Strategic management plan assignment

STRATEGIC
MANAGEMENT PLAN

Contents
INTRODUCTION...........................................................................................................................................3
TASK 1..........................................................................................................................................................3
P1: Applying appropriate frameworks analyze the impact and influence of the macro environment on
a given organization and its strategies...................................................................................................3
M1: Critically analyze the macro environment to determine and inform strategic management
decisions.................................................................................................................................................6
TASK 2..........................................................................................................................................................6
P2: Analyze internal environment and capabilities of business..............................................................6
M2: Critically evaluate internal environment to identify strength and weakness..................................8
TASK 3..........................................................................................................................................................9
P3: Application of five factor force model..............................................................................................9
M3: Devise appropriate strategies to improve competitive edge and market position based on the
outcomes..............................................................................................................................................10
TASK 4........................................................................................................................................................10
P4: Applying a range of theories, concepts and models, interpret and devise strategic planning for a
given organization................................................................................................................................10
M4: Produce a strategic management plan that has tangible and tactical strategic priorities and
objectives.............................................................................................................................................12
CONCLUSION ............................................................................................................................................13
REFRENCES................................................................................................................................................14

INTRODUCTION
Strategic management plan is a used to set priorities as well as strengthen the operations
of business that helps in maintaining long term relationship with stakeholders. It is basically a
framework which emphasis on achieve long term business goals by gaining competitive
advantage over its rivalries. For the better understanding of research, john Lewis ltd company
has been selected which is one of the leading companies in UK. It basically deals in food items
household product as well as apparel. This report covers following topics such as impact as well
as influence of macro environment and internal environment. Moreover, it carries application of
porters five factor model as well as application of theories, concept and models to interpret
strategic planning (Hill, Jones and Schilling, 2014).
TASK 1
P1: Applying appropriate frameworks analyze the impact and influence of the macro
environment on a given organization and its strategies
Macro environment is external as well as uncontrollable environment in an economy. The
macro environment has a dynamic nature and it is very complex, that helps in survival and
growth of the organization (Baker, 2014). Macro environment includes social, legal,
technological, economic and political environment. Proper understanding of these factors helps a
business to do well in a long run. There is various importance of macro environment like it
analyses opportunities and Threats as well as help in Growth of an organization.
John Lewis has various department stores around UK it should take care of macro
environment around it as it’s a big factor which can affect the company productivity. Macro
environment shape opportunities for the business but at the same time it also pose threats to the
company. Macro environment consist of six forces which are defined below:
Political factor: It include trade policy, tax policy, labor law and so on that directly
affect the profitability of firm.
Positive impact: Herein, John Lewis ltd operates in stable market due to which the
policies of legal authority does not changes much. For instance, the corporate tax in UK was

reduced around 28% that landed up leaving a positive impact on the strategy as well as
profitability of company.
Negative impact: As respective company operate in rising market so any political
imbalance will directly restrict the profitability.
Thus, while making strategic management decision top managers should have knowledge
of political factors such as existing rules and regulations.
Economic factor: It include various factors such as inflation rate, income, interest rate
etc. that affect the purchasing power of an individual.
Positive impact: Company need to keep that into consideration and decide price of their
product accordingly. So, the people in the environment can come to the store and purchase the
product offered by John Lewis.
Negative impact: Selected company should only think of exporting if they know the
market in which they are exporting have purchasing power (Booth, 2015). Otherwise, they may
incur heavy losses.
Therefore, analyzing economic factor significantly enhances the effectiveness of decision
making and leaves a positive impact of the business.
Social factor: Social factor includes belief as well as attitude of people that effect the
strategy of business.
Positive impact: As John Lewis mainly operates in UK, they have their outlets there.
Company while operating needs make sure that they are working while keeping societies basic
values, preferences and behavior in tag.
Negative impact: John Lewis also operates internationally so they need to respect the
culture of the country and do business accordingly. If they fail to do so then they survive in
international market.
Thus, proper study of social environment will help the company to eliminate any blunder
and work smoothly by making sound strategic decision.

Technology factor: It is very important for the company to remain updated. Having the
knowledge of the modern technology is very essential for a company.
Positive impact: John Lewis can adopt latest technology so that they can get the
competitive advantage. This will further help company to enjoy high profits for a long period.
Negative impact: Internet shopping is the biggest tread faced by retailing company that
can lower down the sales due to huge competitive pressure.
Hence, company must make strategic decision in relation to expanding its business
digitally and use updated technology to remain ahead to competitors.
Environmental factor: It include several ways to perform the business ethically in order
to attain long term sustainable development.. Thus, they make their strategy in such a manner it
does not hamper the environment.
Positive impact: Herein, John Lewis ltd may sure they make the optimum utilization of
resources, uses environmental friendly product such as wool and cotton to protect the external
environment.
Negative impact: Though company take several precautions for environment but due to
its huge size and operations its actions hamper its surrounding such as emission of carbon.
Moreover, external factor should be kept into consideration while formulating any
strategy otherwise the overall business will get affected.
Legal factor: It include customer rights, product labelling as well as safety.
Positive impact: Selected company make sure they abide by all the legal regulation such
as they follow health and safety measure for their customer. As well as they make the use of their
own renewable resource for their apparel business.
Negative impact: Though selected company depends on renewable resources but it need
to be adequately utilized as it is limited in nature (Stead and Stead, 2017).

M1: Critically analyze the macro environment to determine and inform strategic management
decisions
It is necessary to have a link between the environment and strategic decision.
Organization do get affected by external factor which are PEST. Outcome of election may affect
the strategic planning of the company, so organization should plan accordingly. Herein,
respected company should have the knowledge of the government so that they can plan after
knowing that and it will help them immensely as it can give them competitive advantage. The
PEST analysis factor provides an overview which is very important for an organization before
forming any strategy. Proper knowledge of external environment along with SWOT analysis
may help the company to do good and much clear strategic planning.
TASK 2
P2: Analyze internal environment and capabilities of business
It is vital for a company to conduct its internal analysis that include strength and
weakness as well as external analysis to identify opportunity and treat (Crawford, 2014). This
helps the company to use its advantage to face challenges and achieve long term sustainable
development.
Strength
Brand loyalty: As John Lewis ltd is one of the top retailers of UK, it has gained loyalty
of huge customers and made long term relationship with them. This has landed making it up a
successful brand.
Good financial position: As John Lewis ltd company is growing enormously by
overpowering their competitors due to which it has gained excessive capital. Therefore, this fund
is being utilized for further expansion and promotion of leading department stores of respective
company who sell enduring brands through its chains (Therivel and Paridario, 2013).
Celebrity endorsement: One of the reasons of expansion of company is that they
intensively use various promotional techniques such as celebrity endorsement. This helps the
company to retain their existing customers as well as attract potential customers to enhance the
market share of company.

Weakness
Competitive pressure: As John Lewis ltd is a strong brand due to which they have huge
competitors such as marks and Spencer therefore this affect the profit as well as strategy of the
company. Moreover, at times company has incurred low earnings ratio due to it. This, tough
competitors affect its marker.
Poor managerial incompetence: In the growing phase company faced many criticisms
related to lack of transparency and improper management system to handle its diversified
business.
Low margin: company had even cut down its profit margin by providing various goods
and service at low margin. Though this technique helped company to increase by sales or footfall
but at the same time the company received less revenue.
Opportunity
Expansion in developing country: As the company has already generated enormous
growth in developed country but on the same way they have opportunity to tap into developing
country such as Asia market. Hence, it will help company to expand its earning ration by
diversifying overseas.
Cater changing needs: the preference and taste of people change with changing time.
For instance, with the increasing in health awareness or health freak customers company must
serve large variety of organic food items (Stolzer, 2017).
Inverse in online market: with the emergence of digitalization and increase in number
of people working outside people are more keen to perform online shopping. This, company
must take advantage of it by promoting and engaging the traffic from online source.
Threat
Loose its customers due to various scandals: company faced various scandals like
some were related to its inefficient to meet dues or financial obligations. Other were related to
lack of coordination or poor corporate governance this affect the trust of customers and finally
lose its existing customers that affect the growth of company (Stark, 2015).

Existing competitors: company faced neck to neck competition with its various
competitors such as marks and Spencer as well as Tesco. This leads to the risk of substitution.
VRIO analysis of John Lewis: Such analysis is conducted to analyze the capabilities,
skill set as well as internal resources of company to provide competitive advantage. Thus, it
include various factors that help business to achieve competitive advantage.
Valuable: John Lewis ltd has huge financial resources which gives the opportunity to
business in order to expand successfully. Along with that as it include huge manpower due to
which company train them significantly as they are considered as valuable resources of
company. This has increased the retention of its existing employees by lowering down the
absenteeism rate.
Rare: The distribution channel of selected company is rare resources as it require huge
funds which every competitor cannot afford. Further, company tend to develop their customer by
giving them training as well as through extrinsic motivation. This has landed up making them as
a asset for company.
Imitable: There are various factors such as financial resources as well as patent of
company that is difficult to imitate. As existing or new competitors require to generate similar
profit to generate such resources. Similarly, business is not supposed to get a right over patent
product. On contrary, employees of company are imitable as other firms can also enhance the
skill of their employee. In that case selected company should provide better compensation as
well as opportunity to get temporary advantage.
Organization: The strong distribution channel as well as financial resources of company
must be invested in such a manner it capture huge value to gain long term competitive
advantage. Moreover, patent right give company competitive advantage among their rivalries.
M2: Critically evaluate internal environment to identify strength and weakness
It is significant for the selected company to evaluate the internal environment and the key
take away from the evaluation was the employees of company are the assets of company as they
have a huge human resource and they coordinate with each other well to achieve organizational

objective. Whereas the weakness of company is that it sells quality product at low price resulting
in less margin.
TASK 3
P3: Application of five factor force model
Porters five factor model: It includes five factor that needs to be determined by the
company to gain long term profitability (Stead and Stead, 2014).
Level of competition: As John Lewis sell wide range of goods such as food items,
apparel as well as daily utility items. Due to the high level of competition from various
competitions like Sainsbury, Marks and Spencer, Tesco and so on. Though respected company
made huge efforts to differentiate itself from the competition by placing itself as premium quality
product that is value for money. But it didn’t help company to lower down competition rate.
Further, lowering down price in apparel became a threat to company as it leads to devaluing risk.
Moreover, the financial product such as insurance and credit card competitors is bank (Ward,
2012).
Threat to substitution: John Lewis ltd faces competition for its departmental store. But
in terms of food and cloths section they does not faces major competition For instance, marks
and Spencer as well as Peter Jones company offer apparel by charging high price leads to less
competition. Whereas, threat of substitution of company like Asda is high because their
strategies are alike respective company.
Threat of new entrant: As company has already done massive capital investment and
can make the use of its economies of scale for further expansion due to which threat of new
entrants is low. Moreover, selected company has gained huge loyalty of customers by
establishing itself as reputation brand due to customers are reluctant towards new entrant.
Bargaining power of buyer: in terms of selected company the bargaining power of
buyer is relatively high as they have the choices among alternative who deals in same type of
industry. This, it is significant for company to identify taste of customer and serve them
accordingly.

Bargaining power of supplier: As John Lewis ltd is reputation as well as large company
due to which it earns huge revenue by catering large amount of existing as well as potential
customers. Hence, due to which supplier are not in state to bargain leading to low bargaining
power of supplier. However, even the supplier’s wants to build good terms with such company
perhaps they want select company's products must be placed on the shelves of retailer. Further,
as the brand has its own store so they are more depend on supplier for raw material as compare
to finished good .
M3: Devise appropriate strategies to improve competitive edge and market position based on the
outcomes
Company can focus on cutting the cost by that they can offer their product in cheaper
price as compare to their competitor, its known as cost cutting strategy (Therivel and Paridario,
2013). Herein, respected company differentiate their product via branding company can get
competitive advantage given that customer likes the brand and the quality offered by them.
another way of getting competitive advantage is bringing a new technology which were not there
in market before, by that company can get an advantage of being a first user. Analyzing the
external and internal environment and framing strategies after that may also help John Lewis to
get the competitive advantage over other companies.
TASK 4
P4: Applying a range of theories, concepts and models, interpret and devise strategic planning
for a given organization
Ansoff Matrix is used by the organization in order to adopt best suited strategy that work
in favor of company by increasing its profitability. Herein, John Lewis ltd make the use of this
matrix to select appropriate growth strategy for business. Thus, it include various strategies that
are defined below (Tascikaraoglu, Boynuegri and Uzunoglu, 2014):
Market Penetration: Within this strategy business focuses on providing existing
products at existing market. In relation to respected company majorly operate its business in its
home country so that make strategy in such a manner they can cover the whole market
uniformly. For this they take several measure to build relationship with existing customer and

moving towards untouched customer. This helps the company to cover their geographical area by
making brand loyal customer (Ansoff, et.al., 2018).
Market expansion: This strategy is prepared to cater new market by offering existing
products. Herein, respected company makes the use of its past experience as well as financial
resources generated from old market to cover new untapped market. In this case respective
company can make the use of its brand image to attract the potential customer in new market
area as well.
Product expansion: It is just opposite of market expansion. As here new product is
offered or sold in existing market. In relation to John Lewis, it has already the knowledge of
market demand, preferences of customer and most important company has the advantage of
brand positing so it is easier for them to launch new product. For instance, selected company can
expand its apparel business by providing different variety of products for various customers.
This will grab the attention of customer and finally lead to increase in profitability of business.
Diversification: This is the most challenging strategy as here totally new product is
launched it the new market due to which it is risky for business. It directly affect the profitability
as well as productivity of business. Herein, John Lewis can take the advantage of its economies
of scale or massive capital advantage to adopt diversification strategy in order to tap uncover
market before the arrival of competitor. This may give brand global success.
On the basis of various strategies John Lewis can initially start with market penetration.
Such strategy can help company to widen its market size as well as share. Further, it leads to
generation of enormous revenue for company.
Strategic management plan: Strategic management plan may include all the analysis
only after that the above mentioned company should form the strategies. They should interpret
the result of various analysis (external or internal) and only after that strategies should be form so
that there is no confusion and clarity should be their while taking any decision. Common areas to
focus on strategic planning are vision, scenario and issues planning. All the challenges should be
addressed while forming a plan and company should bank on their strengths to get the
competitive advantage (Gond, 2012).

Thus, the strategic management plan which is being prepared for John Lewis include
various aspects such as aim, vision, mission, values, strategies and tactics that are associated with
the overall growth and development of consumer by enduring its relationship with various
stakeholders. Therefore, these factors are determined below (Gond, et.al., 2012):
Aim: The aim of John Lewis ltd is to scale up the existing operations in order to serve
existing customer effectively as well as efficiently.
Strategic Objective:The objective of company is to enhance its sales by 20% within
upcoming one year (Haines, 2016).
Vision: The vision of selected company is to gain global dominance in its leading retail
industry. Company simply wants to establish global image by catering worldwide customers.
Mission: In order top achieve vision of company their mission is to provide high quality
of goods and services at affordable prices. This will help customer to gain value of money by
providing maximum satisfaction to its existing as well as potential customers.
Values: John Lewis has gained huge success because they believe in adopting proper
managerial function, transparency and suitable corp[orate governance strategy.
Strategies and tactics: Market penetration strategy is adopted by John Lewis to gain the
interest of huge population. Along with that such tactic strategy has given tough competition to
its competitors.
M4: Produce a strategic management plan that has tangible and tactical strategic priorities and
objectives
A tactical strategic refers to strategy made for day to day operation of the business.
Strategic management plan may include all the analysis only after that the above mentioned
company should form the strategies. They should interpret the result of various analysis (external
or internal) and only after that strategies should be form so that there is no confusion and clarity
should be their while taking any decision. Common areas to focus on strategic planning are
vision, scenario and issues planning. All the challenges should be addressed while forming a plan
and company should bank on their strengths to get the competitive advantage.

CONCLUSION
From the better analysis it has been determined that the company need to take care of all
the macro environment, internal as well as external before forming a strategy. A detailed analysis
of micro and macro environment will result in clearly while setting objective and strategies of
the organization. Thus, the proper knowledge of all the factors helps the organization to get
competitive advantage and confidence to employees of the company.

REFRENCES
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