Effective Business Strategies for Organisational Goals

This report highlights the importance of effective business strategies in achieving organisational goals. It emphasizes the need for companies to properly analyse their internal and external business environment, without which it is not possible to attain desired objectives and targets.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Evaluate impact and influence of the macro environment on an organisation and its
strategies......................................................................................................................................1
TASK 2............................................................................................................................................3
P2. Analysis of the internal environment and capabilities of a company...................................3
TASK 3............................................................................................................................................5
P3. To evaluate the competitive forces by using Porter's Five force model...............................5
TASK 4............................................................................................................................................6
P4. Use a range of theories, concepts and models, interpret and devise strategic planning for a
firm..............................................................................................................................................6
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business strategy is referred to a tactics that is used by business organisations in order to
attain their desired objectives and goals. It is considered as a long term business plan that helps
the companies in sustaining a strong presence within marketplace. Usually, a business strategy is
adopted by a company for three to five years. Strategies helps an organisation in acknowledging
the quantity of resources required for a particular task (Akter and et. al., 2016). This assignment
is written in context with John Lewis which is a UK based departmental store, headquartered in
London, UK. Company was founded in 1864 and successfully operating at more than 50
geographic locations. This assignment will cover PESTLE and SWOT analysis so that business
environment can be acknowledged in a detailed manner. For understanding organisational
capabilities, VRIO model is used. Analysis will be carried out to identify competitive
environment. Beside this, different theories, concepts and models are implemented in order to
formulate an effective strategic plan that will helps the company in attaining desired
organisational goals.
TASK 1
P1. Evaluate impact and influence of the macro environment on an organisation and its strategies
Macro environment is a situation in which entire economy is considered as a single entity
rather than a specific region or sector. Macro environment includes GDP, fiscal and monitory
policy, inflation, technology, society, environment, legal aspects etc. In this regard, manager in
John Lewis can implement PESTLE analysis to acknowledge external business environment in
an appropriate manner. Factors associated with PESTLE analysis are mentioned below:
 Political factor: These factors specifies the extent up to which a government and its
policies can impact a business or an organisation. It involves political stability and policy
along with fiscal, taxation and trade policies. UK is politically stable but due to Brexit,
nation has faced some political debates and uncertainties. As UK is a popular destination
for FDI, it will benefit John Lewis in enhancing their market shares. For companies
corporation tax rate is 19% , if it will increase them this will impacts John Lewis in a
negative manner (Chu, KrishnaKumarand Khosla, 2014).
 Economic factor: These aspects posses a visible impact on the economy of a nation due
to which organisational profitability got impacted. It includes employment rate, foreign
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exchange rate, currency fluctuation, raw material costs etc. As UK is fifth biggest
economy in world, it is advantageous for business organisation to work there. Due to
recession in 2008, UK has faced economic instability for some time but measures had
been taken to reduce their impact. Increase in interest rate can reduces the profit margins
of business organisations. Due to diversified economy for both private and public sectors,
there are high growth opportunities for John Lewis. If inflation rate will be high, then
purchasing power of people will reduce. This will decreases the revenue margins of John
Lewis.
 Social factor: These are concerned with the social environment and emerging trends of a
nation. These aspects helps an organisation in understanding the desire and expectations
of customers in a detailed manner. Social factors involves educational level, cultural
trends, demographics etc. As people in UK are trendy, if John Lewis will produce trendy
and modern clothes, people will buy it without considering its price which will help the
company in increasing their sales and revenues.
 Technological factor: It is associated with mobile or digital technology. As UK is one of
the technologically advanced nation, people prefer to shop online rather than visiting
stores. In this regard, it is essential for John Lewis to upgrade its manufacturing
machines, official websites and mobile application so that comfortableness of customers
can be enhanced that will results in increases sales and profitability. If company will not
update its technology, customers will change their preference towards products of other
firms which will reduce the revenues of John Lewis.
 Legal factor: It involves different legislations and laws which are formed by government
so that an organisation can work in a proper manner without harming the welfare of its
workforce and customers (Leonidou and et. al., 2017). Different laws which are included
in this aspect are discrimination act, consumer law, employment law etc. Following these
laws will benefits John Lewis in maintaining a positive brand image. If company will not
follow these laws, then they may have to pay high penalties and fines due to which
customer base will also reduce.
 Environmental factor: These aspects include recycling procedures, sustainability,
renewable sources etc. people around globe are getting more concerned about
environment and prefer to use those products and service which do not harm environment
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in any manner. If John Lewis will follow all environmental norms and laws then
customer base of company will enhance. If manager of John Lewis will not consider
these laws and adopt those policies which will impact environment in a negative way
then customer will stop purchasing there products. This will results in reduced customer
base and revenues for company.
TASK 2
P2. Analysis of the internal environment and capabilities of a company
Internal environment of a business or an organisation consists of different aspects like
corporate culture, current employees and management of company. In order to analyse the
internal environment of John Lewis in a proper manner, manager of company can take help of
SWOT analysis. It is a framework which assists an organisation in acknowledging its strengths
and weaknesses along with potential opportunities and threats that can impacts the revenues and
profit margins in a considerable manner. In context of John Lewis, SWOT analysis is mentioned
below:
In order to acknowledge the organisational capabilities of a company in a proper manner
there are different framework which can be adopted. In case of John Lewis, manager of company
can implement VRIO analysis to identify organisational capabilities in a desired manner (Peng,
2017).
VRIO analysis
It is an analytical tool which helps in identifying and evaluating the available resources of
company. This helps in determining competitive advantage of firm in context of market. VRIO is
abbreviated as value, rareness, imitabiltiy and organisation.
Value- According to this factor, if a resource is valuable then it will be advantageous for
John Lewis as it will helps in producing unique products and services that will satisfy the needs
of consumers in an appropriate manner. In case of John Lewis, valuable resources of company
are raw material, workforce, finances etc. these resources benefits the firm in gaining advantage
over rival companies.
Rare- If resources posses by John Lewis will be rare and high in demand, then this will
benefits the company in sustaining a strong lead in marketplace. Company is popular for its rare
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products in home appliances and accessories due to which customers prefer to buy their
commodities as compared to rival companies. It will help John Lewis in attaining competitive
benefits (Shuen, 2018).
Inimitable- These types of resources are costly and very hard to imitate by other
organisations. In case of John Lewis, these resources are the capable and trained workforce of
company which delivers their best performance so that innovative and unique services &
products can be offered to the customers.
Organisation- Within an organisation, the resources are managed and organised in order
to gain value. To attain proper value of resources, John Lewis is required to have appropriate
culture, structure and processes. If resources and material posses by a company are valuable,
hard to get and unique then it will became easier for John Lewis to gain competitive advantage
over rivals.
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Illustration 1: Strategic management, 2013

TASK 3
P3. To evaluate the competitive forces by using Porter's Five force model
In order to analyse competitive forces in a proper manner, manager in John Lewis can
take help of Porter's five forces model. This model is a strategic tool which analyse five
competitive forces that helps in determining the strengths and weaknesses of business in a
precise manner. In respect with John Lewis, porter five forces framework is mentioned below:
 Threats of new entrants: In case of new entrants, company faces less threats. This is
because John Lewis is a renowned retailer and posses a strong brand identity and image.
To be a competitor of John Lewis, heavy investment and finances are needed by new
entrant which is not possible in general situations (Thompson, Strickland and Gamble,
2015).
 Threats of substitute: Threat from substitute services and products is also low as most
of the people prefer to purchase commodities by physically interacting with them. This
helps them in deciding whether the product is worthy to buy or not. As company is
known for its superior quality, people will not substitute their products with products of
other company. If company will offer product with low quality, then threat of substitute
will became high and customer base of company will reduce.
 Bargaining power of supplier: This competitive force is also low in case of John Lewis
as company has connection with large number of suppliers. In case, if one supplier will
stop supply then company can interact with other suppliers so that production process of
company will not get disrupted (Scholes, 2015). If company will have contact with
limited number of suppliers, in that case their bargaining power will be high. If supplier
will stop the supply of resources then it will reduces the revenues and sales of company
as manufacturing of products will be delayed.
 Bargaining power of Buyer: This competitive force is very high and intense. In retail
industry customer is treated as a king. In order to sustain a firm position in market, it is
essential for the company to consider the needs and demands of customers in a sincere
manner. Even if John Lewis will offer products according to the demand of customers
they can shift their preference towards other company which will offer them same
products in less cost. Hence, bargaining power of customers is very high and in order to
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manage it, manager in John Lewis is needed to introduce new strategies that will
enhances the number of loyal customers for company.
 Competitive rivalry: As retail sector is facing high competition, most of the
organisations are shifting their business towards non-core sectors. John Lewis offers
different commodities such as household products, drink, food, cloths etc. Due to this,
company is facing high competitive rivalry from different companies such as Tesco and
Sainsbury. To attract customers, company can reduce its price, offer discount to
customers etc (Mellat-Parast and et. al., 2015).
TASK 4
P4. Use a range of theories, concepts and models, interpret and devise strategic planning for a
firm
Strategic planning is defined as a management activity of an organisation which is used
for setting priorities, emphasizing on resources and energy, strengthening operations and
ensuring that organisational goals are acquired in a proper manner. It is an efforts which results
in adoption of effective decisions and actions which shapes the objectives of an organisation. An
effective strategic plan will helps John Lewis in achieving their desired outcomes and objectives
in an easy manner. In this respect, manager of company can use Ansoff's matrix which is defined
below:
Ansoff matrix
It is defined as a strategic planning tool which offers an analysis and framework so that
senior managers, executives and market researchers can formulate effective strategies. These
strategies will benefits the company in attaining desired future growth (Rugman and Verbeke,
2017). This framework include different kinds of strategies that will benefits John Lewis in
acquiring desired results. Growth strategies depicted in Ansoff matrix are defined below:
 Market penetration: In this strategy, the firm tries to enhance revenues and profitability
by using its existing products & services in existing market. In market penetration, main
aim of John Lewis will be to enhance its market shares without expanding its product
line. To attain this, manager in John Lewis is required to sell more products to existing
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and new customers within existing markets. Decreasing product price will also helps in
increasing sales due to which revenues of firm will enhances.
 Market development: In this kind of strategy, organisation tries to enhance its presence
in new market either in a new region or country by providing its existing product. To
accomplish this, John Lewis can target different customer segments residing in new areas
of country. Beside this, company can offer its products in foreign markets. By this, sales
and profitability of John Lewis will expand in a considerable manner (Teh and Corbitt,
2015).
 Product development: In this strategy, manager in John Lewis can introduce new
services and products into existing market so that number of loyal customer can be
enhanced. It includes expansion of product range in those markets where John Lewis is
already operating. To provide new product in market, manager in John Lewis is required
to invest more in R&D of new products so that expectations of customers can be
acknowledged properly.
 Diversification: In diversification strategy, a firm tries to achieve its desired targets and
goals by providing new products and services into new market. It is considered as most
risky strategy as it results in both market and product development. In this strategy, John
Lewis will offer new products to new customers so that sales and market-shares of
company can be enhanced within market place.
In case of John Lewis, manager of company is going to use diversification strategy in
order to attain its desired results and objectives. With the help of this strategy, company will be
able to sold its new products in entirely new market. This will benefits the company in enjoying
wide growth and success opportunities.
Strategic management plan
It is a formal document which is used for communicating goal, priorities, required and
available resources, strengthen operations associated with an organisation. This document will
help John Lewis in acknowledging whether workforce and stakeholders of an organisation are
working to achieve desired objectives or not. It is a procedure which comprises of strategic goals
that helps in gaining competitive advantage over rival companies (Ferreira and et. al., 2014).
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Aim- Main aim of John Lewis is to offer desired satisfaction to its consumers by providing them
high quality of products & services. Also, providing appropriate welfare to employees in another
aim of company.
Objectives- Major objective of the organisation is to enhance sales by 15% in upcoming year
with the help of diversification strategy.
Vision- Main vision of the firm is to strengthen the brand image of company so that desired
growth can be achieved.
Mission- Mission of the company is to provide standardised products to customers in accordance
with their preference so that high profitability can be maintained.
Strategies- These are the action plan which is formulated by management within an organisation
to achieve its short and long term objectives. It involves plan, direction and control of various
activities related with business. Some strategies which can be adopted by John Lewis are
mentioned below:
Market analysis- In this analysis, manager of a firm tries to figure out the demands and
preferences of customers. Management in John Lewis can use this strategy to acknowledge the
choice of their customers so that product development can be carried out in accordance with the
demand. For instance, if John Lewis wants to expand in South Africa, then market analysis will
helps in identifying the scope of company and its products within new region (Bocken and et. al.,
2016).
STP- This strategy is used by companies to identify its customers, markets, service and
products. It involves segmentation, targeting and positioning.
 Segmentation- A company can segment its market on the basis of demographics, psycho-
graphics, geographic or behaviour of customers. In case of John Lewis, company can
segment on the basis of behaviour of customers. Targeting- Targeting is carried out in accordance with the taste, preference, lifestyle and
income of the customers. John Lewis is going to target young, teenager and adults by
providing them products according to their demands.
 Positioning- To position itself in a new market, John Lewis can implement bundle
pricing strategy in which products will be sold in bundle to customers. This will reduces
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the cost of items as compared with individual item. Other than that wide promotions
through online media and newspaper will also benefits in positioning.
Organisational structure- It is employees owned organisation which is managed by board of
directors that comprises of both executive and non-executive members. BOD is directed by
chairman and chief executive. All important decisions are taken by board of directors.
Tactics- It consists of those actions that supports the plan and strategies formulated by a
company to attain desired objectives. Some tactics that can be adopted by John Lewis are stated
below: Free delivery: It is an important tactics that can be used by John Lewis in order to gain
attention of wide customers. As technology is getting advanced and due to busy schedule
more than half of population in UK prefers to do online shopping. Providing free delivery
is a good way to enhance customer base.
 Packaging: Customers prefer to buy those products which are attractive and well
managed. In this respect, company can provide products to the customers by packing
them in an attractive manner. This will increases the interest of customers towards the
products offered by company.
CONCLUSION
From above mentioned report, it can be concluded that to achieve organisational goals
and targets in a proper manner effective business strategies are required. To implement these
strategies, it is vital for company to properly analyse internal and external business environment.
Also, without strategic management plan it is not possible for company to attain its desired
objectives and targets.
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REFERENCES
Books and Journals
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and business strategy alignment?. International Journal of Production Economics. 182.
pp.113-131.
Bocken, N. M. and et. al., 2016. Product design and business model strategies for a circular
economy. Journal of Industrial and Production Engineering.33(5). pp.308-320.
Chu, M. T., KrishnaKumar, P. and Khosla, R., 2014. Mapping knowledge sharing traits to
business strategy in knowledge based organisation. Journal of Intelligent
Manufacturing. 25(1). pp.55-65.
Ferreira, M. P. and et. al., 2014. Mergers & acquisitions research: A bibliometric study of top
strategy and international business journals, 1980–2010. Journal of Business Research.
67(12). pp.2550-2558.
Leonidou, L. C. and et. al., 2017. Internal drivers and performance consequences of small firm
green business strategy: The moderating role of external forces. Journal of business
ethics. 140(3). pp.585-606.
Mellat-Parast, M. and et. al., 2015. Linking business strategy to service failures and financial
performance: Empirical evidence from the US domestic airline industry. Journal of
Operations Management. 38. pp.14-24.
Peng, M. W., 2017. Cultures, institutions, and strategic choices: Toward an institutional
perspective on business strategy. The Blackwell handbook of cross‐cultural
management, pp.52-66.
Rugman, A. and Verbeke, A., 2017. Global corporate strategy and trade policy. Routledge.
Scholes, M.S., 2015. Taxes and business strategy. Prentice Hall.
Shuen, A., 2018. Web 2.0: A Strategy Guide: Business thinking and strategies behind successful
Web 2.0 implementations. O'Reilly Media.
Teh, D. and Corbitt, B., 2015. Building sustainability strategy in business. Journal of Business
Strategy. 36(6). pp.39-46.
Thompson, A., Strickland, A. J. and Gamble, J., 2015. Crafting and executing strategy:
Concepts and readings. McGraw-Hill Education.
Online
VRIO Model. 2019. [Online]. Available Through:
<http://www.free-management-ebooks.com/news/vrio-analysis/>.
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