Business Strategy: Analysis of Macro and Internal Environment, Competitive Forces

This report focuses on the application of appropriate frameworks to analyze the macro and internal environment of John Lewis, a retail organization. It also evaluates the competitive forces in the market sector using Porter's five forces model.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................4
TASK 1............................................................................................................................................4
P1 Apply appropriate frameworks to analyse the macro environment for a selected
organisation............................................................................................................................4
TASK 2............................................................................................................................................6
P2 Using appropriate frameworks to analyse the internal environment and capabilities of a
selected organisation..............................................................................................................6
TASK 3............................................................................................................................................9
P3 Apply Porter’s five forces model and to evaluate the competitive forces of a selected
market sector for an organization...........................................................................................9
TASK 4..........................................................................................................................................11
P4 Apply a range of theories, concepts and models, interpret and devise strategic planning for
a selected organisation..........................................................................................................11
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Business strategy refers as the actions developed by management of an organisation for
attainment of organisational goals and objectives. The main aim behind the development of
strategy is to provide direction to the different employees of an organisation so they will able to
attain both personal and organisational targets. There are large number of benefits associated
with the aspect of business strategy towards an organisation such as competitive edge, improved
productivity, large number of future profits and improved brand image. All such benefits further
contributes in attainment sustainability in market. There is huge role of effectively developed
business strategy is expansion of organisational activities from where possible for many local
and medium size organisations to gain global position (Akter and et al., 2016). In relation to the
large organisations, this help to maintain competitive edge through combating negative impact of
various external forces and factors. The main aim of this report is also to ascertain that how
effective business strategy help an organisation to gain growth in market. The organisation
selected for carrying this report is John lewis. It is the large retail chain organisation that has
global precess due to the business operations at world wide level.
The aspects coving in this report includes application of appropriate frameworks to
analyse the macro environment for a given organisation, usage of appropriate frameworks to
analyse the internal environment and capabilities of a given organisation, application of Porter’s
five forces model and to evaluate the competitive forces of a given market sector for an

organization and usage of different range of theories, concepts and models, interpret and devise
strategic planning for a selected organisation.
MAIN BODY
TASK 1
P1 Apply appropriate frameworks to analyse the macro environment for a selected organisation
The organisation selected for carrying task is John lewis. It is the retail organisation that
has business operations in all over the world. The main aim of an organisation is to gain
sustainability within the market so able to carrying business for longer period of time. It is the
duty over management of an organisation that they focus over application of the strategies which
are perfect in nature according to current market trends. In this regard, they also have the duty to
carrying out different investigating exercises that help in determination of factors that have both
positive and negative impact over an organisational business functions. It is known to all within
business world that external factors are having major impact over business functionalities and
success or failure of an organisation also depends over same. Determination of these factors
provide an ultimate opportunity to build the strategies that will help to gain market opportunities
along with combating identified risks (Bıçakcıoğlu, Theoharakis and Tanyeri, 2019). The tool
which is bets in this regard to use is PESTLE. The application of this tool in relation to
identification of the impact of external factors on the business functions of John lewis is
presented below;
Political: This is the factor that includes the conditions which are developed with action
of government or any kind of changes that happen in respect to the nation's government. John
lewis has the business operations in UK and also have online presence in market. The UK
government has stable operations that creates opportunities for an organisation to expand
business activities successfully in local areas. Also, the nations where an organisation has
operations are developing and developed in nature along with stable government level. In this
regard, online presence of an organisation supports in fulfilment of different needs of consumers
at the expense of minimal amount of costs. Here, this will create an opportunity that focus over
improved level of physical presence. This will provide benefit in form of improved brand image
where they recognised distinctly from their competitors.

Economical: This is the factor that includes about the economic situation of a nation and
other related factors such as per capita income and flow of cash. John lewis has major operations
in UK which has strong economical presence in all over the world. This will present an
opportunity in front of an organisation that focus over expansion of business and deployment of
technologies that will attract the new potential customers towards their services. Also, the
presence in developing and developed nations provide an opportunity to gain large number of
benefits from good per capita income level of consumers. This will help to improve profit margin
along with sales figure (.González-Rodríguez and et al., 2018).
Social: This is the factor that includes the aspects related to social behaviour of
consumers towards the different features of offerings. Currently, the behaviour of individuals in
all over the world is getting of quality product and service irrespective to its associated cost. This
creates the opportunity in front of John lewis that improve the more quality of their offerings and
gain the trust of society individuals. This will not only help in improving sales figure but also aid
in building effective level of trust and long term bond. This aspect help an organisation to boost
their global sales along with distinct image where people has good qualitative perception towards
organisational offerings.
Technology: This is the factor that includes about the presence of technological aspects
within a nation. Currently, use of technology in performance of functions is on boom in all over
the world. UK is developed nation where technology is uses from large period of time. The
actual presence of technology is quite significant in UK that provides an opportunity to an
organisation like John lewis that improve their online presence through use of more effective
online platforms along with software's that improve their market presence and ease the
operations for general public. Also, this will aid aid an organisation to reduce their cost of
operations by focusing over the use of more advanced technological based operational methods.
In respect to the global operations, technological influence over the perception of consumers is
also high. Here, they prefer to attach with the organisation that has good level of technological
working. This provide an opportunity to an organisation that build their name in same aspect and
gain competitive edge (Holotiuk and Beimborn, 2017).
Legal: This the aspect that covers about the legal rules and regulations exist in nation
where an organisation has business operations. John lewis is multinational organisation that has
business operations at global level. All the different nations have different legal laws and

regulations related to employment and business operations. This creates the threat for an
organisation as difficult for them to analyse and understand the different nations legal
requirement along with their fulfilment. In case, if the not able to fulfil then going to face the
negative consequences that diminish the brand image of an organisation in market. Here,
management of an organisation has the obligation that develop business strategy through which
they bale to manage the business operation perfectly so able to gain the positive contributions
only.
Environmental: This is the factor that includes the aspects such as environmental
concerns of society and the impact of business operations in environment of a nation. In the
current period of time, all the different nations and society are very much aware about the
environment and wants that nothing will exist in such manner that has harmful impact over their
environment. Here, such strictness of governments will create threat for an organisation that have
to focus over their management of operations in environment friendly manner otherwise have to
face the negative consequences in future. Now, organisation has the opportunity to focus over the
performance of online functions more as this will not only help to save the environment but
expands the reach too. The other benefits of same will be ascertained in the form support of
government and society (Leonidou and et al., 2017).
TASK 2
P2 Using appropriate frameworks to analyse the internal environment and capabilities of a
selected organisation
In exercise of the developing perfect business strategy, there is huge need for internal
analysis along with capabilities. This will provide an opportunity in getting of the information
about internal strengths and weaknesses along with resources. Only determination of the external
factor is not satisfied because without information of internal resources not possible to made best
tailored approach according to the organisational requirement. Effective evaluation of internal
organisational aspects and their integration with external conditions is important in direction of
building best business strategy that further aid in accomplishment of goals and targets. SWOT is
the best too in respect to analyse the organisational internal strength and weaknesses. This has
another advantage where it provide the information about the external opportunities and threats
too (Soltanizadeh and et al., 2016). On the other hand, VRIO is the best tool in direction of

analysing an organisation current level of resource capabilities. The application of both is
presented below in related to John lewis;
SWOT
Strength
 John lewis has strong brand image in market due to the offering of high quality products
along with usage of advances technology in offering of their operations.
 John lewis has effective level of online presence in market that provides an opportunity to
organisation that attract large number of customers distinctly from the other competitors
those have physical presence in market.
Weaknesses
 The organisation has low level usage of marketing plans. This was the reason that unable
to build unique image in market where consumers will recognise differently from their
competitors on the basis of design or features.
 Organisation not provide over emphasis over the application of effective initiatives that
resultant into low level of power to grab existing and potential market opportunities
(Ukko and et al., 2019).
Opportunities
 There is huge opportunity in front of organisation tat expand their business in various
different locations where they don't have business with the aid of existing good brand
name in industry and online operations.
 Organisation has effective managerial capability that aid in development of effective
marketing plans through which they can gain the effective presence in market.
Threats
 There is large amount of competition in retail industry where large number of players
exist and having large amount of business operations such as ASDA, LIDL and ALDI.
 There are huge number of close substitute products exist in market so any kind of issues
or change in any aspect will lead direct negative over their sales and customer base (Yuan
and et al., 2018).
VRIO
Resources Valuable Rarity Inimitable Organized What is the
result?

Global
presence
Global
presence
- - - Competitive
Disadvantage
Products Products Products - - Partially
competitive
Software Software Software Software - Competitive
advantage on
temporary basis
Employees Employees Employees Employees Employees Competitive
advantage
Valuable
Global presence: This is valuable for an organisation has help to improve market base
along with attraction of the large new potential consumers.
Products: The products of this organisation is also valuable as it offers qualitative
products which are effective in direction of building and holding of trust and long term relation
with consumers.
Software: Different number of software's are using by an organisation to perform
actions. They valuable as huge role in elimination of errors that will must present in case
performing with the aid of humans.
Employees: These are assets of an organisation and valuable as they able to optimally
utilise the resources of an organisation.
Rare
Products: Some products of the organisation are rare because of the existing diverse
portfolio of an organisation.
Software: These are rare because using those which are top of the level according to
industry standards. So, no possible for everyone to use the same due to their expensive nature.
Employees: These are rare because they have unique skills which is rare to have by
others or use in the same way they are using within an organisation.
Inimitable

Software: Some of the software's of an organisation are inimitable because these are
unique and technology based that developed inside the organisation by technological teams.
Employees: These are inimitable because not possible for the outsiders to copy the skills
of other employees. Skills were gained by an individual with the aid of their own competence
and knowledge. So, not possible for anyone to copy the same (Yuliansyah, Gurd and Mohamed,
2017).
Organized
Employees: This is the only resource that organised and using by an organisation
perfectly. This depicts that it will be used by an organisation effective in all situations integrally
with all other resources presented above.
It is ascertained from the above analysis of the resources that an organisation have
effective number of resources that are successfully working in direction of success. These all
help an organisation to complete their work and perform actions in determined manner so they
able to grab the opportunities along with attainment of organisational objectives. The only
resource which perfectly fulfil all criterion of VRIO is employees of an organisation. These are
such assets of an organisation that aid in every kind of situation to get goals by integrally helping
every other resource in its own effective performance. So, focusing over employees help an
organisation to gain competitive edge along with sustainability.
TASK 3
P3 Apply Porter’s five forces model and to evaluate the competitive forces of a selected market
sector for an organization.
It is a framework in which helps the organisation in ascertaining the competitive forces
which it is surrounded. Through this the organisation can make the required strategies and
business plans. This model was propel by Michael Porter in which he has mentioned around 5
forces which can put impact upon the operations of any businesses. The Porter's five force model
of the company, John Lewis is as follows:
Competition level: The level of competition which is faced by this industry is very much
huge as the degree for rules and regulations for this industry is very much low so this enable free
entrance and exit. As it has no such restriction, the organisation faces major cut throat
competition into the market (Pham, Pham and Pham, 2018.). Retail industry faces a large

competition from other competitors. There are huge rivals available for the company which
creates the burden for the company. Major competitors for the company are tesco, sainsburry,
Asda, Next and so on. To eliminate such risk the company has to come up with various
innovative and creative services and products which enable the company in gaining the
competitive advantage.
Threat of substitute: As the company faces a huge competition from many brands or
company, the threat for getting substitute for its products also can possible. The other company
can produce the same product or services which offers the same features to the customers with
low in its prices. And when the customer gets aware that they are getting the same product which
is offering the same services of different company and also that product is available in the lower
prices. To eliminate this element the organisation has to bring up innovative and creative
products on a regular basis.
Threat of new entrant: As the industry has very low degree of rules and regulation
about the entrance and exit of the company, any company can start its business into this industry.
The organisation, John Lewis faces many burden through this as they are loaded with increase in
number of competition into the industry. This factor does not work in favour of company as the
company has to face a lot of competition from other companies.
Bargaining power of buyers: The bargaining power of buyers is very prominent into the
industry. As there are variety of opinions available to the customer, through which the customers
can shift their purchase from this company to another when they find the same product is
offering by another company in low prices. Therefore the bargaining power of the buyers are
very high in this industry (Ransbotham and et. al., 2017). The customers can easily get shift from
one company to another.
Bargaining power of suppliers: The suppliers have the low degree of control upon the
terms and conditions they have. As the company John lewis has the number of suppliers
available with them, they easily can shift their suppliers of they feel that these are very costlier
for the company. And the company has many opinions available for their suppliers which gives
very low power to the suppliers.

TASK 4
P4 Apply a range of theories, concepts and models, interpret and devise strategic planning for a
selected organisation.
There are different theories and models that will assist in developing effective and efficient
planning. It is crucial for respective company to develop and create accurate strategic plan that
will lead to support in performing business activities successfully (Amran and et.al., 2016).
Strategic planning can be describe as the procedure that is developed and created in order to use
all resources of business in correct and accurate manner as well as developed creative plan of
action for performing business activities in significant manner. John Lewis company is dealing in
highly competitive market area so it is important for this company to create and develop
effective strategic plan. This plan will lead to provide direction and guidance to employees for
performing organisational activities in more accurate manner. For developing proper strategic
plan respective company needs to consider different models and framework. Various concepts
and models for developing effective strategic plan is mention below -
Ansoff Matrix
This is consider as an effective model for developing and creating most effective business
strategy. Ansoff matrix is developed in order to provide support to company for determine which
market area to tap and which strategy to consider for enhancing organisational activities. This
model will support John Lewis organisation to determine different opportunities to business by
considering current or new products and market area. This model includes four major strategies
which is based on market or products of respective company. Ansoff matrix in context of John
Lewis is mention below. Market penetration – This strategy can be describe as the business action plan in which
organisation is selling its current products or services to existing market area. Market
penetration business strategy is consider as one of the most effective and easy strategy as
it is more safe for company. In this strategy, John Lewis company will try to attract
current customers and increase sales of business.
 Market development – It refer as the strategy in which company is focusing on
introducing to new market area by providing its current products and services (Bharadwaj
and et.al., 2013). Market development is effective business strategy that will support
business in entering new market area and increase customer base. In it crucial for

organisation to determine market area which require products and services that is offered
by respective company. Product development – This business strategy refers to providing new and innovate
products and services to customer. In this strategy John Lewis company will offer
different products to existing customers (Gilligan and Hir2013). For adopting this
business strategy respective company will identify and determine needs and wants of
customer. This will help in developing and producing products which is as per the needs
of customers.
 Diversification strategy – This strategy refer the organisational plan in which company is
planning to offer new products and services to new customers. Diversification business
strategy is consider as most risky business strategy as in this company is planning to tap
into new market area with new products or services.
Thus, for John Lewis company market penetration will be most suitable business strategy as
in this company will be able to attract its current customer base and offer existing products and
services. This strategy will be significant in accomplishing objective of respective company as
well as increase sales of organisation.
Porter’s Generic model
This model is developed with the purpose of providing support to company for identifying
firms position in market area. John Lewis organisation will be able to determine what is the
firm’s profitability as compare to average of the industry. This model includes different
strategies and this model in respect to John Lewis company is mention below –
 Cost leadership – This business strategy can be describe as approach that is consider by
company for attracting large number of customers towards the business. John Lewis
needs to offer products and services at the lowest cost as compare to other rival
companies. In this strategy company will not minimize the quality of products but offer
high quality products at lower rates.
 Differentiation – It refer the developing and creating different products in market area.
Differentiation business strategy will lead to support in send unique and creative products
to customers in more to meet with their needs and requirements (Johnson, 2016). John
Lewis organisation needs to research about the wants and requirements of potential
customer for offering differentiate products and services.

 Focus – This will be effective business strategy if organisation is providing its products
and services to small group of customers. John Lewis is currently targeting larger market
area in order to sale its products.
Therefore, cost leadership will be correct and accurate strategy for organisation in more to
meet increase sales and profitability.
 Aim - The aim of John Lewis company is to develop business activities in different part
of the world and increase sales or profits of organisation.
 Vision – Vision statement of John Lewis organisation includes becoming the leading
company in market area and meeting with the needs of customers.
 Mission statement – Mission of John Lewis company to provide high quality products
and services which is significant in order to meet with the needs of customers.
 Goals and Objectives - John Lewis Company has developed both short term and long
term goals which is significant for providing guidance to employees to performing
organisational activities. Short term goal of this company is to enhance the quality of
products and services provided to customer. Where as the long term goals of respective
company is to develop strong brand image in market area are full filling the needs of
customers in more creative manner.
 Strategies – Strategy which is used by respective company to attain objective is market
penetration. This will be effective business strategy for increase sales or profitability of
organisation.
 Tactics – There are different approaches and tactics used by company in order to increase
sales and profitability of company in market area. This organisation needs to use different
tools and technology for promoting its products and services for attracting customers.
Cost leadership tactical approach needs to be used by John Lewis company while
offering its products.
CONCLUSION
It has been concluded from the above report that there is huge need of developing
effective business target as this is the way that help an organisation gain success in market. There

numerous number of benefits that can be gained by an organisation through the development of
effective business strategy includes competitive edge, improved productivity, large number of
future profits and improved brand image. It is effective aspect for all small, medium and large
organisation. The impact ascertained by all of them will be different. This is so because aim of
all is different for working in market. Development of effective business strategy is not easy
task. This includes the assessment of external and internal environment along with conditions in
industry. PESTLE is the effective method that will help an organisation to get information about
external forces along with determining their positive or negative impact over organisational
functioning. SWOT analysis is another effective tool that will help an organisation to get
information about internal sources along with external threats and opportunities. The futuristic
benefit of the same will be ascertained as effective business strategy through which an
organisation able to get their targets. Porter five forces is the effective tool in relation to getting
information about industry. The impact of same will be gained by an organisation as ascertaining
power of different industry determinants towards an organisation.

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