Analyzing the Impact of Macro Environment on John Lewis Ltd's Strategies

This document analyzes the impact of the macro environment on John Lewis Ltd's strategies. It includes a PESTEL analysis and strategic planning using frameworks like SWOT analysis, VRIO model, and Porter's Five Forces model.

Business
Strategy

Contents
INTRODUCTION...........................................................................................................................................3
TASK 1..........................................................................................................................................................3
P1 Applying appropriate frameworks analyse the impact and influence of the macro environment on a
given organisation and its strategies.......................................................................................................3
TASK 2..........................................................................................................................................................5
P2 Analyse the internal environment and capabilities of a given organisation using appropriate
frameworks.............................................................................................................................................5
TASK 3..........................................................................................................................................................7
P3 Applying Porter’s Five Forces model evaluate the competitive forces of a given market sector for an
organisation.............................................................................................................................................7
TASK 4..........................................................................................................................................................9
P4 Applying a range of theories, concepts and models, interpret and devise strategic planning for a
given organisation...................................................................................................................................9
CONCLUSION.............................................................................................................................................11
REFERENCES..............................................................................................................................................12

INTRODUCTION
Business strategy refers to a mechanism or technology that allows a company create
viable and higher level policies and approaches to accomplish objectives and priorities
effectively. By effective strategic strategy a company may gain many advantages that help it
meet goals and priorities, such as economic growth, market advancement, financial performance
change, client base and so on (Yuliansyah, Rammal and Rose, 2016). Throughout the area of
strategy, 'strategic management' involves establishing and executing the core goals and actions
developed on behalf of stakeholders by the leading executives of an enterprise on the basis of
capital identified and an internal and external climate evaluation carried out by the company For
this task, John Lewis Ltd is the company chosen. This was created in 1929 by John Spedan
Lewis. We primarily work in the shopping market, with their head offices in Oxford Road,
London, UK. Their ranges include clothes, watches, shoes, luxury goods, chairs, health items,
cosmetics, bedding and several other facilities. This related research includes subjects such as
market assessment and analyzes with respect to micro and macro environmental factors. These
would also provide proactive strategies for environmental evaluation.
TASK 1
P1 Applying appropriate frameworks analyse the impact and influence of the macro environment
on a given organisation and its strategies
A company should examine the external factors that impact the respective company to
effectively conduct and manage the business (Sanden, 2016). PESTEL analyzes and analyzes the
macro-environmental variables was done by John Lewis Ltd. PESTEL description which is
given below in conjunction with John Lewis Ltd.
 Political: Most businesses prefer to enter the European Union sector in the United
Kingdom. There is far less competition obstacle in Europe of which the businesses,
which tends of struggle with John Lewis Ltd, are made easier to join. As a consequence,
the UK government has agreed to slash corporate tax from 30% to 28%, helping
businesses improve their potential competitiveness. The businesses will also be able to
act efficiently and adequately with their company processes and activities. However,

under the conditions, modifications to government rules and regulations that John Lewis
Ltd. would need to implement new plans accordingly.
 Economical: The British economy risks stagnation, because of the volatile condition with
rising interest rates. The supermarket firms will sell their goods and services at affordable
costs to tackle these circumstances. It also impacts the John Lewis Ltd. company, they
are often forced to sell their goods at affordable cost and provide discounts. With their
pricing strategy, the business organization attracts more people very easily, but it is very
challenging for other business leaders to change appropriate strategies.
 Technological: In order to reduce wasting of paper, John Lewis SA provides internet
shopping and encourages consumers to buy in any location. The organization also uses
sophisticated technologies to quickly and reliably control its departments and activities.
Adoption of modern technologies simplifies research and allows it effective, while at the
same time costing companies that control their spending and other activities.
 Environmental: Initiatives are developed to improve the air by several supermarket
businesses. John Lewis Ltd. also utilizes recyclable materials and electricity to minimize
emissions by introducing innovative technology and methods to decrease the carbon
footprint. With the production of skin friendlier, more earth conscious goods, but at the
same time more capital to be spent in these methods; the business is able to draw many
more buyers.
 Legal: John Lewis Ltd. needs to manage that the legislation applicable to both consumers
and workers' health and welfare when operating in the retail industry. Renewable
products can be used in textile development. They will always look after their employees
in accordance with this by ensuring their health and proper facilities. John Lewis Inc can
successfully and reliably run the market by following the correct criteria, but adjustments
in these considerations have a daily impact on the manager's decision taking.

TASK 2
P2 Analyse the internal environment and capabilities of a given organisation using appropriate
frameworks
In order to evaluate the internal context of SWOT analysis and VRIO, John Lewis Ltd can define
the capacities correctly and efficiently (Chen, Eshleman and Soileau, 2017).
SWOT Analysis:-
Strength Weakness
 A strong public identity of the relevant
business inspires and enables customers
to purchase goods.
 They are also very well represented
online, offering customers a smooth
and attractive design.
 John Lewis Ltd’s management insists
on the preservation and creation of
productive ties with employees. By
which they will inspire and attract long-
term workers.
 By selling designers and fashion goods
in reasonable terms to their prospective
clients, John Lewis Ltd draws its
consumers.
• John Lewis Ltd faces difficulties in the
international growth of business.
• In fact, the creation of effective
communication techniques is still missing.
• There is still a shortage of them on the
central, regional and international markets in
the light of economic growth.
Opportunities Threats
 The organization will extend its
presence on the foreign market by
successful and adequate strategies.
 John Lewis Inc will also create creative
new advertising techniques, exclusive
and revolutionary, to draw ever more
customers.
• Legislative laws and guidelines affect John
Lewis Ltd’s company practices.
• The rivals such as ASDA, TESCO Plc, Marks
and Spencer, ZARA and several others are one
of their biggest challenges for the respective
companies.
• John Lewis Ltd still fears loss, specifically,

 New product lines may be added as
well.
 The respective company often enhances
its industry by developing effective and
acceptable private labels.
that it will lose as it spreads into different or
varied communities.
SWOT assessments indicate the strength, opportunities, weakness and threats of the respective
firms. The VRIO model is now being applied to evaluate their market growth capability.
VRIO Model: A company adopts this particular model to identify and analyze its capabilities. In
this manner, they will establish and define a broad variety of issues such as developing correct
vision and project statements and objectives (Zakaria, Hashim and Ahmad, 2016). In the
background of John Lewis Ltd, the following is an overview of VRIO model:
Valuable: It refers to certain things that are important to John Lewis Ltd and who help to
accomplish their goals and priorities.
 Global presence- It has value because it generates different things, such as an efficient
brand image, profit margins, loyal customers and much more through such a respective
company (La, Melloni and Stacchezzini, 2016).
 Products- It's so the business will draw more and more consumers successfully behind
this important feature.
 Software- It is important as this respective company can efficiently and properly protect
and maintain its records.
 Employees- To John Lewis Inc, they are most important as they will easily accomplish
their target.
Rarity: It addresses causes that are unique and that significantly boost profitability for John
Lewis Ltd. There are rising competitive firms on the sector here and foreign competition is not
unusual.

 Products- To the respective firms, goods are unique and in terms of price and nature they
are special than certain businesses.
 Software- This is rare because it is established according to the needs and requirements of
each company.
 Employees- This is uncommon because all John Lewis Ltd’s employees have their new
and distinctive knowledge that they can achieve their goals.
Imitable- It includes the factors that another company does not copy or imitate for benefit. Many
firms are capable of achieving comparative edge in terms of their respective goods (Anwar, Shah
and Hasnu, 2016).
 Software- the Company’s software is not emblematic, because it is very complicated to
replicate on the basis of their needs.
 Employees- John Lewis Ltd’s staff is really productive and competent, so nobody will
imitate.
Organized- It refers to those factors which require very little organization and achieve strategic
goals in the respective business. John Lewis' program is not structured because it would be
arranged in time.
 Employees- Employees within each organization will be periodically supervised. They
are really trained and well-informed. When innovative approaches are implemented, John
Lewis Ltd also offers instruction to staff.
TASK 3
P3 Applying Porter’s Five Forces model evaluate the competitive forces of a given market sector
for an organisation
Porter's five-force model is a methodology or approach implemented by a business association to
determine and evaluate competitive strength. By designing and determining tactics, proposals

and regulations appropriately for a business members and managers (Oldman and Tomkins,
2018). In fact, a company thus successfully and reliably improves the productivity level and the
consumer base. It method includes primarily aspects such as processes, systems, research done,
goods and services and much others. In order to carry out a demand review in successful and
productive manner, John Lewis' management adopts Porter's 5-force model, describe below:
Threat of new entry- It is seen as a circumstance where a new company quickly joins a given
sector. It can also be achieved when that particular market is highly profited and barriers and
legislation are greatly reduced. As a consequence, various companies in particular would like to
develop their businesses, particularly on the market or industry. The danger of new entry is weak
with respect to John Lewis Ltd. This could be that it will be impossible for emerging firms to
start up their operations in a smaller time period than John Lewis. According to the UK industry
report, one of the top 10 retail firms is listed.
Threats of substitute- This is a condition because the profitable company delivers the same
premium goods and services, at a cheaper price. In this situation, the consumer is likely to turn to
other options which provide the same product quality at a lower price. In this situation, the
consumer becomes the business lord since they have more options to a given goods and services.
The danger of substitution hazard is smaller in John Lewis Ltd. as a business that cannot sell
same quality goods at a cheaper price is not similar to itself.
Bargaining Power of Customer- The customer's negotiating ability is a requirement for
consumers to order goods and services, albeit at a more affordable price. Only consumer can
compromise the price because there are many alternatives in the market. When the commodity is
made below the typical quality point, it may affect an organization’s production, but markets it
for cheaper costs than the normal profit margin (Kitsios and Kamariotou, 2016). Even when the
commodity is made at a poorer condition to retain the cheaper purchase price; it impacts the
customer's standards as the product's consistency has already been reduced. There is an immense
probability of being won with John Lewis Ltd. as different firms provide the same product and
service content at competitive rates. To this end, the organization needs to establish an effective
manufacturing plan that can draw clients.

Bargaining power of supplier- It is because the demand for a specific goods and services is less
frequent by manufacturers. Within this supplier higher costs will be demanded for basic
commodity content and will impact a company's cost of output directly. Here, the negotiation
strength of the retailer is strong as fewer vendors are in nature. The negotiation power is quite
weak in the case of John Lewis Ltd, as there is a limited number of vendors to offer uniform
commodity quality. It strategy means that a organization maintains a stable partnership with its
manufacturer.
Competitative Rivalry: It applies to the circumstance in which various companies sell the same
goods at cheaper rates to gain vast quantities of market share. Nevertheless, extreme competition
will reduce the company's income, which relies entirely on price cuts. To this end, different
companies adopt the strategic plan and analyze their strength and weakness. John Lewis Ltd. has
an excellent probability of winning as other rivals provide goods and services of the same price
to their clients on the market. Few examples of this include ASDA and TESCO plc.
Therefore, an appropriate plan must be formulated and strategy for the respective reasons listed
above must be established which will assist the organization in the long term.
TASK 4
P4 Applying a range of theories, concepts and models, interpret and devise strategic planning for
a given organisation
The management at John Lewis Inc. uses Ansoff Matrix in order to assess and measure the
competition in a manner that quickly and reliably establishes initiatives, tactics and policies. This
is the following description in relation to growing company:-
Ansoff Matrix- This applies to approaches or methods utilized by an company to create and
implement proposals, tactics and policies that enable them to extend their business efficiently
and accordingly (Nadeem, Abedin and Chew, 2018). This can usually be used by managers,
senior managers, marketers and many more that plan their employees' strategies to perform their
work effectively and appropriately. In the John Lewis Ltd context, its manager uses a

methodology to conduct a market assessment to identify opportunities to work effectively and
properly on strategies. The following is an explanation:
Diversification: This approach is to bring the company to a global industry a wide variety of
goods and services. In order to increase the efficacy and performance of their clients. By John
Lewis Limited growing into a different area their variety of goods, they will improve their
business competitiveness and interest on the sector. To order to do this, they have to conduct
various roles such as detection of future buyers and of the sector.
Market development: Under this approach an company aims to grow its industry with the help
of the new division in different markets. Through way of which they will attract more and more
consumers from different parts in a fair and effective manner. They are launching a new product
line in the current sector within the respective business. We will sell the same core goods on the
new market that we give on another business. In this manner, they will extend their departing
product base for consumers, for which they will need to sell new goods.
Product development- This involves the strategy by which an company creates a fresh and
exclusive range of goods on established markets to allow consumers to be drawn and maintained
on a wide and long basis (Gumusluoglu and Acur, 2016). With regard to John Lewis Ltd, they
are developing innovative and unique products to expand their client base in large quantities.
With this client, too, visiting retailers to try out new product offerings was welcomed, so this
business will therefore improve its footprint.
Market penetration- This applies to a development introduced by a corporation in order to
maintain or improve its industry on the global market by selling new goods (Parnell, 2016). With
respect to John Lewis, they should follow different strategies in order to draw more and more
buyers in addition to extension of their current commodity in the global marketplace. They boost
their campaigning, give deals and enticing products and much more. They can persuade and
cover a broad customer ratio. Through this, they can effectively and efficiently increase both
their profitability and their market shares.
After all the considerations of Ansoff process founder John Lewis Ltd have been defined and
measured, it has been decided whose goods are most desirable and successful for them. They are
mainly concerned with Western clothes, with which they are launching a wide selection of goods

and services. Thus, they will launch more items such as mainstream goods, from which they will
draw even more established consumer consumers. It would also allow rising business to increase
its competitiveness and market shares.
CONCLUSION
On the basis of above project report, it can be inferred and evaluated that for growing
organisation, management approaches are necessary in order to function efficiently and
efficiently. If an organization wishes to analyze internal factors, it can use the SWOT
analysis and VRIO analysis. PESTEL research may also be carried out for the study of the
macro-environmental plant. When micro and macro environmental variables are analyzed,
Porters five forces model will assess competitiveness in a sector. In addition, a company can
implement a generic model for porters to develop suitable strategies, plans and policies.
Each of which helps business managers to establish and implement plans in which
businesses can work successfully and efficiently.

REFERENCES
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