Business Strategy Analysis and Evaluation for John Lewis Ltd

This report provides a comprehensive business strategy analysis of John Lewis Ltd, a major player in the retail industry. The analysis begins with an introduction to business strategy and its importance, followed by an overview of John Lewis Ltd. The report then delves into the macro and micro environmental factors affecting the company, utilizing PESTEL, SWOT, VRIO, and Porter's Five Forces models to assess the external and internal environments. The PESTEL analysis examines the political, economic, social, technological, environmental, and legal factors influencing John Lewis. The SWOT analysis identifies the company's strengths, weaknesses, opportunities, and threats. The VRIO model evaluates the company's resources and capabilities in terms of value, rarity, imitability, and organization. The Porter's Five Forces model assesses the competitive intensity within the retail sector. The report concludes with an evaluation of the company's strategic position and its ability to navigate the complexities of the retail market. This assignment demonstrates the student's understanding of strategic management concepts and their application to a real-world business context.

Business
Strategy

INTRODUCTION
Business strategy is defined as a technique or tool through that a firm can develop or
create plans and strategies of high level for attain goal as well as target in successful as well as
efficient style (Alsudiri, Al-Karaghouli and Eldabi, 2013). By this company is also able to gain
various advantages for example enlargement of business operations and functions, competitive
advancement, increase in financial position and customers bases and many more. Organisation
that is selected for this assignment is John Lewis Ltd. Which is founded by John Spedan Lewis
in year 1929. Its headquarter is at Oxford Street, London, United Kingdom and the respective
company is operating its business at industry of retail. Products offer by respective company are
watches, clothing, giftware, jewellery, furniture, food, cosmetics, beddings and many others.
Topics which are going to be discussed in this report are analysis and evaluation of market on
micro as well as macro environmental element. Moreover, it mentioned strategic plan of action
in order to evaluate environment evaluation.
TASK 1
P1
If a company want to operate as well as run their business operations in appropriate
manner they need to evaluate its macro environment factors by which they are able to know
external factors which affect this organization. John Lewis Ltd conduct PESTEL analysis which
help them in evaluating as well as analysing their macro environment factors.
PESTEL Analysis - It refers to technique which is use to analysis external or macro factors
of an organisation which help them in developing strategies accordingly as well as effectively.
There letters stand for Political, Economic, Social, Technological, Environmental and Legal.
Description of PESTEL analysis in respect of John Lewis Ltd is mentioned below- Political: Respective company decide to come in into United Kingdom market part of
European Union. In Europe marketplace obstruction or limitation is very less due to
which companies can enter into market easily, which is seems as competitors for John
Lewis Ltd. Due to this government of UK take decision to reduce corporation tax from
30% to 28 % which is helpful for respective company to enhance profitability in future
basis (John Lewis PESTEL Analysis, 2019). By adopting political factor in effective
manner respective company is able to conduct their business operations and functions in

effective and appropriate manner. But rules and regulation of government change
according to requirement due to which John Lewis Ltd also have to develop strategies
accordingly. Economical: United Kingdom economic is dealing with recessions due to which
sensitive situation occur for changing interest rate. In order to deal with this situations all
companies of retail sectors needs to offer products and services at low price to their
customers (Bharadwaj and et. al., 2013). This situation also influence business and
operation of John Lewis Ltd, they also have to reduce their price of products and offer
discounts to customers most of time. When John Lewis Ltd develop products accordingly
they able to attract more customers with their pricing strategy. But it is very difficult for
respective company manager to change strategies accordingly. Social: Social culture and lifestyle of society change on the regular basis which is
opportunities for a business to attract customers by offering new products and services.
That helps a company in increasing their customers bases and profitability. John Lewis
Ltd introduce and offers new and trendy products in order to attract and please customers
in effective manner. By this company able to introduce new products according to change
in trends and demand of customers in order to enlarge their customers bases and
profitability. It is also threat for a company to develop or make changes according to
competitors, otherwise customers shift to another company. Due to this factor currently
respective company able to develop products and services in effective manner according
to changing demand of society. Technological: It is define as method which is adopted by a company in order to conduct
their operation and functions in effective manner. In regards of John Lewis they adopt
online process or shopping offer which help them in reducing waste of paper. It will
attract customers too and encourage them to shopping any where as well as at any time.
Along with this respective company also adopt advance technology that leads to
accomplishment of products with effective time as well as quality. But there is some side
effect of this like adopting new technology may hamper on this company budget. They
also change or update their process as well as they also need to provide training to
employees.

 Environmental: Now a day many retail company taking step for making environment
cleans. John Lewis Ltd adopt technology and strategies for reducing their carbon
footprint (PESTEL Analysis of John Lewis, 2019). Along with this they use recyclable
papers and energy in order to reduce pollution from environment and make it effective.
By this company able to develop products which is more skin friendly and environment
friendly in order to attract more customers. But due to this John Lewis Ltd have to invest
more money in adopting these techniques.
 Legal: It is one of the essential factor which a company need to follow or adopt so that
they can conduct their business operation effectively. In regards of John Lewis it is
responsibilities of their manager to insure that their all employees should follow each and
every legislation. Along with this, they also insure that they consider health and safety act
while conduct manufacturing process, it is essential for both employees as well as
customers. They also ensure that all the equipments used in process should be in effective
condition which will leads to ensuring safety of employees. On the other hand it also
have some limitation like legal bodies change rules and regulation at continuous basis
due to which company also need to change their process as well as policy accordingly.
TASK 2
P2
For analysing internal environment John Lewis Ltd conduct SWOT analysis and VRIO
analysis, by this they also able to know their capabilities in effective and efficient manner.
SWOT Analysis:-
Strength Weakness
 This company has its strong brand
presence which attract customers and
encourage them to purchase products.
 This organisation have high online
presence with attractive as well as
treading designs.
 They develop and maintain effective
and efficient employee’s relation in
 John Lewis Ltd lack behind in
international business experience.
 They are also lacking in effective and
appropriate marketing strategies (John
Lewis SWOT Analysis, 2019).
 Respective company is also lacking in
competitive advancement at a market
place.

order to motivate and retain them for
long run.
 Respective company offer executive
and treading products ranges to
customers.
Opportunities Threats
 It is opportunity for respective
company to enlarge their business
operations at global marketplace.
 They can also design as well as develop
new, creative and unique selling
strategies or proposition.
 Respective company can also develop
new ranges of products and services.
 John Lewis Ltd can expand or grow
demand by developing private labels in
effective and appropriate manner.
 The respective company may also face
negative impact of government
legalisation.
 Respective company operate art global
level due to which they have various
competition such as ASDA, TESCO
and so on.
 Respective company also have threat of
failure if they expand in new and
different culture.
After conducting SWOT analysis for evaluating micro environment factors John Lewis
Ltd do VRIO model in order to identify company capabilities.
VRIO Model:- This model use by an organisation in order to identify and evaluate its
capabilities. Through this which company identify their vision statements and decide objectives,
analysis internal and external analysis and many more (Eaton and Kilby, 2015). Evaluation of
VRIO model in context of John Lewis Ltd is given below:

To identify capabilities John Lewis Ltd decide to analysis four factors that are global
presence, products, software as well as employees.
Valuable: It refers to those factors which are valuable for an organisation and by which
company is able to attain goal as well as target in impressive and effective style (Iacob, Quartel
and Jonkers, 2012). Valuable factors of John Lewis Ltd are- Global presence: John Lewis is present at worldwide which will help them in attracting
more and more customers. That will leads to gaining high profitability ratio and market
shares. Products: Products which are offer by this company are of good quality with latest trends
designs which attract customers on huge basis. Software: It refers to software which is use by John Lewis Ltd in order to manage and
operate there function in effective and safely manner.
 Employees: It refers to staff who help respective company in attaining goal and
objectives in effective and efficient manner.
Rarity: It is define as a factors of an organization that are consider as rare and due to which
company gain competitive advancement at a market place(Jocovic and et. al., 2014). In context
of respective company worldwide existence is not rare because there are various other companies
in marketplace who have equal global presence. Rare produce is -

 Products: Products which are offer by respective company are of best quality and
according to latest trends. So it is hard for any other competitive company to copy it in
effective manner. Software: It define as software which is developed as well as use by John Lewis Ltd in
order to maintain records and software in secure manner and it is rare because it is
develop according to need of company.
 Employees: Staffs at respective company are consider as rare resources because every
employees have their own skills and knowledge which help them in conducting work in
appropriate manner and achieve target in impressive style which enhance company's
profitability and market shares.
Imitable: It refers to those products and services which are not imitable or copy by an
competitive company (Lawton, 2017). In context of respective organisation products are not
imitable because it can be copied by any other in order to gain competitive advancement. There
are some factors which are not imitable- Software: Software which is use by respective company are develop by respective
company according to their need so it is hard to copy for any competitive company.
 Employees: It refers to effective and efficient staffs of John Lewis Ltd which cannot be
copied by any company in order to attain goal and objective in effective manner.
Organized: It refers to those factors which needs to organized in very little aspects and it help a
company in order to attaining goal and objective in effective manner. Software of John Lewis
Ltd need to be organised on time to time basis.
 Employees: It is those factors which only need to be organized when any change occur
in an organization. Such as employer plan training and development activities in order to
attain goal and objectives in effective as well as efficient manner.
TASK 3
P3
Porter's five forces model refers to a tool that is use by a company for evaluating and
determining level of competition at a marketplace. By this analysis manger and leader of an
organisation is able to develop strategies and plans in effective manner (Li and Tan, 2013).
Moreover, through this company is able to enhance their profit as well as customers bases.

Mainly it is based on operations, structures, products and services, work conducted and many
more. John Lewis Ltd conduct market evaluation by using porter's five force model, whose
explanation is given below: -
 Threat of new entry- It refers to situation which consist of how easy a company can
enter into a particular marketplace. If that particular industry is profitable and has very
few or little barriers and legislation, then huge companies and enterprise want to establish
and expand their business operation in that particular industry. In context of John Lewis
Ltd threat of new entry is low this is because it is not possible for new company to build
themselves like respective company in less time duration (John Lewis -- the five
competitive forces, 2019). Respective company is also consider in top 10 retail company
at United Kingdom marketplace.
 Threat of substitutes- It refers to condition when there is huge availability of same
products and services which is offer by a particular company. In this there is threat of
buyer switching from own company to another, where they get quality products at low
price. In this case power of buyers is high when they find more substitutes of a particular
products. In context of John Lewis Ltd threat of substitutes is low because there are vary
less company who offer quality products at affordable price which attract customers.
 Bargaining power of customers- It is a condition when a buyer has power to ask for
quality products at low price. This can be possible when there are various substitutes of a
product is available. In this production of an organisation get affected, when they
manufacture products at low price then customer’s expectation get affected and if the
product quality products and sale it at low price then profit of that company get
influenced. In respect of John Lewis Ltd bargaining power of customers are high because
there are companies at marketplace which offer same products and services in effective
price. Due to which company has to develop strategies and products which is more
attractive and effective.
 Bargaining power of suppliers- It refers to a situation when there is less suppliers of a
particular products and services at a marketplace. In this situation power of suppliers is
high and if there are more suppliers then power of supplier are low (McGrath, 2013). In
this situation supplier can ask more money for low quality products due to which
production cost of a company get affected. In respect of John Lewis Ltd bargaining

power of suppliers is low because there are very few suppliers with whom respective
company supply there products. Along with this management of respective company
maintain and establish effective relationship with supplier in order to get products in
effective and appropriate price.
 Competitive rivalry- It is a situation when there are various companies who offer same
products and services in respect to particular company. According to this company, they
develop appropriate and effective strategies and plans by there managers able to
analysing strength and weakness. In context of John Lewis Ltd threat of competitive
rivalry is high because there are large number of respective company competitors who
offer same products and services to customers. Such as ASDA, TESCO Plc and many
more.
By evaluating all factors it can be determine that this is duty of John Lewis manger and
leader to develop strategies and plans by considering all factors which are discussed above. By
this they able to operate business as well as sustain at marketplace in effectual as well as
impressive style.
TASK 4
P4
For analysing and evaluating market and after it developing strategic plan and strategies
John Lewis Ltd conduct analysis by conducting Ansoff Matrix. Whose explanation is given
below in context of John Lewis Ltd:-
Ansoff Matrix:- It is a technique or method that a company use to design and develop
strategies and plans for getting growth in future or expand business in appropriate and efficient
manner (Murthy, 2012). This method is generally used by executives, senior managers,
marketers and many other who develop strategies and plans for staff, so that they conduct work
in efficient and proper way. Managers of John Lewis Ltd conduct analysis by respective method
in order to identify which is method is more appropriate and effective for expand business.
Explanation of different steps of Ansoff Matrix in respect of respective company is given
below:- Diversification: In this matrix an organisation introduces new products at a new market
in order to enlarge their customers bases and profitability ratio in effective and efficient

manner (Oestreicher and Zalmanson, 2013). When John Lewis Ltd expand or diverse
themselves at market then profit of brand get boost by which goodwill of company also
get increased. To get better outcome respective company has to do various activities such
as identifying potential customers, develop effective advertisement strategy and many
more. Market development:In this company expand their business in new market by developing
new segment in order to target more and more customers in effective manner from
different group or section. When respective company want to there market they will work
at multiple components mode, in which they they expand more new market with same
products which they are offering in other places. By this John Lewis Ltd able to enhance
customer’s bases for existing products. Product development:It is a strategy in which a company develop a new innovative
products for existing market in order to attract and retain customers in effective and
appropriate manner. In context of respective company, they develop new innovative and
creative products which attract customers on huge ratio. By this method customers also
get encourage for visiting stores to check out new products which increase there footfalls.
 Market penetration: According to this strategy or matrix company try to expand and
sustain there business operation and function with existing products at existing
marketplace (Peng, 2017). In case of John Lewis Ltd for expanding in existing market
with existing products, company will increase there promotional and advertising
activities which help them in covering more and more potential customer. That will
directly enhance profitability and market shares of respective company in effective way.
By determining and analysing all matrix of respective method for John Lewis Ltd product
development is most effective and appropriate method. This is so because they are currently
dealing in western clothings and if they introduce more range they able to attract more and more
customers. For this respective company can develop new products such as they can introduce
traditional products ranges. That help in attracting those customers who prefer traditional
clothings.
CONCLUSION
By analysing above mentioned points it can be assess as well as conclude that, for
developing as well as running a business in effective manner a company's owner needs to do

analysis of marketplace for develop business strategies. For analysis of internal market company
can conduct SWOT analysis as well as VRIO analysis. Along with this for conducting analysis
of macro element an organisation can use PESTEL analysis. After evaluating micro as well as
macro factors of environment company should do analysis of competition at a market place by
using Porters five forces model. Moreover, for developing strategic planning for conducting
work in effective and appropriate manner an organisation can use porters generic model. By
conducting all these factors or activities an organisation management able to conduct and create
strategies for their business operations and functions in effective as well as efficient manner.