Strategic Planning for John Lewis Ltd: Analyzing Macro and Internal Environment

This report analyzes the impact of macro and internal environment on John Lewis Ltd and suggests strategies to improve its competitive edge and market position.

Strategy

Contents
INTRODUCTION.................................................................................................................................3
MAIN BODY........................................................................................................................................3
P1 Applying appropriate frameworks analyse the impact and influence of the macro environment
on a given organisation and its strategies...........................................................................................3
M1 Critically analyse the macro environment to determine and inform strategic management
decisions............................................................................................................................................5
P2 Analyse the internal environment and capabilities of a given organisation using appropriate
frameworks........................................................................................................................................5
M2 Critically evaluate the internal environment to assess strengths and weaknesses of an
organisation’s internal capabilities, structure and skill set.................................................................6
P3 Applying Porter’s Five Forces model evaluate the competitive forces of a given market sector
for an organisation.............................................................................................................................6
M3 Devise appropriate strategies to improve competitive edge and market position based on the
outcomes............................................................................................................................................6
P4 Applying a range of theories, concepts and models, interpret and devise strategic planning for a
given organisation.............................................................................................................................7
M4 Produce a strategic management plan that has tangible and tactical strategic priorities and
objectives...........................................................................................................................................9
D1 Critique and interpret information and data applying environmental and competitive analysis to
produce a set of valid strategic directions, objectives and tactical actions.........................................9
CONCLUSION.....................................................................................................................................9
REFERENCES....................................................................................................................................10

INTRODUCTION
It is very important for company to develop and create effective strategies in highly
competitive environment. Strategies can be described as the framework that will support
organisation to enhance its business activities and operations (Pagani, 2013). By determining
different factors business is able to develop strong strategies. This report is based on John
Lewis Ltd company. This organisation was established in 1929 and founder of this is John
Spedan Lewis. Main products and services of this organisation is watches, clothing,
cosmetics, furniture, direct food services, financial services and many more. This report will
include different factors of macro environment that will have impact on business. Internal
environment and capabilities of business is also determine. Apart from this ranges of theories
are analysed in order to develop strategic planning of organisation.
MAIN BODY
P1 Applying appropriate frameworks analyse the impact and influence of the macro
environment on a given organisation and its strategies.
Macro environment of business consist of various factors that have influence of performance
and productivity of business. It is crucial for John Lewis Ltd organisation to analyse and
evaluate factor of external factor in order to take better decision for growth and development
of business. In order to evaluate different factors of macro environment PESTEL analysis
framework is considered. This is an effective tool that will support organisation to take better
decision for growth of business. PESTEL analysis in context of John Lewis Ltd company is
mention below in detail.
Political factor – John Lewis Ltd organisation is performing its business functions in retail
sector and rules developed by UK government will lead to have major impact on respective
company. Political factor consist of regulation and policies, taxation charges. Trade
restriction, stability and in stability of political party and many other factors. Government of
UK is taking decision regarding decrease of corporation tax from 30 % to 28 %. This
decision of UK government will be very supportive for John Lewis organisation as this will
help in increasing profits of business.
Economical factor – This factor is major related to economic rate of country. Economical
factors consist of exchange rates, inflation rates, interest rate, economic system of country,

employment rates, GRP rate etc. UK country has stable economic system that helps in
continuous growth of GRP and economic rates (Köseoglu and et.al., 2013). John Lewis
organisation will be benefits by UK economy system and perform business operations in
more effective manner. Due to high employment rates in country, customer purchasing power
increase and this will help John Lewis organisation to increase its sales and profits.
Social factor – It is essential for organisation to consider social factor while taking business
decisions and developing strategies. Social factors includes elements such as cultural,
regional, demographic, preference of customers and so on. John Lewis organisation is
creating products and services which is as per the need and requirement of customers. This
helps in developing strong relationship with customers as well as increase sales of John
Lewis company. Population size and demographics targeted by respective company has high
power and potential to purchase the products. Positive attitude and preference of customer
will be very supportive for organisation to accomplish desired goals.
Technological factor – This factors is related to up gradation and modification in
technology. New and innovative technology is very supportive or organisation as this help in
increasing manufacturing of products as well as accomplishing desired goals. Technology is
very important for company dealing in retail sector as this support organisation to
performance business task in more speed in less time. UK country technology increasing very
fast and this can be consider as advantage for John Lewis organisation to accomplish desired
goals and objectives. With the help in new and advance technology respective company will
be able to gain competitive advantage over other rival companies.
Environmental factor – John Lewis company needs to consider environmental factor while
developing strategies as well as performing business activities. Environment factor can lead
to have major impact on business productivity (Khalili Shavarini, Salimian and Nazemi,
2013). This factor consist of weather, climate condition, water bodies, pollution, ecological
system and other natural elements. John Lewis organisation is using different natural resource
in its production process. Lack or limited availability of these resources can affect the
manufacturing of products and services.
Legal factor – This factor consist of all laws and legalisation that is developed by
government. It is essential for respective company to consider laws such as employment law,
health and safety law, patent rights, copyright and so on. This organisation is developing
different types of products and services that will lead to meet with the needs and

requirements of customers. John Lewis company is considering health and safety of
customers as well as employees while developing its products.
M1 Critically analyse the macro environment to determine and inform strategic
management decisions.
Macro environment can lead to have positive and negative impact on business and its
decision making process. It is crucial for respective company to analyse this environment in
order to develop strategic decision. Political and economical factor will help in earning more
profits as well as social factor will support in increasing sales. Strategic management decision
should of John Lewis company will be developed on the basis of macro environment factors.
P2 Analyse the internal environment and capabilities of a given organisation using
appropriate frameworks.
Strategic management decision is majorly dependent on the internal environment as
well as capabilities of business. It is essential for organisation to identify and determine
internal capabilities of business in order to take better decision. For evaluating internal
business environment of John Lewis company, SWOT analysis will be very effective as this
will assist in analysing strength, weakness, opportunity and threats. SWOT analysis of John
Lewis organisation is describe below in detail.
Strength – High level of brand is the main strength of John Lewis company as it is providing
its products and services from many years (Johnson, 2016). This organisation is offering
range of products and services that is able to meet with the requirement of various customers.
It has develop strong relationship with its customers by meeting with the their needs. John
Lewis organisation has strong online presence and it is focusing on innovative approaches in
order to enhance marker share. Go to market strategy of respective company is highly
successful in market area. It employees are highly capable to conduct business task in more
effective manner.
Weakness – Lack of investment in technology is one of the weakness of John Lewis
company. Less updated technology lead to have negative impact on performance and
production of products and services (Gilligan and Hir2013). Due to this respective
organisation has missed various market opportunity to grow and develop business. This
company is not providing timely training to its employees will lead to decrease in their
performance and capability to conduct task in better manner. Inappropriate financial planning
is a weakness of this company as it affect the current and liquid asset ratios of organisation.

Opportunity – There are number of opportunity avaible in market area that will help
respective company to grow and develop its business activivities. John Lewis organisation
needs to take advantage of new and advance technology in its business activities. This will
lead to improve the overall efficiency of manufacturing unit and with the support of digital
technology John Lewis company will be able to market its products and servies in more
creative and effective manner. It is crucial for this organisation to provide training to its
employees in order to develop their skills and capabilities. This organisation should focus on
effective financial planning as this will help in managing all assets in better and accurate
manner.
Threat – There are various threat faced by this company which has have impact on its
performance and profits. John Lewis organisation is conducting its business activities in
highly competitive environment which is one of the biggest threat to this business (García‐
Rodríguez and et.al., 2013). There are many strong companies which is performing its
business activities in same market area. Major rival companies of John Lewis are Tesco,
Marks and Spencer, H&M and so on. Inconsistency of suppliers is one of the major issues for
this company as this will have influence over production process of John Lewis company.
M2 Critically evaluate the internal environment to assess strengths and weaknesses of
an organisation’s internal capabilities, structure and skill set.
There are many factors of internal business environment which can be considered as its
strength and weakness. It employees has one of the strongest internal capability which has
right skill set to perform business task and activities. John Lewis Company is following
functional business structure that will support in effective performance of organisation task
and activities. Lack of investment in technology will major weakness of John Lewis company
as this affect the business activities.
P3 Applying Porter’s Five Forces model evaluate the competitive forces of a given
market sector for an organisation.
It is the model which is used by business unit to get the competitive advantage in
business, in this function some internal factors will be identified for getting advantage in long
run of business. This help in making business strategies which will impact on performance of
business and help in increasing productivity with motivation and effective utilization of firm
resources. It is the study of five points which are new entrants, threat of substitutes,
bargaining power of customers, bargaining power of suppliers and competitive rivalry, these
all are stated as:

Threat of new entrants: New entrants also act as an problem for existing firm and
John Lewis have their existence from long time where they are selling number of products.
New entrants bring new and innovative products in market which change the market
condition according to them. They damage the market of existing firm as customer divert
towards them. if there is large number of new entrant in market than there is less advantage to
John Lewis because and is there is less number of entrants than there will be more advantage
to firm. John Lewis have less advantage in this because there are large number of entrants in
there market with more innovative product.
Threat of substitutes: Substitute are the identical products which competitor of firm
sell in market, if there are large number of substitute than chances of advantage are less and
vice versa. In context of John Lewis, firm have also number of substitute but because of
good brand value and innovation in products firm can deal with it and have moderate level of
competitive advantages in business world.
Bargaining power of customers: Bargaining power of customer is also a factor
which help firm in getting advantage in long run. If there is small number of buyer of product
then firm customer will get power to bargain with firm and if there are large number of
buyers than firm will get advantage to decide prices according to them. John Lewis has large
number of customer support with them as it sells its product in global context. So here John
Lewishas full competitive advantage because of large number of customer and ability to
decide prices.
Bargaining power of supplier: this impact on firm as if there are more supplier of
raw material firm can get the right to bargain for prices and credit facility but if there are
small number of suppliers than supplier have the power to sell raw material at their condition
which will lose the power of firm. John Lewis has number of supplier which also provides
credit facility to it and firm has competitive advantage for it.
Competitive rivalry: this is last point in this where firm have to check its competitor.
In context of John Lewis there is no big competitor in market because of lage sacle
investment and low rate of return so firm get advantage as it can decide its polices without
any interruption.

M3 Devise appropriate strategies to improve competitive edge and market position
based on the outcomes.
It is true that if firm use an perfect market strategy than it can get more competitive
advantage which will also help it in maximising productivity and profit in limited time
period, some market factors like large number of customer and lack of competitor must be
focus by John Lewis for improving performance and get competitive advantage in market.
P4 Applying a range of theories, concepts and models, interpret and devise strategic
planning for a given organisation.
Strategic planning can be describe as the structured process of organisation in which
company will organize and coordinate different activities of business. This includes different
framework and strategies in order to analyse what company should do and how to do.
Strategic planning framework are supportive in providing direction to companies as well as
developing strong strategies for organisation (Amran and et.al., 2016). By developing
strategic plan John Lewis company will be able to attain set objectives as well as accomplish
intended outcomes. Different models and framework are mention below in detail that will
support organisation to take better decisions.
Ansoff matrix
This is considered as tool that will assist business to develop strategies on the basis of
its products and market area. This business framework is classified into four strategies which
are explain below in detail.
 Market penetration strategy – This business strategy will help company to increase
sales of current products and services in current market area. John Lewis organisation
will be able to develop its market share by with the implementation of market
penetration strategy. Respective company can offer its product with creative manner
such as using promotional techniques or providing discounts to customers.
 Product development strategy – In this strategy company will develop new product
in order to sale it in current market area. Product development strategy will support in
creating innovative products which is able to satisfy requirement of customers. John
Lewis company needs to investigate and research about the need and wants of
customers in order to develop product.

 Market development strategy – This is effective strategy for company to enter into
new market area. Market development refers to increasing sales of current products in
new market area. John Lewis business needs to identify market area which has
demand of products offered by this company (Bharadwaj and et.al., 2013). Market
development strategy will help in expanding market share as well as increasing
customer base.
 Diversification strategy – This strategy is considered as one of the most risky
business strategy as in this organisation will focus on selling new products and
services in new market area. Successful implementation of diversification strategy
will lead to increase sales and profits of business.
Porters generic model
This will include three approaches that will help organisation to gain competitive
advantage over other rival companies. Porters generic strategy will support business to
develop and create useful strategies that will provide maximum benefits to company. Porter’s
generic strategies are mention below in detail
Cost leadership – This strategy can be describe as the strategy that will support organisation
to gain cost leadership in market area. In this strategy respective company will have to
produce products at lower cost so that organisation can sell products at less prices as compare
to other rival companies.
Differentiation leadership – In this strategy company will offer new and innovative
products which is different from competitors products and services. Differentiation leadership
strategy will be implemented by business by offering different products to targeted market
customers. John Lewis company needs to conduct good researcher for developing innovative
and different product.
Focus strategy – Organisation will consider this strategy when it is targeting niche market
area. Focus strategy includes cost focus and differentiation focus strategy. In cost focus
strategy respective company will offer low price products to particular market area. Where as
in differentiation focus strategy will lead to create new products for specific customers. John
Lewis company is offering its products and services to large market strategy not only niche
market segment.

John Lewis organisation needs to consider product develop strategy and create new
and innovative products which is as per requirement of customers (Akter, and et.al., 2016).
Differentiation strategy will be more supportive for respective company as this will lead to
developed products and services which is new and different to customers as well as full fill
their needs.
M4 Produce a strategic management plan that has tangible and tactical strategic
priorities and objectives.
Strategic management plan of John Lewis company will be able to increase the
market share as well as attract more customers towards business. Product development and
differentiation strategy will be effective strategy for this company as it will lead to attain
objective of business. Respective company should conduct effective market research in order
to determine the needs of customers and products will be develop accordingly.
D1 Critique and interpret information and data applying environmental and
competitive analysis to produce a set of valid strategic directions, objectives and tactical
actions.
Environmental analysis and competitive evaluation are very effective in creating a
proper procedure that will includes strategic directions, objective of business as well as
tactical action used.
Strategic direction – There are different model and framework consider by business in order
to provide strategic direction to John Lewis company. Product development strategy as well
as differentiation strategy is used by company.
Objectives – This company is working to develop and create high quality products and
services which is able to meet with the requirement of customers. Objective of John Lewis
organisation is to gain competitive advantage over other rival companies.
Tactical actions - Tactics that is used by this organisation for increasing sales and
accomplishing objective include conducting proper research in order to analyse needs of
customers. New and innovative technology is also used by this organisation.
CONCLUSION
From the above report it has been concluded that strategies is very complex part of
business and its is important for company to develop effective management strategies. In

order to take strong strategic management decision respective organisation needs to analyse
and evaluate different elements of business environment. Macro and micro environment will
lead to have major impact on decision making process of company. Porters five force model
will assist in determine competitive position of company in respective market area. Apart
from this Ansoff and Porters generic model is very supportive in developing devise strategic
management plan in order to gain competitive advantage over other rival companies.
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