Essay on John Lewis Analysis

‘Industry analysis and possible
adaptations’

Table of Contents
INTRODUCTION ..........................................................................................................................3
a) Use the Porter’s 5 Forces model to identify and analyse the current environmental
influences on the Apparel Retailers sub-sector within the UK economy...................................3
b) Use the Value Chain model to analyse the internal business environment of a firm in the
Apparel Retailers sub-sector within the UK. .............................................................................5
c) Explain appropriate adaptations that your selected firm could undertake in response to the
external business environmental forces......................................................................................7
d) Reflect on the usefulness of the Porter’s 5 Forces model in understanding the business
environment and describe its potential limitations......................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES .............................................................................................................................11

INTRODUCTION
Industry analysis has become necessary to know the future scope and development for
better customer satisfaction and business advantage. Along with analysis, possible adaptations
are also required to make industry more reflective and attractive (Debrah, 2013). Possible
adaptations such as pure and advance IT system, usage of artificial intelligence, skilled
workforce & resources etc. has raised the scope of apparel retail business. This essay will be
carried on John Lewis which is the leading multi-retailer in an appraisal sub-sector working
within the UK economy. This company has to gain their customer trusts and belief by adding
value addition and customer experience in products & services. This assessment will put light on
porter's 5 forces model to identify and analyse the various current environmental factors on the
apparel retailers along with the value chain model to be analyse regarding the internal
environment of the business. This essay will also tell about the appropriate adaptations for
raising the business opportunity. Along with this, there will be discussion about the business
expectancy in the future.
a) Use the Porter’s 5 Forces model to identify and analyse the current environmental
influences on the Apparel Retailers sub-sector within the UK economy.
Apparel retailers’ sub-sectors has become competitive and challenging from past period
of time. Such model is necessary to receive valuable inputs about the competition and critical
market issue at the higher level. In the UK economy, apparel retail sector has grown over the
period of time with contributing to the market share and long term growth for raising the future
potential scope for fashion industry development. There are various factors such as
environment, political, technological etc. which has put emphasis on the apparel retail sub-sector
to co-relate with other growing sector and industry (Budhwar, 2015). In context with John
Lewis, apparel segment of this company has grown and raise at both domestic and global level.
On domestic level, apparel retail sector has grown largely with value addition to the buyer’s
needs and wants. United Kingdom market has grown with an involvement of numerous
industries such as apparels, food, transportation and logistics etc. In this assessment, there will be
analysis of current environment influences on the apparel retailer sub-sectors in the entire UK
scenario. To analyse the environmental factors, it will be beneficial to understand the Porter's
five force model to analyse the environmental factor required to analyse the influence on the

prospective customer along with an entire business support system of the United Kingdom.
Porter's five force model is an approach to determine how competitive the market is and how it
will be profitable for the business. In context with UK market, where apparel sector has grown at
the larger sector, this model will help John lewis to identify what all sort of environmental
factors such as cultural , economic, technological, political, demographic, regulatory etc. which
have put positive and negative effect on the sale and production of their goods & services. The
major aim and objective of this model is to know the competitive advantage of an industry onto
the business of the John Lewis and apparel based products or services. This model will help
different business in getting advantage of an existing resources or acquiring the new one to
generate the business for the John lewis apparel products. Along with this, porter's five force will
help top recover the political, economical and technological impact on the business operations.
This model framework has five factors explained here.
Buyer power which shows the buyer's ability to lower down the price they used to pay.
Supplier power enables the potential of suppliers to increase the cost of their products or
service. Competitive rivalries shows the magnitude of competitive activity which may affect
how much business the company have received till now or what will be margin level to the seller
Threat of new entrants tells about the risk or burden which is possess by new entrants in a
market. Substitution shows the threat possess by possibility of substituting a product or service
in one market with other product.
The apparel retail industry of the UK has been valued as 70 billion pound with the price
set on average basis of 19 pound per product. This assessment will attempt to analyse the present
environmental factors influences on an apparel sub-sectors within the UK industry. An analysis
is as follow:
Bargaining power of buyers says that environmental factors such as demographic,
culture etc. have played an important role in influencing the buyers’ decision making and their
taste and preferences for apparel products. This is an important part of Porter's five force model
which has put the pressure to decrease the prices of the commodities or power to switch other
brand/suppliers. Demographic has demonstrated the choice and preference of different customer
at one point or during process of purchasing. In case of John Lewis apparel sector, buyer power
is associated with price/affordability to buy the products. Culture differences has played the
necessary role to counter that power. Such power has made buyer to shop for apparel and little

incentive to stay with one particular company which will give indirect bargaining power to the
customers. Another factors is that bulking purchasing has made bargaining power high of the
customers.
Bargaining power of suppliers reveals those environmental factors such as economical,
political etc. that has made supplier's power relatively less along with insignificant force. Now a
days, most of the apparel companies source their products from third party manufacturer in order
to save the cost time. Third party manufacturer generally at the low cost to build and gain the
business. Economical factors such as tariff rate, discount rate and complicated funds policy has
made supplier's flow of raw material in the complicated manner, which is simply responsible for
increasing the price of goods or services. John Lewis has total number of 4 suppliers, with
different priority towards the raw materials. They have various categories of raw materials,
which are differentiated on the basis of quality, quantity & durability. Supplier's switching cost
is relatively higher, because of growing demand of updated and new trends based products.
There actual switching cost also varies from one suppliers to another suppliers as per demand
raised into the market. Suppliers have little control over the apparel industry, because materials
price for this industry is relatively low which is not suitable to bear their expenses and hardly
result in the revenue generation. John Lewis needs to control this power of supplier in order to
gain productivity and profitability in the apparel retail business.
Threat of new entrants is the major weaknesses for every products company. It was
notice that new entrants generally fight in an unique way to get popularize their products which
might be a long term threats for existing firm like John Lewis. In current era, apparel industry is
one of the leading industry with number of new entrants or existing units who are competing
towards the maximum customer satisfaction level. In context with UK market, investment can
also be major barrier. It is why because investors are attractive toward the new start-up with the
forecasting of future return from the business after the entire valuation. Here, political factors is
the major concern. The country which has strong political influence, their investment raising is
always in the ease to start the business. This will be threat for existing firm. In context with John
Lewis, it is required taken care of each and every factors.
Threat for substitutes says in the UK economy, threat for substitute in context with
apparel industry is relatively moderate. In apparel industry, where easy and availability of the
substitute is large because number competitor such as Marks & Spencer, Waitrose, H&M etc. So,

the customers have wide range of choices along with price affordability and post-purchase
services such as product replacement, damage error etc. John & Lewis needs to provide the
optimized quality of their product along with the price affordability. They also required to
provide the effective and utilized quality of customer service (Teeny-boppers, 2016).
Critique: In case of John Lewis, firm is operating with long term relationship with their
supplier, customer etc., which are their major focus to retain in competition. Supplier's
bargaining power is increasing, which has led burden on John Lewis to increase price of their
Apparel products. Also, this has been realised that, critical analysis and consideration over this is
required to stop or minimise negative impact of forces of supplier,s, buyer, threats of rivalries
etc.
b) Use the Value Chain model to analyse the internal business environment of a firm in the
Apparel Retailers sub-sector within the UK.
Internal business environment is composed of the elements such as current employees,
management, corporate culture which defines the employee and business behaviour of the entity.
In context with John Lewis, it is important and necessary to do complete analysis of internal
business environment such as plans & policies, human resource, financial resource, corporate
image etc. Value chain model is useful to identify and analyse such internal environment to
increase the business scope and suitability to continue the business for long period of time. In
apparel retail sector, value chain analysis would help to create the value addition and gaining
competitive advantage for the specific segment of the customer. Value chain is the collection of
activities that is used to be performed by company to create value for their customer. Creation of
value is the tool & technique which is used to create value which leads to the competitive benefit
to the customer and firm both (Erasmus, 2016). Ultimately, its main is to create high profitability
for the business entity. In context with John Lewis, strength of the value chain analysis is its
approach or activity includes. To identify and analyse an internal business environment, this
model is useful to know and realize future value addition is required in the products or services
of the John Lewis. Such value addition can also be generated by internal aspects of the company
such as IT department, labour management, human resource etc. To maximize the addition in the
customer satisfaction, value chain analysis will make clear from the where the source of value
and loss amount would be found in John Lewis. For the proper usage of internal business

environment, it is required to understand and analyse the value chain activities to enhance the
production, maintenance, sales and support. This value chain activities is comprises of:
Primary activities This activities are basically used in process of significant add-on and
helpful to bring competitive advantage as part of the value chain. This involves Inbound
logistics, production, outbound logistics, marketing & sales and services.
Inbound logistics says that there is the involvement of receiving, storing and internal
distribution of the raw materials or the basic ingredients of the product or service. In context with
John Lewis, relationship with the supplier is necessary to get easy access of the logistics and
inputs into the shorter period of time.
Production says that for effective retailing of apparel, there are various activities such as
production floor or production line which is helpful to convert inputs into the finished goods.
Operational system is the major guiding principle for the creation of value. In context with John
& Lewis, such activities are useful to make the availability of apparel products more easily at the
retail units. Effective plant and machinery has been identified as suitable and necessary to carry
out such activities for an appropriate qualities.
Outbound logistics says that John Lewis are engaged in various activities which is
related to effective value delivering to the apparel's customer by proper storage, distribution, IT
system along with customer service support.
Marketing and sales for John Lewis is related to all the processes to put products into
the market which includes managing and generating the customer relationship for selling
apparels. UK economy which is enriched with famous apparel brand needs a guiding principle
for setting self apart from the competition and en-roll self for creating advantage for the
customers.
Service reveals in context with John Lewis that there are many activities that is important
for maintaining the value of products or service to customers as soon as enable the relationship
by creating the value addition by the procurement of products or services. For effective apparel
retail management, it is important for John Lewis to improve their customer service to enable the
higher value addition to the customers.
Supportive activities of the John Lewis comprises of supply chain, which they had taken
very seriously with bringing innovation for easy access of their apparel products into the market
with suitability towards cost and time efficiency. John lewis has developed their suppliers as well

as retailer's structure who will facilitate them towards providing the good quality service and
future commitment for innovative apparel products.
Sources: Supply chain management of John Lewis, 2018
c) Explain appropriate adaptations that your selected firm could undertake in response to the
external business environmental forces
In apparel industry, it is important and necessary to conduct the external business forces
such as political, economical, social, technological, legal, environment etc. (Kietzmann, 2014).
UK economy has already hit by various outsider forces such as political instability, economical
reforms, unexpected technological changes, and severe legislation etc. of different countries.
Apart from the UK industry, there would be an opportunity for UK based apparel retail to step-
up to the other economy to raise the business sustainability along with ensuring and identifying
maximum growth to the business. Analyse of the various external business factors along with
adaptation and suggestion is important to raise the brand value and importance of John Lewis.
Here, adaptation means adding value to overcome the negative impact of Apparel on an
economy. In context with John Lewis, analysis of external business force is required to ascertain
the future business expectancy for John Lewis in their apparel segment to develop into domestic
level as well as international level. There are various external business forces such as political,
Illustration 1: Supply chain management

social, technological and political for which possible adaptation will be conducted and being
taken place. For adaptation and fruitful suggestion, it is important to understand and analyse the
external force of business simultaneously which is as follows.
Political environment is all about the political influence of an economy to the business.
The government has ability to encourage companies to buy the fabrics for the production of the
apparels. But, what happened today is that companies are buying from an entities who already
engage in the development of the fabrics. Rise in the import duty could enable firm to buy
fabrics from the domestic market of United Kingdom. Such adaptation would prove help to raise
the employment opportunities to the people by opening up the entities of supply and logistics
related to the raw materials. Change in the political stability could not be helpful for John Lewis
to regulate business of apparel appropriately because of different political perceptions. Here, to
overcome the issue of unstable political circumstances, the prefer adaptation would to start using
the resources of an existing places and location to deliver the maximum value addition to the
customers. John Lewis needs to have implementation of policies or regulation to have major
control over political ups downs.
Economical factors says that price regulations, tax empowerment has put deeper impact
on the Apparel industry on the United Kingdom at the Moderate level. Apart from this, other
countries like USA, China, Australia has put severe impact on the fashion market of UK
economy. This is so because continuous usage of e-commerce has put impact such as people of
UK start suing the platform of other countries for buying the products and services. This has put
burden on the local business vendor and people of the United Kingdom. For overcoming this,
John Lewis has start converting the trends of its fashion to gain maximum customer attention for
future value addition to their buyers. Such adaptation will be helpful for apparel industry of UK
to gain more business along with scope and possibility for future retailer sector scope in the
Fashion industry. John Lewis must focus on customer attraction through building of an economic
policies which are required to enhance cost and price policies in order to overcome issues related
to this context.
Social influence has become critical for business to overcome as soon as possible. It is so
because people are more inspired and motivated from their society rapidly and companies are not
much capable to change their product or business functioning easily. Hence, such factors are
responsible to lower down the retail business of the apparel and fashion especially in the United

Kingdom. To overcome this, John lewis has taken several adaptation such as pre-research before
development of new product, taking regular feedback from the customer, analysing the customer
focus and choice consistently and also follow the trend and latest fashion trends in the apparel
industry. Such adaptation has to be conduct in accordance with retail choice and preference of
the customers. John Lewis needs to have focus on establishing customer's response in a given
period of time or process to handle social psychological issues in this macro environment.
Technological influences has put both positive and negative impact on the retail business
of apparel of the UK economy. It is why because majority of the customer of United Kingdom
are not co-operate with the technological and optimum artificial intelligence. Hence, because of
this, apparel companies are facing an issue of less revenue and lower customer involvement
(Cohen, 2016). In order to overcome this issue, John Lewis has taken several adaptation such as
innovation as according to customer choice, asking from the customer actually what they want,
what is their technological awareness etc. Such doings has proven secure and beneficial for this
company to understand their customer and provide the value addition in the apparel segment to
their customer at the fullest level. Retail business of apparels has saw various ups-downs while
engaging with their potential customers. In the current time, apparel market is considered as one
of the leading industry in entire United Kingdom.
Recommendation: In an Apparel market, John Lewis must go for analysis of suit of an
environment's in which they are operating such technological advancement, price factors, social
glory etc. For example: John Lewis is currently operating through technology or using websites
to get access to their customer's needs and wants. Here for John Lewis to adopt in preferred in
environment, this is necessary for them to follow current trends such as selling through e-
commerce platform, social patriotism, penetration price to fit in business operation. They can go
for adaption of technological empowerment, e-payment gateway, as more people are shifting to
that area, enhance brand solidity by led loyalty of customer's focusing on quality or purity.
In this brief discussion, it is to be concluded that adaptation accordingly with changing in
the future trends of the apparels business has grown over the years with the full expectancy to get
retail business successful for longer term with increased revenue and higher employment
opportunities.

d) Reflect on the usefulness of the Porter’s 5 Forces model in understanding the business
environment and describe its potential limitations.
In context with John Lewis, there are different usefulness of the Porter' five force model
for the apparel industry in many ways namely, it has been resulted in the effective understanding
of the business environment of the John Lewis such as political, legal, political, technological
forces in the proper way. Also, it can be useful to gain the knowledge of the existing and future
business forces and pushes. There is the major role of porter five force model in the influencing
the customer needs and wants along with enhancing their choice and preference for the apparel
industry. Also, it is useful to identify the competitive advantage of the business. Along with this,
Porter's five force model for apparel industry is also useful to gain the future scope for the
market expansion and tackling the competition at the wide level.
In the brief discussion, it is concluded that for apparel industry, porter five model is not
completely beneficial and suitable. It would only focuses on the competitive advantage and
market attractiveness of the apparel industry. But, it is required to use this tool effectively with
complete analysis of the fashion industry. John Lewis is required to put their focus on critics of
this model such as flux in suppliers behaviour, increasing buyers priorities and also changing
operations due to increasing competition in market.

CONCLUSION
From the above assessment, it is concluded that industry analysis along with finding the
competitive advantage is the most necessary and crucial task into the entire business operation of
the company. Along with this, porter five force has been proved advantageous for every business
to gain business strength and weaknesses of the business and regulation. Organisation need to
operate along with offering their customer' the actual and fruitful value addition to the products
& services of the company. Such value generation can be adopt by bringing the innovation,
technology along with the aim & objectives of the maximum customer satisfaction. Analysis of
external factors has give emphasizes to actual importance for understanding the business roles
and responsibility. Usefulness and limitation of the Porter's five force model is required to
analysis the functioning of the five force model.

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Online
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