International Business and Globalisation: Business Expansion Report

This report provides a comprehensive analysis of John Lewis's business expansion strategy, focusing on its potential entry into the African market. The report begins with an executive summary highlighting the importance of business expansion for organizational growth and financial success. It then delves into a detailed evaluation of the internal and external environments using tools such as SWOT, PESTEL, Porter's Five Forces, and the Diamond Model. The SWOT analysis identifies the company's strengths, weaknesses, opportunities, and threats. The PESTEL analysis assesses the political, economic, social, technological, environmental, and legal factors impacting the business. Porter's Five Forces model evaluates the competitive landscape, and the Diamond Model analyzes the company's organizational structure and rivalry. The report also examines the African market, considering its growth potential and consumer behavior. It concludes with recommended business development plans based on Porter's generic model and Ansoff Matrix, emphasizing quality focus to drive expansion. The report also addresses the impact of globalization on the company's expansion strategy, and considers factors such as market size, internal analysis, and the causes of business expansion into Africa. The report also includes recommendations for business development plans based on Porter's generic model and Ansoff Matrix model.

Business Expansion
Student’s Detail

Business Expansion 1
Executive summary
Organizational growth and success require business expansion operations at a certain growth
point. These business expansions are essential for the financial profits and brand image of the
company. The concept of globalization is helping the business organization to expend their
business throughout the world.
In this business report, we identified business strategies and expansion plans through evaluations
of the internal and external environment of John Lewis Company. The is one of the largest retail
chains in the UK with having a business operation in Ireland and Australia. The company is
intended to expand the business in Africa under the business development strategy of the
company.
To pursue this organizational goal, external and internal environment analysis has been done
through various tools such as SWOT, PESTEL, Porter’s five forces model, and diamond model.
These tools helped the company to identify the major factors that will affect the business
expansion plan of the company and suitability & feasibility of expansion plans of the company.
This analysis results that though the company has some weaknesses, threats, and weaknesses that
may will barriers in the expansion plans of the company. But organizational internal strengths
and external environment of the organization is strong enough to push business expansion
operations of the company.
This discussion also covers some recommended business development plans based on Porter's
generic model and Ansoff Matrix model. Porter’s generic model identified that through the
quality focus company can develop its business in Africa which is a potential market for the
company.

Business Expansion 2
Contents
Background..................................................................................................................................................4
Introduction.................................................................................................................................................5
Section 1......................................................................................................................................................6
Evaluation of need...................................................................................................................................6
Internal Analysis......................................................................................................................................7
External Analysis....................................................................................................................................8
PESTEL Analysis................................................................................................................................9
Porter’s five forces model......................................................................................................................10
Diamond Model.....................................................................................................................................12
Supply chain Analysis...........................................................................................................................13
Business expansion plan and internal impact on the company...............................................................13
Section 2....................................................................................................................................................14
Section 3....................................................................................................................................................15
Functional strategy................................................................................................................................15
Porter's Generic.................................................................................................................................15
Market development..............................................................................................................................16
Risk factor.............................................................................................................................................17
Methods of business expansions............................................................................................................17
Merger and acquisition......................................................................................................................17
Conclusion.................................................................................................................................................18
Bibliography..............................................................................................................................................20

Business Expansion 3
Figure 1 SWOT analysis..................................................................................................................6
Figure 2 PESTEL analysis...............................................................................................................8
Figure 3 Five Force Model............................................................................................................10
Figure 4 Diamond Model...............................................................................................................11
Figure 5 Porter Generic Model......................................................................................................14
Figure 6: Ansoff Matrix.................................................................................................................15

Business Expansion 4
Background
Business expansion is a stage of business growth process where a company seeks outreaches
operations after optioning a certain growth point. Business expansions bring increments in
financial growth and enhance the company's reputation by expending the business at a large
platform. The business expansion is a part of a change management strategy of a business
organization which is essential for the existence and success of an organization (Osano, 2019).
Any business organization identifies the need for business change or expansion after reaching an
ideal growth point in the existing business process. Thus, business managers need to identify the
growth stage of the organization and develop suitable and effective business strategies for the
business expansion of the organization.
It has been identified that globalization is the most influencing factor which affects business
expansions decisions and strategies of an organization. Globalization promotes business
expansion throughout the world by providing free trade and immigration policies with
information technology and transport development (Verbeke et al., 2018).
This study covers the business expansion strategy of John Lewis Partners Company which is a
department store chain. The company is operating its business throughout the UK including
Wales and Scotland. In the process of business expansion company also established business
concessions in Australia and Ireland. The company was founded by John Lewis in 1864 with
headquarter in London, UK. The company has 54 stores and 253 Waitrose shops and online
businesses and serves around 52 countries around the globe. The JLC offers a wide range of
product lines such as home furnishings, gift range, financial products, food, personal styling and
nursery advisory services (John Lewis, 2020).

Business Expansion 5
Introduction
Discussion of global trade in the world economy is quite a common phenomenon in the present
business environment. It includes global transections, information exchanges and expansions
within cultures. In the global complex environment need for development, corporations, human
integrations, exchange of the resources and tools push the global business. Hence, to the
fulfillment of these requirements, globalization is a crucial phenomenon. Changes and
relaxations in political and economic policies, technology development, development in transport
and communications have a deep impact on global business operations of organizations
(Katerina & Aneta, 2014). Globalization also has huge impacts on the business expansions and
global expansion strategy of the John Lewis partner company as well. As the company intends to
penetrate in African market so globalization has a positive impact and helps the company to
carry out business expansion in the African market.
This discussion covers the impact of globalization on the business expansion strategy of the
company. This discussion mainly is divided into three sections which include market size and
internal analysis of the company and causes of business expansions of the company into Africa.
To internal factor which is pushing the company for global expansion, SWOT analysis has been
conducted. This discussion also covers the external audit of Africa using porter's five forces
model and diamond model. Section one also comprises the potential impact of business
expansion on internal strategies of the company including HR, marketing, and finance.
Further study analyzes the need for global expansion based on the external analysis environment
model. African polices and business determined of the company have been discussed with porter
generic strategy and a new market business development model has been created in this study.

Business Expansion 6
Section 1
Evaluation of need
Africa is a country with having a significant growth rate of the young population. Besides, the
country is also experiencing rapid growth in urbanization and growth rate in consumer
expenditure which is attractive opportunities for the business organizations that are intending to
enter in a new market and wishing for business expansions. The contribution of the retailing
sector in the GDP of the country is continually growing. According to a report, in the financial
year, 2018 total retail sales in the country were USD500 billion. This sales amount indicates
consumption-driven rete in the country (Tawii, 2019).
The vision statement of John Lewis states 'Our Founder signed away his ownership rights in a
growing retail company to allow future generations of Partners to take forward his 'experiment in
industrial democracy'. Not unreasonably, he wanted to leave some clear guidelines for his
successors, so that the values which had motivated him would not be eroded over time'. This
statement indicates future business expansion and generation to generation. Thus, towards the
vision and goals of the organization, the company is seeking an African market for business
expansions and intended to increase its presence in Africa (Johnlewispartnership, 2020).

Business Expansion 7
Internal Analysis
Figure 1 SWOT analysis
Source: (Shewan, 2020)
For the global business expansions of the company firstly it required to have an internal
assessment of the company to identify the strength, weaknesses, opportunities, and threats of the
company which may affect expansion strategies of the company.

Business Expansion 8
In the home care and financial services line company is a major and leading player. The
company has a good reputation in the parenting country and continuously fostering the
relationship with customers and stakeholder. The core focus of the company is innovations.
Quick check the app and propel partnership cards are an example of the innovations in the
company. The John Lewis Company also has a stronghold on the online market place
(Dudovskiy, 2020). Despite these strengths, the company has a notable lack of international
presence. Inconsistent profitability is also a lacking point of the company. Although growing
demand for private labels in the industry and African market demands, increasing focus of
people towards healthy food and attracting African markets creating opportunities for the
company. Yet intense competitions of bigger retain chains such as Woolworth, Walmart and
SPAR Group are given a threat of the company. Government policies and legal regulations of the
UK and Africa also are some pebbles in the way of business expansion of the company (Rajion,
2017).
External Analysis
External analysis of the company in the context of Africa will be helpful to understand the
suitability of business expansions in Africa. To evaluate the external environment of the country
PESTEL Analysis, Porter’s five forces model and diamond model have been used.

Business Expansion 9
PESTEL Analysis
Figure 2 PESTEL analysis
Source: (Yourfreetemplates, 2018)
South Africa is a country having a parliamentary Republic. But the political environment of the
country is quite unstable with mismanagement, corruption, political intolerance, violence and
frequent protest. Thus, for business organizations, it is difficult to get public support in the
country (Bishop, 2018). The country is the 34th largest economy in the globe with 371billion
USD GDP by the year 2018. The economic growth of the country is continuously increasing.
The corporate tax rate for business organizations is 28% for both domestic and international
companies (Expatica, 2019). Although social-economic standards are continuously growing in
the country, yet the company has huge unemployment. Unemployment is an opportunity for
business organizations including John Lewis to expand the business and get human resources at

Business Expansion 10
low investment. With the increasing social-economic standards people in the country desires
quality and facilities. Thus, it is a prospect opportunity for the company to enter the African
market and serves the people to the country (Mobius, 2017). The government of the country is
highly contributing to science, technology, and innovations. Decadal plan 2020-2030, focus on
technology and innovations. The science and technology department of the country is working to
improve artificial intelligence, quantum computing, nanotechnology, and biotechnology. This
increasing technology advancement is offering an opportunity for business organizations to
penetrate in African market (South Africa Govt. , 2020).
South Africa is known for its immense biodiversity in the world. This biodiverse and
invigorating environment of the country attracts tourists throughout the world. Thus this world
wide tourism in the country contributes to the GDP of the country. Besides, this tourist pool also
increases the demand for food and facilities (Rogerson, 2016). The country has a good legal
business environment. Commercial laws of the country are much similar to commercial laws in
the UK, thus it is an extra advantage for a UK based company to operate a business in Africa.
The legal laws of the country also provide impartial trails for foreign business as well which is a
welcoming gesture of the country to invite foreign business organizations into the country
(Nordeatrade, 2020).
Porter’s five forces model
External Analysis with Porter’s five forces model
Bargaining powers
of buyers
Low

Business Expansion 11
 The large population as consumer pool.
 Small individual purchases.
 High diversity of society (worldometers, 2020).
Bargaining Power of
Suppliers
Low
 Large range of suppliers.
 Strong competition among suppliers.
 High availability procurement.
Threat of Substitutes Low
 Lack of variety in substitutes.
 Substitutes at higher prices.
 Moderate Availability of substitutes.
The threat of new
entry
High
 Moderate capital costs.
 Low business cost for an existing business.
 High coast in brand development.
Rivalry High
 Various large firms in the retail market.
 High aggressiveness of retail firms.
 A large variety of retail firms.

Business Expansion 12
Figure 3 Five Force Model
Diamond Model
Organizational analysis with Diamond Model
Organizational
structure and
Rivalry
 The organizational structure of the company includes department
stores, home shops, supermarkets, production unites, farms and online
business (Johnlewispartnership, 2020).
 John Lewis has competition with other firms they are expensing the
business on a global platform. Ex: Wal-Mart and Woolworth.
 Polices of country, sometimes the country's polices opposed to such
large retail chains to save the small retail business.
Factor
Conditions
 Africa is rich with natural resources (IIED, 2017).
 High unemployment in the country provides easy human resources for
the company.
Supporting
Industry
 The retail industry depends on various suppliers.
 The John Lewis company has a large list of suppliers from various
industries like food, beauty and cosmetics, manufacturing industry,
spa, and lifestyle and many more (Green, 2019).
Demand
conditions
 In a country like Africa, there is a huge demand for the retail industry
with growing social-economic standards.
 Though this industry comprises a wide range of products and services.
Figure 4 Diamond Model

Business Expansion 13
Supply chain Analysis
John Lewis conducts its business operations through online and off lines stores in the UK,
Ireland, and Australia. The primary activities of the company include developing and delivering
products and services. Thus inbound and outbound logistics are the key value-adding activities of
John Lewis Company. Operations of the company are serving through product and service
delivery. Though, the company focuses on quality productions, so an emphasis on the marketing
strategy of the company is quality. The firm infrastructure of the company includes department
stores, home shops, supermarkets, production unites, farms and online business. The technology
development company had innovation with check-in and check-out facilities, value card services,
etc. The company is offering employment as a significant number of people by keeping them in
the human resources team of the company (Johnlewispartnership, 2020).
Business expansion plan and internal impact on the company
After analysis of the business environment, it is also important for the company to consider the
potential impact of the global operation in the company. As the company is intended to expand
business operations in South Africa so the company needs to analysis internal impacts on human
resources, marketing, and finance of the company. The most important element is the required
business expansion in financial resources. For the business expansions in a new country, the
company needs to invest huge finance for infrastructure, human resources, marketing, and to be
compatible in the country as by regulations. Besides, with the business expansion company
needs to formulate new marketing and promotional strategies that also affect the marketing
management of the company. Business expansions of the company require extra human
resources, thus it will have a direct impact on the recruitment process of the company. Human
resources and financial risks are highly associated with business expansions of a company. To

Business Expansion 14
expanded business operations, the company needs a huge financial investment, but the profit
from the business expansion is uncertain. Thus, financial risk is highly involved in the business
expansion plans of the company.
Section 2
After evaluating the internal and external environment it can be understood that there are
abounding opportunities for John Lewis to enter in African market under business expansion
operations.
Internal environment analysis results in that company has a good brand image and adequate
financial resources that are the basic requirement for the business operations. Apart from this, the
quality of the product, a wide product line, technology, and good organizational environments
provide an ideal push to the company for this expansion plan. similarly, external environment
analysis of the company also found that the company should expand the business and African
market and utilized the opportunities provided by the market. Although, social and political
instability, moderate economy, and some legal regulations are some challenges for the company,
still by formulating effective strategies to overcome these challenges company have an ideal
opportunity to enter the African market.
‘

Business Expansion 15
Section 3
Section 1 and 2 analyzed the internal and external environment of John Lewis and identified the
business expansion suitability in the Africa market. Yet the company needs to develop adequate
functional policies. The discussion identified suitable market strategies for the company as per
Porter's Generic model.
Functional strategy
Porter's Generic
Figure 5 Porter Generic Model
Source: (IFM, 2020)
Porter's Generic model identifies relative position in an organization based on cost, product
differentiation, and focus. From the internal analysis of John Lewis, it has been identified that
quality is a major focus of the company. Thus, the company needs to focus on the product

Business Expansion 16
differentiation basis as the business expansion strategy because the unique dimension of the
company is the quality of the product.
Market development
Figure 6: Ansoff Matrix
Source: (CFI, 2020)
The John Lewis Company is intending to expand the business in African market with the
existing product range. Thus, the business expansion strategy of the company falls in the market
development category where the company enters into a new market with an existing product line.
As per the Ansoff matrix market expansion of the company involved in moderate because the
product line is controlled with the company which has low risk but new market full of
uncertainty which includes high risk.

Business Expansion 17
Risk factor
Business expansions often involve high risk for the companies. Several risk factors are
associated with risk with the business expansion plans of the company including financial,
cultural, HR and ethical risks.
Business expansions increase pressure for the business managers which affects production or
services. Though expansions are required huge investment, thus it is also associated with high
financial risk. Besides, cultural and ethical risks are also involved with business expansion plans.
This is difficult to determine that in the African culture the company will be acceptable or not.
John Lewis is planning to enter the African market but acceptance of the company in diverse
African cultures is a subject of risk. Also with the penetration of new retail chain in the country
will adversely affects to small retail businesses of the country which is related to the ethical risk
of the company.
Methods of business expansions
Merger and acquisition
For the business expansion merger and acquisition is an important corporate strategy. This
method of business expansions requires human resources and infrastructure sources because in
this method John Lewis will develop a merger with a large firm and will sell the product under
the big brand name or will acquire a small firm and will deliver both the products under
company’s brand name. This business strategy leads to the rapid growth of an organization. For
African operations, John Lewis may create mergers and acquisitions with existing companies
like wall marts or other local retailers (Chui, 2017).

Business Expansion 18
Joint venture
In the business expansion strategy, John Lewis can have a Joint venture with two or more firms
to do business together. In this business expansion strategy firms share their resources and
profits, which reduces the risk of the business or divides the risk amount among associated firms.
For the intention of business expansion in Africa, John Lewis can have joint ventures with small
retail business organization and shares profits and risk both (Nippa & Reuer, 2019).
Conclusion
Business expansions are a required step in the growth of an organization. The concept of
globalization positively affects to business expansion of the organization. Technology
advancement in transportation and communication technology, free trade policies and free
movement of the people enable organizations to expand their business beyond national
boundaries.
This study comprises the business expansion operations of John Lewis in Africa. With the
context of this planning of the company internal and external environmental analysis of the
company and country have been discussed in this study. The internal analysis of the company
has been identified that sufficient resources and opportunities for the global operation. Although
there are some weaknesses and threats like highly centralized organizational structure, trade
policies, the role of government and competitors are some challenges for the company.
For the global operation, this discussion concluded the ideal opportunity for John Lewis despite
some challenges and drawbacks. Under the expansion planning of the company, functional
strategy and market development also have been discussed. As focusing on product quality
company should adopt product differentiation and market development expansion plan. This

Business Expansion 19
study also discussed some potential risk factors like financial, cultural, HR and business ethic in
the business expansion of the company. Under this discussion, mergers & acquisitions and joint
ventures are effective methods under expansion plans.

Business Expansion 20
Bibliography
Bishop, A., 2018. The influence of politics on the South African economy. [Online] Available at:
https://www.investec.com/en_za/focus/economy/politics-and-the-south-african-economy.html
[Accessed 10 February 2020].
CFI, 2020. What is the Ansoff Matrix? [Online] Available at:
https://corporatefinanceinstitute.com/resources/knowledge/strategy/ansoff-matrix/ [Accessed 11
February 2020].
Chui, A.B., 2017. Improving merger and acquisition decision-making using fuzzy logic and
simulation. International Journal engineering and business management, 9, pp.1-18.
Dudovskiy, J., 2020. Research methodology. [Online] Available at: https://research-
methodology.net/john-lewis-swot-analysis/ [Accessed 10 February 2020].
Expatica, 2019. A guide to company tax in South Africa. [Online] Available at:
https://www.expatica.com/za/finance/taxes/a-guide-to-company-tax-in-south-africa-949408/
[Accessed 10 February 2020].
Green, W., 2019. John Lewis vetting all suppliers. [Online] Available at:
https://www.cips.org/en-SG/supply-management/news/2019/april/john-lewis-vetting-all-
suppliers/ [Accessed 11 February 2020].
IFM, 2020. Porter's Generic Competitive Strategies (ways of competing). [Online] Available at:
https://www.ifm.eng.cam.ac.uk/research/dstools/porters-generic-competitive-strategies/
[Accessed 11 February 2020].

Business Expansion 21
IIED, 2017. Social and environmental trade-offs in African agriculture. [Online] Available at:
https://www.iied.org/social-environmental-trade-offs-african-agriculture [Accessed 11 February
2020].
John Lewis, 2020. John lewis partnership. [Online] Available at:
https://www.johnlewispartnership.co.uk/about/john-lewis.html [Accessed 10 February 2020].
Johnlewispartnership, 2020. Johnlewispartnership. [Online] Available at:
https://www.johnlewispartnership.co.uk/about/who-we-are/our-locations.html [Accessed 10
February 2020].
Johnlewispartnership, 2020. OUR VALUES. [Online] Available at:
https://www.johnlewispartnership.co.uk/about/our-values.html [Accessed 10 February 2020].
Katerina, R. & Aneta, R., 2014. The Impact of Globalization on the Business. Economic
Analysis, 47(3,4), pp.83-89.
Mobius, M., 2017. South Africa: Key Issues and Challenges. [Online] Available at:
https://emergingmarkets.blog.franklintempleton.com/2017/03/16/south-africa-key-issues-and-
challenges/ [Accessed 10 February 2020].
Myatt, M., 2020. The Impact of Globalization on Business. [Online] Available at:
https://www.n2growth.com/the-impact-of-globalization-on-business/ [Accessed 10 February
2020].
Nippa, M. & Reuer, J.J., 2019. On the future of international joint venture research. Journal of
International Business Studies volume, 50, pp.555–97.

Business Expansion 22
Nordeatrade, 2020. Business law in South Africa. [Online] Available at:
https://www.nordeatrade.com/en/explore-new-market/south-africa/legal-environment [Accessed
11 February 2020].
Osano, M.H., 2019. The global expansion of SMEs: role of global market strategy for Kenyan
SMEs. Journal of Innovation and Entrepreneurship, 8(3).
Rajion, R., 2017. Mixed realities of African retail. [Online] Available at:
https://www.howwemadeitinafrica.com/mixed-realities-african-retail/57136/ [Accessed 10
February 2020].
Rogerson, M.C., 2016. Climate change, tourism and local economic development in South
Africa. Local Economy: The Journal of Local Economy Policy Unit, 31(1,2), pp.322-31.
Shewan, D., 2020. How to Do a SWOT Analysis for Your Small Business (with Examples).
[Online] Available at: https://www.wordstream.com/blog/ws/2017/12/20/swot-analysis
[Accessed 11 February 2020].
South Africa Govt. , 2020. Science and innovation. [Online] Available at:
https://www.gov.za/about-sa/science-technology [Accessed 11 February 2020].
Tawii, C., 2019. Eyes on Africa: Understanding Retail in Africa. [Online] Available at:
https://blog.euromonitor.com/eyes-on-africa-understanding-retail-in-africa/ [Accessed 10
February 2020].
Theglobaleconomy, 2020. Australia: Political stability. [Online] Available at:
https://www.theglobaleconomy.com/Australia/wb_political_stability/ [Accessed 10 February
2020].

Business Expansion 23
Verbeke, A., Coeurderoy, R. & Matt, T., 2018. The future of international business research on
corporate globalization that never was. Journal of International Business Studies, 48(9),
pp.1101–12.
worldometers, 2020. worldometers. [Online] Available at:
https://www.worldometers.info/world-population/africa-population/ [Accessed 11 February
2020].
Yourfreetemplates, 2018. PEST analysis template. [Online] Available at:
https://yourfreetemplates.com/pest-analysis-template/ [Accessed 11 February 2020].