Business Strategy: Analysis and Evaluation of John Lewis

This report provides an analysis and evaluation of John Lewis's business strategy, including PESTLE and SWOT analysis, competitive environment analysis using Porter's Five Forces model, and identification of strategic options. It also discusses the organisation's resources and capabilities.

Business Strategy
1

INTRODUCTION...........................................................................................................................3
Part A...............................................................................................................................................4
PESTLE and SWOT of the organisation and an evaluation of the organisation’s resources and
capabilities..............................................................................................................................4
Analysis and critical evaluation of the competitive environment using Porter’s Five Forces
model....................................................................................................................................11
Identification and justification of the organisation’s existing and/or potential competitive
advantage..............................................................................................................................13
Devise valid strategies and tactical objectives to achieve overall strategic objectives-200.13
Part B.............................................................................................................................................13
Critically evaluate the different types of strategic directions available to the organisation-200
..............................................................................................................................................13
Justify and recommend the most appropriate growth platform/s and strategies..................15
Evaluate ways and means by which the chosen strategy/ies can be monitored in order to
ensure success.......................................................................................................................15
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................17
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INTRODUCTION
Business strategy is defined as a course of action in addition decision that all together
provides an effective direction to company through which they can perform their operations in
order to generate value (Ali and Anwar, 2021). Business strategy mainly aim towards allowing
organisation to capture attention of large base of audience through which company can
accomplish their business goals as well as objectives in effective way, while assuring high
profitability and competitiveness. Furthermore it has been identified that business strategy
effectively offers assistance to company strategic as well as competitive edge that allow
organisation to have competence over other rivals in industry.
Present report has been conducted on John Lewis which is a leading organisation operating
it’s functioning in the provinces of United Kingdom in retail industrial sector. This organisation
offers wide range of products and services in the segment of furniture, food, clothing, jewellery,
cosmetics and more. Present report includes PESTLE, SWPT and VRIO analysis through which
capabilities of organisation can be identified in effective way. In addition to this Porter’s five
forces is also included in this report along with Ansoff Matrix in order to identify strategic
options available for company that helps in devising strategic management plan.
Part A
PESTLE and SWOT of the organisation and an evaluation of the organisation’s resources and
capabilities
PESTEL Analysis
Pestel analysis is a strategic technique through which company can evaluate external
elements that can affect organisations smooth business operation. This analysis will also allow
for organisation to formulate efficient strategies in order to conduct business operation
(Bhattacharyya and Thakre, 2021). This analysis includes elements related to political,
economical, social, technological legal and environmental. Mentioned below pestel analysis of
John Lewis the method is being conducted:
Political:
John Lewis is operating its business services as a leading premium retail store in the
provinces of United Kingdom. There are a number of trade policies such as export and import
along with regulations of country that impact upon business operations of this company. This
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organisation is performing their business services in more than 55 countries worldwide in which
government plays major role in organisations strategic operations. It has been identified that due
to the outbreak of Covid-19 there are number of uncertainty and changes prevails in foreign trade
policies. In this it is essential for John Lewis to be agile in their actions, as to stay strong in
market, as politically stable country provides profitable business opportunities. John Lewis is a
retail store and having outlets that deal with beauty, cosmetics etc. which directly deals with
consumers which required right government regulations. In this with the help of an abiding
political factors company can successfully strive and can operate their business in country.
Economical:
The factor includes elements such as tax duty, inflation and more which led consumer to
shift their spending habit. During covid-19 lockdown John Lewis have suffered due to shutting
down of stores that decreases its sales (Caballero-Morales, 2021). However with improvement in
situation it is essential for organisation to make shift in their strategies in order to influence
attention of consumers with different promotional tactics. It has been identified that
macroeconomic condition in stabilizing which is increasing consumer spending. In this company
with the help of taking advantage of economic Strategies and number of subsidies and relieves
provided by United Kingdom government to retail sector organisation can gain profitability.
Social:
With the changes in behaviour and societal tradition consumer are tend towards buying
more rigorously and often. In addition to this it has been identified that demographic element
impact the lifestyle and choice of attitude towards brands and products. It is essential for John
Lewis to emphasize more upon hygiene, quality and safety of their products with the help of
segmentation, targeting and positioning strategies (Claro and Esteves, 2021). Along with this
company is also required to understand consumer’s needs and further make strategies
accordingly in order to influence needs and demands of consumers. However it has been
identified that due to increase in local and private label there is negative impact and increase in
competition for respective organisation. In this, John Lewis with the help of taking advantage of
its unique selling proposition can gain more competitiveness.
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Figure 1: Pestle analysis
Technological:
Technological innovation is happening in each and every industrial sector. It is essential
for organisation to go digital in this internet savvy world. In this John Lewis by making
investment and artificial Intelligence and mobile technology can get relevant data about
consumer and can influence their mind set (Gkoltsiou and Mougiakou, 2021). Along with this
company with the help of partnering with digital companies with the help of the digital business
strategy can effectively meet needs and demands of consumers. Along with this during the time
period of Covid-19 John Lewis with the help of taking advantage of innovative strategies can
offer their products with safety standard and high quality.
Environmental:
It is important for band like John Lewis to emphasize up on environmental factors in
order to gain sustainable competitive advantage. There are some of environmental elements like
waste management, reducing carbon footprint, recycling and greenhouse emission which is
required to imprecise upon by organisation. It has been identified that John Lewis has already
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made lot of initiative to reduce wastage with the help of natural packaging with the help of 70%
recycle material (OUR VALUES. 2021). Company also decreased their plastic hanger waste and
encourage consumers to bring their own bags. Company is required to emphasise upon most
sustainable business practices in order to gain lead in market.
Legal:
This element is playing important role for organisations especially operating their
services in retail luxury industry. It is essential for John Lewis to emphasize upon all the laws
associated to this industry such as safety laws, consumer privacy law, discrimination and
antitrust law and more. It is essential for company to make sure that consumers are protected
from any form of unlawful practice. Company is required to follow consumer privacy regulation
through which they can enhance trust level of consumers towards the brand. Lawful business
practices to allow organisation to enhance their market share and competitiveness. Negligence of
this will make company to face many legal obligations and penalties.
SWOT Analysis
Strength Weakness
 John Lewis is having strong brand
image in retail industrial sector that
encourages and attract consumer
towards their services and products
effective.
 Organisation is also having eye catchy
and trending designs comparatively to
other competitors.
 John Lewis emphasize upon sustaining
valuable employee relationship in order
to retain them for longer period of time.
Work force effectiveness is one of the
most important strength of John Lewis.
 Respective organisation is having wide
range of product ranges that are
 John Lewis invests comparatively less
in digital marketing and other digital
platforms comparatively to other rivals
in industry.
 Company also lacks in having
sufficient knowledge related to
international business strategies that
affects their global business sales ratio.
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trending and helps company to
maximize their share in market
segment.
Opportunities Threats
 John Lewis is having opportunity in
making heavy investment in digital
marketing and other digital platform in
order to influence large base of
consumer base on national, local and
international level.
 Company have opportunity to develop
and widen in new resourceful as well as
exclusive selling strategies in order to
assure market competitiveness (Mishra
and Yadav, 2021).
 Company can also introduce new
product ranges in order to gain
competitiveness over rivals.
 John Lewis is having opportunity to
enhance demand by making
introduction of personal label in
valuable and suitable way.
 John Lewis is facing threat from the
uncertain factors due to the outbreak of
Covid-19 that bring new rules and
regulation and can affect smooth
operations of company.
 Company also have threat from other
competitors like Tesco PLC, Marks and
Spencer and more.
 Organisation is also having threat
related to collapse if they maximize
their business operations as per new as
well as diverse culture.
VRIO Model
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Factors Valuable Rarity Imitable Organized What is the
result?
Global
presence
Global
presence
- - - Competitive
Disadvantage
Products Products Products - - Partially
competitive
Software Software Software Software - Competitive
advantage for
temporary
basis
Employees Employees Employees Employees Employees Competitive
advantage
Valuable: This factor includes those components which render help to an association in
accomplishing its objectives and destinations inside time. Valuable components of John Lewis
Ltd are:
Global presence:
The presence of this organization inside worldwide market is solid successful and wide. It
allows organisation to gain competitiveness over other rivals in industry in an effective manner.
Products:
Excellent products made by utilizing the most recent advancements are offered by
organization to clients (Onyama, 2021). With the help of this company maximises its consumer
base.
Software:
John Lewis Ltd utilizes software for adequately overseeing and working things in the
attractive way for accomplishment of authoritative objectives
Employees:
The staffs of John Lewis works in a way that gives help to association in accomplishing
specified focuses in opportune way.
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Rarity: It alludes to such parts of the organization which are uncommon and offers organisation
competitive advantages. Corresponding to John Lewis, worldwide presence is not discovered to
be uncommon on the grounds that various other enormous scope substances have a worldwide
presence. John Lewis rare elements are:
Products:
Products offered by this association are as per the most recent patterns and advancements,
accordingly, it is difficult for some other organization to handily duplicate them
Software:
The product utilized by John Lewis Ltd for upkeep of records and execution of tasks is
uncommon on the grounds that it is created according to the prerequisites of substance.
Employees:
The work forces of John Lewis are rare as they have their own arrangement of abilities
and skill which helps association in accomplishment of hierarchical destinations in a viable way.
Imitable: It alludes to those assets of organization which cannot be duplicated by rivals. For
John Lewis, items do not hold this element as the patterns and innovations with which these are
created can be utilized by rivals moreover.
Software:
Software utilized by John Lewis are planned and created as per hierarchical necessities,
consequently, it is difficult to be replicated.
Employees:
The abilities and information on staff are exceptional to people attributable to the
preparation gave to them and their own qualities, consequently these cannot be duplicated by
rivals.
Organized:
It very well may be alluded to as the components which are required to be coordinated in
a precise way to achieve authoritative objectives and targets (Phan, 2021). John Lewis software
must be updated at regular period of time to address the issues of association thus it does not fit
this criterion.
Employees:
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The staff of organization possibly must be organised in a situation when a change
happens inside hierarchical premises like conduction of instructional courses by business.
It has been evaluated from the environment internal environmental analysis of John
Lewis that there is certain strength that provides advantage to company in number of ways. It has
been identified that organisation employees act as it's one of the most important resources which
is imitable, valuable, rare and organised. Furthermore, it has been underlined that organisation
lacks in efficient marketing initiatives as well as strategies that affect them to reach towards
wider audience. Furthermore it has been identified that due to the presence of competitors like
ALDI, Marks & Spencer, LIDL, TESCO, ASDA, company face threat upon its higher
profitability and large consumer base.
Analysis and critical evaluation of the competitive environment using Porter’s Five Forces model
Porter’s five force analysis is defined as a specific tool through which organisation can
evaluate competition swelling in market segment. In terms with John Lewis with the help of
taking advantage of this model actual competitiveness in industrial sector can be identified with
the help of this John Lewis can execute their Strategies and operations in efficient way:
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Figure 2: Porters 5 forces
Threat of new entrants
The threat of new entrants in United Kingdom is comparatively low as in this
geographical segment consumer behaviour is basically inclined towards established as well as
respected stores. However it has been identified that there is time to time entry of new entrants
such as ALDI and Lidl those who are competing with John Lewis on price segment in United
Kingdom (Pylak and Kogler, 2021). It has been underlined that in departmental store business
threat of new entrants is comparatively low, as in this organisations are required to make
investment of high cost of capital. Along with this main reason behind low threat of new entrants
is that investors are not having full knowledge about market segment. This can provide
significant opportunity for John Lewis in which they can take advantage of innovation and can
offer new products and services to gain more competitiveness.
Threat of substitutes-
In retail industrial sector there is intense competition between leading companies which
can affect business operations of John Lewis. This makes high threat of substitutes. Competitors
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like Tesco and Sainsbury's are significantly diversifying into clothing and household goods. It is
essential for John Lewis to overcome this competition by shifting their pricing strategy from
premium prices to low cost. However it is essential for John Lewis to maintain their product
quality as negligence of this can affect consumer mind set.
Bargaining power of customers-
Bargaining power of John Lewis suppliers is relative low as company is having number
of suppliers through which they acquire raw materials and other resources. Furthermore it has
been underlined that suppliers always want to work with leading organisation like John Lewis.
This provides opportunity for company through which they can enhance their sales and can earn
good turnover. In this company by enhancing quality of their raw material especially in sector of
textile in which they can purchase high quality raw material can enhance their brand
competitiveness.
Bargaining power of suppliers-
There is high bargaining power of consumers in retail industrial sector. It has been
underlined that due to increasing competition from organisations like Sainsbury, Tesco and
more. John Lewis is facing high competition due to their premium pricing strategy. In order to
gain consumer attention John Lewis is required to switch towards low price products with low
price strategy. In this company is required to consider all the factors in order to overcome price
war. In addition to this it has been identified that due to the outbreak of covid-19 retailers are
subjected to lowering the prices in order to influence consumers to buy their products and
services (Ullah, Arslan and Puhakka, 2021). Furthermore it has been underlined that John Lewis
profitability is mainly dependent on United Kingdom market as they are having low international
presence.
Competitive rivalry-
Threat of substitute is high in retail industrial sector as in this consumers have number of
options to purchase as number of organisations are offering their services and products on
discount basis. It has been identified that organisations like Tesco and Asda keeps on offering
their production services on discount rate basis in their departmental stores, as stock clearance
sale. Along with this due to the outbreak of covid-19 low disposable income also affect premium
pricing strategy of John Lewis that make consumers to go to the stores like Tesco over respective
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organisation. In order to tackle this situation it is essential for company to undertake advantage
of flexible pricing strategy and have product specialisation in order to ensure competitiveness.
Identification and justification of the organisation’s existing and/or potential competitive
advantage
According to the analysis of above mentioned strategic tools it has been identified that
John Lewis is having existing competitive advantage in terms of their employees and excellent
products that they are offering to consumers. Furthermore, it has been identified that company is
having strong global presence and their workforce utilizes their abilities and skills to accomplish
organisation objective. The software that John Lewis utilizes is difficult to be imitable that
enhance organisation competitive advancements. However it has been identified that potential
competitive advantages of John Lewis mainly lies in its software which is required to be updated
at regular interval of time. Along with this by providing training and development courses to
employees in order to be adaptable towards changes is also potential competitive advantage of
this organisation.
Devise valid strategies and tactical objectives to achieve overall strategic objectives
It is essential for John Lewis to device strategic as well as practical objectives in order to
fulfil overall strategic objectives. For this it is essential for organisation to have a strategic
management plan in order to gain overall success:
Aim: To maximise operational scale of company in existing market segment
Vision: To be a global leader in retail industrial sector.
Mission statement: To provide innovative, unique and high quality goods and services as
to gain maximum level of consumer satisfaction.
Values: John Lewis is operating its functioning as a leading brand that possesses
transparency, integrity, beliefs and ethics.
Strategies and tactics: It is essential for company to undertake advantage of effective
strategic direction in order to gain attention of large base of consumers and maximize their
overall sales and revenue (Yu and Kim, 2021). In this company with the help of market
penetration strategy can influence existing consumer base and can further gain competitive
advantage and attention of dedicated as well as loyal consumers. In addition to this with the help
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of taking advantage of tactic like launching new high quality product at affordable price range
will allow them to influence attention of consumer base of all economic groups.
Part B
Critically evaluate the different types of strategic directions available to the organisation
Ansoff matrix is defined as a strategic tool through which organisation can have guidance
in order to adopt best strategy for company growth. With the help of suitable strategy
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organisation can maximize their profitability as well as sales growth. In terms with John Lewis
manager is planning to undertake use of this matrix as to identify most appropriate strategy:
Market Penetration:
This Ansoff Matrix strategy mainly emphasise on offerings existing items in the current
business sectors. In relation with John Lewis, it very well may be said that its administrators
could acquire this system by zeroing in on untouched customers in existing market segment. This
will effectively help the organization in improving its benefits by focusing on same market.
Alongside this, it is simpler for organization as they know about economic situation and
purchasing conduct of clients.
Market expansion:
This procedure is likewise prominently named as market development. This system
essentially focuses on offering existing item or service into new market region (Sharma and
Singh, 2021). The primary guide of this procedure is to upgrade its number of clients by moving
toward new market zone. Regarding John Lewis, it tends to be said that, by securing this
methodology the organization could without much of a stretch upgrade its benefits as they can
arrive at extra geological areas.
Product expansion:
In this procedure, organization centres on offering new item in existing business sector.
In setting to John Lewis, it tends to be said that if this organization will gain this methodology
they have foster another item based on the need of consumers. Further these items will be offered
to similar zone of clients in existing commercial centre (Zahra, 2021). Here, John Lewis could
extend their clothing sector inside UK and other working region for gaining consumers attention
and enhancing their profitability with additional sales.
Diversification:
As per this strategy, company offers totally new product or service in new market
segment. It has been evaluated that diversification technique is viewed as the most risky
methodology as it is not always possible for organization to get attention as well as
acknowledgment of customers in new market with new item (Tang and Karim, 2021). In the
event that John Lewis receives this system, it will be considered as the costly method for them as
they need to embrace assortment of advertising techniques for creating positive relationship with
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designated client zone. This will straightforwardly affect upon their benefits as their costs will be
higher than their incomes.
Justify and recommend the most appropriate growth platform/s and strategies
According to the above Ansoff Matrix analysis, it has been identified that market
penetration is the most appropriate strategy through which John Lewis can maximize their
growth profitability and can overcome the competitiveness prevailing in market segment, due to
number of factors such as covid-19 and increase in competition. With the help of this strategy
John Lewis can lead to direct sales as well as can lead towards direct brand awareness. In
addition to this market penetration strategy allow organisation to have quick diffusion as well as
adoption of their product in market segment. It discourages competition and creates goodwill.
With the help of market penetration growth strategy John Lewis can increase product demand
and can maximize market share (Hendrawanto and et. al., 2021). It also helps company to
conduct cost effective business operation which is essential for company in order to conduct
business in effective way due to the emergence of covid-19 outbreak. It allows company to have
greater volume of production. With the help of this strategy company can offer their products
and services at lowest cost comparatively to rivals and can swiftly capture market share. Thus, it
is recommended for John Lewis to undertake advantage of market penetration strategy, as it is
most appropriate growth strategy through which company can maximize their sales profitability
as well as competitiveness in respective industrial segment.
Evaluate ways and means by which the chosen strategy/ies can be monitored in order to ensure
success
It is essential for organisation like John Lewis to undertake advantage of effective means as
well as ways in order to monitor the selected strategy as to achieve high success. Market
penetration is defined as a measure of the extent at which service or product is being used by
consumer as compared to the total estimate market for the service or product. This is also
associated to number of potential consumers that have purchased a specific organisation product
instead of competitor’s product (Wanyonyi and et. al., 2021). With the help of market
penetration company can significantly enhance their sales by focusing upon steps to achieve
gains in market share. It has been identified that market penetration strategy is defined as a
situation in which organisation work towards higher market share by effectively tapping into
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existing products in existing market. This helps organisation to increase their sales among
individuals those who are already in the market. It is essential for organisation to offer
promotional program in order to boost loyalty among consumers with the help of new marketing
campaigns. Company is required to also focus upon social as well as digital selling. In addition
to this it has been identified that by taking advantage of regular monitoring of competitive
pricing strategy company can assure success in effective manner (Yu and Li, 2021).
Furthermore, it has been identified that there are different type of sales as well as marketing tools
through which company can penetrate in market segment and gain more market share. With the
help of pricing company can offer low-cost products and services to customers at low price that
will play integral role for John Lewis, through which they can enhance their sales. It is essential
for company to take advantage of the pricing strategy tactics such as offering discount for repeat
consumers, offering coupon system, volume based pricing for larger purchase and more in order
to gain competitiveness. Company is also required to effectively emphasise upon reviewing the
aspects in which the product can add more value compared to other competitors. In addition to
this by analysing common problems that has been experienced by other competitors John Lewis
can develop effective market penetration. It is essential for organisation to regularly monitor all
these activities along with their extent of the impact upon organisation sales in order to gain
success.
CONCLUSION
According to the above mentioned report it has been concluded that, business strategy acts
as an essential aspect for an organisation in every industrial sector that provide assistance to
organisation in the process of strategic planning. This allows company to fulfil their objectives
and goals in time effective manner while assuring high competitiveness in industry. This report
states that PESTLE analysis is an effective tool through which company can identify various
factors that can affect organisation operations. Furthermore, it has been evaluated from this
report that with the help of SWOT and VRIO analysis organisation capabilities can be
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significantly identified. This helps organisation to emphasize upon their strength while taking
advantage of opportunities available in the market. There are different types of strategic options
available that company can emphasize upon in order to maximize their operational areas in order
to maximize their profitability and sales.
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Claro, P.B.D.O. and Esteves, N.R., 2021. Sustainability-oriented strategy and Sustainable
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PENINGKATAN KINERJA PENGRAJIN BATU PIRING KABUPATEN JEMBER.
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Onyama, D.N., 2021. Profitability, Productivity, and Sustainability: Organizational Behavior
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Phan, S., 2021. The effect of PESTLE factors on development of e-commerce. International
Journal of Data and Network Science, 5(1), pp.37-42.
Pylak, K. and Kogler, D.F., 2021. Successful economic diversification in less developed regions:
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Zahra, S.A., 2021. The Resource-Based View, Resourcefulness, and Resource Management in
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Online
OUR VALUES. 2021. [Online]. Available
throughhttps://www.johnlewispartnership.co.uk/about/our-values.html
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