John Lewis Strategic Management Plan

The assignment discusses the strategic management plan of John Lewis, aiming to raise its scale in the domestic marketplace. The company's vision is to become the topmost market player within the retail sector globally. Market penetration is identified as the most suitable strategy for achieving market growth, which will help increase sales and profits in existing markets by leveraging a loyal customer base.

BUSINESS
STRATEGY

Table of Contents
Table of Contents.............................................................................................................................2
INTRODUCTION...........................................................................................................................3
P1 Macro environmental analysis with PESTLE analysis.....................................................3
M1 Critique of PESTLE Analysis..........................................................................................5
P2 Internal analysis with the help of SWOT and VRIO analysis...........................................5
M2 Critique of internal environment......................................................................................8
P3 Five Force analysis............................................................................................................9
M3 Ways to improve marketplace positioning....................................................................10
P4 Strategic planning with Ansoff Matrix............................................................................10
M4 SMP................................................................................................................................11
CONCLUSIONS............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business strategy refers to the course of action along with decisions that together give an
alignment to the functioning of business enterprise (Brewster, 2017). This is majorly aimed at
capturing the attention of a large quantum of population with a view to achieve organisational
objectives in set time frame. This provides assistance to an organisation in gaining a strategic and
competitive edge in marketplace. This report conducts strategic analysis of John Lewis that is a
British retailer dealing in product segments such as watches, clothing, jewellery, food, cosmetics.
This comprises of PESTLE, SWOT as well as VRIO analysis to gain an insight into macro
environment of entity and company’s capabilities. Furthermore, Five Force model is included to
assess firm's competitive atmosphere. Further, Ansoff matrix is included to analyse the strategic
options and devise a strategic management plan.
P1 Macro environmental analysis with PESTLE analysis
To conduct and successively running business operations in effectual manner business
organisations are required to assess their macro environment factors which will assist them to
evaluate the external factors which has a great impact on the organisation (Cavusgil and et. al.,
2014). John Lewis has done macro environmental analysis with the help of PESTLE.
PESTLE Analysis
It can be defined as the strategic technique that is used to analyse the external factors
affecting an organisation to develop suitable strategies to carry out the business operations in an
effective manner. PESTLE analysis applied to John Lewis as follows:-
Political: The business organisation has been functioning within the marketplace of
United Kingdom which is a part of EU. In Europe, the political state is strong and this results in
creating great chances of competition for John Lewis Ltd. Because of this reason the government
of UK has decided to decrease the corporation taxes from 30.2% to 28.1% that will be really
helpful for the business organisation to augment profitability in the market (John Lewis PESTEL
Analysis, 2019). The implementation of the political factor in successful manner will lead the
organisation in carrying out their business operations in effective and efficient manner. John
Lewis is also required to develop the strategies according to the rules and regulations formed by
the government. The threat in this regard for the company can be a political turmoil or terrorist
attacks. To deal with this, organisation should keep a back-up plan through which they can
ensure least harm owing to adverse political state.

Economical: The economy of United Kingdom is influenced by Brexit owing to which it
is facing recession due to which there are high fluctuations in the interest rates. To handle this
situation effectively the business organisations working in the retail sector are required to
provide the products at a low price to the customers (Goffee and Scase, 2015). This market
situation will also affect the business operations of John Lewis Ltd. they will also need to cut the
prices of their products and services for the customers and also required to provide great offers to
sustain in the market. John Lewis Ltd. is required to develop the products in view of that they
will be able to attract more consumers with their pricing scheme. But it is very complicated for
the manager of the organisation to amend the strategies accordingly. The opportunity associated
with economic system of UK is that the economy of this nation is strong and facilitates the
growth of businesses that launch innovative products.
Social: Culture of the society changes at a fast pace that result in the creation of great
opportunities for the business organisations to catch the attention of customers by presenting new
products and services in the market (Chen and Jermias, 2014). That helps a business organisation
in gaining a large customers base and profitability in the market. John Lewis Ltd. introduces new
and fashionable products in the market to catch the attention of the customers in successful
manner such as clothes, accessories etc. (John Lewis: competitive advantage in a tough retail
market, 2015). In this regard, threat for the company is the probability that an external market or
consumer trend is detected by rivals earlier than John Lewis. To deal with this, company should
invest in R&D through which knowledge can be gained about key trends in market.
Technological: These factors refer to the internet shopping which is introduced by the
John Lewis Ltd with the aim to decrease the wastage of paper and catch the attention of
customers and giving the facility for shopping at any time from any place (John Lewis SWOT
and PESTEL Analysis, 2019). The business organisation also use advance tools and techniques to
manage their business operations in effective manner (Chang, 2016). These factors help them to
implement new technology which formulates their work in a easy and successful way. But
adopting new technology is expensive for the company which affects their financial plan and
other activities, thus, John Lewis should allot a particular segment of budget to procurement of
adequate and effective techniques or technologies.
Legal: While working in the retail sector John Lewis Ltd. make sure that all the
legalisation associated with the health and safety for the customers and employees are duly

followed. They apply apt renewable resources for the manufacturing process of clothes (John
Lewis to boost renewables use in SmartestEnergy deal, 2019). By the side of this they take care
about the health of employees by keeping proper measure of safety and required equipment’s. A
slight variance with the set standards and laws for retail companies may lead to penalisation or
public prosecution for enterprise. For tackling this, John Lewis should act in the interest of law
and governmental regulations.
Environmental: Nowadays, organisations working in the retail sector are enchanting
steps for building a clean environment. John Lewis Ltd has partnered with the Intergovernmental
Panel on Climate Change (IPCC) for dropping their carbon footprint use (John Lewis pledges to
reduce carbon emissions, 2017). Beside this they have started to use the biodegradable packs in
order to decrease contamination from the environment and formulate it effectively (John Lewis
unveils biodegradable packs, 2019). By this the business organisation is competent enough to
manufacture products which are more environment friendly in command to draw more customers
towards it. But due to this John Lewis Ltd. has to endow more funds to implement these
techniques in the business organisation which reflects the over-budgeted expense. To deal with,
company should make sure that they allot fixed amount of funds to use of innovative techniques.
M1 Critique of PESTLE Analysis
PESTLE of respective company reveals that certain adverse aspects are also associated
with macro environment. Brexit tends to have a negative impact upon operations of company
within political and economic factors. Adverse changes in consumer trends and attitudes (social),
absence of knowledge to company about the latest technologies (technological), unadherence to
relevant laws (legal) and acting against the interests of environment (environmental) are other
critical impacts of macro factors on the company (Jocovic and et. al., 2014). The manager of
company should develop strategies which can provide assistance to deal with such adverse
conditions.
P2 Internal analysis with the help of SWOT and VRIO analysis
To analyse the internal environment John Lewis Ltd. has performed SWOT analysis and
VRIO analysis, it will lead in assisting them to know their capabilities in effective and well-
organized manner.
SWOT Analysis:

Strength Weakness
 Business organisation has a strong
brand image in the market which
attracts and encourages consumers to
buy products.
 John Lewis Ltd also has well-built
online existence with eye-catching and
trending designs (Jeston, 2014).
 They expand and sustain valuable
employee’s relation in bid to encourage
and hold them for long period of time.
 The business organisation present
specific product ranges to the
customers which are trending in the
market to enhance the share in
marketplace.
 John Lewis Ltd. has lack of knowledge
of the international business
understanding.
 They are also missing in effectual and
successful marketing strategies.
 The business organisation is also
lacking in getting competitive
development at the market place
(Klettner, Clarke and Boersma, 2014).
Opportunities Threats
 John Lewis Ltd. can enlarge their
existence in the international market.
 They can also create and widen new,
resourceful and exclusive selling
strategies to capture the market.
 John Lewis Ltd. can also introduce the
new products ranges.
 John Lewis Ltd. can grow demand by
introducing personal labels in valuable
and suitable manner.
 For a while the business organisation
may face negative impact of new rules
and regulations in the market.
 The major threat of John Lewis Ltd is
there competitors such as Marks and
Spencer, ASDA, TESCO Plc. And
many more.
 The organisation can also have threat of
collapse if they enlarge the business
operations according to the new and
diverse culture.
VRIO Model:

For identification of capabilities of company, VRIO Model has been used in context of
John Lewis as follows:-
Factors Valuable Rarity Inimitable Organized Competitive
Outcome
Global brand
image
Global brand
image
- - - Disadvantage
Goods Goods Goods - - Temporarily
Competitive
Software Software Software Software - Competitive
for partial time
Workforce Workforce Workforce Workforce Workforce Competitive
advantage
Valuable: The elements which render assistance to a business in attaining its long term
objectives in due course of time. Global brand image: The image of this entity within global market is very strong. Owing
to this, John Lewis is able to attain edge over rivals in an effective way. Goods: High quality goods made with the help of use of the latest technologies are
offered by company to customers. This assists in building a strong base of loyal
customers. Software: Software is used by company for effectively managing and operating things in
the desirable manner for achievement of organisational goals (Lawton, 2017).
 Workforce: The employees of John Lewis operate in a manner that provides assistance to
organisation in achieving stipulated targets in timely manner.
Rarity: It refers to such aspects of the company which are rare and renders competitive
advantage to entity at marketplace (Laudon and Traver, 2016). In relation to John Lewis, global
image is not found to be rare because a number of other large scale entities have a global brand
image. Rare resources of enterprise are:-

 Goods: Products offered by this organisation such as clothes, accessories and other items
are in accordance with the latest trends and technologies, thus, it is hard for any other
company to easily copy them. Software: The software used by John Lewis Ltd for maintenance of records and
execution of operations is rare because it is developed as per the requirements of entity.
 Workforce: The personnel of John Lewis are rare as they have their own set of skills and
competence which assists organisation in achievement of organisational objectives in an
effective manner.
Inimitable: It refers to those resources of company which can not be copied by rivals. For John
Lewis, goods do not hold this feature as the trends and technologies with which these are
developed can be used by rivals also. Software: Software used by John Lewis are designed and developed in accordance with
organisational needs, thus, it is hard to be copied. Workforce: The competence and skills of individuals are unique owing to the training
sessions conducted for them to equip them with necessary traits, so, workforce is not
imitable for rival firms.
Organized: These are the elements which need to be organised in an orderly manner to attain
organisational goals and objectives (Scholes, 2015). Software of John Lewis has to be updated at
regular intervals to meet the needs of organisation thus it does not fit this criterion.
 Workforce: Respected company makes use of their knowledgeable staff to gain
competitive advantage in market and to achieve long term sustainability.
M2 Critique of internal environment
It has been ascertained that internal environment of respected company has certain merits
and certain demerits. It has been found out that workforce serve as the most essential resource as
it is are valuable, rare, imitable and organized. Further, the internal analysis reveals that this
organisation lacks effective marketing initiatives or strategies which affect the company in
reaching a wider audience. Also, the presence of a large number of rivals pose threat to the
existence and sustainability of entity.
P3 Five Force analysis
Porter’s five forces model is considered as the specific tool which is used by business
organisations in order to determine and analyse competition available at marketplace. In relation

with John Lewis Ltd., its manager have opted Porters Five Forces Model for evaluating actual
competitive market condition for the company. It will also help this company in executing their
operations and strategies in effective manner. All the five forces of this model are elaborated as
below:
Threat of new entry- This is generally seen as the extent to which a new company can
easily gain entry in a specific industrial area. For John Lewis Ltd, this threat is very little. It is
because, if an company wants to enter into this industry then it essential for them to invest high
for establishing their business effectively. Therefore, it is not always possible for a new company
to do this in less period of time. Further, the laws, legislations, standards and rules set by
government and regulatory bodies for retail sector are innumerable which enhances difficulties
for new entrants to gain entry into market.
Threat of alternatives- This is found to be high for JL Ltd. This owes to the fact that a a
large number of businesses that are intending to offer alternate products in order to attain
competitive advantage at market place which provide household, clothing, accessories and other
items within retail sector. There are a number of supermarket retail chains such as ALDI, LIDL,,
Sainsbury’s etc. It is required by JL Ltd. to lay concentration upon the wants of customers. This
will help them in influencing customer’s interest towards them for longer time. This will provide
assistance to the organisation in ensuring its sustainability within marketplace for a long course
of time.
Bargaining power of purchasers- This is found to be high within the industry, this
happens because customers are those who provides opportunity to company to sustain longer at
market place. In context to respected organisation, this power is immense as companies dealing
in substitutes are present in a large quantum at market, thus, if any mishappening will happen
with quality or price of product then it would definitely influence its customers to switch to
another brand. Thus, this organisation needs to provide best quality product to customers at
feasible price. This will help them to sustain longer at marketplace.
Bargaining power of vendors- Suppliers render necessary resources and other related
materials to companies which helps them in manufacturing best product that will be further
consumed by consumers. With reference to respected company, it is analysed that bargaining
power of suppliers is low. It is so, because John Lewis is large scale company which has
numerous of suppliers who could deliver them best raw material at low price. Thus, there is

option for this company to switch to another supplier for attaining better quotation rates (Veit
and et. al., 2014).
Competitive rivalry- This force of Porter’s Model represent actual competitiveness for the
companies belonging to same industry. In context to John Lewis, it can be said that this industry
is highly competitive in nature. Intense competition ultimately affects overall profitability of the
industry as well as companies belonging to it. The main competitors within this sector are LIDL,
ASDA, Sainsbury’s that provide optimum quality offerings at reasonable pricing. In this case, it
is required by company to bring up products by tapping the advantage of diversification strategy
so as to attain a competitive advantage in marketplace. This will help this company in becoming
different from other companies of same industry. As a result, it will definitely generate huge
profits in effective manner.
On the basis of above analysis, it is comprehended that this will help managers and
leaders of John Lewis in developing appropriate strategies and market plan which would assist
them in enhancing their market positioning. Apart from this, this will provide assistance in
enhancing their sustainability at marketplace effectively.
M3 Ways to improve marketplace positioning
It has been analysed that the marketing initiatives undertaken by company over years
have been ineffective to communicate the mission, vision and goals of entity to audience
(Wheelen and et. al., 2017). Thus, company can use social media or promotional campaigns so as
to create awareness about the company as well as its latest launched products. This helps in
enhancing sales and profits of company in existing markets.
P4 Strategic planning with Ansoff Matrix
Ansoff Matrix refers to the technique with which an organisation can decide the best
strategy that can facilitate in attaining growth (Peng, 2017). In context to John Lewis, this is used
in order to identify its best strategy towards growth. Strategies within this model are elaborated
as follows:-
Market Penetration: It emphasises upon delivering current products in domestic or
revenue generating markets of company. In context to John Lewis, it can be said that its
managers could obtain this strategy by focusing on untouched customers in existing market. This
would help the company in enhancing its profits by focusing on same market. Along with this, it

is easier for company as they are aware about market condition and buying behaviour of
customers.
Market development: This strategy mainly emphasizes on offering existing product or
services into new market area. The main aid of this strategy is to enhance its number of
customers by approaching new market zone (Peng, 2017). By acquiring this strategy, the
respected company could easily enhance its profits as they are able to reach additional
geographical locations.
Product expansion: In this strategy, company focuses on offering new product in
existing market. In context to John Lewis, it can be said that if this company will acquire this
strategy they have develop a new product on the basis of customers demand. Further these
products will be offered to the same zone of customers in existing market place. Here, John
Lewis could expand its clothing sector within UK and other operating area for grabbing attention
of customers and maximising its profits with extra sales.
Diversification: This strategy emphasis on presenting new products into untouched
geographical location. Diversification strategy is risky as company does not always get customer
support and acceptance in new market with new product. If John Lewis adopts this strategy, it
will be expensive to adopt variety of promotional techniques for developing positive relationship
with targeted customer zone. This will directly impact upon their profits as their expenses will be
higher than their revenues.
From before mentioned discussion, it is considered that market penetration will be the
most suitable strategy for John Lewis to achieve market growth. This will help the organisation
to increase its sales and profits in existing market as company is well aware about the customers
in this market zone (Spender, 2014). This makes it easier for company to satisfy customers in
more effective manner which ultimately increases its sales and leads to high generation of
profits. John Lewis will sell the existing products within UK so as to gain the advantage of
already established loyal customer base to enhance its sales and profits.
M4 SMP
The strategic management plan of John Lewis is as follows:-
Aim: To raise the scale of company in domestic marketplace
Vision: To become the topmost market player within retail sector across the globe.

Mission statement: To give optimum quality offerings for consumers by adding value to
attain immense contentment from customers.
Values: John Lewis is a leading brand possessing beliefs like integrity, ethics, and
transparency.
Goals and Objectives: Small term goal of John Lewis is to keep a control upon prices as
well as quality component of goods to gain maximum satisfaction from consumers. On the other
hand, long-term goal of entity is to gain access to developing marketplaces which possess
potential of enhancing sales and profits of company.
Strategies: John Lewis will make use of market penetration to grab the attention of a
large quantum of population in the existing markets. This will render competitive advantage to
company as it already has a loyal and dedicated customer base.
Tactics: Company will launch high quality offerings at fair pricing with a view to
influence buying behaviour of consumers assigned towards various economic groups.
CONCLUSIONS
On the basis of before mentioned discussion, it can be said that that setting organisational
strategies is important for every company to attain the long term objectives within due course of
time. Further, it is comprehended that business operations of organisation should be as per
formulated strategies so that long term sustainability within market can be achieved. Besides
this, internal assessment indicated that company has the potential to launch innovative products
in domestic marketplace with a view to increase the sales as well as profitability. The macro
environmental analysis in terms of PESTLE demonstrated that such factors offer both
opportunities and threats which have to be taken into account by enterprise to gain success in
market.

REFERENCES