrement in the corporation tax from 39% to 28% which is favourable for this company because
it help in increasing the profit margins of the firm in forthcoming time (Allen and Truman,
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2016). But the government of UK make increment in interest rates which negatively affect the
consumer confidence and sales of the firm.
Economical- It is another factor which include exchange rates, economic growth rate,
discretionary income, inflation rate, unemployment rate and others. In UK, there are ongoing
changes are generated in the economic condition. For example, all the business operation of the
firm are depend on the labour and worker so if there are any change occur in economy, it directly
affect the labour cost (Beamish and Lupton, 2016). In 2017, the development is slowing down as
real incomes were compressing. It affect the sales and cost including business rates and wages in
negative manners.
Social- It involve taste and preference, culture, values, trends and various other factor
which affect the business and strategies of the company. In UK, there are various kind of
changes occurred in John Lewis due to change in trends and fashion so the firm also offer
products accordingly to their potential customers. This positively affect the business of this firm
in terms of profit. This firm produces western clothes but it operate its business internationally so
it is not fulfil the need of those customers who prefer traditional wear according the culture of
the nation. It unfavourably affect the business and growth of the firm.
Technological- It include various technologies which can be used by the company in
different manners such promotional, operational, management, production etc. John Lewis is
have information that now these days customers prefer online shopping so the management of
the company used online tool and technologies to provide this services to it customers. It help in
retaining the clients and maximizing the productivity of the business of the company. The
management of the company expected that johnlewis.com responsible for these kind activities
like online shopping etc. and in 2014, it hit £1billion turnover. But the management of the
company do not use more channels and tools of promotion which unfavourably to the firm.
Environmental- Weather, climate change, recycling, waste management, environmental
legislations and others are include in environmental factor. In John lewis, the management of the
company follow recycling and waste management process which help in minimizing the wastage
and managing the inventory. With the help of it, the management of the firm manage carbon
emission and other kind of pollution. Now these days, customers are also conscious about the
environment they also have demand of eco friendly packaging which will not harm the
environment. It help the company in enhancing productivity and increasing profitability. Some
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elements of environmental factor also affect firm in negative manners such as change in climates
and weather (Bocken and et. al., 2016). For example, if the raw material of the firm destroy due
to climate, then it unfavourably affect the firm in terms of loss.
Legal- This factor consist of different laws and regulations which are majorly formulated
by the national authorities for running and operating the business smoothly. In John Lewis, the
management of the firm effectively follow data protection act so that it can provide security to its
customer's personal information and the clients show their loyalty towards it (Bui and De
Villiers, 2017). This company operate its business in numerous nations and there are various
fluctuation or changes occurred in the laws and legislations, so it affect the business and
strategies of the organisation.
TASK 2
P2. Analysis of the internal environment and capabilities of a company
Internal environment refers to those factors which affect a company or its business
operations initially. To monitor these factors, the management of the organisations use SWOT
analysis which is as mentioned below:
SWOT Analysis- It is an strategic tool and technique which is used by the management of the
firm to monitor the strengths, weaknesses, opportunities and threats. In John Lewis, the manager
of the company can also use this analysis to determine the impact of internal environment. It is as
follows:
Strengths Weaknesses
 John Lewis manufacture good quality
clothes as per their customers
requirement which help in building or
making a strong brand images.
 It is one of the most upmarket retail firm
in UK because it offer a large range of
trendy and fashionable clothes
according to the trend and also provide
an option of inline shopping with global
delivery
 The management of the company do
not design and formulate effective
business strategies in comparison to its
competitors so there are lack of
effective business strategies and John
Lewis are not taking competitive
advantages (El-Masri and et. al., 2015).
 The pricing strategy which is used by
John Lewis for selling its products is
higher in comparison to other
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supermarkets and grocery retail stores.
Opportunities Threats
 By making changes and using new or
innovative ideas, the management of
John Lewis can make innovation in its
existing products, services . This help in
providing an opportunities to increase
the customer base and gaining
competitive advantages.
 By using different promotional channels
according to the culture of the country,
expanding network and opening more
flagship stores to reach to various
customers. It will, provide an
opportunity to create awareness about
the products and services of the firm and
make enhancement in the productivity
and sales of it.
 John Lewis, operate its business
internationally so if the government of
countries make changes in their rules
and legislations, then it affect the
business strategies and operation of the
firm and generate threats for it.
 There are numerous competitors like
Tesco, ASDA, Marks & Spencer etc. in
the market and they are also producing
various substitute products like this
firm which generate threat of
competition for John Lewis and affect
its sales (Gibbons, 2015).
Capability Analysis- It is a set of determination which is used to assess that the company is able
to fulfil the specific and particular need and requirements. In John Lewis, the management of this
firm can use VRIO Model to assess capabilities of the firm. This analysis is as following:
VRIO Framework- It is a tool which is used to analyse internal resources and
capabilities of a firm to identify that they can be a origin of uninterrupted combative benefit.
This framework consist of four factors which are mentioned below:
Valuable- In John Lewis, resources are seen as valuable when they are involve by the
management in implementing strategies. Labour and employees are most important resources for
the company because the operations or business are running by them. So they have value for the
firm and the management also provide them different types benefits.
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Rare- It is the second factor which mentioned that those resources which are valuable
and must be rare (Matt, Hess and Benlian, 2015). In John Lewis, Employees are valuable and
rare because they help in producing products according to the needs and demands of the
customers and useful for gaining the competitive advantages from the market.
Imitate- It refers to those resources and strategies of the firm which are unusual and hard
to copy by others. In John Lewis, the management of the company use unique designing
strategies so they manufacture trendy and fashionable clothes which is hard to copy.
Organisation- It indicates the effective distribution of resources which are valuable
rare, and hard to imitate. In John Lewis, the management of the company, properly manage and
organise these resources so that they can help in the development and growth of the firm (Noe
and et al., 2017). For this, they design formal report structure, strategic planning, budgeting
system and management control system etc.
TASK 3
P3. Implementation of Porter's Five Force model to evaluate the competitive forces
Porter's Five Force Model
It is a tool which is used by the management of the company for monitoring the
competition of a business. This model analyse five competitive forces that help in shaping each
and every sector and help in analysing the weaknesses and strengths of a sector. This model can
be used by the management of John Lewis and the analysis is as follows:
Threats of new entrants- In John Lewis, there are low threats of new entrants because
there are more and huge amount of fund required to enter in retail industry. So it is not easy to
come in this sector for each and every firm. It positively affect the business of the company
because if there are no more new entrants then the risk of competition is low. Lack of market
information is another factor which specifically stop foreign investors to enter in retail sector as a
barrier to new entrants.
Bargaining power of suppliers- There are number of suppliers who provide material for
the production of goods and services to John Lewis. So the bargaining power of suppliers is low.
This company is not totally depend on its suppliers because mainly sells are conducting through
it own branded products. It favourably impacted the company because suppliers demand is low
and the firm will not pay more for the material which they provide to the company for
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production purpose. John Lewis having a strong brand images at market place so the supplier are
understand its reputation and not make force for bargaining .
Bargaining power of buyers- There are various organisation who are manufacturing
goods and services like John Lewis so the bargaining power of buyers is relatively high. Because
they have more options to purchase products according to their needs and demands (Prajogo,
2016). In UK, the economy of the nation is prospected to slow down since 2013 so the retailers
cut down prices and highly make concentration on the consumer's demands. The company offer
quality products to its customers at affordable prices so the customer show their loyalty which
positively affect the productivity of company. But the chance of switching is available due to
taste and preferences so it can unfavourably affect the firm.
Threats of substitutes- In John Lewis, the threats of similar products and services are
high because there are various retailers which produces different products like this company. The
main substitute companies are Waitrose, marks & Spencer, Peter Jones and others which
manufacture good quality and trendy apparel according to the fashion and consumer's needs and
demands. Due to more competitor, switching cost is high then it influence negatively but cause
of good quality product, the consumer can show their loyalty which favourably affect the
company.
Rivalry among existing products- In context of John Lewis, the competition is high in
retail sector. This company operate its business in clothing sector so there are various
competitors like Zara, Peter Jones, Gucci and others (Saebi and Foss, 2015). In grocery sector,
there are numerous competitors like Tesco, Marks & Spencer etc. which generate high level
competition for John Lewis because they are well established brand and recognised by the most
of the customer cause of having a large customer base. It create negative impact on the sales of
the firm.
TASK 4
P4. Use of different theories, models and concepts to interpret strategic planning for the firm
There are different methods and theories that can be used by the management of the
company to interpret strategic planning for the firm. In John Lewis, it can be used by the
management to monitor the growth of the firm through different strategies.
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Ansoff Matrix- It is a strategic planning tool and techniques which help in offering a structure
which can be helpful for devising the strategies for the forthcoming development and growth of
the firm. This analysis consist for development strategies which are as following:
Market development: It is defined as seeking growth by targeting the existing products in
the new market. John Lewis develops the market with the help of supplying its existing products
in the new markets. By adopting the market segmentation strategy the company segments the
people by age, gender and demographic profiles. Which helps in differentiating their taste and
preferences according to the segmentation criteria. The sales channels can also increase the
market through online sales, direct sales and agents. There are high risk in this growth strategy
because the company expand its business in to new market so it is not confirm that product is
liked by the clients of not. But the chance of growth are high if the product adopt by the
customers.
Product development: It refers to the development of new products in the the existing
market. John Lewis can extend and modify its product development for reselling them in the
existing market (Serra and Kunc, 2015). the company can use different packaging styles and add
new ingredients and technologies to the products so the consumers can easily purchase the
products and services. The improvement in service quality will help John Lewis in product
development strategy. In this strategy, the risk is moderate and the management of the company
can attain growth by making expansion in to product line. The chance of development are high if
new product easily accept by the target audience of the company.
Market penetration: It defines the growth of market with the selling of existing products
and services in current market. Here John Lewis will penetrate the market by creating awareness
through advertisements, social media, promotions and discounts this will attract the customers
and increase the demand of existing products (Sotiriadis, 2017). A consumer is rational discount
polices attracts them to buy more products which they are already using. In this development
strategy risk and growth or development of the business all are less because the company trying
to make development in its business with the help of existing products by launching them
existing market.
Diversification: It refers with development of new products and services in new markets.
John Lewis will develop completely new products by analysis of customers demand and
preferences this can be risky for the company. But can also help them to capture the market by
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the help of new innovating products. The diversification strategy is useful for the company
because the company produce different and unique product from existing ones. In any case if the
product fails to capture the market the existing market will not get affected. It is more risky
growth strategy because the company launch new product in to new market so it is not ensure
that market easily adopt the product.
Recommendation and Justification: From the above mentioned report it can be analyzed that
product development will help John Lewis to capture more market shares by introducing kids
wear. The increasing demand of kids apparels will help the company to target the existing
market with new range of cloths. In UK the kids parents work in companies and they don't have
enough time to search for kids cloths at different location. So By introducing kids clothing brand
it will save the time of kids parents to shop from one place for each family member.
Strategic management plan
It refers to a management activity which is used by the company to set priorities so that
the company can attain its set business objectives according to plans. In context of John Lewis, it
is a process of planning, determining, analysing and assessing all the organisation's activities and
actions which help in meeting the aims and objectives of the firm. The company can formulate
this strategic plan for product development for manufacturing new product kids wear. To
formulate a strategic management plan, there are various activities which are followed by the
management, they are as following:
Strategies- It indicates to those plans, acts and activities which are formulated by the company
to achieving its aims and objectives in a set period of time (Wheelen, and et. al., 2017). There are
some strategies which can be adopted by this organisation. They are mentioned below:
Market analysis- It can be used by management of John Lewis to identify and get
information about the needs and demands of the customers. With the help of this strategy the
manger of the firm can find out the requirement of the customers (Aithal, 2016). For example,
when the consumers go for shopping and purchasing clothes from the store of this firm then they
also have a need that if the company produce kids wear then it will beneficial for them. Because
most of the customer are working and they have not time so this help in saving their time.
STP- It refers to the process of dividing customers according to the products. In John
Lewis, the management make segmentation according those customers who have irregular
working houris or works sifts. In its targetting process, they target youths, college students,
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professionals and working class people who are fashion conscious. But when it launch kids wear
then it target kids. In positioning, it positioned according to at home stores and pre exist8ing
shopping regions.
Mission- The mission statement of the company is to provide happiness of all members by
providing satisfaction to employment in an effective or successful business.
Vision- To earn required profit by providing quality products to the customers so that they can
show their loyalty.
Objective- The smart objective of the company is to increase 15% sales of the company within 2
years.
Tactics- It refer to those strategies which are formulated by the management of the company to
solve short term issues. Some of them are as following:
Innovation-It is the most important and effective tactics which help in resolving issues. I
John Lewis, the management of the company can minimize the problem of customer turn over
and others. By making small changes and innovation, the firm can retain its target audience by
providing products according their demands.
Packaging- It is another effective tactics because now these customers are also demand
for eco friendly packaging material which is easy to recycle and not harm the environment
(Allen and Truman, 2016). So by making change in packaging material, it can make
improvement in its sales and profit.
CONSLUSION
As per the mentioned information, it can be monitored that business strategies are
beneficial for resolving business issues and make development in the business of the firm. These
strategies are effective to solve internal and external business environment issues and conflicts.
For analysing these kind of problems organisations can use PESTEL and SWOT analysis.
Porter's five force model can be applied by the management to monitor the competition against
the firm. With the help of Ansoff Matrix, an organisation can monitor different growth strategies
which are effective for the development of the business of the company.
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REFERENCES
Books & Journals
Aithal, P. S., 2016. Study on ABCD analysis technique for business models, business strategies,
operating concepts & business systems. International Journal in Management and
Social Science. 4(1).
Allen, S. and Truman, C., 2016. Women in business: Perspectives on women entrepreneurs.
Routledge.
Beamish, P. W. and Lupton, N. C., 2016. Cooperative strategies in international business and
management: Reflections on the past 50 years and future directions. Journal of World
Business. 51(1), pp.163-175.
Bocken, N. M. and et. al., 2016. Product design and business model strategies for a circular
economy. Journal of Industrial and Production Engineering. 33(5), pp.308-320.
Bui, B. and De Villiers, C., 2017. Business strategies and management accounting in response to
climate change risk exposure and regulatory uncertainty. The British Accounting
Review. 49(1), pp.4-24.
El-Masri, M. and et. al., 2015, July. The Impact of IS-Business Alignment Practices on
Organizational Choice of IS-Business Alignment Strategies. In PACIS (p. 215).
Gibbons, K., 2015. Small seasonal business strategies to improve profits through community
collaboration (Doctoral dissertation, Walden University).
Matt, C., Hess, T. and Benlian, A., 2015. Digital transformation strategies. Business &
Information Systems Engineering. 57(5), pp.339-343.
Noe, R. A. and et al., 2017. Human resource management: Gaining a competitive advantage.
New York, NY: McGraw-Hill Education.
Prajogo, D. I., 2016. The strategic fit between innovation strategies and business environment in
delivering business performance. International Journal of Production Economics, 171,
pp.241-249.
Saebi, T. and Foss, N. J., 2015. Business models for open innovation: Matching heterogeneous
open innovation strategies with business model dimensions. European Management
Journal. 33(3), pp.201-213.
Serra, C. E. M. and Kunc, M., 2015. Benefits realisation management and its influence on
project success and on the execution of business strategies. International Journal of
Project Management. 33(1), pp.53-66.
Sotiriadis, M. D., 2017. Sharing tourism experiences in social media: A literature review and a
set of suggested business strategies. International Journal of Contemporary Hospitality
Management. 29(1), pp.179-225.
Wheelen, T. L. and et. al., 2017. Strategic management and business policy (p. 55). Boston:
pearson.
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Online
PESTEL Analysis of John Lewis. 2019. [Online]. Available Through:
<http://blueoceanuniversity.com/frontpage/pestelcoanalysis/20175-john-lewis>.
John Lewis SWOT Analysis. 2019. [Online]. Available Through :
<https://www.mbaskool.com/brandguide/lifestyle-and-retail/9226-john-lewis.html>.
Porter's Five Force Analysis of John Lewis. 2019. [Online]. Available Through:
<https://writepass.com/journal/2012/10/swot-analysis-and-porters-5-forces-analyses-of-
john-lewis-partnership/>.
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