John Lewis Business Strategies and Competitor Analysis

The assignment provides a comprehensive analysis of John Lewis's business strategies, including its political advantage in establishing a market in European countries, technological advancements, and strong brand image. It also evaluates the importance of various competitive strategies and factors affecting business environments for growth and survival. The study highlights John Lewis's ability to reach a wide area coverage through internet use and its success in beating competitors and creating a strong customer base.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Pestle and Swot analysis of John Lewis Ltd..........................................................................1
Analysis of Competitive environment through Porters five forces........................................3
TASK 2............................................................................................................................................4
Strategic management plan for John Lewis............................................................................5
Justify and recommend the most appropriate growth platform and strategies-......................7
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Business Strategy is a course of action or we can say that it is a master plan that supports
and help the management of the company to secure top position in the market as compared to its
competitors and to achieve the desired objectives of the business. It is designed to perceive and
take advantage of opportunities, to mobilise the resources, and to secure a competitive position
and to attract potential customers, to strength the position in the market. The report describes the
Analysis of capabilities of John Lewis Ltd. through SWOT and PESTLE analysis. Report will
also analyse competitive environment using Porter Five Forces Model. John Lewis Ltd is
founded in 1864 by John Lewis. It is a chain of Department stores which has operations
throughout U.K. It is a Public Limited Company. It's headquarter is in London, SW United
Kingdom.
TASK 1
Pestle and Swot analysis of John Lewis Ltd.
Political factors- As Being noted that John Lewis is U.K. based company, it would be an
ease for them into European market, government has mentioned that any U.K. based competitor
company can enter in the market without any limitation and restrictions. This creates a positive
1
Illustration 1: Pestle Analysis
Source : (Pestle analysis , 2017)

impact on the company. On the other end, being established its business in 50 other countries,
John Lewis Ltd. has to deal with many trade barriers, government laws, pricing regulations
which serves as negative side.
Economic- UK is currently facing recession in economy and various changes in interest’s
rates. With intense competition in retail sector enforces the retailers to provide a lot of incentives
to customers which influences John Lewis Ltd. to drove down its prices consistently, and creates
negative impact on economic stability. On the other hand, John Lewis objective to sell the
product at cheaper price and better quality has led to its increase in sales volume resulting in
improving economic position of the company.
Socio-cultural- With changing in modern day scenario, the customer s is also changing
their preference and lifestyle and demand the products that may pay value for their money. John
Lewis thus, have to introduce the latest fashion products to satisfy customers and that too on
regular basis. It will pose negative results if the company fails to identify the consumer wants
and desires. Again positive thing here for John lewis is that they provide better quality products
at cheaper price and create materialistic component customers,
Technological- Internet and technology is expanding day by day has direct influence on
sales of retail industry, especially John Lewis which has its primary base of online selling of
products. Here the technological advancement will create positive impact on growth of John
Lewis. But on other hand this technology usage is not allowing John Lewis to establish
employment opportunities as every operation of business is conducted on software and servers,
resulting on negative impact of company's CSR.
Environmental- Environmental laws has been enforced for companies to reduce their
carbon footprint and increase energy efficiency which possess John Lewis to incur higher cost
and spending money in developing eco-friendly products. Also, positive side for the company is
that it deals with cotton and wool which are renewable resources and environmental friendly.
Legal- Government is concerned more with health and safety as well as consumer rights,
which makes John Lewis design Consumer friendly products whereas John Lewis uses
renewable and environmental friendly resources, so it creates positive advantage for them
(Pisano, 2015.)
SWOT analysis of John Lewis Ltd company.
2

Analysis of John Lewis Ltd. Company capabilities-
Strength- Strong growth strategy is the company's main strength which makes it capable enough
to expand its business. Strong brand name along with product differentiation and its dealings in
various household products, limits John Lewis depend on one source of income and helps it to
benefit economic advantage. Being established its trading platform online, John Lewis has
capability to reach all over the world through technology. Also, John Lewis manufactures
products that are materialistic to consumers, that makes it capable for sales and profit
maximization.
Weakness-It has been analysed that from past few years John Lewis is suffering from
inconsistent profits due to lack of global presence. The range of items offered is limited
compared to super-markets which limits the options available to consumers.
The prices of items are higher than supermarkets and grocery stores which might limit the target
group.
Opportunities- John Lewis partnership has a lot of scope and great opportunity to enter the new
market segments and increase their global presence. They can also open up more stores and sub-
brands in untargeted area, in order to expand their business.
Threats- John Lewis facing huge threat and intense competition from other super-markets,
grocery stores. Many organizations such as Marks and Spencer, Tesco Plc, ASDA group is
giving firm a rough competition.
Analysis of Competitive environment through Porters five forces
By analysing the five forces of competition, John Lewis Ltd. can get a complete picture of
all the factors that will affect the profitability of organization and its operational areas in market
and provide it various alternatives to deal with the barriers and finding optimum solution to the
problems faced (Scholes,2015.).
Threat of new entrance - New entrance of retailers in household sector are bringing
innovative techniques and alternative ways of doing things and thus increase pressure for John
Lewis to reduce down its prices for the products and provide value to the customers. John Lewis
firstly needs to innovate its products in such a way that it attracts new customers as well as
provide old customers a reason to buy John Lewis products. The threat of new entrance is high as
competition is intense in Chinese department store market with the largest market share divided
3

between such companies as Lane Crawford, Lotte Mart, Maoye International, Mitsuokoshi, and
New World Department Store China Limited
Bargaining power of suppliers- Suppliers are the person who supply raw materials that
are required to manufacture a product. Higher the cost of raw materials, higher will be cost of
production for company. Suppliers in consumer goods use their powerful negotiating skills to
extract higher prices from company. Bargaining power of supplier is high due to shortage and
planned price system To overcome this John Lewis needs uses alternative raw materials for their
production process and product design so that if the price of one raw material goes up, the
company can switch on to another. Also, John Lewis has created strategies in such a way that
supplier may be dependent on the company.
Bargaining power of buyers- Buyers are always in need of the best offerings and demand
a lot as value for their money. This will serve as a barrier for John Lewis to maximise its profit in
the long run. The smaller customer base of John Lewis, higher will be their bargaining power
and demand, discounts, offers etca. Bargaining power of consumers is high due to intense
competition in the market. They are facing huge competition from enterprises like ASDA group,
Tesco
Threat of substitute products or services- When a new product substitute enters in a
market the profitability level of industry is affected, as customers maybe likely to shift on other
products if it offers better value or good service. Threat of substitute product is highly limited
and it increases the attractiveness of the market. John Lewis is engaged in finding out what is
the core need of customer rather than what he buys. Also, John Lewis can increase switching
cost (it is the cost that customer pays when he switch to another product) so that customer may
not shift to another product.
Rivalry among the Existing Competitors-This statement says that if there is rivalry or
conflicts between existing competitors, the profitability of the industry will decrease. John Lewis
operates in a very competitive market of Personal and household goods industry, so it needs to
focus on building sustainable differentiation of product, by collaborating with competitors to
increase market coverage rather than just competing in small markets..
TASK 2
4

Strategic management plan for John Lewis
Ansoff's Matrix is also called product or market growth matrix. It suggests various types of
growth strategies available to an organisation for giving direction to its business strategy.
MARKET PENETRATION -
This strategy which focuses on selling existing products in existing markets. By using this
Strategy, John Lewis Ltd will be able to maintain its market share by using competitive
Strategies related with pricing, sales and promotion of products through personal selling.
Company can restructure the existing market by taking competitive advantage as compared to its
competitors through launching promotional campaigns and by designing a pricing strategy or the
Products. Another way of selling existing products in existing market is by making adjustment in
the price of the product like, lowering the price to increase the sale of the product. Company can
increase investment in the promotion of product. Ex. John Lewis Ltd. can increase sales of food
items through Advertisement, promotional campaigns , sponsoring events, introducing a new
packaging etc.
MARKET DEVELOPMENT-
5
Illustration 2: Ansoff matrix
Source: (Business Strategy,
2018)

It is another growth strategic direction which an organisation can use to sell its existing
products in new market. There are different ways of using this strategy like, by using new
product design by expanding the region to a different country, New distribution channels and
various pricing policies like different price of products for different market segments to attract
them . John Lewis Ltd. can also approach new geographical segments like, it can export its
products to other countries other than own country. Company can diversify its business into new
products or can launch new packaging of the existing products. Company can use different
innovative and creative practices to attract customers from different market segments.
PRODUCT DEVELOPMENT- It is another growth strategy through which company
can produce new products and sell them in the existing market. Firstly, company should have
new competencies, skills and skilled workforce to develop new products to sell them in new
geographical markets or it can modify its existing products so that, company can target the
customers of new market (Buckley, 2015).
This strategy is useful for such companies who are required to continuously make
improvements in their products to remain competitive in the market and to get competitive
advantage over competitors. John Lewis Ltd. has to perform continue Research and
Development to identify the needs and wants of potential customers so that, it can satisfy their
needs by developing new products. Through Research and Development company can also
identify the areas in which modifications in the product are required. For this, company must
have enough funds and skilled workforce (Rugman, 2017).
Eg. John Lewis Ltd. can develop a new energy drink 'Storm' to attract more customers in existing
market.
DIVERSIFICATION- It is another important growth strategy through which a company
can sell the new products in new geographical areas. It is one of the most riskier growth strategy
because company will sell new products into new market of new country so, it may be possible
that, company have little or no experience of rules and regulations of the government of that
country.
So, before launching a new product in new market company should identify the risk and rewards
related to it. John Lewis Ltd. can also add related products in existing product line for expansion
6

is another method of diversification. Ex. Company may diversify its existing business by
launching a new energy drink “Storm” to attract more and more customers.
Justify and recommend the most appropriate growth platform and strategies-
PRODUCT DEVELOPMENT- Product development strategy can be used by John
Lewis Ltd. because of various benefits of this strategy. By improving the condition of existing
product or by introducing a new energy drink, company will able to help its sales staff to gain
competitive advantage over its competitors. And it will also enables the company to increase its
revenue, profits as well as overall performance of the business.
Under product development strategy, company make efforts to improve the quality of
product through setting quality improvement standards which helps the company to enter into
new markets for selling existing products or modified products which in turn results into an
increase in the revenue of the company. This strategy will also help John Lewis Ltd. to reduce
its cost of production by redesigning the existing product, by using low cost of raw materials or
by eliminating those features of products which are not as per the customer preferences.
Company can also collect information from existing clients through survey like, by providing
checklist to customers or through questionnaire to choose strategy for
marketing new energy drink in existing market. This strategy will help the company in
expanding the market for newly developed products and also to provide maximum satisfaction to
existing and potential customers.
Eg. John Lewis Ltd. can develop and launch Storm (Energy Drink) in existing market
and target population of a particular age group like , young population. Before developing this
organic drink, company has to study about the main competitors of the company that are selling
energy drinks. And company has to develop an attractive packaging for new product.
The most appropriate strategy that can be recommended to John Lewis Ltd. is Product
Development Strategy. Innovation and launching a new product in the market is very much
essential for a company to remain competitive in the market. Consumers are becoming more
conscious regarding their health so, company can satisfy their need and want by launching
'Storm' energy drink in the market. By creating value in new energy drink the position of
7

company in the industry will strengthen. The new energy drink company will launch is able to
satisfy customer needs which help John Lewis Ltd. to become leader in the industry and
reputation of the company will improved.
There are many benefits to consumers through new energy drink 'Storm'. Like, energy
drink will provide mental alertness to consumers at their workplace, boost the energy, positive
impact on their health etc (Hockerts, 2015. )
Product development helps a company to grow in a competitive environment. Before developing
the goods, the business company must identify risks as well as opportunities related to it.
Through, product development, company can easily face the competition in the market. It
provides a continuous steam of cash flow to the company. It also helps a company to increase its
existing market share (Yuliansyah, 2017.).
John Lewis Ltd can develop product by bringing new products such as Storm in the market to
attract more and more customers towards departmental stores (Prajogo, 2016.).
.
8

Strategic management plan
Mission Mission Statement of John Lewis is “the happiness of all our
members, through their worthwhile, satisfying employment in
successful business”, which means to enhance the position of
outstanding retailer and also provide employment opportunities
with satisfaction (Amran and et.al., 2016).
Vision Vision of John Lewis include satisfaction of partners-by creating a
strong brand name and goodwill, satisfaction of customers by
establishing itself as cheapest vendor of items it sells which are of
high quality and exclusive, maximization of profit- by increasing
sales volume and wide market area coverage (Buckley and et.al
2016).
Core
values
Core values may include Firstly – The employee satisfaction
because of their employment.
Secondly- Identify what customer actually needs rather than what
he buys and provide them products and services which values extra
than they pay.
Lastly- John Lewis needs to focus on health related products,
which is the current trend in market and also they can get political
advantage from the government.
Aim 1. To build a strong customer base for its new product “storm”.
2. To develop habits and preferences of customers for “storm”.
3. To develop more distribution channels for this newly launched
product, so that it will be regularly available in market.
Objective 1. To increase 5% sales volume in every quarter and a target of

s 20% by the start of 2020. (for the energy drink “storm”)
2. To achieve atleast 7-9 % of contribution in overall profit of John
Lewis through this product “storm”.
3. To maintain Healthy quality standards of “storm” that at least 5
out of 10 customers prefer to by this drink.
10

Strategic direction 1. To focus mainly on sales and promotional activities and build an
image in the eyes of customers for “storm” drink.
2. To focus on maintaining healthy quality standards and
ingredients of “storm” energy drink to make it unique and
Highlighted.
3. To make “storm” available everywhere at all departmental
stores in market (Chang, 2016).
Market Analysis 1. To conduct timely market research, to understand the customer's
views and reviews about “storm”.
2. To avail continuous feedback from customers and monitor the
changes after launching this product “storm”.
3. To understand the need of customers and develop “storm” in
such a way that it gains competitive advantage in market for its
unique quality and healthy standards.
Operational direction 1. Spent more amount on Market research in order to increase sales
volume of “storm”.
2. Timely analysis of storm's contribution in company's overall
profit.
3. To work on achievement of target sales and profit contribution
of “storm” in company's overall turnover.
4. Monitor all the factors related to sales and promotion of “storm”
Tactics John Lewis need to follow following techniques in order to
achieve its goals and objectives-
1. Offer discounts and offers on its newly launched products.
2. Conduct health campaigns and seminars in order to provide
information regarding its newly launched energy drink “storm”.
3. Launch Limited edition products so the customers may buy it
considering it as a unique form.
11

CONCLUSION
From the above study it has been summarised that, John Lewis had gained political
advantage to establish its market in European countries and had expanded its wide area coverage.
Also, due to its technological advancement and use of internet, John Lewis is able to reach in all
areas of the world. By analysing the competitive strategies and implementing more on research
work, John Lewis had built strong brand image by beating of its competitors as well as creating
strong customer base. Here we conclude that understanding the importance of all the strategies,
advantages, disadvantages, factors affecting Business environment is necessary for growth and
survival of business.
12

REFERENCES
Books and Journals
Amran, A. and et.al., 2016. Business strategy for climate change: An ASEAN
perspective. Corporate Social Responsibility and Environmental Management.23(4).
pp.213-227.
Buckley, P.J. and et.al 2016. The strategy and organization of international business. Springer.
Chang, J.F., 2016. Business process management systems: strategy and implementation.
Auerbach Publications.
Peng, M.W., 2017. Cultures, institutions, and strategic choices: Toward an institutional
perspective on business strategy. The Blackwell handbook of cross‐cultural
management.pp.52-66.
Pisano, G.P., 2015. You need an innovation strategy. Harvard Business Review.93(6). pp.44-54.
Scholes, M.S., 2015. Taxes and business strategy. Prentice Hall.
Buckley, P.J. and Ghauri, P. eds., 2015. International business strategy: theory and practice.
Routledge.
Rugman, A. and Verbeke, A., 2017. Global corporate strategy and trade policy. Routledge.
Yuliansyah, Y., Gurd, B. and Mohamed, N., 2017. The significant of business strategy in
improving organizational performance. Humanomics. 33(1). pp.56-74.
Prajogo, D.I., 2016. The strategic fit between innovation strategies and business environment in
delivering business performance. International Journal of Production Economics.
171.pp.241-249.
Hockerts, K., 2015. A cognitive perspective on the business case for corporate sustainability.
Business Strategy and the Environment. 24(2). pp.102-122.
ONLINE-
Business Strategy. 2018. .[Online]Available
Through:<https://www.smartinsights.com/marketing-planning/create-a-marketing-plan/ansoff-
model/>
Pestle analysis 2017 .[Online] Available Through:<https://www.business-to-you.com/scanning-
the-environment-pestel-analysis/>
13