Business Strategy Report: PESTLE, SWOT Analysis of John Lewis Ltd

This report provides a comprehensive business strategy analysis of John Lewis Ltd, a prominent UK-based retail firm. The analysis begins with an introduction to business strategy and its importance, followed by an examination of the macro-environmental factors influencing John Lewis Ltd through PES...Read More

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
P1 Presenting the impact and influence of the macro environment on John Lewis Ltd by
applying PESTLE analysis.....................................................................................................1
P2 Analysing the internal environment of John Lewis Ltd by using SWOT analysis...........4
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business strategy plays an important role in every business such that it helps a firm to
lead its business at further level of success. The report main aim is to understand the macro and
micro factors that affect the business in both positive and negative way. Report is based upon the
case study of John Lewis Ltd which is one of the top leading firm in UK who offer home ware,
electricals and clothes to their customers at reasonable rates. Further, the report describes the
impact and influence of some macro environment by using Pestle analysis and in order to
determine the internal capabilities of the quoted firm, report uses SWOT analysis.
P1 Presenting the impact and influence of the macro environment on John Lewis Ltd by applying
PESTLE analysis
John Lewis Ltd, is the third largest firm in UK who operates in more than 50 shops and
have more than 300 Waitrose shops as well. Thus being a large and brand image in market, the
quoted firm is also influence from the macro environment, which can be easily analysed by using
PESTLE analysis.
1
Illustration 1: PESTLE analysis
(Source: PESTLE analysis, 2018)

Political Factor: Political factor plays an important role in order to determine those
factor which creates impact upon John Lewis Ltd. Political factors generally link with the tax
rates, government rules etc. Such that the changing trading policies and some tax regulations also
creates impact upon the business of John Lewis (Pestle analysis of John Lewis Ltd, 2019).
Moreover, the decisions taken by UK, to exit the European Unions will also weaken the pound
and as a result, it has created fluctuation with its future trade restriction in Europe. Thus, it also
affects the profit margin of the business and force to change in its trade policies.
Beside this, the uncertainty in import and export duties also affect the business in
negative way. Such that in UK, if the government increases the tax rates then as a result, the
sales of the business will also affect in negative way. For example, as the tax rates are increasing
then the cost of the offered products are also raised and it shows negative result upon the
business because customers than are not able to spend a lot amount on these products. Thus, it
shows that this macro factor affects the business in adverse way.
Economical Factor: This factor directly deals with the inflation rate, saving rates and
interest rates. In order to survive in this competitive world, it is quite necessary for the firm to
keep cope up with these economical factor. As a result, as the economy of the country will
fluctuate then this will also affect the business in negative way. Even the rigid competition
within every sector is also lead the retail company to give a lot of incentives to their customers
which leads to decline the profitability of a business.
Moreover, the increase in political and economic certainty in UK will also create
fluctuation in current market as well. As John Lewis Ltd also operates its unit at global level,
then it has been analysed that the business is also affected from this fluctuation. Further, the
continuous change in the economic conditions in UK, will also increase the competition and
raise prices as well (Islam, 2017). For example, the quoted firm is completely depended upon the
labour force and employees and if there is any change in the labour market or economy then it
affects the business in negative way.
Social Factor: It is another factor that affect the business in negative way. Customer
shifting preference and their lifestyle also correspond to different opportunities for a business.
That is why the quoted firm should have to introduce more branded and fashionable products as
per to meet out the demand of their customers. This will help to create positive impact upon the
business and also lead a good or positive impression upon their customers. Apart from this, the
2

customers also shift their views to other company if they found good quality of products low
range then they will definitely shift their views. To cope up with this situation, it is quite
necessary for the firm to provide the best quality of products to their customers by determining
their competitor’s strategy (Aithal, 2017).
As John Lewis Ltd also provide food products to their customers and now people are
becoming health conscious and more focus on healthy foods, this leads to create negative impact
upon the business and as a result, people do not spend their money on unhealthy products. That
is why it is recommended to firm to also introduce healthy products to their customers.
Technological factor: For customers, Internet is the main trend for shopping and it
directly influences the sales approach as well. Even the paperless operation of John Lewis Ltd,
its management and administration of the firm also carrying out IT system which also access and
make flexibility in its operations of a business. Moreover, adopting the technology into the
working area, will help to raise the profit of the business and saves time as well. Thus, the quoted
firm should not only do technological analysis but also speed through which the technology
disrupts the industry. It has been further analysed that recent technology development helps to
compete the business against their rivals. Further it also creates positive impact on the value
chain structure so that it provides the good quality of goods to their customers.
Legal factor: It is another macro factor that creates impact upon the business in both
positive and negative way (Brown and Taylor, 2018). Such that the legal factor deals with all the
laws which should be implemented by the business such as employment law, Health and safety
law etc. Therefore, a firm should carefully implement all the rules and regulations so that it
creates positive impact upon the employees and customers. Further, if the firm is entering into
new market, then they should carefully evaluate overall market in order to survive in this
competitive world. Further, John Lewis Ltd is also kept adhering discrimination law and
Copyright, patents in order to sustain its brand image in market. Apart from this, the firm should
also follow Data protection act so that it will help to keep their company's private data
confidential and secure from the third party.
Environmental Factor: Different market also have variety of norms and environmental
standard which can creates impact upon the business profitability. In order to monitor the
environmental factors, John Lewis Ltd keep producing those products which are eco-friendly.
But on the other side, the firm also have the threat related to legal penalty in the terms of health
3

and safety (Lal and Davis-Ngatai, 2018). Further John Lewis Ltd also keep making their efforts
in order to reduce the carbon foot prints and increase the energy efficiency so that it helps to
reduce the negative impact upon the environment factor.
P2 Analysing the internal environment of John Lewis Ltd by using SWOT analysis
To determine the internal capabilities of the business, SWOT analysis is used because it
determines the strength, weaknesses, opportunities and threats that affect the internal business of
the company. SWOT analysis of John Lewis Ltd is as follows:
Strength: John Lewis Ltd is the third largest retail store in UK and also offers wide range
of fashion brands with low and affordable prices. The firm also offer the products online and
even there is a facility to deliver the products at international market as well. Currently the firm
have more than 35000 employees and also maintain an effective level of employment
relationship with an extensive product range which no other company offers. It also has brand
image in market and also focus on innovation and creativity platform so that it will help to keep
maintaining its customer base (Zhao and Li, 2019). John Lewis Ltd also have strong online
presence and even it is considered one of the most effective player when the firm comes to
4
Illustration 2: SWOT analysis
(Source: SWOT analysis, 2018)

finance and home care. That is why it is one of the most recognized company in UK who knows
the customer relationship importance. Hence, the firm also keep growing its business in further
countries because of having strong financial performance in every years. John Lewis Ltd also
have strong customer base because of offering good quality of products at low rates that helps to
sustaining its brand image in market.
Weaknesses: The biggest weakness of the firm is such that the range of offering items is
limited as compared to super market thus it also limits the options that is available for their
customers. It has been further analysed that the price if the items are higher than supermarkets
regarding the grocery stores. Which creates negative impression upon their customers. Apart
from this, John Lewis Ltd also have absence of international business experience and due to lack
of effective marketing strategy, sometimes its loss the competitive edge.
Though the firm have brand image in market and have good financial performance as
well but there is inconsistent profitability for it as well. This also consider another weaknesses
for the business because fluctuation in profitability will lead to create a negative impact upon
business and also affect its customer base as well (Weng and Liu, 2018). John Lewis Ltd did not
develop strategies in order to lead a business and gain high competition in market. Thus, it
affects the overall performance of the business in negative way.
Opportunities: Having a brand image in market also helps to expand the business
internationally by developing new unique selling propositions as well. By analysing the lifestyle
of their customers, quoted firm should be developing new products so that it will helps to attract
more new customers towards them. Opening new products nearby their store, expand their
network, product selection will also create a better opportunity for the business to expand their
current business at new country will also help to generate more revenue for the firm and sustain
its brand image in market.
To enter into new market, John Lewis Ltd can also use franchise and strategic partnership
to creates more opportunities. Apart from this, the firm should also focus on some healthy foods
because people are now a days becoming more health conscious that is why offering new healthy
products will provide better opportunities to maximizes their profitability.
Threats: As the business have high and brand image in market, it also faces some threats
related to high competition in market. As the firm wants to enter into new market and it leads to
failure because of cultural differences and even the negative effects of new legislation also
5

creates threats upon the business (Rupp and Clinton, 2017). Fluctuation in the cash flow also
leads to threat for the business and apart from this, as the firm is emerging to new competitors
will also lead to create a stronger competitive advantages and this is another threat which is faced
by the John Lewis Ltd. Further, it has been analysed that the firm is also faces tough competition
from their rival firm and as a result, it also leads to create threat among them.
VRIO model for John Lewis:
Valuable Rare
 The quoted firm is provide a valuable
item such as different clothes,
insurance facilities as well
 It has a best working environment.
 Good customer services.
 Also work for the society
responsibility.
 The firm have best customer service
and best pension scheme which is not
available for all the business.
Inimitable Organized
 The company have best working
environment with customers services.
 Its system is organized in better way
such that no customer faces any
6
Illustration 3: VRIO analysis of John Lewis
(Source:VRIO analysis of John Lewis, 2018 )

difficulties in their service.
CONCLUSION
By summing up above report it has been concluded that business environment plays a
crucial role in every business such that both macro and micro factors affect the business in
positive as well as negative way. Further report concluded that by using PESTLE analysis, the
firm will easily determine its macro factor which influence the system in both positive and
negative way. Apart from this, it has been further concluded that by using SWOT analysis, the
firm will easily determine its strength and capabilities which affect the business internally.
7

REFERENCES
Books and Journals
Aithal, P. S., 2017. An Effective Method of Developing Business Case Studies based on
Company Analysis.
Brown, C. and Taylor, B., 2018. A business case for work-life balance in retail management.
Islam, A., 2017. A study on promoting and positioning The Super Star Brand (fan, lights,
accessories) through their retailers.
Lal, M. and Davis-Ngatai, P. S., 2018. A competitor analysis.
Rupp, W. T. and Clinton, S. A., 2017. Book Retailers and the Ever-Changing SCM Landscape:
Case Study of Barnes & Noble Company and Amazon.
Weng, J. and Liu, T., 2018, June. Enterprise Strategy Analysis Based on SWOT Analysis.
In 2018 International Conference on Sports, Arts, Education and Management
Engineering (SAEME 2018). Atlantis Press.
Zhao, L. and Li, L., 2019, February. Analysis of Operational Benefits of Unmanned Retail
Business Form based on DEA Method. In 2018 International Symposium on Social
Science and Management Innovation (SSMI 2018). Atlantis Press.
Online
Pestle analysis of John Lewis Ltd. 2019. [Online]. Available through:
<http://fernfortuniversity.com/term-papers/pestel/nyse4/6653-john-lewis-of-hungerford-
plc.php>.
8