Comprehensive Business Strategy Analysis of John Lewis Retail Company

This report provides a detailed analysis of John Lewis's business strategy. It begins with an introduction to business strategy and its importance, followed by an examination of the macro-environment using PESTEL analysis, considering political, economic, social, technological, environmental, and legal factors impacting the company. The report then delves into the internal environment, employing SWOT and VRIO models to assess the company's strengths, weaknesses, opportunities, threats, and core capabilities. Further analysis includes Porter's Five Forces to evaluate the competitive landscape and the Ansoff growth matrix to explore potential growth strategies. The report concludes with a strategic marketing plan designed to enhance John Lewis's competitive advantage and market position. The analysis provides critical insights into the company's strategic decisions and recommendations for future growth.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
P1 Applying appropriate frameworks analyse the impact and influence of the macro
environment on a given organisation and its strategies..........................................................1
M1 Critical analysis of macro environment to communicate strategic decisions..................3
P2 Analyse the internal environment and capabilities of a given organisation using appropriate
frameworks.............................................................................................................................3
M2 Critical analysis of internal environment.........................................................................6
P3 Applying Porter’s Five Forces model evaluate the competitive forces of a given market
sector for an organisation.......................................................................................................7
M3 Strategies to enhance competitive advantage and market position..................................8
P4 Applying a range of theories, concepts and models, interpret and devise strategic planning
for a given organisation..........................................................................................................8
M4 Strategic management plan............................................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business strategy is considered as an competitive actions of company that allows them in
attracting customers, improving their organisational performance as well as attaining
organisational goals and objectives. It also provides effective direction to company through
which they can improve their operations and also gain competitive advantage at market place
(Anwar and Hasnu, 2016). The current project John Lewis has been taken into account as it is a
large scale company offers its products and services worldwide. The company belongs to retail
sector and was incorporated in the year 1864. This report will provide description of PESTLE
analysis in order to identify impact of macro environment on company. It will also explain about
VRIO and SWOT in order to understand capabilities of company effectively. Furthermore, the
project will also cover information on Porter's five force analysis and Ansoff growth matrix for
assessing competitive environment and exploring available growth strategies for the considered
company. At last, effective strategic marketing plan will going to be developed which will allow
them in gaining competitive advantages.
P1 Applying appropriate frameworks analyse the impact and influence of the macro environment
on a given organisation and its strategies
Analysis of macro environment is identified as an essential effort that is required to be
taken by business organisations so that they can understand the market in effective manner and
also identify its impact over the company. Here, manager of TESCO has conducted PESTEL
analysis for improving their knowledge on macro environmental factors in effective manner.
PESTEL Analysis
PESTEL analysis is identified as an strategic technique that supports in exploring all
external factors which could influence organisations operation activities and business growth
(Buckley and Ghauri, 2015). In context of John Lewis, its manager has carried out PESTEL
analysis for identifying available threats and opportunities for company. All six factors of this
framework are described as below:
Political: John Lewis is UK based company which also comes under European union.
Entering into EU is not difficult as it has lower market limitations. This directly develops higher
level of competition for John Lewis as any new company can easily enter into this marketplace.
Due to This, UK government have reduced corporation tax that is from 30% to 28% which have
ultimately supported company in enhancing profitability at marketplace (John Lewis PESTEL
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Analysis, 2019). Here, it is essential for John Lewis is to develop effective strategies as the legal
norms developed by government. The main threat of this factor of John Lewis terrorist attacks.
In order to deal overcome this, John Lewis should keep a back up plan by which they can ensure
that least harm owing to adverse political state.
Economical: The result of Brexit has brought recession in United Kingdom. This have
also resulted in the fluctuation of interest rates. For managing this situation, it is mandatory for
retail companies to offer products to customers at lower price (Buckley, Burton and Mirza,
2016). Here, it is essential for John Lewis, to go for cost cutting strategy in their operational
activities so that customers could get the product at lower price only which also leads to
enhancement of sustainability of company in effective manner. The opportunity related to
economic status within UK for John Lewis is that there is a strong economic backup of this
nation which also facilitates growth because it supports them in handling rapid innovation.
Social: Social culture of United Kingdom is changing every day with the rapid speed.
This ultimately brings opportunity for the John Lewis as the company can easily grab attention
of customers by offering them highly new products and services such as fashionable cloths,
accessories etc. as per current market trend (John Lewis: competitive advantage in a tough retail
market, 2015). This will support company in influencing its sales performance. Along with this,
it will also contribute in enhancement of sustainability of this company within UK. On the other
hand, probable threat associated with the same factor is quicker access to customers with latest
fashion product earlier than John Lewis. For overcoming this problem, it is important for
manager of John Lewis to conduct some regular based research so that latest trends can be
detected by its own team in faster manner.
Technological: For John Lewis, this factor is associated with internet shopping which
was implemented by the company for main motive of reducing paper wastage and also
facilitating customers to shop at their feasible time and place (Dranove, 2016). John Lewis is
using latest tools and techniques that are helpful in managing their operational activities in
effective way. While, the major issue with the technological advanced tools and technique is that
it is quite expensive which directly places effects over financial plan too (John Lewis SWOT and
PESTEL Analysis, 2019). In order to deal with this situation, it is essential for its managers to
allot adequate amount of budget to technical department so that they can use it as per the
availability.
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Environmental: John Lewis have initiated using biodegradable packs so that they can
easily minimise contamination level from surrounding environment (John Lewis unveils
biodegradable packs, 2019). This have helped company in manufacturing various environment
friendly products and services to customers that directly influences interest of customers in
effective manner. Implementation of this directly increases budget of company which also
effects their financial performance in negative manner. It is essential for business organisation to
finalise the funds for innovative techniques in order to overcome situation of overburden.
Legal: Managers of John Lewis ensures that all organisational work in the company are
implemented in effective manner without compromising with the health and safety of employees.
Along with this, they also checks that all equipments which are used by managers are safe for
employees or not (Ghosal, 2015). And if it is not done in effective manner, there are probable
chances that company might get penalised for not adhering with the legalisation associated with
health and safety of employîs. For managing this kind of issue it is essential for John Lewis to
upgrade their knowledge on legislation at regular basis.
M1 Critical analysis of macro environment to communicate strategic decisions
The PESTEL analysis of John Lewis has expressed both the positive as well as negative
areas that are associated with macro environmental factors. In this, Brexit have placed negative
influence over operational activities of enterprise that are associated with economic and political
factor (Habib and Hasan, 2017). Also, it has been identified that, In social factor fluctuation in
consumer trends in legal factor, non adherence with legalisation, lack of effective knowledge
latest technology could be seen as adverse effect of technology factor on the growth of John
Lewis. All of these macro factors places critical impact over company. In order to overcome this,
it is essential for management of John Lewis is to develop effective strategies so that they can
deal with it in effective manner.
P2 Analyse the internal environment and capabilities of a given organisation using appropriate
frameworks
For analysing internal environment of John Lewis, the manager of this company has
carried out SWOT analysis as well as VRIO analysis for developing their knowledge on
understanding its capabilities.
SWOT Analysis:
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It is a tool that help organisations to identify its strength, weaknesses, opportunities and threats
that is internal and external factors related to business to develop strategic planning.
Strength Weakness
 Organisations has a strong image in the
market that inspire the consumers to
buy products.
 John Lewis has well settled online
existence with attractive and trending
designs.
 They maintained a good relationship
with the employee’s that encourage
them to be part of the organisation for
longer period (Lawton, 2017).
 It provides specific product range to the
customers which increases their market
share.
 The company has lack of understanding
about international business which will
degrade them in the market.
 They are also not having proper and
successful marketing strategies
(Lehmann, 2016).
 Organisation lacks in getting
competitive development at the market
place.
Opportunities Threats
 John Lewis can upgrade their existence
in the international market.
 It can also create differentiated selling
strategies to capture or attract the
market.
 They can also produce new product
range in the market (Linder and
Williander, 2017).
 John Lewis Ltd. Can increase its
demand by introducing personal labels
in precious and suitable manner.
 Introducing of new rules and
regulations in the market may create
negative impact.
 competitors such as Marks and Spencer,
ASDA, TESCO Plc. acts as a major
threat for John lewis.
 The organisation can also have threat of
collapse if they increase the business
operations according to the new and
diverse culture (Malerba, 2015).
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VRIO Model:
In order to find out capabilities of John Lewis, its top management team have opted
VRIO Model which is described as below:
Factors 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 for
temporary
basis
Employees Employees Employees Employees Employees Competitive
advantage
This framework is comprised of various resources such as global presence, employees,
products, software etc. With reference to John Lewis, all associated resources are described as
below along with their importance:
Valuable: It is identified as those elements that provides supports to business organisation in
attaining its organisational goals and objectives. The core valuable factors for John Lewis are
described as below: Global presence: The company has strong global presence across the world. This
supports them in gaining competitive advantage at marketplace. Products: John Lewis offers higher quality of products and services to customers which
the usage of latest technology (Marx, 2015). This also supports them in developing strong
customer base at marketplace.
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 Software: The company is using effective software for operating and managing their
operational activities in such a manner that leads to attainment of organisational goals
and objectives.
 Employees: John Lewis has highly trained staff who owes capability of managing
organisational work in such a manner that contributes in fulfilment of organisational
work in timely manner.
Rarity: For John Lewis, its rarest resources are products, employees, software etc. This helps
company in enhancing their sustainability at marketplace. Products: John Lewis provides higher quality products to its customers by aligning it
with latest trends. This is not possible for any rival company to offer similar kind of
product to customers. Software: It mainly uses specific software for recording its regular based business
activities that is quite rare as it uses personalised software according to their activities
(Sircar, 2015).
 Employees: Employees of this company are highly skilled who are also devoted towards
their work which contributes in attainment of organisational goals and objectives.
Inimitable: Inimitable resources for John Lewis are employees and software which are
described as below: Software: It uses personalised software which cannot be copied by any other company.
 Employees: Regular based train is provided to employees according to their
organisational work.
Organized: It is essential for John Lewis to upgrade its software so that they can attain
organisational goals and objective within the provided time frame.
 Employees: The company uses skills, competency and knowledge of its staff member
that contributes in enhancing their sustainability at marketplace.
M2 Critical analysis of internal environment
Analysis of internal factors have developed various kind of advantages for John Lewis.
From this section, it has been identified that essential resources for this company are valuable,
rare, imitable and organized. It has also revealed that this enterprise is not having effective
marketing activities switch keeps them away from reaching maximum number of audience
(Soltanizadeh, 2016). Along with this, it can also be said that the company majorly has threats
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from its competitor company which could affect their sustainability at marketplace. These
competitors are Marks & Spencer, ASDA, ALDI, LIDL and Tesco.
P3 Applying Porter’s Five Forces model evaluate the competitive forces of a given market sector
for an organisation
Porter's five force is an effective tool that is opted by business organisation in enhancing
their knowledge on competitiveness of the industry. With reference to John Lewis, it has been
analysed that its managers in conducting competitive analysis with the usage porter's five forces
analysis. This framework is consist of five forces that one by one declares that competitiveness
for the company is high or low. All of these forces are described as below in effective manner:
Threat of new entry (Low)- For John Lewis, threat of new entrant is identified as low
because the company deals in retail industry where it has already its strong position. Thus, if any
new company plans to enter into this market then it will be going to be difficult for them because
it will directly create requirement of spending higher investment in the promotional activities,
adherence of legal clause, taking permission from regulatory bodies etc. Execution of all the
stated things would not be possible for company in lesser period of time (Thomé and Medeiros,
2016). Also, it has been identified that the industry is comprised of numerous of large scale
company which grabs huge market share. Thus, it becomes difficult for new entrants to enter into
this sector in effective manner.
Threat of substitutes- Influence of this force for John Lewis is identified as high. The
company deals in retail sector which includes higher range of products and services. It has been
observed that there are numerous of companies which plans for developing substitute products in
order to gain competitive advantage. In order to overcome this situation and maintain its position
at marketplace. It is essential for John Lewis to emphasise on fulfilling core needs and
requirement of customers so that they can stay loyal with the company for longer period of time.
This will simply lead to enhancement of sustainability for John Lewis with the industry in
effective way.
Bargaining power of buyer- Buyers plays an essential role in the growth of every
business. With consideration to John Lewis, it has been analysed that bargaining power of buyer
is high for this company. It can be said that the retail industry has numerous of organisations
which offers similar kind of products and services at almost similar price. This clearly states that
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buyers have lots of option available at marketplace so if in any case if their need is not satisfied
then they will definitely switch to another organisation. For reducing influence of this force, it is
important for manager of John Lewis to modify their existing products and services according to
customers so that they can retain them for longer period of time.
Bargaining power of suppliers- Large scale companies stay connected with numerous
of suppliers who helps them in grabbing raw material. Influence of suppliers for this company is
low as John Lewis is having contacts with numerous of suppliers which supports in them in
executing their organisational activities at marketplace in effective manner. Effective market
presence of this company and bulky orders directly attracts suppliers to stay loyal with the
company for longer period of time (Weber, Geneste and Connell, 2015). This also influences
retailers on agreeing to provide high quality raw material with low prices. As a result, for
maintaining healthy longer relationship, suppliers gets agree at the provided quotations.
Competitive rivalry- Retail industry is highly competitive as there are numerous of
companies available in the industry which also raises its competition. With relation to John
Lewis, it is suggested to its top most authority to emphasise on developing their relationship with
the core competitors in order to gain benefits with one another support. The company can also
merge with its rival companies so that they can cover maximum area of market share from whole
instead increasing difficulties for one another within same sector. This collaboration will also
contribute in the growth of overall retail sector.
As per the above described explanation, it has been identified that business managers of
John Lewis are required to develop effective strategies so that the company can easily gain
competitive advantage within the same industry. This will also contribute in the enhancement of
sustainability of company.
M3 Strategies to enhance competitive advantage and market position
Ineffective marketing strategies of this company keeps them away from conveying
mission, goals, vision etc. to the targeted audience. Here, it is essential for this company to
develop rightful marketing strategies through which company could effectively aware its
customers about newly introduced products and services. This will directly help John Lewis in
enhancing its profitability of company with effective sales performance.
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P4 Applying a range of theories, concepts and models, interpret and devise strategic planning for
a given organisation
Ansoff matrix is a planning tool that helps organisations in adopting the best possible
growth strategies. In context to John lewis it is divided into four growth strategies that is market
penetration, market development, product development and diversification. The strategies are
defined below:
Market penetration : It is basically selling the existing product and services into the
existing market in order to gain high profits. In context to John lewis, organisations can acquire
this strategy by focusing on present customers in existing markets. This would help the
companies to earn more profit and increase its market share (Wu, Gao and Gu, 2015). In order to
make product or services better for their existing customers, John lewis can bring innovations in
their existing accessories, home and garden furniture. This will influence the customers which
leads to enhancement of sales performance as well as profitability.
Market expansion: It is also known as market development growth strategy. In this
strategy organisations tries to expand its market by offering its existing product or services into
the new market. The main objective of this strategy is to approach the new customers and
increase its profit and market share. With reference to John lewis, it should focus into the four
areas while adopting the market development strategy that is Existing customers, competitor’s
customers, current trends and New segments.
Product development : In this strategy, company can offer new product and services
into the existing market. In context to John lewis, the strategy require new competencies,
modified products and the knowledge about the current trends of the market in order to
differentiate it from the competitors and maximise its profit. John lewis can expand its clothing
sector in UK to grab the attention of customers and increase its market share.
Diversification: In this strategy, company offers new product into the new market and
tries to increase its market share. This strategy is riskier as compare to other strategies because it
is not always possible to get acceptance of the new product into the new market (Anwar and
Hasnu, 2016). In reference to John lewis, it is considered as expensive if product fails in the
market and will directly impact the market share and profits of the company.
By analysing all the strategies of Ansoff matrix, it has been identified that John lewis
should go for market penetration strategy. This strategy will increase its market share in the
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existing market as well as its customers in same market area. This can be done by providing
innovative products in the existing market area. It will be easier for John lewis to satisfy its
customers in an effective and efficient manner which leads to increase its sales and generation of
high profits.
M4 Strategic management plan
Top management team of John Lewis develops effective strategic management plan in
order to communicate all key aspect to its stakeholders (Buckley and Ghauri, 2015)). All of them
are described as below:
Aim: To improvise operational activities of company with already established market
zone.
Vision: To become a market leader at international level in retail industry.
Mission statement: To provide higher quality products and services to customer with
high level of satisfaction.
Values: The company is leading enterprise with possess higher brand values such as
transparency, ethics and integrity.
Goals and Objectives: The main goals of John Lewis is to maximum their sales
performance as well as profitability with broader market presence.
Strategies: Management team of John Lewis uses market penetration strategy for
enhancing its number of customers within the existing marketplace within existing offering.
Tactics: The main tactic used by this company is to offer high quality products at lower
prices for influencing customer's interest.
CONCLUSION
As per the above described report, it is concluded that every business organisation has to
upgrade its strategies in order to grow in a quicker manner. Adoption of right strategy also
allows businesses in attaining their organisational goals and objectives in effective way.
Effective SWOT analysis has allowed company in understanding its own capabilities that also
contributes in developing their market share in positive manner. PESTLE analysis has enhanced
knowledge of company in identifying major threats and opportunities that is required to be
considered by company in order to make its successful. It has also been identified that market
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penetration strategy is an effective growth strategy for company that allows them in growing
faster with minimal risk.
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