Business Strategy Report: Analysis of John Lewis's Environment

This report provides a comprehensive analysis of John Lewis Ltd., a prominent player in the British retail industry. It begins with an overview of the company, its history, and current operations, followed by a detailed SWOT analysis that identifies its strengths, weaknesses, opportunities, and threats. The report then applies Porter's Five Forces model to assess the competitive landscape, examining factors such as competitive rivalry, bargaining power of suppliers and buyers, and the threat of substitutions and new entrants. Furthermore, a PEST analysis is conducted to evaluate the political, economic, social, and technological factors influencing the organization. The conclusion synthesizes the key findings, highlighting the company's challenges and opportunities within the dynamic UK retail market. The report leverages strategic tools to provide a thorough understanding of John Lewis's business environment and strategic positioning.

Running head: BUSINESS STRATEGY ASSIGNMENT
Business Strategy Assignment
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction:...............................................................................................................................3
Overview of the selected company:...........................................................................................3
SWOT Analysis:........................................................................................................................4
Strengths of John Lewis Ltd.:................................................................................................4
Weakness of John Lewis Ltd.:...............................................................................................4
Opportunities of John Lewis Ltd.:.........................................................................................5
Threats of John Lewis Ltd.:...................................................................................................5
Porter’s Five Forces Analysis:...................................................................................................6
Competitive Rivalry: High.........................................................................................................6
Bargaining Power of the Suppliers: Moderate.......................................................................6
Bargaining Power of the Buyers: High..................................................................................6
Threat of Substitutions: High.................................................................................................7
Threat of New Entrants: Low.................................................................................................7
PEST Analysis:..........................................................................................................................7
Political effect on the organization:.......................................................................................7
Economic effect on the organization:....................................................................................8
Social effect on the organization:...........................................................................................8
Technological effect on the organization:..............................................................................8
Conclusion:................................................................................................................................8
References:...............................................................................................................................10

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Introduction:
The paper discusses regarding the business environment of a chosen organization in
the form of John Lewis Ltd. Which is popularly known as John Lewis and Partners in the
British retail industry. The paper analyses the internal and the external environment of the
selected organization with precise application of the PEST and SWOT strategic tools. The
paper includes the analysis of the macro-environmental factors of the selected organization in
order to elaborate the business environment that surrounds the selected organization. In
addition to this, the paper includes the assessment of the Porter’s Five Forces model for the
effective elaboration of the level of competition that the selected organization faces from the
competitor organizations in the British retail industry.
Overview of the selected company:
The chosen organization for the paper is John Lewis Ltd. and the organization
operates in the retail industry of Britain. The organization is able to establish a strong
presence in he mentioned industry with the formation of a chain of high-end departmental
stores and operating them across the various regions of the mentioned nation. The company
was established in the year 1864 by John Lewis (Johnlewis.com. 2019). The organization is
observed to open more than 51 number of outlets across the nation and that enables the
organization to operate in an efficient manner in providing quality household products to
their customers. The current headquarter of the selected organization is seen to be in London.
The company is currently led by the duo of the finance director of the organization and the
managing director of the organization in the form of Bérangère Michel and Paula Nickolds
respectively (Johnlewispartnership.co.uk 2019). Apart from this, the company currently
employs 38100 number of employees and the entire business operations of the selected
organization is controlled by the parent of the company, John Lewis Partnership. The selected

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organization is able to increase their revenue to £ 3.78 billion in the year 2017 and one of the
major reason responsible for the significant growth is evaluated to be the urge of the
organization in improving the services of the employees of the organization and the quality of
the products that the selected organization serves to their customers in the Britain
(Johnlewis.com. 2019).
SWOT Analysis:
Strengths of John Lewis Ltd.:
The selected organization is one of the very few upmarket retail store available in the
United Kingdom business market.
The selected organization provides a wide range of the brands for their customers to
choose from and along with that, the customers have the option of buying from the
company’s brand as well.
The company has significant facilities in the form of the international delivery and
along with that, the skills of 38100 number of expert professionals is considered to be one of
the strong points for the selected organization (Johnlewispartnership.co.uk 2019).
Apart from that, the company is able to create significant amount of value for their
customers through its policy of “Never Knowingly Undersold”.
Weakness of John Lewis Ltd.:
One of the major characteristics that has the potential to help the business operations
of modern supermarkets is seen to be to their amount of offerings. In the modern business
world, the customers are observed to have diversified requirements which for majority of the
business organizations, are tough to meet (Oh, Sohl and Rugman 2015). The absence of the
sufficient products that can meet the diversified requirements of the selected organization is

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seen to affect the selected organization as well. The number of products that the selected
organization offers to the customers is largely limited in comparison to the other
supermarkets and that restricts the mentioned organization from retaining their customers.
Opportunities of John Lewis Ltd.:
The target group of the selected organization is expanding in a significant manner and
that is pretty evident with the increment in the number of the young professionals living away
from their home.
With a precise focus on the increasing demand of the household products that the
selected organizations serves to their customers, the company has the possibility of increasing
their sales and revenue in a significantly efficient manner.
Apart from this, the much required increment in the product chain of the selected
organization has the potential to increase the company’s reach to the customers (Cavallo,
Cruces and Perez-Truglia 2017).
Threats of John Lewis Ltd.:
The organization is subjected to significant amount of competition from the local
grocery stores, corner stores and supermarkets such as Tesco, ASDA group and Marks and
Spencer.
The company is expected to be affected in a significant manner due to the absence of
the large scale infrastructural development for increasing their space.
The increasing labour and employment charges is expected to be a major concern for
the selected organization going forward.

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Porter’s Five Forces Analysis:
Competitive Rivalry: High.
The selected organization is seen to serve considerable number of products that are
subjected to intense competition from the UK retail market giants such as the Tesco, ASDA
group, Sainsbury and Marks and Spencer. Along with this, the company is facing intense
competition in the clothing section from the competitor organizations such as the Next, Zara
or Topshop (Next.co.uk 2019).
Bargaining Power of the Suppliers: Moderate.
With a precise focus on the impact of Brexit on the business operations of the
organizations operating in the retail industry of UK, it is pretty evident that the availability of
the international suppliers is a major concern for majority of them. However, the suppliers
available in the retail industry of the nation are seen to have the quality of accurate supply, on
time supply and provides the materials at a considerably affordable prices. Many of the
suppliers are even ready to provide discounts to the organizations on bulk purchases and that
makes sure that the bargaining power of the suppliers in the industry is moderate.
Bargaining Power of the Buyers: High.
With a precise focus on the business operations of the competitor organizations such
as Tesco, ASDA group, Sainsbury and Marks and Spencer and their capability of introducing
quality products along with the application of the competitive pricing, the customers of the
modern UK retail industry is observed to have considerable number of options to choose
from. Apart from this, the significant product offerings of majority of these organizations is
playing a crucial role in enabling the customers for achieving the products of their
preferences.

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Threat of Substitutions: High.
As mentioned earlier, the retail industry of United Kingdom has considerable number
of organizations with application of different pricing policies and with the quality of
providing the products that meets the diversified requirements and the preferences of the
customers. Companies such as Zara or Marks and Spencer are seen to have the capability of
delivering the quality in their products and at the same time, majority of the organizations
operating in the retail industry of the nation is seen to apply the low pricing strategy which
makes the products affordable for the customers (Gauri 2013).
Threat of New Entrants: Low.
The requirement of the significant investment for the setting up the needed
infrastructure is seen to be a major concern for many of the new organizations in entering the
retail industry of UK. Apart from the concern regarding the investment, the high level of
market share of majority of the organizations such as Tesco, ASDA group, Sainsbury and
Marks and Spencer is one of the major threat that is restricting the new organizations from
entering the market.
PEST Analysis:
Political effect on the organization:
The UK retail industry is observed to be affected with the impact of Brexit in a
significant manner and that is pretty evident with the lack of international suppliers in the
nation. The national government of UK is seen impose considerable number legislations as an
impact of Brexit over the business operations of the international organizations and along
with that, Brexit is observed to create a significant vacancy of the skilled labours inside the
nation (Fernie and Sparks 2018).

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Economic effect on the organization:
The impact of the recession on the business operations of the retail industry is seen to
be under control and along with that, the expected global sales of 30 trillion US dollars by the
year 2020 is pretty significant in defining the stability of the industry (Retaileconomics.co.uk.
2019). However, the economic turmoil in Europe is seen to have the potential of affecting the
business operations of many of the organizations operating in the industry.
Social effect on the organization:
The effective achievement of the preferences of the customers is seen to be the main
concern for the organizations operating in the industry and that is pretty evident with the
increasing urge of the leading organizations in the effective achievement of the preferences of
the customers and in designing their products in accordance to customer requirements.
Technological effect on the organization:
One of the significant inclusion of the technology in the business operations of the
organizations operating in the retail industry of UK is seen to be digital catalogue (Pantano
2014). With a precise understanding of the necessity and the acceptance of the technology
amongst the people of the modern generation, the inclusion of the digital catalogue has
significant potential of getting appreciated by the customers.
Conclusion:
It is visible that the scope of achieving the products of the diversified brands along
with the service excellences of the employees of the mentioned organization is one of major
strengths of the selected organization. However, the company is observed to face
considerably high bargaining power of the customers owing to the presence of considerable
number of companies capable of providing quality materials at cheaper rates. Apart from this,
the human resource management department of the selected organization is seen to face

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notable amount of difficulty in the recruiting efficient employees in the region owing to the
detrimental impact of the Brexit. In addition to this, the economic turmoil in the region has
affected the performance of the company in a significant manner as the purchase intention of
the customers in the region is seen to be limited.

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References:
Cavallo, A., Cruces, G. and Perez-Truglia, R., 2017. Inflation expectations, learning, and
supermarket prices: Evidence from survey experiments. American Economic Journal:
Macroeconomics, 9(3), pp.1-35.
Fernie, J. and Sparks, L. eds., 2018. Logistics and retail management: emerging issues and
new challenges in the retail supply chain. Kogan page publishers.
Gauri, D.K., 2013. Benchmarking retail productivity considering retail pricing and format
strategy. Journal of retailing, 89(1), pp.1-14.
Johnlewis.com. 2019. John Lewis & Partners. [Online]. Available at:
https://www.johnlewis.com/
Johnlewispartnership.co.uk 2019. John Lewis Partnership. [Online]. Available at:
https://www.johnlewispartnership.co.uk/
Next.co.uk 2019. Next Official Site: Online Fashion, Kids Clothes & Homeware. [online]
Next.co.uk. Available at: http://www.next.co.uk/
Oh, C.H., Sohl, T. and Rugman, A.M., 2015. Regional and product diversification and the
performance of retail multinationals. Journal of International Management, 21(3), pp.220-
234.
Pantano, E., 2014. Innovation drivers in retail industry. International Journal of Information
Management, 34(3), pp.344-350.
Retaileconomics.co.uk. 2019. Retail Economics: Market leader for Retail Insight ǀ Data ǀ
Analysis | Retail Economics. [online] Available at: https://www.retaileconomics.co.uk