John Lewis Market Entry Strategy

This assignment analyzes John Lewis's proposed market entry strategy for a new chocolate-scented deodorant in the US market. It examines internal factors using SWOT analysis and external factors through PESTLE analysis. The document also explores competitive strategies, emphasizing differentiation and cost leadership, and recommends actions for John Lewis to achieve success in this new market.

Strategic Marketing

EXECUTIVE SUMMARY
This report is all about introducing deodorant product with chocolate fragrance in USA in
order to expand their business on large scale. They main target are the young generation who are
more conscious about grooming their personality in order to present better in front of people.
There are internal as well as external environment which affects their decision of launching new
product in new market of USA. Thus, the company can successfully introduce new product into
market of USA with the help of getting support from the existing business organisation
established in USA.
This assignment report covers the macro factors along with the evaluation so that step of
John lewis of introducing new product in USA are not that much affected.
The project also covers the different through which the company can enter into new
market and exist for longer period of time.
The segmentation and targeting people after making research has also been examined
under this report.
The project also overs Porter generic strategy which identified the power of buyers and
suppliers, threat of substitutes etc. so that the management take further actions in order to make
profitable decision.

INTRODUCTION
An organisation can achieve growth and success in competitive market world for longer
duration only when their management are able to formulate an effective marketing strategy
which help them in communicating with their targeted customers regarding their products and
services. It will be more helpful for such organisation who decide to introduce new product in
the market so as to attain huge customer strength. John Lewis, a UK company which deals in
offering haberdashery and household products to the people of UK The company decided to
introduce new deodorant products with chocolate fragrance in USA with a motive of grabbing
attention of large number of customers and make them loyal customers.
The project covers the internal and external environment which may either restrict or
motivate an organisation to follow pre-decided policies and schemes (Baker, 2014). As John
Lewis introduced new product into market thus pick out most appropriate mode through which
company can easily exist in market for longer period of time. The project also summarises
segmentation and targeting audience on the basis of which company make decisions to enter into
new market. Porter Generic strategy which help them in identifying the competition in market
are also discussed under this report.
TASK 1
1: Environmental analysis
John Lewis, a UK company which deals in offering which deals in offering haberdashery
and household commodities to maximum number of customers in UK and through out the world.
As the company launches new deodorant product with chocolate fragrance in market of USA in
order to gain competitive advantage. The young generation are the main targeted customers of
John Lewis company on which the growth and success of an organisation depends. Thus, it may
bring profitable result to company if their decision regarding launching new product in market of
USA will be followed. Due to high competiton in market such as LYNX, Rexona etc. which
gives tough competition to John Lewis company in new market industry thus it is important for
to bring innovation in their product so as to compete with them in more effective and efficient
manner. The people of USA are more conscious about their looks and personality and thus spend
more money in purchasing grooming products to represent themselves in front to people in an
effective manner (Bar‐Isaac, Caruana and Cuñat, 2010). Therefore, the company may find not
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that much difficulties in bringing new fragrance deodorant in new market and make them
successful within shorter period of time. It is only required for management to analyse external
factors such as economical, political. Social. Technological etc.
According to the above graph, it has been clearly shown that an organisation who decide
to launch new product into new market has more changes to get success in near future. Such
graph motivated other company's as ell to bring new product into new market.
SWOT analysis:
Such analysis need to be conducted by company with a motive of identifying their actual
strengths and weaknesses so that can able to make corrective actions in order to convert
weaknesses into strengths.
Strengths: John Lewis company which deals in providing diversified products has
already attained good brand image in competitive market. It provides an opportunity to the
customer of UK to buy their product online along with international delivery. The company has
attained over 35,000 employees which contributes their valuable services to the organisation to
achieve desired goals and objectives. It also offers wide range of fashion brands to the people of
UK.
Weaknesses: John Lewis, a UK company which deals in offering haberdashery and
household products to the people of UK. The wide range of items the company offered is limited
due to which they have limited options to avail products to customers. As they are newly
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engaged in providing deodorant products which brings difficulties for company to survive in new
market industry.
Opportunities: As John Lewis company only deals in providing in offering haberdashery
and household products to the people of UK thus in order to survive in market for longer period
of time, the company need to implement new chances in their existing products or bring new
fragrances of deodorant with a motive of influencing interest and buying behaviour of large
number of customers (Bhattacharya, 2010).
Threats: There are large number of competitors in new idstruy in which John Lewis
company decided to enter such as LYNX, Rexona etc. which gives tough competition relating to
the quality and price of products. Thus, it is important for company to make an effective plans
and strategies regarding improvement of products or bring new products in market so as to
compete with their rivals in effective and efficient manner.
PESTLE Analysis
To analyse external environment which make huge impact on the business operation of
John Lewis company, the management need to conduct PESTLE Analysis due to which they are
able to identify the challenges and problems that comes in the process of introducing new
product in market.
Political factors: It is related with rules and regulation implemented by government for
an organisation with a motive of operating business operation more smoothly. As John Lewis
company decided to operate its business activities in USA due to which they need to first find
out the taxation rate imposed by government on grooming and deodorant product before
introducing new deodorant in market. For example if the taxation rate on deodorant products are
increases then it may difficult for company to survive new deodorant product in market (Chaffey
and Ellis-Chadwick, 2016). Thus, the management need to consider following factors which
affects their decision of introducing new product into market:
 Tax rate imposed by government
 Tariffs and regulations related with Grooming and deodorant products.
For example: Changes in government policy may brings difficulties for company to enter into
new market as new government may increase tax rate on Grooming and deodorant products due
to which their sales figure may also affected.
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Economic factors: It is related with economy of country which affects the growth and
success of new product into market. Such factors consists inflation rate, interest rate and saving
rates etc. which can affect their decision of introducing new deodorant of chocolate fragrance.
For example, If the economy of USA decreases then buying power of people goes down due to
which they do not have sufficient income to spend on purchasing grooming and deodorant
products. Thus, in this situations the chances of bringing new deodorant product with chocolate
fragrance will low. Thus, it is important for management to wait for the right time to introduce
new product in market (Tsiotsou and Goldsmith, 2012).
Social factors: It refers to such factors which includes the behaviour, culture, attitude and
interest of society towards purchasing products. Thus, it is important for management of John
Lewis to understand their interest and behaviour so that they can able to make an effective plans
and strategies in order to influence the interest and buying behaviour of all age group of people
which help them in generating huge revenues (Crane, Kawashima and Kawasaki, 2016). Before
introducing new deodorant product with new chocolate fragrance, the management of John
Lewis need to understand following factors:
 Interest and culture of people
 Customer's behaviour
For example: Some customers thoughts using such deodorant products will negatively affect
their health. Some people are suffering from allergy of using Deodorant products due to which
the company has limited number of customers.
Technological factors: It is an important factor which help an organisation to produce
quality products without facing lots of wastage in production process. Therefore, it is important
for the management of John Lewis company to adopt new and innovative technologies in order
to produce grooming and deodorant product with new fragrances at minimum cost. Thus,
following factors need to be considered by management:
 Advanced technology in order to compete with their rivals
 Technological diffusion
 Allocation of Budget on purchasing or hiring equipment on rental basis.
For example: Adopting advanced technologies requires huge amount of funds due to which the
company may find difficulties in managing financial resources. Their profitability has also been
affected.
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Environmental factors: It refers to the factors which includes climatic conditions which
need to consider by the management of John Lewis while producing quality products. As the
company produces grooming and deodorant product which may causes air pollution due to
which the environment are very much affected. This will make bad impact on the people of UK
due to which they may opposed production activities of company (Fulgoni and Lella, 2014). The
main factors which need to be consider by John Lewis which are as follows:
 Climatic conditions and weather of country.
 Guidelines and standards implemented by government for the protection of environment.
For example: Disposal of deodorants products may affected the environment due to which the
government may imposed some restriction of selling deodorant products.
Legal factors: It is related with legal laws and legislations implemented by government
which is essentially required to comply in order to run business operations more effectively.
Non-compliance will affects their reputation as well as may difficult for them to get success of
company.
For example: If the John Lewis has failed to follow government's rules and policies then they
may faced legal consequences in terms of paying huge penalties or fines.
TASK 2
2.1: Assessing the modes of market entry
There are various modes through which the company can bring new deodorant product
with chocolate fragrance in USA which help them in sustaining into new market for longer
duration. Thus, the management are held liable to find out the small as well as medium sized
retailer company of USA and approach them to provide them sufficient support in introducing
new product into their country. For this, the company should required to arrange meeting with
them and discuss with them regarding the proportion of profits they want to share with each
other (Hollensen, 2015). Following are the different ways through which John Lewis can easily
introducing new deodorant products in USA without facing any difficulties:
Acquisition: It is considered as an effective way of entering into new market in more
successful manner. It is the process in which one company acquire another company with the
purpose of establishing itself into new market. It can be done when one company faces losses for
last many year and the owner feels that there is no chance in future as well to earn profits. Due to
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this, they decided to sell their business to another company which are financially strong and
stable in market. Acquisition can de done through paying in cash, or acquire all assets and
liabilities of selling company (Phillips and Hallman, 2013).
There are three laws which ned by be comply by John Lewis which are as follows:
 Section 7 of the Clayton Act
 The Hart-Scott-Rodino Antitrust Improvement Act of 1976 The Exon-Florio Amendments to their Defences Production Act of 1950
Joint venture: In this, when owners of two businesses join and meet together for the
purpose of sharing ownership, returns, risks and governance with a motive of expanding business
to different countries so as to achieve large market share within short period of time. It will
brings beneficial result to large companies such as John Lewis company to join hands to small
and medium sized company for the purpose of sustaining in new market for longer duration
(Kapferer and Bastien, 2012).
Legal structure of joint venture
Joint venture has been governed and directed wholly by the legal agreements that brings them
into existence. The activities and obligations are managed through co-ventures governed and
directly by contract law.
Franchising: It is a foreign market entry strategy through which one company agreed to
pay fees to other company for the purpose of using their name, logo while providing products
and services to maximum number of people. A contractual agreement is formed in which all
terms and conditions are mentioned regarding using company's name and trademark. As John
Lewis company is newly introduced product in USA market which need to get support from
well-known company which deals in providing similar products in market. This will help in
increasing sales figure of John Lewis company and achieve huge profits within short period of
time.
Laws and Regulations:
Franchise Disclosure: It is written document which every franchisee required to pass to
capitalist before 14 days of signing an agreements and contracts.
Franchise registration: With the help of this, the franchisor can assist their investors
through given disclosure laws.
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Notice laws: It is type of notice which must be filed with the state which contains names
of organisation as well as owner. Notice describes the interest of franchisor to sell its business.
They also need to submit an application form to federal laws and regularities related to franchise
businesses.
Relationship laws: These laws maintain the relationship between franchisee and
franchisor through consider following matters:
 Notice period of termination
 Grounds for eliminating franchise contracts
 Equal treatment among all franchisees by franchisor.
2.2: Most appropriate mode of entry into new market
Joint venture may be considered as most affective mode of entry into new market as it
helps new company to sustain into new market for longer duration. As John Lewis decide to
enter into new market with new deodorants products with chocolate fragrance thus they need to
get support from existing companies operated in USA from last so many years. Thus, the
management of John Lewis need to first arrange meeting with such existing companies and
discuss with them regarding sharing of profits and losses in future. There are many advantages of
Joint venture which are determined as below:
 It helps John Lewis company to access to new markets and distribution networks
(Lorenzo-Romero and Constantinides, 2013).
 It provides an opportunity to company to enhance their capacity to sell their products and
services to maximum number of customers.
 Working with other companies help in sharing risks and costs.
 Through adopting modes of Joint venture, both the companies have adequate amount of
funds along with the specialised staff, technology which help them in operating business
more successfully (Pagani, and Otto, 2013).
Legal procedures of Joint venture in USA:
There are some rules and regulations which need to be followed by business while merging with
other company for the purpose of expanding business on large scale:
Setting a clear legal agreement: Joint ventures comes under the governance of commercial
transactions law which includes all relevant partnership and contract precedents. They also
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required to comply with the rules in the jurisdiction where the company decide to run. Countries
such as USA requires from their business to follow international trade laws.
Joint ventures are governed by establishing legal agreements which contains all terms and
conditions such as sharing profits and losses, sharing holding etc.
Legal procedures of Joint Venture in USA
Letter of Intent: During bilateral transactions, a letter of intent has been discussed which
contain following relevant information about acquisition:
 Sharing profit/loss ratio
 Terms and conditions
 Types of warranties that should be given
 Non-compete covenants that may be given Confidentiality
Exclusive agreement: This agreement provide the right to both parties to negotiate
exclusively for a period of time with the merged party in relation of the acquisition of the target
company (Marketing Strategy, 2017).
Non-disclosure agreements: A non-disclosure agreement is commonly used with the
purpose of protecting confidential information relating to acquisition. It is prepared with motive
of binding both parties in legal manner.
TASK 3
3.1: Segmentation
Market segmentation is an important process in which the customers are divided into
subgroups on the basis of their interest, behaviour, attitude and preferences. For this, R&D team
need to first identify the common interest, similar lifestyle etc. and on the basis of which, they
are separated into groups. It helps an organisation to consider the needs and requirements of all
segments without indulging in any confusion situations. In context of John Lewis, they need to
decide to introduce new deodorant commodity with chocolate fragrance in new market with a
motive of capturing large market share in competitive market world. Market segmentation can be
understood by following points:
Geographic: It refers to the classification of market on the basis of geographical
locations. It is essentially requirement for marketer to identify the needs and requirements of
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customers residing in different locations (Morgan, Katsikeas and Vorhies, 2012). The
management of John Lewis should first focus on urban areas where more people prefers to use
grooming and deodorants products.
Demographic: This is the segmentation in which market has been divided on the basis of
age, gender, marital status etc. of customers. This will help company in making an effective
strategies to different group of people in order to maximise their satisfaction level. Mostly the
young generation prefer to use deodorant products thus the company should focus on attracting
them through various marketing strategies and identifying their purchasing capability.
Psycho-graphic: Under this segmentation, the company divided their customers on the
basis of their taste and preferences which changes frequently. The management need to analyse
them all carefully in order to fulfil them in more effective and efficient manner. The management
of John Lewis should focuses on taste and preferences of targeted customers mainly the young
generations according to which they offer grooming and deodorants products at an affordable
prices.
Behavioural: Under this segmentation, the company segment their customers on the
basis of their personality, behaviour, lifestyle and their attitude. As the people residing in USA
are more conscious about their lifestyle and personality due to which they prefer to buy
grooming and deodorant products. This will help John Lewis company in increasing the sales
figure and generating huge revenues (Nath, Nachiappan and Ramanathan, 2010). The people
mostly young generation wants to smell good in front of others in order to develop their
personality among others. Some said that good smell attract others thus it will increases the
chances of making new product of John Lewis into new market more successful.
3.2: Targeting
Target market defines as the group of customers on whose needs and requirements are
undertaken by company with a motive of providing quality products and services. In context of
John Lewis company which attracts mostly young generation to purchase their products and
services need to first consider the taste and preferences and accordingly brings new deodorant
with demanded fragrances in market. This will help in grabbing attention of targeted customers
and influencing their behaviour and interest to purchase new deodorants products in order to
enhance their personality. As with the changes in fashion, every customers required to enhance
their personality to present themselves impressive than others which directly provide beneficial
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outcome to company in form of attaining better results (Oly Ndubisi, 2012). The organisation has
mainly targeted people of urban areas who prefer to consume more grooming and deodorants
products as compared to people of rural areas.
Positioning: Before introducing new product into new market, the company should think
about their position in market. They should present their new product in such a ways that attracts
the minds of customers and it can be possible only when they adopt an effective marketing
strategies. Due to high competition in market, they need to take position in such competitive
market which will be difficult for them from starting.
TASK 4
4.1: Porter Generic Strategy
There are three strategies of Porter's generic which are applied in products and services of
John Lewis company and its size. It is known as generic strategies. It consists of three parts
which are cost leadership which has no frills, differentiation which describe and create their
unique products and services and last one is focus which provides a special services in a market
of niche. These strategies should required to adopt by John Lewis company in order to expand
their existing position in market through bringing new deodorant product with chocolate
fragrance in new market which are further described in detail below:
Cost leadership strategy: In this strategy, the company becomes low cost producer in
market for a given level of quality. The management has to set prices for their product either at
an average price in order to earn huge profits as compared to their rivals, or charges low prices
in order to capture large market share. Therefore, the management of John Lewis need to first
lower the prices of their deodorant products and once they settled in new market then they
should slightly increases the prices in order to achieve huge profits.
As entering new market with new product required huge funds which is required to be invested
in operational activities, management activities, functions and other business functions.
Therefore, the management need to first select an advanced technology and tools through which
they can faces minimum wastage during production process.
Using Management Information system also help in reducing management cost as it helps in
making an effective decision and budget for future business activities.
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Due to forecasting, the manager get to know abut future cost which help them to make an
effective plans to control future cost.
Differentiation strategy: Under this strategy, the company should required to produce
quality products which are more valued as compared to their rival's product. It can be done
through adding some attributes and features in the products which makes them different and
unique from their competitors. As John Lewisdecide to introduce new deodorant product with
chocolate fragrance thus it helps in grabbing attention of lots of customers and through which
they can able to compete with the existing rivals in USA.
Focus strategy: John Lewis should required to concentrate on niche markets, identifying
the fluctuations of market, different customer's demands and introduce new product at low
prices in a market. It is essential for company to determine differentiation and cost leadership as
focus is only not adequate for developing a product. As an organisation is small in sized due to
which it becomes difficult for them to deliver good in wider market.
Differentiation focus: John Lewis should required to focus on introducing unique and
different products than their competitors which help them in gaining competitive advantage in
market. As John Lewis comes in new market with deodorant of chocolate fragrance which are
something new and different from their rivals thus it helps in making their new product more
successful in market and achieve competitive advantage as well.
As there are limited number of companies who provide deodorant products with chocolate
fragrances due to which they charged more from the customers. Therefore, entering into USA
market help John lewis company with new deodorant with chocolate fragrance at much
affordable prices.
From above all elements, there are few recommendations which need to be adopted by
John Lewis in order to develop their marketing strategy through which they can communicate
customers regarding the quality, features and price of new product. It can be further understood
by following points:
 The company need to lower the price of products in order to capture large market share.
 It is essentially required for company to make products which are more unique and
valued by customers as compared to their rival's product.
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 The company should required to focus on specific niche market and also required to
identify the needs and requirements on the basis of which they should introduce new
products in market.
CONCLUSION
It has been concluded from the above project assignment report that before thinking of
launching new product into new market, the company should required to first evaluate the
internal and macro factors which affects their business operations wither in negative or positive
manner. For this, the management of John Lewis company need to conduct SWOT and PESTLE
with the help of which they can able to implement corrective actions in order to eliminate
barriers which comes in the process of introducing new product in new market. There are
different modes of entry into new market which need to be selecte4d by an organisation after
forecasting the result received in future.
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REFERENCES
Books and Journals
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Online
Porter’s generic strategies. 2018.[Online]. Available through:
<https://www.safaribooksonline.com/library/view/the-strategy-book/9781292084411/
html/40_chapter-28.html>.
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