Business Strategy

Unit Number and Title Uni
t 32
Project Title Tesl
a
BUSINESS
STRATEGY
1

Table of contents
INTRODUCTION...........................................................................................................................4
Application of appropriate framework and identification of influence of macro
environment on organisation functioning................................................................................4
Evaluation of macro environment in order to converse strategic decisions.........................6
Evaluation of internal environment with the help of appropriate framework....................7
Application of Porter’s Five Forces......................................................................................10
Strategies in order to increase organisational competitive advancements.........................13
Application of models, theories and strategic plan for organisation..................................13
Strategic management plan.....................................................................................................16
CONCLUSION..............................................................................................................................18
REFERENCES..............................................................................................................................19

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INTRODUCTION
Business strategy is being termed as a course of action and decision that provide formative
directions to operation of an organisation. In simple terms, it is a working plan that aids an
organisation to achieve their vision, objectives and gain more competitive advancements by
optimising their financial performance (Brewster, 2017). By undertaking business strategy,
organisation can effectively able to gain strategic edge over the competitors within marketplace.
Present report is based on John Lewis; it is British retailer engaged in the process of offering
cosmetics, watches, furniture, clothing, food, jewellery etc. to customers. In this present report,
formative discussions have been made on factors within macro environment that affect
functioning of organisation. In addition, this report includes SWOT, PESTLE and VRIO
analysis with the help of which an organisation is effectively analysed by considering its internal
and external environment. Along with this, present report also includes porter’s five force
analysis by which a well-defined strategic management plan is developed that can aid company
to increase its profitability and productivity.
Application of appropriate framework and identification of influence of macro
environment on organisation functioning
Organisation is required to evaluate factors that are prevailing in macro environment as to
operate functioning of business in well-defined manner. It has been identified that those factors
affect functioning of organisation and will significantly impact on productivity and profitability
of company operations. To analyse the factors which may affect the operational strategies of
John Lewis, PESTLE can be used in following way –
PESTEL Analysis
Political:
It has been determined by management of John Lewis Limited is looking forward to
enlarge their operations in the provinces of United Kingdom Marketplace. Europe have less
number of market limitations that provide an ease to organisation to enter within Marketplace
with more diversify and opportunity towards creating large base of competition. Some factors
like instability of political rights, trade restrictions or trade wars, arise a number of challenges in
front of organisations, to run their business both at domestic and international level effectively.

In context with John Lewis, trade regulations and tariffs which are related to consumer goods,
highly effects its business strategies. As it has been analysed that due to Brexit, currency of UK
became weak, so, it ultimately hikes the prices of import commodities as well, at marketplace.
This has highly affected the sales of John Lewis and other retailers negatively. In order to
overcome from such challenge, this company focuses on developing effective strategies to fulfil
customer’s requirement on time, by making availability of sufficient stocks at stores. This will
benefit business organisation to enlarge their profit holding ratio within Marketplace.
Economical:
Brexit is considered as the main factor behind fluctuation of economic conditions of
United Kingdom that has negative impact on John Lewis. In order to overcome from this
challenging situation, organisation that deal in retailing sectors like John Lewis, should update
their organisational strategy and offer products to customers on low prices (Wheelen and et. al.,
2017). This in turn affects their functioning and profitability. In addition to this, respective
company is also required to analyse customer demands and develop their products within cost
effective range as to attract customers towards organisation products and services. In addition to
this, it is essential for organisation’s manager to undertake attractive pricing schemes to
consumers in order to expand their operations within country in best effective manner.
Social:
Due to increase in competition between organisations, availability of products on
amazing rates with efficient quality, shifting the preference of customers' lifestyles. Furthermore,
it has been determined that due to inclination of society towards online shopping, preference of
customers for fashionable and trendy items are changing at higher rates. Therefore, changes in
demand of customer considered as the main challenge for John Lewis. Due to this factor, John
Lewis’s strategies are influenced as to cope with the issues of this factor, John Lewis has to
introduce more quality products which can fulfil the needs of consumers related to their lifestyle.
Technological:
Online shopping has become the major trend in retailing sector that reduces paperless
operations and also helps in providing best satisfaction to customers. But moving business on
internet platform arise a number of risks related to security of organisation too. Therefore, John
Lewis needs to work on its IT system so that it can enhance online shopping experience of its
customers. In addition to this, it has been analysed that John Lewis can conduct their operations
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by considering e-commerce. With this assistance, introducing business on e-platform, John
Lewis has become effectively able to reduce paper work while selling items, which further
strengthen its work efficiency.
Environmental:
Society and individuals nowadays are more inclined towards environmental concern. In
addition to this, government has also framed rules and regulations related to environment which
is required for all organisations to abide. These factors impact John Lewis organisation as now it
is important for them to minimise carbon footprint level. For this, company has to update their
strategies and make sure all their operational activities must adhere to the governmental
environmental policies. In addition to this, it is important for company to undertake advantage of
policies and strategies as to manufacture their products in environment friendly manner. With the
help of this company can ensure long term sustainability and profitability.
Legal:
This factor includes rules and regulations like discrimination law, health and safety law,
etc. that highly affects effects the employment policies of a firm. In context with John Lewis,
these laws may highly affect its position in market, if it fails to framework the policies and
business strategies as per legal requirement. Adherence to standards and legislations that are
formulated by authorises of retail sector support the respective entity in creating positive image
in front of community. This helps in attracting customers and formulating a base of loyal users.
Evaluation of macro environment in order to converse strategic decisions
The macro-environment includes factors that are beyond the control of business
organisations, but companies can influence government to make policies that reduces the
negative affect of same. This will prove beneficial for companies in creating dynamic
environment of business, that lead to create innovation and develop better strategies to enhance
profitability. But uncontrollable factors like changes in tariff rates and trade policies, impacts
negatively on business strategies as well. For this purpose, developing policies as per current
market trend and political laws, helps John Lewis in earning sustainability.

Evaluation of internal environment with the help of appropriate framework
In order to operate organisational functions in best effective manner John Lewis is
required to evaluate every factor within internal environment. For this purpose, SWOT and
VRIO analysis can be used, that helps in evaluating the internal capabilities of business as well,
in following way:
SWOT Analysis:
Strength Weakness
 John Lewis is having attractive brand
image within marketplace that
effectively helps them to encourage
customers towards organisation
products and services.
 Company offer trending designs of
clothing and jewellery products to their
customers that further allow them to
gain more competitive advantage as
compared to its competitors (Peng,
2017).
 John Lewis offer their products and
services as per current trend and
demand of customers with the help of
which company significantly increases
their market holding share capabilities.
 Organisation take advantage of highly
qualified management team, who are
expert in providing clear vision to
employees to enhance business
profitability. This team also helps in
giving timely appraisals to employees
 Management of John Lewis hold
minimum knowledge related to
international business that acts as major
weakness for company.
 Company also lacks in framing
successful marketing strategies that
affect them to perform their operations
in best effective manner.
 Availability of limited offers as
compared with other super-markets,
reduces the retention of customer that
shows major weakness factor of John
Lewis.
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to get their long-term retention.
Opportunities Threats
 The idea of moving business at
international area like Asian market,
will provide larger opportunities to
John Lewis in generating high
revenues.
 Company can use technology in order
to introduce more innovative and
advanced products and services.
 With the help of technology company
can have easy access to providing more
satisfactory services to customers.
 John Lewis is facing threat related to
new rules, legalisation and regulation
that may further disrupt their smooth
working.
 ASDA, Marks and Spencer, TESCO
etc. are some of the market leaders that
create threat opportunities of John
Lewis.
VRIO Model:
To identify the internal capabilities of business, VRIO model considers as the best
method, where in context with John Lewis, it can be analysed in following manner -
Factors Valuable Rarity Inimitable Organized What is the
result?
Presence in
international
market
Presence in
international
market
- - - Competitive
disadvantage
Products Products Products - - Competitive
on partial basis
Software Software Software Software - Competitive
advantage on
temporary
basis only

Sustainable Sustainable - - - Able to gain
sustainability
due to global
presence
Staff Staff Staff Staff Staff Competitive
advantage
Valuable: It defines factors which prove beneficial for organisation in accomplishment of their
goals in desires way. In context with, John Lewis Partnership the valuable factors of this
company can be analysed in following way – Global presence: Having strong presence in international marketplace, shows the major
competitive factor of John Lewis, which make it able to gain long-time sustainability. Products: Availability of branded with high quality products at stores, helps John Lewis
in building the strong customer base and gaining their loyalty. Software: Implementation of Paragon’s Live Management software aid John Lewis Ltd
in effectively managing its business operations.
 Employees: Present company has highly qualified management team, that helps in
providing best services to customers.
Rarity: It includes resources that shows existence and unique factors of a company. In this
regard, global presence doesn't reflect rare factor of an organisation, due to presence of number
of competitors in the same sector. Therefore, in context with present company i.e. John Lewis,
factors that shows the rarity of its business are explained in brief as below - Products: This company mainly focuses on current trends of marketplace, in order to
match the same criteria with its products. So, availability of latest trendy clothes and
designer jewellery makes John Lewis able to retain loyal customers. Software: To maintain of records of inventories, stock and other operations, John Lewis
also uses latest technology like Paragon’s Live Management software, which is rare to
design as per organisational need.
 Employees: Staff members have possessed own set of skills as well as competence that
shows rare factor of John Lewis in achievement of company's vision, within set period of
time.
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Inimitable: The resources of an organisation which is difficult for other companies to copy
shows the inimitable factors. For this purpose, to hold inimitable factors, John Lewis consider on
two main aspects, viz. introduction of best software and enhancement of competence of
workplace, as described below - Software: As per needs of business and necessity of enhancing customer satisfaction,
John Lewis introduces software accordingly, which is inimitable for its major competitors
to be copied.
 Employees: Providing personal training to staff members, help in making them able to
face future challenges, shows another imitable factor of John Lewis.
Organized: This would can be referred as arrangement of resources in systematic manner, to
achieve business goals within set duration. Therefore, software used by John Lewis i.e.
Paragon’s Live Management software, helps in updating system at regular intervals, to meet
business objectives.
 Employees: It is essential to only organised staff when there is any change implemented
in organisation like conduction of training sessions by employer.
Assessment of internal environment
It has been analysed through VRIO Model and SWOT analysis, there are many factors
which shows high capabilities of John Lewis in penetrating the retail market. It includes usage of
latest software which is rare to design as per business needs, talented workforce and availability
of trendy products, that reflects that present company can gain sustainability in marketplace, for
longer period. But limited stock of inventories and ineffective marketing strategies also depicts
the shortcomings of John Lewis that gives opportunity to its rivals (M&S, H&M and other) to
gain competitive edge over its business.
Application of Porter’s Five Forces
Porter’s Five Forces Model is said to be a crucial tool which is utilised by a range of
business firms that are looking forward to gain competitive advantages through analysing the
market. It consists with five different elements and these are Threat of new entry, Threat of
substitutes, bargaining power of customers, bargaining power of suppliers and Competitive
rivalry as well. With regard to John Lewis, in order to gain competitive advantages, its

management are needed to identify those factors which arise threats for its business. For this
purpose, a market analysis is done in following manner –
Threat of new entry- This is for the most part observed as the circumstance which
shows that how effectively an association could go into a particular industry. It has been further
identified that entry of new organisation within retailing industry is comparatively difficult. It
effectively states that threat of new entrant for John Lewis is low. In addition to this, it has been
identified that company is having good market command within marketplace with the help of
which they have wide range of opportunity to increase overall profitability of organisation. At
this point, it is vital for John Lewis to contribute high for building up their business adequately.
In this manner, it isn't constantly feasible for a whole new start up or another organization to do
this in less time frame.
Threat of substitutes- In present context, for John Lewis the threat from substitutes is
high in nature. There are a range of organisations that are trying their level best to offer
substitute products. It includes Tesco, ALDI, M&S and more, that works on large level and have
capabilities to penetrate the market easily by offering products on relatively low price. Therefore,
to compete with such organisations, John Lewis has to develop effective strategies to gain
retention of loyal customers (Goffee and Scase, 2015).
It has been identified that buyer bargaining power is high as in this consumers offer wide
base opportunities to organisation as to offer products as to make sure their sustainability for
long duration of time. It is mainly acts as threat for organisation as within marketplace there are
already existing famous retailers. All these organisations provide close substitutes services as
well products to customers. Thus, it is essential for John Lewis to provide their products at cost
effective price range. With the help of this company can ensure their long term sustainability
within market place while ensuring high profitability and productivity.
Bargaining power of customers- As in retail industry, there is a high competition present
therefore, it provides a number of options in front of customers, to fulfil their needs as per
preferences. This leads to enhance bargaining power of customer much high for John Lewis,
where to deal with same, it needs to offer high quality of branded products on amazing discounts.
Basically, there are ample number of firms that are offering customers with different products
and services and dealing within the same sector. If any sorts of misleading take place among
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quality of a product, then it is may be possible that whole interest of customers would go to other
firms, who is offering the same product with good quality and with low prices.
Bargaining power of suppliers- Bargaining power of suppliers for John Lewis is said to
be low in nature, because to run business globally, organisations give preference to maintain
effective relationship with vendors. This shows the capabilities of retailers including John Lewis
in making negotiation on prices of raw materials with suppliers. It has been evaluated that John
Lewis have good presence within marketplace of UK. This effectively allow company to switch
to other suppliers.
Competitive rivalry- In retail industry, competition is high in nature, due to presence of
both large and small retailers that offer similar type of products and services on different price
rates. Therefore, in order to compete with M&S, ALDI and other major retailers, John Lewis
need to diversify its business. Thus, John Lewis is suggested to effectively collaborate with rivals
as to make enhancement in their customer base. With the help of this organisation can able to
increase profitability and productivity in best effective manner.
McKinsey 7’s Model
Strategy: John Lewis mainly pursues cost leadership as a business strategy to deal with extensive
bargaining power of customers.
Structure: Organisational structure of John Lewis is highly hierarchical that includes a layer of
management, starting from store managers to CEO.
System: To sustain operations, supermarket chain of John Lewis relies mainly on a wide range of
system. It includes performance evaluation system to improve performance of staff members, so
that entire process will greatly simplify.
Staff: Having more than 83k number of employees, shows the internal capabilities of John Lewis
to earn high competitive advantage, through efforts of them.
Style: The working style of John Lewis includes steering wheel style that concerns on four main
areas as customer satisfaction, employee performance, customers and operations, for
achievement of its objectives.
Shared values: With sophistication of management techniques, aid John Lewis in enhancing
shared values in staff and entire managers for achieving business objectives.
Skills: The capabilities of an organisation show majorly by its high skilled and large workforce.

Strategies in order to increase organisational competitive advancements
Through overall analysis of condition of retail market, it has been acknowledged here, that
to run business competitively, John Lewis requires to develop effective marketing strategies. It
includes usage of unique marketing campaigns, influence social media users and promotion via
flyers to create awareness among customers about its business. This would help in attracting and
retaining loyal customers, for longer period of time.
Application of models, theories and strategic plan for organisation
Ansoff matrix is termed as a planning tool that aids an organisation to implement best
effective form of strategies. This will further allow organisation to gain more growth
advancements. In relation with John Lewis Company segregates their growth strategies within
four different groups that include Market development, Diversification, Market penetration and
Market development. Mentioned below there are some strategies elaborated:
Market penetration: It is basically selling the existing product and services into the
existing market in order to gain high profits. In context to John Lewis, organisations can acquire
this strategy by focusing on present customers in existing markets (Chang, 2016). This would
help the companies to earn more profit and increase its market share. In order to make product or
services better for their existing customers, John Lewis can bring innovations in their existing
accessories, home and garden furniture. This will influence the customers which leads to
enhancement of sales performance as well as profitability.
Market expansion: This direction also known as market development strategy, in this
strategy organisations tries to expand its market by offering its existing product or services into
the new market. The main objective of this strategy is to approach the new customers and
increase its profit and market share. In context with, John Lewis, it can focus into the four areas
while adopting the market development strategy that is its Existing customers, competitor’s
customers, current trends and new markets. These new markets can be nations of Asia.
Product development: In this strategy, company offers new product and services into
the existing market. In context to John Lewis, the strategy requires new competencies, modified
products and the knowledge about the current trends of the market in order to differentiate it
from the competitors and maximise its profit. John Lewis expand its clothing sector in UK to
grab the attention of customers and increase its market share.
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Diversification: In this strategy, company offers new product into the new market and
tries to increase its market share. This strategy is riskier as compare to other strategies because it
is not always possible to get acceptance of the new product into the new market. With reference
to John Lewis, it is considered as expensive if product fails in the market and will directly impact
the market share and profit of the company.
By analysing all the strategies of Ansoff matrix, it has been identified that John Lewis
should go for market penetration strategy (Cavusgil and et. al., 2014). This strategy will increase
its market share in the existing market as well as its customers in same market area. This can be
done by providing innovative products in the existing market area. It will be easier for John
Lewis to satisfy its customers in an effective and efficient manner which leads to increase in its
sales and generation of high profits.
Porter's generic Matrix
It is a strategy which includes different types of strategies that enables business entity to
enhance marketplace and gain competitive edge. In context of John Lewis, management team of
this company can adopt this model to identify the suitable strategies for overall growth at
competitive marketplace. Some of these strategies as per this matrix, is discussed as below –

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Cost leadership: It is defined as one of the most effective strategy where to gain
competitive advantages, John Lewis can adopt the cost leadership strategy. With the help of this
strategy, management team of John Lewis needs to offer commodities at the lowest price to
customers at the marketplace. This will help in grabbing the attention of large number of
customers at market.
Differentiation: In order to create differentiation in products or in customer service,
management team of John Lewis need to offer its products with unique techniques. This will be
attracted customers more towards its business. In this context, management of respective firm
needs to emphasise more on providing high quality product to their customers.
Focus Strategy: According to this strategy, to concentrate on niche markets, John Lewis
needs to identify the unique demands of customers, that will help in building strong brand loyalty
among them.
As selecting the right strategy is essential to gain successful growth of business,
therefore, it has been analysed that cost leadership is the best strategy for John Lewis. The reason
behind this is high threat of bargaining powers of customers, that can be cope up only when
respective company offer quality products on low price.
Horizontal and Vertical Integration
Managers of the company which is John Lewis mainly uses vertical as well as horizontal
integration so that they can increase their growth rate. Both these terms are going to be discussed
as follows:
Horizontal integration- Manager of John Lewis adopt this strategy as it will assist them
in order to manage their each and every activity at similar level within similar sector. Along with
this, it will also assist them in order to enhance their overall market share as well as reduce the
competition at the marketplace within similar industry or sector.
Vertical Integration- According to this strategy, if John Lewis adopt this strategy they
will be able to expand their business function at both upper as well as lower level of supply
chain. This will provide assistance in order to reduce overall transportation cost of the company.
Strategic management plan
The plan is important to grow and analyse the market trends effectively. This plan is made
in John Lewis and here is some key aspect which are drawn below:
Aim: To enhance their market share to increase the profitability within two years.

Vision: To enhance the growth and become the global leaders.
Mission: To offer high quality products & services to expand market share while operating in
current operating boundaries.
Value: This organisation believes in integrity, trust and ethics.
Strategies and tactics: John Lewis will use the market penetration method as their strategic
direction in order to attract more customers and enhance market share. The company will spend
more on market research to provide better services to the customers and it also help in gaining
the information about the changing demands of the customers. Suitability, Accessibility and
Feasibility will be the another main technique of John Lewis to accomplish its mission and
vision statement. This would help in choosing the right strategy that fits with situation for
achievement of objectives.
Marketing Mix
This tool consists those elements that can be effectively managed by organisation like
product, place, price and more, in order to efficiently influence consumer towards its business.
Manager of John Lewis undertake use of marketing mix as to facilitate its organisational
operations in following manner:
Product: For business expansion, John Lewis will expand its product range, especially in
clothing sector with trendy and fashionable brand.
Price: To penetrate demand of customers, competitive pricing strategy will be adopted.
Place: This firm will offer its products to consumers at different outlets that easily access for
customers. Along with this, online shopping facility will also provide to global customers.
Promotion: Management of John Lewis can utilize advanced and innovative form of promotional
strategies to promote its trendy and fashionable products within marketplace.
Physical evidence: Creating simple and easy to operate website, as well as well-organising the
layout at stores, will aid customers to easily find the desired products and satisfy their wants.
People: For enhancing sales, John Lewis will recruit more sales executive who are highly
experience in respective field. Along with this, proper training will also provide to existing ones,
to acknowledge them how to enhance sales by providing better customer service.
Process: By speeding the billing payment process at both online and offline process, will help in
enhancing customer shopping experience.
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With the help of marketing mix organisation can effectively able to execute its
organisational functions while ensuring sustainability within marketplace. This will also allow
John Lewis to gain more competitive advantage than other retailers. Furthermore, progress will
be measured timely by setting KPI factor and allocation of resources properly. This would help
in determining timely that if objectives are met or not, so that modification can be created, in
case of emergence.
CONCLUSION
As per above mentioned, it has been identified that, the planning is essential in any business
as it help in providing blueprint as well as method to grow and expand the business effectively. It
has been figuring out that strategic planning help in developing sustainable business model for
the long run. Along with this SWOT analysis has been taken into account for identifying the
strength and weakness of the company. At last the marketing plan has been made to clearly
understand the aims as well as objectives of the company which help in expansion and growth in
a well define manner.

REFERENCES
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Online
John Lewis PESTEL Analysis. 2019. [Online]. Available through:
<https://businessteacher.org.uk/pestel/john-lewis.php>.
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