Value Chain Model for John Lewis & Partners in UK

This study explains the overall concept of value chain model proposed by Michael Porter in 1985, to analyse the internal environment of businesses within market. It defines the overview of organization and use of this model in context of business to examine the internal environment.

ESSAY

Table of Contents
INTRODUCTION...........................................................................................................................3
Value chain model proposed by Porter........................................................................................3
John lewis & Partners business familiar and operates in UK......................................................4
Value chain model to analyse the internal environment of business...........................................5
Reflection based on usefulness of value chain model.................................................................7
CONCLUSION................................................................................................................................8
REFERENCES ...............................................................................................................................9

INTRODUCTION
Internal business environment is composed of components within companies, including
existing workers, corporate culture and management, which define staff behaviour. The internal
environment of organization also define the strength and abilities to retain consumers & gain
benefits. The present study is based on John Lewis & Partner, operating business in UK, they
offer its products to range of customers effectively. This study explains the overall concept of
value chain model proposed by Michael Porter in 1985, to analyse the internal environment of
businesses within market. It defines the overview of organization and use of this model in
context of business to examine the internal environment. Furthermore, it justifies the reflection
based on usefulness of value chain concept in helping to understanding inner environment of
firm.
Value chain model proposed by Porter
In 1985, Porter introduced the concept of value chain, he proposed this model for general
purpose. Firms can use this model to analyse all of their activities and examine how they are
attached (Smit, 2015). Value chain is the set of range of activities that companies operating in
their sector performs in order to provide valuable goods or services to consumers. This concept
comes through business management, which is described by Michael Porter in 1985, bestseller.
The idea of this model is based on procedure view of businesses, seeing manufacturing company
as system made up of subsystems. It is the conceptual notion of value added in sort of value
chain, Porter suggested that firm is split into primary and support activities. Value chain model is
the concept that help to examine the specific activities of company through which they can create
competitive advantage and value. With the help of this model, they analysis of business internal
environment is possible, it is considered as one of the most the easiest way to visually analyse
organizations functions or actions to see how they create competitive benefits for themselves.
Companies seeking competitive benefits turn to value chain concept to determine the chances for
differentiations and cost savings in production cycle.
In context of ideal situation value chain model demonstrates that cost to create is far
decrease than cost market bear, but it is become harder as consumers demand increase in
complexity. Since Michael Porter introduced Value chain model, the communication and
technology approaches have changed effectively in 1958. Even with innovation and growth,
value chain model is still helping businesses to identify market opportunities and also help in

gaining competitive differentiation. It streamlines the procedure that take goods from concept to
market. Integral linkages is supported and good communication between indirect, support and
direct elements. In value chain model of Porter produced in 1985, expanded Leontief's output or
input concept by accenting connections between primary activities as well as secondary activities
of businesses. Michael Porter value chain is the best framework for creating an analytic structure
that adopt or follow interdependent actions from idea and raw material acquisition through
manufacture and finally, into hands of consumers (Fagioli and et.al., 2017). It is defined as
decision support tools, that is quite beneficial for organizations how wants to operate their
businesses in globalization era. Primary activities includes, inbound, outbound logistics,
operations, marketing sales and services. In additional to this, support activities includes, firm
infrastructure, human resource management, technology development and procurement
activities.
John lewis & Partners business familiar and operates in UK
John Lewis & Partners is the British organization which operates their chain of
department stores, banking, financial services, Wait rose and partners supermarkets and other
retail related operations in UK. The firm is owned by trust on behalf of all their worker known as
partners. It is considered as the third biggest UK non traded business by sales, company
broadened their marketing strategy towards all kinds of consumers, with launching of value
range to John Lewis along with essential range of Wait rose and their business expansion. The
owner of company opened it's first shopped that is drapery in London at 132 Oxford street, the
had been bound at 14 to line draper in Wells (Robb, 2018). John Lewis & Partner started
business acquisition procedure in 1933, where they acquire other retail businesses, buying Lance
& Lance of Weston super mare and Jessop & Son of Nottingham. The most attractive thing
about this organization is that their workers are called partners, they hold branch forums at every
outlet which discussed local problems. Organization is mainly focusing on making good and
effective employee relations, they give annual bonus to its staff members, akin to share of profit,
which is calculated as percentage of wages with same percentage for all staff members. The
purpose of John Lewis & Partner is to provide happiness of all their members through its
worthwhile, they want to satisfy their consumers and workers that help in success of business
within retail sector (Sullivan and Gouldson, 2016). They own Wait rose and partners, a high
market supermarket chain which have 336 branches and 61,000 partners. John Lewis & Partner

currently operate their manufacturing business, in Darwen, that is Herbert Parkinson. They
operate 50 outlets across nation, they have 36 department stores, 12 John Lewis at home as well
as shops at St, Pancras International.
Value chain model to analyse the internal environment of business
Value chain refer to operational and functional activities of company that add value to
their target consumers (Ayers and Odegaard, 2017). This model is highly well-known in business
world, here it is used to examine the internal environment of John Lewis & Partners operating
their business in UK effectively with talented applicants at workplace. The value chain model is
divided into two categories that is;
Primary activities-
Organization primary value chain activities is directly included in selling and
manufacturing its products to target market. Analysis of primary activities improve performance
of business as explained below.
Inbound logistics-
Developing strong relationship with suppliers is very essential for business as it helps to
store, distribute and receive quality products. John Lewis & Partners is able to focus on each
aspect of transformation from raw material into finished goods. They develop good and effective
relationship with their suppliers that allow getting good raw materials. Some examples of
inbound logistics is retrieving raw material, internally distributing it and element to strat
production.
Operations-
When raw material arrives, analysing operational functions is very important,
organization is able to process materials into final products and also capable to launch in wider
market. Machining, testing, packing and assembling are the examples of operational activities
that managed by John Lewis & Partners effectively (Storey and Salaman, 2017). With the help
of manufacturing products and delivering quality goods to potential consumers, company is able
to increase productivity and profitability as well.
Outbound logistics-
It includes the actions that deliver good to consumers by passing through various
intermediaries. John Lewis & Partners is capable to transport and deliver their products across

UK. It helps to gain competitive advantages and help to achieve organization business growth
objectives.
Marketing & sales-
At this phase, company highlight the advantages and differentiation points of providing
goods to potential clients. Producing good quality of products at affordable price is created value,
the organization is able to distinctive feature of their products. Firm is capable to create their
advertising plan and marketing strategies effectively. Company develop wisely and effective
marketing activities that help to create brand equity.
Services-
Post and pre sales services provided by organization plays vital role in creating
consumers loyalty, it helps to retain target clients with business for longer. Modern people
consider post sale services as essential as promotional and marketing activities.
Support activities-
Firm infrastructure-
Illustration 1: Value chain model
(Source: John Lewis & Partner Value Chain Analysis, 2018)

It denotes range of activities such as accounting, strategic management, quality
management, handling legal matters and financing. John Lewis & Partners have effective
infrastructure management that allow business to operate and optimize value of entire value
chain. They have the power to control infrastructure activities such as overhead cost through
making discussion with senior to strengthen competitive position within marketplace.
Human resource management-
John Lewis & Partners have strong and effective HRM, it helps them to reduce risk of
employee turn over and competitive pressure based on commitment, skills and motivation of
their workforce. With the help of having good human resource management at workplace,
organization is able to work with skilled labour who are capable to contribute in procedure of
achieving business objectives. Company is achieving their cost decreasing objectives by
analysing training and hiring costs with their relative return.
Technology development-
In recent time, technology get advanced, almost all value chain activities either primary
or support depend on technological support (Jones, Comfort and Hillier, 2016). Technological
advancement in distribution, human resource activities, production and marketing needed
company to recognize the importance of technological development. Management, paperless
operation and administration of organization carrying out on IT systems, which is access through
prevent servers and develop accessible flexibility in operation of overall business. The
development and research department of John Lewis & Partner is distinguished into two
categories that is product and procedure technological development activities.
Procurement-
It denotes processes in value chain included in buying inputs that range from machinery,
supplies, equipment and raw material for manufacturing finished products. Company is focusing
on their procurement activities effectively in order to optimize operational, inbound and
outbound activities.
Reflection based on usefulness of value chain model
Value chain model is quite amazing and beneficial tool which is mostly used to analyse
the internal capability or strength of business, it helps to determine the abilities of organization to
sustain within marketplace. While using this model, I was able to understand the overall internal
environment of business. Here, I am analysing the inner atmosphere of John Lewis & Partners

company, I make me able to get in depth information about its business strength and operational
functions. When I used value chain model in my work, I realize that it is very flexible strategy
tool, it is one of the big benefits of this concept. It helps to create and diagnose competitive
benefits on cost as well as differentiation. I think that it help me in comprehension the entire
work activities of company, it is very useful and helpful tool that I can use in further research or
study. By using this model I can easily understand possible source of competitive benefits for
business. It provides useful approaches for me to examine effectively and systematically where
values may be included to companies. This framework is useful in that it determine the key
components in manufacturing of services or products as well as areas in which value will be
added in support of those primary functions. With the help of using this model, I believe that it is
quite effective and beneficial in helping to understand different activities of John Lewis &
partners in retail sector. The structure of value chain model is simple and clear, it helps me to
learn and gain more knowledge about company activities, I can clearly consider their
effectiveness and operational efficiencies. There are different benefits of value chain concept,
which all outcome in my ability to optimize and understand activities of business that leads to
their competitive advantages and increased profit level. It helps me to assure value created
exceeds cost by firm, company is gaining competitive edge, their strategies related to business
growth and success and plan to boost profit. In additional to this, With value chain model, I can
easily and effectively determine those activities where company can quickly optimize effort,
reduce cost, increase profitability and eliminates waste (Havice and Campling, 2017). Analysing
activities also provide insights into components that create greater value to me.
CONCLUSION
From above analysis, it has been concluded that value chain model developed by Porter
in 1985 is helpful and effective tool. It provides numerous benefits to company, as it help to
analyse the internal abilities and capabilities of John Lewis & Partner which they can use to gain
competitive edge and increase profit margin rather than before. Organization is using value chain
analysis model, in order to develop their brand identity and select premium quality raw materials
which they manufacture and present in front of consumers. Firm is able to achieve competitive
differentiation by increasing or speeding up delivery of provided goods to target people.

REFERENCES
Book and Journals
Ayers, J.B. and Odegaard, M.A., 2017. Retail supply chain management. CRC Press.
Fagioli, F.F and et.al., 2017. From the farm to the agri-food system: A multiple criteria
framework to evaluate extended multi-functional value. Ecological indicators. 79.
pp.91-102.
Havice, E. and Campling, L., 2017. Where Chain Governance and Environmental Governance
Meet: Interfirm Strategies in the Canned Tuna Global Value Chain. Economic
geography. 93(3). pp.292-313.
Jones, P., Comfort, D. and Hillier, D., 2016. Materiality in corporate sustainability reporting
within UK retailing. Journal of Public Affairs. 16(1). pp.81-90.
Robb, T., 2018. A strained partnership?: US–UK relations in the era of détente. 1969–77.
Smit, J., 2015. The innovation value chain and adaptability of organizations. Journal of
International Technology and Information Management. 24(3). p.4.
Storey, J. and Salaman, G., 2017. Employee ownership and the drive to do business responsibly:
a study of the John Lewis Partnership. Oxford Review of Economic Policy. 33(2).
pp.339-354.
Sullivan, R. and Gouldson, A., 2016. Comparing the climate change actions, targets and
performance of UK and US retailers. Corporate Social Responsibility and
Environmental Management. 23(3). pp.129-139.
Online
John Lewis & Partner Value Chain Analysis. 2018. [Online]. Available through: < John Lewis &
Partner Value Chain Analysis, 2018>