Influence of External Environment Factors on Business Enterprise

BUSINESS
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
LO 1.................................................................................................................................................1
P1 Influence of external environment factors on business enterprise.........................................1
M1 Critical evaluation of PESTLE ............................................................................................3
LO 2.................................................................................................................................................3
P2 SWOT, VRIO and McKinsey................................................................................................3
M2 Critical evaluation of internal surroundings.........................................................................7
LO 3.................................................................................................................................................7
P3 Porter Five Force model.........................................................................................................7
M3 Strategies for gaining competitive edge ..............................................................................9
LO 4.................................................................................................................................................9
P4 Strategic planning for business enterprise.............................................................................9
M4 Strategical administration plan...........................................................................................12
D1 Representation of information from competitor evaluation................................................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Business strategy is considered as the competitive moves taken by company in the form
of actions for influencing interest of customers towards them. This is effectively done by
strengthening employees performance that is supportive in attainment of company's objectives
(Yuliansyah, Rammal and Rose, 2016). The present report upon John Lewis, a UK based chain
departmental store. The company mainly deals in various categories like watches, food, jeweller,
furniture, accessories, clothing and many others. This report is conducted to explore strategies
adopted by this company and its decisions taken by them over the passed time period. The
current report will include description about PESTLE, SWOT and VRIO analysis for exploring
macro environment, internal environment, in internal resources and capabilities of John Lewis
respectively. Furthermore, Porter's Five Force framework will going to be explained in order to
analysis competitiveness of this company within the industry. In the last section, availability of
strategic options will be explored with the usage of Ansoff Matrix. It will further be used for
developing strategic management plan for business entity.
LO 1
P1 Influence of external environment factors on business enterprise
Business associations are required to evaluate external environment for identifying major
threats and opportunities available to the company at marketplace. Managers of John Lewis is
using PESTLE analysis to analyse influence of macro environment. These factors are elaborated
as below in effectively:
Political: Political stability of UK is strong and stable. This clearly states that there is
huge opportunity for John Lewis within this area as political stability ensures that company will
remain stable in that nation for longer period of time (Chang, 2016). Any incident associated
with political turmoil or terrorist attack might develop threat for John Lewis within UK as this
activity may not allow company to execute their organisational work at regular basis. For
managing this kind of situation, the company is required to keep satisfactory level of stock all
time in order to tackle overall footfall at store and deal with demand and requirement of
customers in this kind of situations.
Economical: Economic stability of United Kingdom is very effective and strong which
ensures that the companies belonging to this nation has strong backup which supports them in
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introducing innovative products, new techniques and systems within the nation. It includes
unemployment, recession, inflations and many more terms. With reference to UK, it can be said
that if this nation goes through recession then it will also reduce purchasing power of the localise
people. This will also reduce sales performance of retail sector as people of this nation goes from
financial trouble which enables them to buy costly products. Here, John Lewis can tackle this
situation offering affordable products to customers so that victims of Brexit can also deal with
the situation.
Social: John Lewis has specific team of market research that analysing external market in
order to develop their knowledge on latest lifestyles and trends of customers. This allows them to
formulate trendy commodities as well as services as per current needs and requirements of
customer in segments of clothing, accessories, watches etc. (John Lewis: competitive advantage
in a tough retail market, 2015). Also, if any of the rival company introduces trendy product
before John Lewis, then there are probable chances that it might create threat for this company.
This is because, customers of this company might shift to another company due to trendy
product. For handling this errors, manager of John Lewis is required to conduct regular based
research in order to update themselves about customers preferences.
Technological: There are numerous of changes which can be seen in technology with the
passing time. These changes allows companies in upgrading making performance of enterprise
smoother that also contributes in the enhancement of this sustainability. In context of John
Lewis, the company holds good coverage at technological ground. It has taken initiative to enter
into e-commerce for minimising their paper work so that its performance could be strengthened
in effective way (Nadeem and et. al., 2018). The main threat associated with this factor is that it
requires huge capital so that latest technology can be adopted by the same. For reducing this,
John Lewis can go for cost cutting in different departments so that they can use this saved cost in
acquiring new technology.
Legal: The organisations pertaining to retail sector have to abide by certain laws and
legislations in order to survive in market for long term. These include employment regulations,
Health and Safety Law, Anti Retail Law, Equality Act, Anti Discrimination Act etc. By
complying with the provisions of all these laws, the management of John Lewis ensures
sustainability within retail sector for a long period of time. Adherence to standards and
legislations that are formulated by authorises of retail sector support the respective entity in
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creating positive image in front of community. This helps in attracting customers and
formulating a base of loyal users.
Environmental: John Lewis performs all of its activities by considering interest of
community as well as environment which is also supported by local bodies as well as
government. John Lewis has used biodegradable packing stuff which ensures that it does harm
environment (John Lewis unveils biodegradable packs, 2019). This requires huge investment
which affects financial position of company in negative manner.
M1 Critical evaluation of PESTLE
The overall analysis of PESTLE framework has provided knowledge about influence of
macro environmental factor on John Lewis. From this analysis, it has been identified that it has
both positive as well as negative influence over organisational performance. Constant
fluctuations in customer's taste and preferences, strong political stability of UK, non compliance
with retail legislation etc. are seen as the positive and negative influence of external factor on
John Lewis. For dealing with these lack areas, managers of John Lewis should develop effective
strategies towards the same errors by taking expertise advises (Tsai and Lin, 2016). This will
support them in managing the situations at the same time and improvising their operational
activities within the company in effective manner.
LO 2
P2 SWOT, VRIO and McKinsey
SWOT Analysis
Strength Weaknesses
 One of the big supermarkets in UK
which offers a wide range of products
to its customers.
 Highly qualified staff and team makes
company achieving their goals
(Hamilton, Cruz and Jack, 2017).
 The company makes use of latest and
emerging technological trends to
 Price is comparatively high as compare
it to other grocery stores.
 Lack of international business presence
as the company is limited in certain
countries only.
 Usage of non effective marketing
techniques keeps them away from
attracting potential customers
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develop high quality products.
Opportunities Threats
 John lewis has the opportunity to
expand its market in other countries.
 The company can also enter in new
market segment for e.g. they can offer
healthy food to its customers.
 John lewis online presence give higher
margin to the company if they can
provide good services to its customers .
 Competition from strong players like
Tesco, marks and Spencer dominate the
sales of John lewis
 Due to cultural differences John lewis
fails in new market (Whitehead, 2017).
 John lewis target older customers who
is around age of 45, might be the risk
for the company.
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