Analysis of Macro-Environment and Internal Environment of John Lewis Ltd.

This report analyzes the macro-environmental factors affecting John Lewis Ltd. and its strategies. It also examines the internal environment and capabilities of the organization. The report includes a PESTEL analysis, SWOT analysis, and VRIO analysis. The competitive forces in the market sector are evaluated using Porter's Five Forces model.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Analysis of macro-environment on organisation and its strategies- ................................3
TASK2.............................................................................................................................................5
P2 Analysis of internal environment along with capabilities of organisation-......................5
TASK 3............................................................................................................................................8
P3 Implementing porter's five force model and evaluate the competitive forces of given market
sector of an organisation.........................................................................................................8
TASK 4..........................................................................................................................................10
P4 Determining application of concepts, models and implement strategic management plan of
the business...........................................................................................................................10
CONCLUSION.............................................................................................................................12
REFERENCES..............................................................................................................................13
Books and Journal:...............................................................................................................13

INTRODUCTION
Business strategies are moves and actions that are used by a business in order to compete
in market, attract customers, enhance performance and attain business goals. It is the basic map
of how a business should be carried out in order to reach its ends (Akter, Wamba, and et. al.,
2016). Business strategy helps a business to sustain in competitive environment. These strategies
are usually made for log run. Business strategies are made at three level I.e., corporate, business
and functional levels. Following report is based on John Lewis limited a British based retail
company. Company was founded in 1929 by Spedan Lewis. It deals in a range of products which
includes cloths, jewellery, furnitures and watches etc. To analyse how external factors impact
business PESTEL analysis is performed. SWOT ans VRIO are performed to analyse internal
environment and capabilities of company. In order to learn about competition in marketplace
Porter's Five force model is used. In the end for analysing strategic concepts Ansoff matrix is
used with strategic management framework.
TASK 1
P1 Analysis of macro-environment on organisation and its strategies-
In order to run a business without any complications it becomes essential for a
management team to critically analyse all the macro-environmental factors affecting business.
For this analysis PESTEL analysis is carried out on John Lewis Ltd.
PESTEL Analysis
PESTEL analysis is a tool used by businesses to examine all the external factors that have
an impact on it directly while developing strategies. External environment is judged based on
five factors which are political , economical, social, technological, environmental and legal.
PESTEL analysis in context of John Lewis Ltd. Is mentioned below:
Political Factors: The factors related to government interventions in an economy are
political factors. This includes foreign trade policies, tax policies, government policies etc. In
context of John Lewis Ltd, company is planning to extend to UK market which is now a part of

European Union. Entry in European market is easy (Bai, and et. al., 2020). This creates huge
competition for John Lewis. In order to reduce competition in market the UK government
reduced tax to 28% which was 30% earlier. Due to this change company now needs to frame
policies taking taxation system into consideration. Company needs to strategically design
policies to take advantage of such changes and increase their profits.
Economical Factors: Economic Factors consists of factors which effect profitability of a
business. Factors such as interest rates, inflation, exchange rates, economic growth etc. are
included in it. John Lewis Ltd. Is affected by BREXIT. Recession caused due to it led to
fluctuations in interests rates. To cope up with such situations it is required by a company to
reduce their prices and provide goods and services to customers at minimal prices (Balon and et.
al.,2019). Business operations in John Lewis are affected due to such market situations, due to
which they also need to cut down their prices. Company also needs to provide attractive offers to
their loyal customers to be stable at marketplace. It becomes difficult for a management team to
formulate strategies in such cases, so John Lewis needs to carefully formulate its strategies
accordingly.
Social Factors: Social factors refers to beliefs and values of the society in which business
is set up. Social factors include career attitudes, population growth, age distribution etc. John
lewis Ltd. is majorly affected by due to changing perceptions and taste of people. In such cases it
becomes important for company to keep on innovating and launching new offers or products to
customers in order to grab their attention. This will help company to attract more customer,
resulting in increase of customer base and will ultimately result in increase of profits for the
company. Launching new companies also help company to compete with their competitors in
marketplace. John Lewis needs to be competitive and launch new products from time to time
taking into consideration requirements and demands of customers.
Technological Factors: Technological factors are defined as new ways of production,
distribution and communication of goods and services in market. In context of John Lewis,
communication of goods and services are technological factor affecting business. Company
needs to be up-to-date with changes in technology. This has resulted in use of online ways for
selling product (Elias Mota and et. al., 2020). Another benefit of using online ways to sell their
product is that it leads to reduction in use of papers which is ultimately beneficial for
environment. Digital media is also used for advertising which can reach more customers when

compared to traditional means of advertising. With all these benefits it is required to keep a
check on financial needs for bringing in these technologies. Adapting latest technologies can be
very expensive. It is necessary for a company to go through its financial position and then
critically develop its strategies and plans.
Environmental Factors: All the factors which come in terms with environment and
surrounding are said to be environmental factors. This includes carbon footprints, pollution
targets, scarcity of resources etc.(Leonidou and et. al., 2017). Due to increasing competition in
today's market scenario every organisation plans on developing a clean and safe environment for
its business. John lewis is effected by laws regarding carbon footprints. In order to deal with this
problem company is using machineries which reduce much less carbon. John Lewis is also using
bio-degradable papers which will help in reducing land pollution. Pollution laws majorly affect
John Lewis due to which company needs to take care of these laws before forming strategies.
Legal Factors: It is necessary for a business to know whether all the practices carried out
by them are legal or not. Legal factors include consumer rights, labour laws, product safety,
advertising standards etc. An ordinary change in legal factors have a huge impact on decision
making process of organisation(Peng, and et. al., 2017). The legal factors which affect John
Lewis are majorly laws related to health & safety issue of customers and their employees. Due to
this company needs to make sure that they develop strategies keeping in mind health and safety
issues of all their stakeholders.
TASK2
P2 Analysis of internal environment along with capabilities of organisation-
In order to perform internal analysis of John Lewis managers performed SWOT analysis
and to analyse capabilities of firm VRIO analysis is performed. This will help firm to know about
their strengths, weaknesses, opportunities and threats along with capabilities of business.
SWOT Analysis:
Strength Weakness
 John Lewis has been benefited with the
brand name and image it have built
over years. This makes it easy for
company to attract customer. Company
 John Lewis lacks in analysation of
international market which is a major
drawback for its business.
 Company lacks in making strategies to

already have a huge customer base due
to its brand image.
 John Lewis is marketing and
distributing through digital mediums,
this helps them in expansion of
business to new markets easily.
retain their old customers. Along with
attracting new customers they also need
to retain the old ones.
Opportunities Threats
 Company has a scope of extending its
product and services to international
market which may lead to increase in
its revenue.
 John Lewis also have an opportunity of
increasing its product line in order to
attract new customers (Pucheta‐
Martínez and et. al., 2019).
 The personalised labels of John Lewis
will help it in growing its demand in
today's competitive market scenario.
 Due to changing laws the regular
functioning of company is hampered
and its operations faces downfall.
 Competitors of John Lewis specifically
TESCO, Marks and Spencer, H&M etc.
are major threats (Tardieu and et. al.,
2020).
VRIO Model:
VRIO model is used to analyse capabilities of a firm that gives the business a long term
advantage. VRIO model conducted in context of John Lewis is mentioned below-
Factors Valuable Rarity Inimitable Organized What is the
result?
Global
presence
Global
presence
- - - Competitive
Disadvantage
Products and
Services
Products and
Services
Products and
Services
- - Competitive
Partially
Software and Software and Software and Software and - Competitive

Technology Technology Technology Technology advantage for
short term
Employees Employees Employees Employees Employees Competitive
advantage
Four major resources of John Lewis considered to identify its internal capabilities are
Global presence, Products and Services, Software and technology and Employees( Tsai and Lin,
2016).
Valuable: These are elements beneficial for firm which assist the business to achieve its
goals and objectives in a given time frame. Valuable factors in John Lewis are- Global Presence: Image of John Lewis in global market is good. This will help company
to gain advantage over its competitors. Products and Services: Including latest technologies while production of its product John
Lewis can increase quality of its products which will help in increasing customer
satisfaction. This in turn will help company to build a strong base of customers. Software and technology: John Lewis uses software in its warehousing, packaging and
distribution which will help it to manage its function in an effective manner. Employees: John Lewis have trained and guided its employees in a really good manner.
This helps company to effectively complete its target in a given time frame.
Rarity: It includes all factors in an organization which are rare and other organisations do
not have it. This helps company to attain a competitive advantage in market. John Lewis global
presence is not rare because there are a number of similar firms who have a strong global
presence(Weng, 2020). Most of these companies are competitors of John Lewis. Rare resources
of John Lewis are- Products and Services: John Lewis offer products which are developed after critically
analysing market trends, demands and consumer perception it provides it a competitive
advantage because it is very difficult for its competitors to copy them. Software and Technology: The software and technologies used by John Lewis for
maintaining records helps it in easy execution of work. This software is specifically
developed for John Lewis which makes it rare.

 Employees: John Lewis have trained its employees very well. Copying human resource is
impossible. This makes it rare for this company.
Inimitable: These include resources which cannot be easily copied by rivals. Inimitable
resources with John Lewis are- Software and Technology: Software of John Lewis is inimitable because they have
developed it specifically for this company.
 Employees: Training and experience provided by John Lewis to its employees make it
inimitable.
Organized: This includes all the elements which are required by firm to organize well in order to
attain its objectives. Resources John Lewis needs to organize are-
 Employees: Employees need proper training and guidance to perform their job effectively.
John Lewis need to pay special attention to its employees (Gupta, 2016).
TASK 3
P3 Implementing porter's five force model and evaluate the competitive forces of given market
sector of an organisation
Porter's five forces model is framework through which business strength and position in
market can be determined. This model also assists business in using strategies and methods to be
competitive in market. Also, it helps in effective decision making in business and firm. To
expand operation and activities in market it is crucial to adopt porter five forces model which are
discussed below-
Competitive Rivalry- Competition and rivalry are important in business because they
trigger motivation and improve performance of business. So, competitive rivalry assist in
determining and analysing competition in market. Organisation can use this strategy as tool
which helps them in exploring changing trends in market(Dent, 2015). Competition in market
arises with motive gaining market share, target market and customers. Increase competition in
UK has affected JOHN LEWIS at broad level. So, should considered this strategy to enhance and
improve their performance in target market.
Threats of substitutes- Substitutes refers to availability of product by more than one
market. This is the most crucial strategy of five force model. Due to presence of substitutes in
market, switching behaviour of customer rises and which has deep impact on firm productivity.

In relation with JOHN LEWIS, as it is diversified company many alternatives are available which
has a negative impact on Company's profit and sales revenue. So, entity should adopt different
types of strategies as well as tactics to tackle this situation.
Threats of new entrants- In this, new organisation come in market which leads to rise in
competition and alternatives. New entry of business and entities depends on entry barriers and
government rules as well as regulation of a country. In context to JOHN LEWIS, threats of new
entry is low. Because to start a diversified business requires huge investment as well as networks
which is time consuming and risky (Revathi and Aithal, 2018).
Bargaining power of suppliers- Every organisation needs network and contacts to run
their business successfully. Suppliers are those who provide resources such as raw material, tools,
equipments to enterprises. Market is wide so there are number of suppliers who can assist firm in
accessing to these resources. In relation with JOHN LEWIS, bargaining power of strategies
supplier is low because firm business deals with diversified products such as apparel, shoes,
jewellery etc. Thus, firm take advantage of this trait and it can easily use this strategy and
influence other suppliers depending upon circumstances and price.
Bargaining power of customers- Customers act as a source to organisation who assist
business to gain profit and increase sale of the product. Bargaining power of customers are high
because they are assets of firm and due to wide expansion of market they have the power to
influence firm decisions. So, a proper research is required and parameters should be undertaken
to understand customers behaviour and preferences(Wu, Gao. and Gu 2015). This force has
affected JOHN LEWIS in a negative way because availability of alternatives has a great impact
on customers buying behaviour and decision. In order to attract more number of customers, it is
required by business organisation to provide high quality goods and services within reasonable
and affordable prices. This will increase brand awareness and goodwill of a firm.
After a brief study of above porters five force model it can be stated that this model assist
organisation to formulate strategies, tactics and policies depending upon market situations. Every
activity in business is important and factors affecting those business should be considered and
analysed. JOHN LEWIS is a multinational corporation dealing with diversified products and both
macro as well as micro factors affects productivity and growth of business. Thus, company
should be active and flexible to make be ahead in this competitive market.

Strategies are crucial because they help in providing guidelines and measurable goals and
objectives. By adopting tactics as well as strategies, it gives a error free path to business for
running their activities. So, to determine the effect of strategies porters five force model has been
used. It is a tool used by firm to analyse market and product growth. This tool saves time of
entities while formulating strategies. Using of porters model assist organisation to evaluate the
risk associated with each strategies. After a brief analysis of porters five force model, it has been
seen that competition rivalry is high in market and due to which JOHN LEWIS can loose its
opportunity to become competitive in market due to its static nature of business. Substitutes are
big threat to entities. Thus, due to increase availability of alternatives in market JOHN LEWIS
productivity might get affect. Company should provide products with affordable prices to tackle
this situation. Further comes threats of new entrants in which new industry take place in market.
This threat leads to rise in competition and conflicts. But this threat has a low impact on JOHN
LEWIS, because starting of new business in retailing require time and manpower which is not
easy for new operating business. Bargaining power of suppliers in this context is low. JOHN
LEWIS can take advantage of this opportunity due to presence of numerous suppliers. So, they
can influence other suppliers easily. Bargaining power of buyers is high because customers have
ample number of options to switch. (Lai and Stacchezzini, 2016).
Thus, JOHN LEWIS should provide offers and discounts which can attract more customers. In
diversification, risk associated with this strategy is high and uncertain situations are bound to
happen. So, in relation with JOHN LEWIS they should not adopt this strategy.
TASK 4
P4 Determining application of concepts, models and implement strategic management plan of the
business
Every organisation need strategies and different techniques to run business smoothly and
effectively. So strategies are required in business to manage operating activities and functions.
Strategies are of different types such as human resource, financial and marketing strategies. It
depends on the firm decision and market situation to focus and adopt which strategy. So, to
implement strategies in effective manner Ansoff matrix is most appropriate tool used by every
entity to formulate and implement strategies (Lewis and D'orso 2015).

Ansoff matrix is a tool used by marketers, managers and leaders to analyse the market and
share growth and determine risk associated with those market as well as strategies. It assist
organisation to focus on business growth and expand its market activities at broad level. JOHN
LEWIS uses this tool to analyse and determine the risk and strategy in business. This tool uses
four quadrants which are mentioned below-
Market Penetration- Market penetration refers to selling of existing product into existing
market. Business activities are dynamic in nature so, to gain trust of customers it is crucial for
each and every firm to focus on current product because continuous change of organisation
decision can have a negative impact on firm productivity and buying behaviour of target
customers (Bar-Zeev, Lewis Microsoft Technology Licensing 2017). Adoption of this strategy
by JOHN LEWIS will increase goodwill of firm and old customers buying behaviour will have
positive impact on company's production. Hence, market share of current product increase and a
positive relationship arises in between both the parties.
Market development- Market is wide and uncertain which leads to new opportunities for
organisation. In this types of strategy, firm try to sell existing product in new market which is
profitable as well as risk. Market development assist business to acquire new customers, new
product dimensions and wide network of distribution channels. In relation with JOHN LEWIS,
adoption of this strategy increases their brand awareness across the globe, risk associated with
strategy is also low. Thus, this strategy leads to overall development and growth of business.
Product development- In this strategy, firm introduces new product into existing market.
This strategy reflect innovation, monopoly of product in market and attention by other
organisation as well as customers. In relation with JOHN LEWIS, they can use this strategy in
their clothing line segment in UK and in other country. Thus, it is most the effective strategy
level of risk is moderate (Lindsay and et. al. 2015).
Diversification- Last but not the least; diversification in which entity introduces new
product into a new market. A detailed research and information is required by firm while going
with this strategy. Diversification is considered as most riskier one from other strategies.
Adoption of this strategy by JOHN LEWIS, increases market share & product expansion but on
the other hand it requires huge capital cost and resources for attaining best results. By using this
strategy, overall profit margin and goodwill of the company might get affected in a negative
manner.

After a brief analysis it can be stated that a every business uses different types of
strategies to expand their overall development and growth. JOHN LEWIS should adopt strategies
in order to increase profitability and reduce competition in market. So, with present scenario of
JOHN LEWSIS product development is the most effective and suitable strategy which can be
used by firm.
Strategic management plan
Strategic management plan is analysis used by management and organisation to improve
their performance as well as standard ( Perez and et. al. Microsoft Technology Licensing 2015 ).
These strategic plan helps in clarifying objectives as well as goals of firm. So, strategic
management work as a base of the organisation.
Aim- Main of JOHN LEWIS is to focus on their operational as well functional activities
to maximise profit.
Vision- Vision of company is to access global market and increase position in market
both nationally as well as international and become leading retailing entity .
Mission statement- Organisation mission is to create brand awareness and attract more
customers towards company.
Values- Company works with ethics which creates a healthy relationship and positive
environment within in organisation.
Strategies and tactics- To be more competitive in market JOHN LEWIS has adopted
market penetration which gives boost in their growth and main tactics is to provide reliable
outputs to acquire more customers.
Market research- Another strategic plan is to do market research of field which has been
taken by firm. Market research assists in identifying and solving problems and information
gathering about target customers. JOHN LEWSI before implementing any new strategy, they
always prefer a deep research which assist them in improving their creditability of firm in market.
(Wambaand et. al., 2016).
CONCLUSION
Business strategy is important in every business to survive in market. Strategies are of
different types such as human resource, financial strategy etc. It depends on firm to adopt which
type of strategy. Frameworks are important in organisation because they guide to achieve goals

and objectives in appropriate manner. Certain types of frameworks have been used such as VRIO,
SWOT, ANSOFF and Porters five force model. In relation with John lewis, to increase the
productivity, market share, product development company has used different strategic plan and
models.
REFERENCES
Books and Journal:
Akter, S., Wamba, and et. al., 2016. How to improve firm performance using big data analytics
capability and business strategy alignment?. International Journal of Production
Economics,182, pp.113-131.
Bai, C. Aand et. al., 2020. Blockchain technology: Business, strategy, the environment, and
sustainability.Business Strategy and the Environment.29(1), pp.321-322.
Balon and et. al.,2019. BUSINESS STRATEGY & DEVELOPMENT.Navigation,2(3).
Elias Mota and et. al., 2020. Business strategy for sustainable development: Impact of life cycle
inventory and life cycle impact assessment steps in supply chain design and
planning.Business Strategy and the Environment, 29(1), pp.87-117.
Elias Mota, B. A., and et. al., 2020. Business strategy for sustainable development: Impact of life
cycle inventory and life cycle impact assessment steps in supply chain design and
planning. Business Strategy and the Environment, 29(1), pp.87-117.
Leonidou and et. al., 2017. Internal drivers and performance consequences of small firm green
business strategy: The moderating role of external forces.Journal of business
ethics,140(3), pp.585-606.
Peng, M. W and et. al., 2017. Cultures, institutions, and strategic choices: Toward an institutional
perspective on business strategy. The Blackwell handbook of cross‐cultural
management, pp.52-66.
Pucheta‐Martínez and et. al., 2019. What have we learnt about board gender diversity as a
business strategy? The appointment of board sub committees. Business Strategy and the
Environment,28(2), pp.301-315.
Tardieu and et. al., 2020. Organization Structure—Allocating Roles and Responsibilities to
Support Business Strategy. InDeliberately Digital(pp. 107-121). Springer, Cham.

Weng, W., 2020.Impact of Business Strategy on Big Data Analytics Adoption: The Mediating
Effect of Supply Chain Competence(No. 2719). EasyChair.
Weng, W. W., 2020.Effect of Internet of Things on Business Strategy: An Organizational
Capability Perspective(No. 2590). EasyChair.
Tsai, P. H. and Lin, C. T., 2016. Creating a business strategy evaluation model for national
museums based on the views of curators. Curator: The Museum Journal. 59(3). pp.287-
303.
Gupta, M., 2016. An empirical study on fit between strategic human resource management and
business strategy. International Journal of Management Research and Reviews.6(2).
p.102.
Dent, A., 2015. Aligning IT and business strategy: an Australian university case study. Journal
of Higher Education Policy and Management. 37(5). pp.519-533.
Revathi, R. and Aithal, P .S., 2018. Business Strategy of Top Indian Company: L&T
InfoTech. International Journal of Case Studies in Business, IT, and Education
(IJCSBE).2(1). pp.64-89.
Wu, P., Gao, L. and Gu, T., 2015. Business strategy, market competition and earnings
management. Chinese Management Studies. 9(3). p.401.
Lai, A., Melloni, G. and Stacchezzini, R., 2016. Corporate sustainable development: is
‘integrated reporting’a legitimation strategy?. Business Strategy and the
Environment. 25(3). pp.165-177.
Lewis, J. and D'orso, M., 2015. Walking with the Wind: A Memoir of the Movement. Simon and
Schuster.
Bar-Zeev, A., Lewis, J.R. and Klein, G., Microsoft Technology Licensing LLC, 2017. Optimized
focal area for augmented reality displays. U.S. Patent 9,690,099.
Lindsay, A. and et. al. 2015. Effect of varied recovery interventions on markers of
psychophysiological stress in professional rugby union. European journal of sport
science. 15(6). pp.543-549.
Perez, K .S. and et. al. Microsoft Technology Licensing LLC, 2015. Improving display
performance with iris scan profiling. U.S. Patent 9,202,443.
Akter, S., Wamba, and et. al., 2016. How to improve firm performance using big data analytics
capability and business strategy alignment?. International Journal of Production
Economics,182, pp.113-131.
Akter, Wamba, and et. al., 2016.Bai, and et. al., 2020. Balon and et. al.,2019.Elias Mota and et.
al., 2020 Elias Mota and et. al., 2020 Leonidou and et. al., 2017 Peng, and et. al., 2017
Pucheta‐Martínez and et. al., 2019 Tardieu and et. al., 2020 Weng, 2020.Weng,, 2020
Tsai, P. H. and Lin, 2016. Gupta, 2016 Dent, 2015 Revathi and Aithal, 2018 Wu, Gao.
and Gu 2015. Lai and Stacchezzini, 2016.Lewis and D'orso 2015 Bar-Zeev, Lewis
Microsoft Technology Licensing 2017. Lindsay and et. al. 2015. Perez and et. al.
Microsoft Technology Licensing 2015 Wambaand et. al., 2016.