Business Strategy Report: John Lewis's PESTLE, SWOT Analysis

This report provides a comprehensive analysis of John Lewis's business strategy, focusing on the impact of macro-environmental factors and the company's internal capabilities. The report utilizes PESTLE analysis to assess the political, economic, social, technological, environmental, and legal factors influencing John Lewis's operations within the UK market. Furthermore, a SWOT analysis is employed to evaluate the company's strengths, weaknesses, opportunities, and threats. The analysis highlights the importance of adapting to external factors, managing internal capabilities, and formulating effective strategies for long-term sustainability and growth in the competitive retail landscape. The report concludes with a summary of key findings and recommendations for strategic decision-making. The report also discusses how John Lewis can leverage opportunities and mitigate threats to maintain its market position and achieve its business objectives.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 & M1 Impact and influence of the macro environment on a given organisation..............1
TASK 2............................................................................................................................................4
P2 & M2 The internal environment and capabilities of a given organisation........................4
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Business strategy refers to the plan or process which assist business firms in
accomplishing their predetermined aims and objectives. With the help of business strategy,
managers can take appropriate decisions for the business activities which will aid them to
achieve their goals in an effective manner. There are several external and internal environment
factors which can impact and influence the business activities of a firm. The organisation uses
several tools such as Pestle, Swot analysis etc. for getting an upper competitive edge in the
market. The organisation taken in this assignment report is John Lewis Ltd which is a retail
group chain based in London, UK. This report will analyse the capabilities of an organisation by
using the SWOT analysis and the impact and influence of the macro environment factors on the
organisation by using the Pestle analysis.
TASK 1
P1 & M1 Impact and influence of the macro environment on a given organisation
The firm was founded in 1864 by John lewis in London. Currently, company has 51
stores across UK and is also known as the important part of fashion sector in UK market.
Company have an effective management team which believes in providing quality products in
the market so that sustainability of firm can be maintained in the marketplace. Main base of their
sustainability and growth in the market place is that they always provide better quality products
to customers because of which a large number of customers are liking the offerings of firm. In
current scenario, the competition is very high in the marketplace because the players of fashion
sector are providing unique quality products to the customers at affordable prices so, it is very
difficult for the firm to sustain in the marketplace with supplying old fashioned product in the
marketplace. For gaining good position in the market, It is very essential for the managers of
John lewis to make effective plans and strategies so that they can sustain for the long time in the
market along with providing tough competition to their rivals (Agarwal, Grassl and Pahl, 2012).
Thus, it is very important for managers of John lewis to consider external or internal factors of
the business environment which can adversely or favourably influences their business operations.
For analysing such factors in an effective manner, Managers of cited firm have to conduct
PESTLE and SWOT analysis that is briefly explained as under:
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llustration 1: Pestle analysis
Source: Pestle analysis, 2018
Political factors- It includes tax duties, stableness of government, trade policies etc.
which can positively or negatively influences on the overall productivity of a firm. In context
with John Lewis, the firm delivers products and services across the UK. So, the managers of
company have duty to follow the patterns and regulations which are formulated by a particular
government for fashion sector. For example- sales tax rates on the fashion product in UK is
around 20% which is stable from the last year so it can provide positive impact on the business
strategies of firm. On the other hand, Rivals of cited firm such as Debanhams, M&S etc. which
are considered as a big player in fashion market of UK are providing unique products at cheaper
prices to the customers for attracting them towards their products (Agyapong and Boamah,
2013). Therefore, managers of John lewis needs to consider the policies of rivals which can
negatively influence the sales figures and market position of the firm. As government of UK is
in stable or sustained condition then managers of organisation can gain better opportunities for
their longer time profitability.
Economical - These factors includes economical growth, Per capital income, GDP of a
nation. As the organisation perform its business operation across the UK. So, the management
have duty to consider such elements according to economical condition of UK nation. The
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customers of UK are focusing more on prices due to the recent inflation and the products of the
John lewis also comes at low prices. The GDP per capita of UK in year 2015 was 44,340 USD
which is decreasing in 2016 and 2017 i.e. 40,535 and 39, 761. As a result of this, the customers
are preferring the product of company which is positively impacting the firm in establishing a
good brand image in the UK market.
Social factors- It includes beliefs, taste, needs and wants of customers etc. that can
provide influence on the business operations of a firm in positive or negative manner. Citizen of
UK nation generally likes fashionable and modern clothes along with the low prices which can
serve their needs and demands. The customers of UK prefer the quality based products at
favourable prices. The firm is focusing on the youth of 20 to 30 years who purchased the
fashionable clothes. John lewis is providing their products with improved quality and lowered
prices according to the needs and demand of their customers due to which their sales and profit is
increasing in the UK market. This is positively impacting the firm as the sales and profit along
with the productivity and performance of the firm is improving.
Technological factors – It consists of advanced tools and techniques which can provide
positive or negative impact on the profitability or sales figures of John Lewis. As modern era of
market is based on online platform because citizen of UK give more importance to time and
money and offline process of buying or selling products consumes more time (Burlton, 2010).
John lewis has implemented updated technology such as Augmented and Virtual Realities
through which the customers can check which type of clothes suits them, Checkout-Free Stores
through which customers can checkout themselves in their stores. These are providing the ease to
customers in shopping. This is positively impacting the mindset of customers due to which their
loyalty and satisfaction is increasing towards the products of the firm.
Environmental – It comprises of natural climates, weather of nation that can positively
or negatively influences on the growth and sustainability of organisation. As John Lewis has
developed a good brand image across the nation and follows all the environmental law which are
prescribed by the UK government (Jayaram, Choon and Laosirihongthong, 2014).
Governmental authorities have formulated Extended Producer Responsibility (EPR) that
provides them responsibility to follow it for reducing the wastage of textile industries. If
management of John Lewis will not adhere such responsibility they have to pay penalties which
will not beneficial for the brand image of the firm.
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Legal – Government of UK have formulated various kind of laws and legislations for all
business associations such as health and safety of employees at workplace, employment law etc.
If any firm is not following such laws then they have to pay penalties. The firm is following the
employment laws such as equality act, equal pay act, health and safety at work etc. which is
positively impacting the brand image of firm in front of the customers. Through this, the firm can
sustain in the marketplace for a long period of time which will beneficial for the managers of
organisation in formulating long term strategies. If such laws are not followed by the firm, then
government of the UK can put heavy penalty on the firm which will negatively impact the brand
image.
TASK 2
P2 & M2 The internal environment and capabilities of a given organisation
In order to make growth and success in the marketplace, Managers of John lewis have to
analyse their strength and weaknesses so that future opportunities will be identified and effective
strategies will be formulated for achieving them. For this, they can conduct SWOT analysis
which is described as under:
Source: SWOT analysis, 2018
SWOT analysis of John Lewis
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llustration 2: Swot analysis

Strengths Weaknesses
 The company provides a value of
money to their customers so that
loyalty of customer can be maintained
in the marketplace.
 Organisation offers a wide variety of
fashion products to their customers.
 Company has more than 30000
employees who are providing their
loyal services across the nation.
 Managers of organisation have to
consider the pricing of their offerings
because it is very high than the prices of
supermarkets and grocery stores which
can influences negatively on the
business operations.
 The management of John lewis lack the
skills for developing effective strategies
due to which their market share is not
improving in the global retail market.
Opportunities Threats
 Number of visitors to UK are
increasing due to which firm has
opportunities for enhancing their sales
figures and profitability.
 The firm has sufficient amount of
funds which can help the firm in
opening new stores throughout the UK.
Through this the company has new
opportunities to expand its operations
in rural areas of UK.
 Big competitors of John lewis such as
M&S, Tesco, Debanhmas plc. Are
giving tough competition to the firm.
 Robbery attempts in the stores provided
a negative impact on the brand image of
firm.
 The company using old techniques for
capturing the old customers which can
pose a risk in the future for the
organisation.
Analysis of SWOT - As the firm provides value of money to their customers through
which their customer base is maintained in UK market. Company also offers a wide range of
variety in clothes for their customers which brings loyalty among them and also defines a good
market capturing strategy of the management (Flouris, Triant and Sharon, 2016). Organisation
has employed more than 30000 loyal employees who are providing their services in whole UK
nation. Organisation have appropriate funds and effective team of managers through which they
can easily expand their market share in new global markets. Whereas, Managers of John lewis
are not focused on the pricing of their offerings which can provide negative influences on the
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business operations in future time. Big players of fashion industry can reduce the market share
and profitability of firm with their attractive scheme and discount offers. So the management of
John Lewis have duty to make effective pricing strategies and provide discount to the customers
so that good brand image of organisation along with huge customer base will be maintained in
marketplace (Ghezzi, 2013). By considering such weak areas, managers of John lewis will be
able to formulate effective plans and strategies which will be helpful for them in getting
sustainability and growth in the marketplace.
CONCLUSION
From the above discussed report, it has been concluded that managers of John lewis
needs to concentrate on ways through which they can formulate better decision and strategies for
the betterment of employees. The management needs to consider the impact of macro
environmental factors on the business operations and activities of the firm so that the impact can
be minimised. Also the management needs to consider the strengths and weakness of such
factors so that they can be used as opportunities for future purpose. The impact of macro
environmental factors can be determined by using the PESTLE analysis. Whereas SWOT
analysis can be used for determining the strengths and weakness of the firm.
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REFERENCES
Books and Journals
Agarwal, R., Grassl, W. and Pahl, J., 2012. Meta-SWOT: introducing a new strategic planning
tool. Journal of Business Strategy. 33(2). pp.12-21.
Agyapong, A. and Boamah, R. B., 2013. Business strategies and competitive advantage of
family hotel businesses in Ghana: The role of strategic leadership. Journal of Applied
Business Research. 29(2). p.531.
Burlton, R., 2010. Delivering business strategy through process management. In Handbook on
Business Process Management 2(pp. 5-37). Springer Berlin Heidelberg.
Chang, J. F., 2016. Business process management systems: strategy and implementation.
Auerbach Publications.
Flouris, Triant G., and Sharon L. Oswald, 2016. Designing and executing strategy in aviation
management. Routledge.
Ghezzi, A., 2013. Revisiting business strategy under discontinuity. Management Decision. 51(7).
pp.1326-1358.
Jayaram, J., Choon Tan, K. and Laosirihongthong, T., 2014. The contingency role of business
strategy on the relationship between operations practices and performance.
Benchmarking: An International Journal. 21(5). pp.690-712.
Jeston, J., 2014. Business process management. Routledge.
Kohler, T., 2015. Crowdsourcing-based business models: how to create and capture value.
California Management Review. 57(4). pp.63-84.
Meskendahl, S., 2010. The influence of business strategy on project portfolio management and
its success—a conceptual framework. International Journal of Project Management.
28(8). pp.807-817.
Online
SWOT Analysis. 2018. [Online]. Available through:<https://www.liveplan.com/blog/what-is-a-
swot-analysis-and-how-to-do-it-right-with-examples/>.
PESTEL Analysis. 2018. [Online]. Available
through:<https://www.professionalacademy.com/blogs-and-advice/marketing-
theories---pestel-analysis>.
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