Assessing the Impact of Macro Environment on John Lewis

This report analyzes the impact of the macro environment on John Lewis and its strategies. It includes a PESTLE analysis, SWOT analysis, and VRIO analysis to assess the external and internal factors affecting the company. The report also discusses the competitive forces in the market and different strategic planning for the organization.

BUSINESS
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
P1 Determine suitable framework assess the impact and influence of the macro environment
on a given business organisation and its strategies. ...................................................................4
TASK 2............................................................................................................................................6
P2 Determine the internal environment and capabilities of a given company by using suitable
framework...................................................................................................................................6
TASK 3..........................................................................................................................................10
P3 Porter Five Force model to assess competitive forces of market.........................................10
TASK 4..........................................................................................................................................12
P4 Different Strategic planning for the organisation................................................................12
CONCLUSION..............................................................................................................................14
..............................................................................................................................................14
REFERENCES .............................................................................................................................15

INTRODUCTION
Business strategy is considered as a process in which different plan of action made for
accomplishing objective and goal within stipulated period of time. The manager focuses on
making appropriate strategies , policies as well as procedures that helps business organisation to
achieve pleasing outcomes (Alstete and Beutell, 2016). In addition to this, they aid assistance in
organising the performance of organisation in order to accomplish targets within less time
period. Also they want to achieve leading position within a particular sector. The current report
is presented on John Lewis with the purpose of taking strategical decision by the organisation
during a period of time. In context of John Lewis, it is one of the well established company
located in UK which deal with different sectors such as watch, jewellery, clothes and many
more. This report displays PESTLE Analysis for assessing the external factor which directly
impact on the productivity of company. Also SWOT and VRIO analysis is adopted for
identifying the internal factor of business organisation. Along with this, Porter's five force model
is used for gaining competitive advantage over rival firm. At last, Ansoff matrix is adopt for
making strategic plan in order to develop products in the existing as well as new market.
TASK 1
P1 Determine suitable framework assess the impact and influence of the macro environment on a
given business organisation and its strategies.
For the success of company, it is necessary to operate its business activities and functions
in an effective manner (Anwar and Hasnu 2016). Therefore, PESTLE Analysis is used for
analysing external environment that imposes direct impact on productivity of company. In
reference of John Lewis, the manager of this company adopt PESTLE analysis for analysing the
effect of external environment within organisation which is going to be mentioned below:
Political: Political factor involves law, legislation, rules and regulations which imposes
both positive and negative impact on the performance of business organisation. In context of
John Lewis, the manager focuses on political factor that affect the company directly and
indirectly. The political condition of UK is stable and strong so that it helps company to sustain
for longer time period. In addition to this, the UK government focuses on reducing taxes form
40% to 38% that boosting revenue as well as profitability level. Due to terrorist affliction, it
imposes negative effect on performance of company. Therefore, the company focuses on

maintaining proper inventory in order to reduce any shortage occur within business organisation.
Also due to Brexit, the business organisation has present innovative strategies in order to
promote future success and profitability level.
Economical: It includes factors such as employment rate, exchange rate, inflation as
well as deflation rate and so on (Chang and Tsai, 2016). The economic situation of UK are stable
and strong that helps company to increase the success and growth by offering new products and
services. In reference of John Lewis, the management team provides unique and specific
products and services to its customer. Moreover, Brexit imposes negative impact on the
economic system of UK that distress the level of retail companies. In addition to this, they
provides products and services at discounted rate in order increase future sales and growth of
company.
Social: These factors involves age, population, region, demographics, gender and so on.
The manager of John Lewis focuses on making effective strategies, policies and procedures for
identifying the need and requirement of consumer (Habib and Hasan, 2017). In addition to this,
they offer innovative and specific products and services to its user according to their lifestyle and
market trends like watches, accessories and clothes. Moreover, if the latest market trend is
adopted by competitive firms then it create threat for business organisation .Also the buyer
switch their brand to its good and services which is sold by competitive firm. For managing all
these situation, the business firm invest their money in conducting effective research to increase
the skill and knowledge regarding the changing taste as well as preferences of its buyer.
Technological: Technology plays a very important role for the success and growth of
business organisation. It is mandatory for company to implement and execute latest technology
in order to retain for a longer period of time. In discourse to John Lewis, the manager focuses on
paper less work in order to adopt advance technology in effective manner. On the other hand, the
cost of implementing advanced technology is very high can be considered as a threat for business
organisation. John Lewis should continuously incur expenditure to acquire knowledge regarding
innovative technology prevalent within market.
Legal: Legal factors includes employment laws, antitrust law and many more. The
manager of John Lewis ensure that all sectors of organisation follow the laws and regulations
within retail sector around the world. For production of clothes, it is necessary for company to
take the use of renewable resources. Moreover, if the company does not comply the law related

to safety and employment then they suffer from several consequences. Therefore, the manager of
company focuses on comply the law in effective manner.
Environmental: In present context, the business organisation focuses on working
towards the interest of society take assistance from government of UK (HunTer, 2016). In
reference of John Lewis, the management team of company focuses on offer eco -friendly
products and services to its buyer. They emphasised on raising the standard of living of people in
the society. In addition to this, John Lewis adopt the biodegradable packaging for reducing the
harm that impact on environment. For managing financial instability, it is necessary for company
to invest more money within business organisation. Therefore, the management team of
company emphasised on providing innovative as well as unique products and services to its
consumer in order to increase their standard of living of people living in society. Thus, these
initiative which are taken by this company is the reason of boosting their brand image and
reputation within marketplace. Also, they offer products and services that do not harm to the
environment of the society.
TASK 2
P2 Determine the internal environment and capabilities of a given company by using suitable
framework.
For assessing the micro environment of company, John Lewis focuses on adopting VRIO
as well as SWOT analysis in order to gain skill and knowledge within internal sector. This
analysis assist a company to identify the strength and weaknesses of a organisation. This is
determined as the internal environment factor in a suitable manner. Swot analysis is a tool and
technique that is measured for environmental data and collection for internal and external factors
for implement the threats, opportunities, weaknesses and strengths. In assistance to this, it also
assist to affect on weaknesses in a business industry. Further, the characteristics of a organisation
could take advantage that lead to increase its profitability and productivity of a business
enterprise. The elements of external environment that directly lead to affect on productivity of a
organisation. The SWOT and VRIO analyses which is going to be mentioned below:
Strength Weakness
 The manager of John Lewis company is
to provide unique and innovative
 The manager of company does not
make effective strategies, policies and

products and services to its customer in
order to satisfy them.
 John Lewis has achieved leading
position in online marketing that aid
assistance in boosting revenue and
profitability level (Idemudia, 2017).
 The implementation of latest
technology helps the company to offer
innovative products and services to its
user for boosting future success and
growth of company.
procedure in order to identify the need
and requirement of customer can be
considered as a major threat for
company.
 Herein, the company also have
deficiency in order to achieve
competitive advantage over rival firms.
 Sometime, the competitive firm provide
products according to the need
customer that can be determined as a
threat for company.
Opportunities Threats
 John Lewis is one the well established
company of UK which deal in variety
of products and services such as
clothes, watches and many more as per
the need and wants of consumer that
helps them in retaining customer for a
longer period of time.
 The business organisation adopt
appropriate plan that boost the future
sales as well as profitability level.
 The manager of John Lewis focuses on
launching innovative products and
services that helps them in increasing
the loyalty and trust level of consumer
within business organisation.
 There are numerous competitor
prevailing in the marketplace such as
TESCO, ASDA as well as Marks &
Spencer can be determined as a threat
for the business organisation.
 The products sales by John Lewis
possess a lot of substitute in the market
so that it arises the chance of switching
the brand by its consumer (Johnson,
2016).
 The cost of executing advanced
technology is very high so that it add
cost to the product provided to its
customer is determined as a major
threat for company.

VRIO Model: It is synthetic framework that assist a business to recognise their
competitive profits by examine their resources, ability and core competency. Further, it is a
strategic planning that examine the capability to survive in a market for a long time in order to
achieve competition level. Further, it includes a business mission, vision that could accomplish
the goals and objectives that are executed for improving better productivity. There are four main
resource that are described as underneath:
Resources Valuable Rarity Inimitable Organised What is the
result?
Global
Existence
Global
Existence
- - - Competitive
advantage
Products Products Products - - Partially
Competitive
Software Software Software Software - Competitive
benefits based
on temporary
basis
Competent
Subordinates
Competent
Subordinates
Competent
Subordinates
Competent
Subordinates
Competent
Subordinates
Competitive
Benefits
John Lewis adopt four resources such as Global existence, Products, competent
subordinates as well as software to assess the internal factor of organisation. The above table
views the four main resources of John Lewis that are focused on decision-making, brand image,
corporate culture and large distribution network.
Valuable: It includes all those resources which are valuable for company provided to its
user for achieving competitive advantage over rival firm (Lozano, 2018). This involves attention
to their allotment. Further, this could provide a business to competitive benefits in a long term
basis. In context of John Lewis, the valuable resources of company which is going to be
mentioned below:
 Global Presence: John Lewis has achieved global existence around the world that helps
in gaining competitive benefits in the marketplace

 Products: The organisation implement latest technology in order to provide innovative
and specific products and services to its buyer that helps them in gaining their trust and
loyalty.
 Software: John Lewis adopt the management software in order to handle operation and
activities of business around the world that helps them in increasing whole efficiency of
organisation.
 Competent Subordinates: The employees operates its business activities in effective
manner that help them in increase objective and goal of organisation in less time period.
Rarity: The company provide those resources which is unique and specific for gaining
competitive benefits in the market (Marx, 2016). It has been examined that global existence is
not unique for John Lewis because there are various business firms in retail industry which have
a global existence. The rare resources of John Lewis which is going to be given below:
 Products: The manager of John Lewis focuses on providing products such as jewellery,
clothes and watches according to the taste, lifestyle and preferences of customer which is
not duplicated by the competitive firm.
 Software: The software that is adopted by John Lewis is designed products according to
the need and requirement of customer that is not copied by its rival firm.
 Competent Subordinates: The subordinate of this company have specific knowledge,
skill and talent which is rare and unique for firm. Therefore, the skill of employees helps
company in achieve goal and objective of company in effective manner.
Inimitable: It involves only those resources that is not imitable by its competitive firm.
In discourse to John Lewis, the manager of this company can implement latest technology in
order to provide innovative and specific product and services to its buyer which is inimitable for
the company.
Software: The software that is adopted by business organisation that helps them in satisfying
their need and wants in appropriate manner which is inimitable for company.
Competent Subordinates: The management team of John Lewis provide effective training to its
buyer in order to enhance their ability, knowledge, skill and capability in order to offer unique
ans specific products and services to its customer which is determined as a inimitable for
business organisation (Mohelska and Sokolova, 2016).

Organised: It involves all those factors which is need to be organised in effective way for
achieving objective and goal of business organisation. In addition to this, the subordinates has
given appropriate training for boosting their knowledge and skill that helps company to satisfy
all need and requirement of customer in suitable manner. The organised resource which is used
by John Lewis which is going to be discussed below:
 Competent Subordinates: Through highly skilled and efficient subordinates, the top
management of John Lewis operates its business activities and functions in suitable
manner that helps company in retaining and sustaining the employees for a longer period
of time. This helps business organisation in boosting its future sales and profitability
level.
TASK 3
P3 Porter Five Force model to assess competitive forces of market
It is a insistent for a company that systematically that consists of a competitive forces of
a market to contrive best strategies (Park and Mithas, 2020). It also provides quality and
strengths for a company which lead to increase productivity and profitability in an organisation.
Further, it assist to understand the strategy that is based on the competition surroundings of a
business enterprise. In assistance to this, this could analysis John Lewis for a highly brand that
accession across the worldwide. A manager of John Lewis has the usage of Porter Five Force
analysis which is described as follows:
Threat of new entrants: The threat of new entrants which is low because of high assets
which is needed for giving better opportunities for existing company that assure their survival
and growing within a market environment ( Revathi and Aithal, 2018). In assistance to this, this
are several marketing laws that face very tough situations for a new company in business
enterprise. In context to John Lewis, this company took benefit to increase their sells and
profitability. It also indicates new entrants in a market for recognising competitive boundaries.
Further, the entry of new company that lead to manufacture costly for accomplishing its survival
in all over the industry. John Lewis is a highly brand that increases cost benefits for the existing
company. This could focuses on the new innovations for variations in goods and services in
reference to new entries in all the market environment.

Threat of Substitutes: With reference to John Lewis, this company deals in the similar
products which consists of acceptance of different companies. These companies are included
which sales same variety of products such as Tesco, LIDL, ASDA etc. also they provide
attraction for customer to give high quality of products and services. In addition to this, this
company must need to give circumstances for needs and taste, preferences of people that enable
to evolve goods and products that meet the wants of a customers. This company provides
alternative products to other company such as cosmetics, fashion products for its brand image.
Moreover, this could also provides manufacturing products which includes less profit.
Bargaining power of buyers: The bargaining power of buyers in retail industry, is
determined to high owned to the reality of end users that make better opportunities for giving
goods that assures a long time survival of an organisation (Sanden, 2016). This lead to enactment
for a John Lewis that includes large amount of notable retailers that offers substitute goods in a
business enterprise. In assistance to John Lewis, this company could supply its products at
reasonable price within a market. Further, it involves large amount of suppliers in a market of
John Lewis, that influence more business firms that are manufacturing such goods. The buyers of
John Lewis, gives more customer to accomplish highest market share for th future growth of an
organisation.
Bargaining power of suppliers: The bargaining power of suppliers, is very low of John
Lewis because it is a worldwide served business that keeps large amount of interaction with
merchandiser. In assistance to this, this company dominates the ability of hash out prices with
suppliers and also control the marketers. There is no control on the prices of a company which is
offered and also they have low switching costs. This company buys raw material from the
suppliers with low costs. Whether the goods are not yet set for this brand image and also they
switch to another suppliers (Tang and Gattorna, 2017). This include large number of suppliers
which are avail in various geographical areas. In addition to this, the manufacturer could
produces high and better quality of goods that are rendered for suppliers which fulfil those needs
and requirements. The manager of this company stressed on giving unique products of
cosmetics, fashion designs so that they could attain to future growth of a business enterprise.
Competitive Rivalry: The competitive rivalry is very high in relation to John Lewis that
involves competitors firms such as Tesco, Sainsbury's, M&S, ALDI that offers high and better
quality of products at affordable prices. Further, this company must ensure to evolve various

items by creating usage of changes strategy so that they assure for strategic bounds on the
various competitors in a market environment. It is the analysis of competition for existing
business enterprise. This company focuses on the differentiations of their goods and services that
create attempt for the competitors within the customers that their motive is providing a unique
and specific products. The industry is growing continuously within all the year that anticipates to
run in the forthcoming years. This all depends on accomplishing the competitive advancement
of rivalry firms.
From the above analysis of Porter Five Force model in relation to Sainsbury, the
strategies which are evolved when this competitive advancement for increasing profitability of a
business industry. This could increases the preparation for planning to create strategies in order
to enhance its productivity within a market environment.
TASK 4
P4 Different Strategic planning for the organisation
Ansoff Matrix is implemented as a procedure that involves the preparation for making the
strategies that influence an organisation to plan to design the defined goals and objectives for
growth and success in future ( Viardot, 2017). Further, it is founded by American Igor Ansoff
which is a manager and a mathematician. It is a technique that is used by an organisation to
examine risk which is connected in the near future. In addition to this, it also involves several
strategies for deciding future growth towards market penetration, market development, product
development and diversification. It also recognise new technologies for enhancing profitability
and also forces for more customers. It also aspect for better opportunities to grow and get return
from the income. It also recognise new technologies for increasing profitability and attracts large
amount of customers.
Market penetration: It refers to the existing products in the existing market place. It
gives a business for expanding its strengths and weaknesses in all the competition of a market.
The analysis of John Lewis company that has hold the opportunities which are avail in a market
that make differentiations of this market structure. In assistance to this, it adopts a competition
that lead to morale of a employee. This strategy focuses on condition of existing goods in present
market environment. Further, it also provides a strategic plan of John Lewis that increase the

allegiant basic of customers in UK that are not inclined to substitute the products which is sell by
a business enterprise. Market penetration assist an organisation in increasing their market share.
Market development: It is also known as market expansion. This strategy of business
growth motive is to offer existing products within new markets (Wood and Logsdon, 2017). The
large asset of execution of market enlargement which is given to a company for catching the
attention of new customers by increasing entry of new places. This indicates to enhance sales and
profitability. It also influences new market for enhancing high competition between the brand
image. This company could expand their business functions in new market environment. The
examine of final report novice the entry of new market to 3-4 years that has differentiated from
gaining to higher profitability. It would also offer new markets that involves different society of
customers and their environment.
Product development: This lead to direct on new products in the existing market
environment ( Zhang, 2016). In context to John Lewis, it also help a product to be innovative and
specific that fulfil customer satisfaction with the competitors. The evolvement of new goods
which is not reckon any of superior but it is necessary across the world. In context to John Lewis,
this company could effectively used this strategy for innovations and creation of goods to fulfil
the requirements and needs of end users. This company would develop this strategy by
increasing access in essence section that indicates growth of a customer in UK. This results in a
development of a product that increases innovative and creative goods for satisfying the needs of
a customer.
Diversification: This strategy accent on stimulating of new goods within new markets.
This is connected as a tough and risky strategy that owed for large chances of happening that is
accompanying of diversification all over the organisational assumption ( Zhang, 2016). This
results in serving costly strategy for John Lewis that prepares a several marketing movements
which is organised to boost the new products that is offered by a company. Diversification
strategy involves the entries of national goods and services in new market that cannot transcend
in the future. This results in evolvement of new products that have to examine the less risk in
context to unrelated diversification. In assistance to this, this growth strategy indicates the less
profit which involves low income and that not lead to growth of a business enterprise.
From the above analysis, it can be determined that the market penetration that is more
possible strategy for John Lewis that accomplish business growth. This lead to a business that is

well accepted bases which are loyal for its brand. Therefore, the existing goods and present
markets that give better opportunities to John Lewis which is important to increase its market
share and profits.
Bowman model: This model explains options related to strategic position on basis of product,
price as well as value which is going to be mentioned below:
Low price and low value added: The John Lewis focuses on providing the product at
relative low cost in order to retain customer for a long period of time.
Low price: The Company emphasize on providing superior quality product with
customer at less price in order to increase brand image and repetition of the company in front of
customer at marketplace.
Moderate price/ Differentiation: The John Lewis provide differentiate product its
customer at moderate price in order to achieve competitive advantage of rival firm at
Marketplace.
Differentiation: The firm provide unique and specific product with customer for
increasing sales as well as profitability level in future period of time.
Focused Differentiation: Their main focus is to provide differentiate product for gaining
competitive benefits over competitive firm at market place.
Risky high margins: The main focus of the John Lewis is to increase more and more
profit in order to provide the product and services as per the need of the customer.
Monopoly pricing: The manager of John Lewis focuses on providing unique product and
that product have monopoly right.
Loss of market share: The focus is on providing product and at low price or middle
range price in order to attract large number of customer at marketplace.
In addition to this porter generic strategy which is going to be mentioned below:
Cost leadership strategy: The main focus of the company is to provide superior quality
product with customer at affordable cost
Differentiation strategy: The firm provide unique and specific product with customer for
increasing sales as well as profitability level in future period of time.

CONCLUSION
From the above analysis of report, it can be concluded as the strategies of business that
considers the decisions that are undertaken in an organisation. Further, it also includes Porter
Five Force model that examine the companies strength and weaknesses so that it could improve
profitability and productivity with a business enterprise. With reference to John Lewis, a
manager of this company accent for making effective strategies that lead to future growth and
success. This report also involves Ansoff Matrix which examine the present analysis of market
situations for evolvement of a product effectively and efficiently. Moreover, it also includes
Pestle analysis which determines the external geographical area of a company for survival in
market in a long time. In assistance to this, it includes VRIO and SWOT analysis that lead to
impact on internal environment and abilities of a company. Further, the analysis of competitive
advancement by marketing situations of a business enterprise. Hence, it gives several better
opportunities in providing good satisfaction for its customers.

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