Business Strategy Report: Macro and Internal Analysis of John Lewis

This report analyzes the business strategy of John Lewis & Partners, a UK-based department store chain. It begins with an introduction to business strategy and its importance, followed by an analysis of the macro-environment using the PESTEL framework. The report then delves into the internal environment and capabilities of John Lewis using SWOT and VRIO analyses. Furthermore, it applies Porter's Five Forces model to evaluate the competitive forces within the market sector. Finally, the report interprets and devises strategic planning for John Lewis, incorporating various theories, concepts, and models. The analysis covers political, economic, social, technological, environmental, and legal factors, along with internal strengths, weaknesses, opportunities, and threats. The report also examines valuable, rare, inimitable, and organized resources to determine the competitive advantages. Overall, the report provides a comprehensive overview of John Lewis' business strategy, including recommendations based on the analyses performed.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................4
P1 Appropriate framework analyse impact and influence of macro environment on a given
organisation and their strategies..................................................................................................4
TASK 2............................................................................................................................................6
P2 Analyse the internal environment and capabilities by using appropriate framework............6
TASK 3............................................................................................................................................9
P3 Applying Porter’s Five Forces model evaluate the competitive forces of a given market
sector for an organisation............................................................................................................9
TASK 4..........................................................................................................................................10
P4 Applying a range of theories, concepts and models, interpret and devise strategic planning
for a given organisation.............................................................................................................10
CONCLUSION .............................................................................................................................12
REFERENCES .............................................................................................................................13

INTRODUCTION
Business strategy is the chain of activities related with achieving goals and objectives and
it is an long term business plan. It is majorly concerned with large scope of business activities
about what and where organisation have to produce. Business strategy is one of most important
managerial activity that encompasses competitive position in market to achieve desired level in a
business. This report is based on John lewis & partners which is chain of high end department
stores that operates in whole UK. Its concessions are located in Ireland and Australia and its
chain are created by spedan Lewis. This report is based on impact and influence of macro
environmental factors in an organisation and their works and procedures. It also includes internal
environment and capabilities to attain organisational goals and objectives and to evaluate factors
that helps in understand the power of competitive strength by porter' model. It also elaborates
various models, theories and practices which are very important for organisation to deal with
various circumstances.
TASK 1
P1 Appropriate framework analyse impact and influence of macro environment on a given
organisation and their strategies.
PESTEL analysis is an framework or tool helps to marketers in evaluation and monitor
macro environmental factors that directly impacts on an organisation (Alsudiri, Al-Karaghouli,
and Eldabi, 2013.). It is very much important for an organisation to deal in while going global
and expand their business. This report is based on John lewis and its partners which is an
multinational organisation and to remain always competitive in marketplace organisation have to
analyse various macro environmental factors that are as follows:
Political factors:
Political factors enormously affects on their business, it is an multinational organisation
and operates almost world wide so legal laws with regulations affect on their business operations
in adverse manner. It adopts sales of good act 1979 which give guidelines by satisfying standards
in positive manner with work to help in acknowledge seller (Bharadwaj and et.al ., 2013.). In

that scenario John lewis work to bring political stability by bringing various acts in which data
protection act 1998 which helps in keep data and information in secured and lawfully by proper
collecting data and information. It adopts various measures to deal with political stability such as
sale of good act for that they train staff members when they deal in market. They not apply
biased rules and over exaggerate what they actually want. It describe each and every important
information on their packaging so that not any kind of grey areas can not find while commence
in business.
Economic factors:
In macro environment consist of inflation rate, saving rate with interest rate and
economic cycle which helps in determining aggregate demand and investment in economy. In
case of John lewis they majorly evaluates various factors such as consumer spending, growth
rate of market etc. which helps them to take important decisions in organisation while expand in
international market.
Social factors:
Social factors that are norms and behaviour which changes rapidly in today's scenario due
to change in fashion. Rapid change and boom in fashion industry directly impacts on their
business. To give delighted experience to the consumers John lewis focus on giving from
clothing to kitchen appliances (Bharadwaj and et.al ., 2013.). To deal with high fashion ranging
from young to middle age people and enhance their stock line and invest also in branded items
Ralph Lauren. To give best services they employ more staff in clothing section to comply with
constant needs and wants of consumers.
Technological factor:
Technological is one of most important factor to lead in market, in context of John lewis
they started in since 1800s of introduction of internet which is an great facility to going global
and serve billions of users (Blackburn, Hart and Wainwright, 2013.). With help of internet they
can sell and reach at large no. of consumers frequently and it facilitates to them interact by
electronic media and send promotional tools on web. Recently they use fast broadband services
of 50 mb that give them fast services to interact with their potential clients. They bring chip and
pin from which consumers can easily pay and prevent from changes around them. So to deal
with technological changes they use various measures to bring harmony in work and procedures.
Environmental factors:

Environmental factors consist of new and fast growing awareness to protect environment
in positive manner so that consumers become loyal. They majorly focus on cut emission cost and
carry out various eco friendly works and activities to got sustainability in market. The recent
action to John lewis towards environment is to reduce impact of green house effect. It actively
promote with responsible towards various ways of sustainable way of agriculture, animal
husbandry to give best goods and products to their ultimate consumers.
Legal factor:
John lewis which is an multinational brand name and to remain always competitive in
market they avail various kinds of rules and regulations such as anti trust law in personal and
household goods industry, discrimination law, copyright and patents to remain always
competitive in marketplace.
TASK 2
P2 Analyse the internal environment and capabilities by using appropriate framework.
Internal analysis and capabilities are very important factor in case of an organisation to
know their potential key strength and weaknesses to focus on best attributes in major areas
(Chang, 2016.). To analyse major factors organisation have to study about SWOT analysis and
VRIO framework to reach at desirable goals and objectives.
Strength:
John Lewis is one of the consistent performed in context of revenue by operating income
of 10 billion pounds in financial year 2017. it has growth rate of 2.8% in year 2016 which
enhances in rapid manner so it is one of major factor in their strength area. On other hand it has
strong online presence in market which helps them to being globalize across countries for
development from across years (.Grover and Kohli, 2013.). It has been strong customer
relationship to continuous improvement in works and procedures to bring harmony in works and
activities. It has high brand value in marketplace and have high rate of finance with home care
that helps in fostering growth.
Weaknesses:
There are some weaknesses that hinders self interest of an organisation that are they are
lack in experience of international business because they are not new but occasionally expand
their market in foreign market. The another weaknesses that due to large competition they are not

able to gain high share in profit and sometimes they face defeat in making strong marketing
strategy which affects on their decision making process and potential results. With the advent of
large competition organisation not able to compete in best manner because they not specific team
and members that contributes in organisational growth and enhancement.
Threat:
There are various threats in front of John lewis that they are deals in many nations and
people also work in their organisation come from different background. So in that case they are
not able to deal with cultural difference and brings negative results in organisation. While they
adopt many rules and regulations which helps in different situations but on other hand to comply
with many regulations affect on their profitability.
Opportunities:
The one and foremost opportunities before John lewis that consumers in Australia ready
to pay or deliver premium prices as an healthy alternatives (Hoejmose, Brammer and
Millington, 2013). The taste and preferences of consumers changes rapidly and in respect of
quality ready to pay high prices. They have large scope to expand in new market by strategic
acquisitions by partnering with other businesses because they have great brand value in market.
At time of private labels and changing market needs and demand they pace towards continuous
expansion as well innovation mode to remain always competitive in market.
VRIO analysis:
VRIO analysis is an important tool which is an important part of strategic direction and
process to go through the vision, mission and objectives with internal and external capabilities. It
is useful for analysis of internal capabilities and resources. The major capabilities in which
human resource, innovation and important decision regarding their strategy of business. The
most important with partnership with their clients that contributes in organisational growth and
enhancement. With the help of core partnership they grow and easy to generate returns in
grocery market.
Valuable:
The first and foremost resource that is valuable in nature, it should be valuable enough
while implement various strategies that helps in improve the efficiency and effectiveness by
occupying opportunities and by minimizing threats (Iacob, Quartel and Jonkers, 2012,). In
context of John lewis they have four major valuable resources in which their work environment,

customer service, pension scheme and social responsibility with other clients are major
attributes that they possess. In case of John lewis have adequate and suitable work environment
which helps in accomplish organisational goals and objectives in proper way by giving non
contributory pension scheme and annual bonus on basis of salary percentage. Work environment
which is imitable in easy way by giving same working conditions to employees.
Rare:
The second most important resource which is rare, it establish when an organisation have
some rare resources and people hardly copy it. There are many potentials and capabilities that are
possessed by John lewis (Oestreicher-Singer and Zalmanson, 2013.). In context of John lewis
which has best customer services and by giving training and development to their employee's
they occupy large market share and become competitive in market. In case of John lewis they
employ large no. of candidates at their clothing stores so that they can grab vast opportunities. So
that resource are rare in nature because other firms can not easily copy it.
Imitable:
In context of imitable in which competitors copy their resources due to it is costly and
time consuming process for an organisation (Scholes, 2015.). In case of John lewis they provide
pension scheme to their employees by accessing their needs and wants in proper way so that they
get satisfaction and can give their best in organisational goals and enhancement. In that case
pension scheme is imitable in nature because other organisation can easily imitate easily by
giving to their employees too.
Organization:
In that aspect resources of an organisation does not give any kind of value until or unless
it not managed in an organised way. In case of John lewis they gain competitive advantage by
adopting activities that are eco friendly in nature. It focus on social responsibility by focusing on
major spheres in which improvements are require to reap benefits out of them. They apply
carbon emission and various measures to gain consumer's loyalty. This is organised in effective
manner to gain desirable goals and objectives.
Resources Valuable Rare Inimitable Organised
Work
environment
Work
environment
- - -

Customer service Customer service Customer service
Pension scheme Pension scheme Pension scheme Pension scheme -
Social
responsibility
Social
responsibility
Social
responsibility
Social
responsibility
Social
responsibility
TASK 3
P3 Applying Porter’s Five Forces model evaluate the competitive forces of a given market sector
for an organisation.
Competitors analysis in marketing and strategic management is an evaluation criteria or
assessment program which focus on strength and weaknesses of current and potential
competitors (Schrader, Freimann and Seuring, 2012). It evaluates both offensive and defensive
strategic context by identifying opportunities and threats. In case of John lewis five force
analysis evaluate about competition level in Chinese market that impact directly on their works
and procedures.
Threat of new entrants:
In case of John lewis for them to obtain economies of scale is very much difficult for
them and it is only possible for them which possess large capabilities and cost advantage. So it
make costlier for new entrants and as an weaker force. In case of John lewis they take advantage
of economies of scale by fighting with new entrants by using cost advantage. To enter into
market they focus on innovation to differentiate their products and services in new market. It
spends huge amount on marketing to build an distinctive image in market.
Bargaining power of supplier:
It denotes no. of suppliers in an industry in case of John lewis they buy raw material from
their suppliers at the low cost. To lessen bargaining power of suppliers they switch to another
supplier so that they can save cost (Sia, Soh and Weill, 2016.). On other hand they hand they
have lot of suppliers for example in case of John lewis they have different suppliers at various
geographical locations so that helps in assurance of supply products and services by using
suitable supply chain. Along with the industry is one of important consumer for industry, in case
of John lewis focus on building strong relationship with suppliers in that case both parties can
gain profit.
Bargaining power of buyers:

Bargaining power of buyers consist of lot of options or variety possessed by buyers that
enhance competition level in marketplace. In case of John lewis they to differ from the
competitive world and to reduce power of buyers provide innovative products and services to
attract lot of buyers in market. On other hand they focus on areas in which buyers require
products and services and major competitors not reach at yet so that they conduct research and
grab larger attention of buyers in positive manner. In addition they plan various advantages by
adopting economies of scale by taking cost advantage and sell at low prices to the buyers in an
industry that helps in attract large no. of buyers in positive manner.
Threat of substitute products and services:
There are very less substitute available in products in which John lewis deals. There are
very less no. of substitutes that are exist and also produced at low profit earning industries
(Spender, 2014.). In case of John lewis they emphasis on giving greater quality of products and
services at lower price range so they can remain leader in marketplace. On other hand they focus
on giving differentiate products and services by giving unique values and not easily shift to
substitute products. It helps in giving unique benefits by better understanding their unique needs
by conducting market research.
Rivalry among existing firms:
That attribute denote about the competition level in the industry in case of John lewis
their competitors are less in number and most of it are large in size (Verbeke, 2013.). By differ
products and services from competitors are very important basis to lead in market and gain large
market share. As industry growing rapidly they focus on new consumer base so that they can
enlarge business opportunities. It also conduct supply demand situation within industry and
restrict over production.
TASK 4
P4 Applying a range of theories, concepts and models, interpret and devise strategic planning for
a given organisation.
Ansoff's Matrix
It is marketing planning model which assist business for determining market growth and
product strategy. This model consists of four strategies for growing in competitive market. Here,

John Lewis has used product development and diversification strategy which are described
below:
Ansoff Matrix For John Lewis
It is a strategic planning tool which provide framework and helps executives and senior
managers to devise and implement strategies for future growth. It consist of various
growth strategies which the manager of John Lewis could adopt. These are described as
follows-
Market Penetration- In market penetration strategy John Lewis expands its business by
providing existing products in the existing market. For this John Lewis should try to
increase the market share by selling goods and services to the established customers or
by finding new customers within the existing markets (Woodard and et.al ., 2013). For
this John Lewis could decrease the prices of the product as well as increase in the
promotional and distribution efforts.
Market Development- Under this strategy firm tries to expand into new markets and into
different countries by providing its existing products and services. This could be done
by John Lewis by differentiating the customer segments, moreover by providing
products according in the countries where there is a huge demand for the company's
products. This would leads to increase sales for the respective company' products. Apart
from this respective company can enter into foreign markets and can enhance the brand
image and improve the profitability of the company.
Product Development Strategy-
It is the strategy in which John Lewis introduce new product in existing market (Scholes,
2015.).. Such strategy need development of new competencies and need business for developing
or modifying goods that are appealing in existing market. John Lewis wants to remain
competitive so such type of growth strategy is suitable in order to achieve goals and objectives.
In order to adopt respective strategy, organisation requires proper research, innovation and
development, being first in market and fulfilment of customer needs and requirements.
Diversification Strategy-
This is the strategy where John Lewis can bring new products into new market. It is more
risk strategy because business is moving towards those market where it has very little or no
experiences. In order to adopt such type of strategy, it is very important for organisation to

analyse market properly and need, requirement and demand of consumer. This strategy is
suitable for John Lewis because it is renowned brand in competitive market and if it brings any
new products for their consumer and market then people surely try it.
It has been concluded that one of best strategic for John lewis is diversification strategic that
helps in grab attention of people in large basis.
CONCLUSION
From the above report it has been analysed that business strategy is one of important
aspect to lead in market. To remain always competitive in market organisation have to evaluate
various factors in which strengths, weaknesses that helps in accessing internal capabilities of an
organisation to deal in positive manner. On other hand PESTLE analysis which is an important
attribute that helps in evaluating competitors strength and their policies so that an organisation
can take right kind of decision.