John Lewis: PESTEL, SWOT, and Porter's Five Forces Analysis Report

This report provides a comprehensive business strategy analysis of John Lewis, a prominent UK-based retail brand. The analysis begins with a PESTEL analysis, examining the political, economic, social, technological, environmental, and legal factors impacting the company's operations. It then delves into a SWOT analysis, evaluating John Lewis's strengths, weaknesses, opportunities, and threats. Further, the report applies Porter's Five Forces model to assess the competitive landscape, including the threat of new entrants, threat of substitutes, bargaining power of customers and suppliers, and competitive rivalry. Finally, the Ansoff matrix is used to explore various growth strategies employed by John Lewis, such as market penetration and market expansion. The report highlights the importance of strategic planning, marketing, and adapting to the changing retail environment to maintain a competitive advantage. The report also highlights the significance of market penetration strategies and customer satisfaction.

Business Strategy

INTRODUCTION
Business strategy is defined as the planning and development of strategies that help in
maximising profits of the company. This is known as the set of decisions that is helpful in
attaining goals and objectives of the organisation. Within an organisation, there must be planning
of strategies which will help in building competitive advantage within market (Brewster, 2017).
A strategy of business is helpful for attracting more number of customers and having competitive
advantage. The following report is based on John Lewis. This is a brand of high end department
store that is operating through Great Britain. This brand sells various clothing apparels to
customers. The following report includes SWOT, PESTEL, Porter's five forces model, etc. There
is also information about the strategic planning of the company in which goals are achieved in
less time.
TASK 1
P1
The PESTEL analysis of John Lewis is analysed for knowing what are the different
factors and elements that affects business operations. John Lewis is a branded company that sells
clothes and apparels. As PESTEL analysis is defined as the strategic tool for evaluating the
macro environment of the company. When there are changes in any of the factors – political,
economical, social, technological, environmental, legal then there is affect on the business
activities of this company (Cavusgil, and et. al., 2014). When there are changes in the macro
environment factors, there is direct affect on the John Lewis. The PESTEL analysis of John
Lewis is described below -
Political factors – This has great impact on the profitability and efficiency of the
company. This company deals in personal and household goods in several countries. Because of
this, there is exposure to different political system and environment. There is need to analyse the
political stability before running business.
Environmental factors - The production of John Lewis includes utilisation of different
resources like wool and cotton. These are environment friendly resources and these are used by
John Lewis. There is threat for John Lewis company that it can have legal penalty for the health
and safety of livestock. John Lewis is putting efforts to reduce the carbon footprint. This enables
in increasing efficiency of energy. This is helpful in creating god image in society.

Social factors – Consumers are shifting their preference as well as lifestyle, this affects
the functioning of John Lewis. It is important for the company to analyse the factors that
customers want in their clothing. There are different opportunities in business that helps in
working effectively. It is important for the company that it is evaluating all the demands and
wants of customers for increasing the satisfaction level of employees.
Technological factors – New trend among the customers is internet shopping. This
company has started to provide products on online basis. This directly affects the sales approach
of the company. It is essential for the company to analyse all technological aspects while
providing products and services to people. The various technological factors adopted by John
Lewis are IT system installation, cashless payment systems, etc.
Economical factors - There are both macro and micro economical factors that affects
business activities of John Lewis. Some of the macro factors included saving rates, inflation rate,
economic cycle. The decisions for business are taken by analysing macro environmental
economical factors. The UK market is facing recession and it is very sensitive to the changes
within the interest rates. There is fierce competition in retail sector of market. Thus, it is analysed
that John Lewis has to work in profitable economies for making more profits.
Legal factors – This company ensures that all the business activities and tasks are
completed by following the laws and regulations given by the government. This company is
making use of the renewable sources for the manufacturing of cloth. This brand takes care that
all work is done properly by abiding the laws given by government.
M1
From the PESTLE analysis of John Lewis, it is described that this company has
opportunity to analyse the technological factors that can be used within the processing. This
helps in providing good products to the customers. It is important for the company to handle
work in effective manner and attain organisational goals (Chang, 2016). The managers of John
Lewis consider different factors such as political, legal, social, environmental, economical and
technological while making different decisions of the company. It is important for the company
managers to evaluate positive as well as negative impact of the factors on the company's
processing.

TASK 2
P2
John Lewis & Partners is the UK's largest retail brand. Founded in 1864 company exports
its products all around the world provide service in more than 52 countries. They sell food and
drinks, cloths, and household goods. They recently came in financial services like insurance and
credit card (Chen, and Jermias, 2014). There is more than 50 stores of John & Lewis and 353 of
Wait rose. They also have online business. John & Lewis Partners hold operations and
management services. SWOT consist analysis of companies Strength, Weakness, Opportunity,
Threat. Analyse and examine the environment of the company. This help in increasing
productivity and generate revenue. SWOT analysis means analysing internal environment of the
organisation.
Strength
John Lewis have strong brand image because of better quality of goods. The brand
loyalty attracts customers. They have qualified and intelligent team members. This company is
using good market strategy for customer retention. John Lewis is using online image for
attracting lot of customers (Goffee, and Scase, 2015). This company provides a wide variety of
product and services. This company is having great performance and management for attaining
success within market. There is proper maintenance of launching new products and services
within market.
Weaknesses
John & Lewis need to expand their business and always try to change according to the
environment. The main focus on the cost of the product and service. There is need for creating
competitive advantage in the market. The financial planning of company is not that good and it
should be properly managed. There are higher prices of goods offered by the company which
decreases sales. There is limited variety of products on store for customers.
Opportunity
John & Lewis improve the standard of living by expanding there business. This is focus
on quality of good. There is need of providing healthy food products. There is need of
opportunity to enter in new market. The expansion of market at international level makes it
having good opportunities to enter new markets in different countries.
Threat

John & Lewis face failure in new market because of cultural difference. John Lewis is
having threat from the new competitors that are entering in market (Jeston, 2014). This company
is having insufficient funds for expanding in more markets.
.M2
From the above discussion, it is concluded that John Lewis's internal environment
provides various advantages and disadvantages. Employees are known as the most essential
resource of the company. There are various opportunities for John Lewis to expand it's market in
developing countries. Moreover, it is seen that there is need for developing new and string
strategies that helps in managing business activities. Continuous planning and managing of
business operations will help in maintaining competitive advantage.
TASK 3
P3
There is external model for evaluating the factors that helps in analysing performance of
the company. Porter's five forces model of John Lewis is helpful in analysing the various
elements and increasing the competitive advantage of the company. Some of the factors are
mentioned below -
Threat of new entrants: In context of the John Lewis organisation, the threat for new
entrant is low as retail sector requires lot of fund for staring the business. This is important for an
organisation to maintain the business operations and activities of the company. This is done by
attaining success and making profits for the company (Klettner, Clarke, and Boersma, 2014).
There is less threat for the new entrants but this doesn't mean that there is no competition. Some
retail laws and regulations are present which are to be followed by John Lewis for managing
work in proper manner. There is no difficulty in managing profits in retail sector.
Threat of substitutes: In context of retail sector, it is seen that the threat of substitution is
very high. John Lewis is providing clothes and apparels. There is opportunity with this company
to manage the business by providing latest trends and fashionable products. This is helpful in
developing more effective products as per the trends followed by customers. There are other
companies which are making products similar to John Lewis. Some of the competitors of John
Lewis are Marks and Spencer, Tesco, etc (Peng, 2017). These companies can launch new
products in market that will maximise the profits earned by the company.

Bargaining power of customers: The bargaining power of buyers is very high in context
of the retail industry. The customers have high power to manage which company to choose and
products are bought. It is important for John Lewis to attract more customers by providing high
quality clothes and apparels. This is seen as the rendering of opportunities in an effective
manner. It depends on the customers what pricing is set for products offered by John Lewis.
Bargaining power of suppliers: The bargaining power of suppliers is very low in context
of the retail industry. John Lewis is a global enterprise and there are a lot of suppliers which
provide raw material to the company. It is essential to manage and handle these vendors for
smooth functioning of all process and manufacturing. John Lewis is having opportunity for
changing the supplier whenever required as there are lot of suppliers present in market.
Competitive rivalry: The competitive rivalry in context of retail industry is very high.
There are various competitors of John Lewis in market (Scholes, 2015). For a company, it is
very important to analyse the factors of business effectively and develop competitive advantage
within market. It is essential for the company that they know how to manage the work and
provide effective services to customers. This is helpful in managing work.
M3
According to the Porter's five forces analysis, it is concluded that John Lewis must
provide effective strategies and planning for managing work related to increase in customer
satisfaction (Spender, 2014). It is very important for the company to manage all the processes
involved in managing the work. There are several marketing strategies and plans that can be used
by John Lewis to manage different business activities. There are several effective marketing
strategies such as social media marketing, marketing campaigns, promotion on advertisements,
TV, etc. that can help to grab attention of various customers. From the given model, it is
concluded that various strategies which can be used by organisations for managing business
activities and tasks (Veit, and et. al., 2014). Marketing is the key to success of the organisation.
It is essential for the company to have proper management and performance of different business
operations.

TASK 4
P4
Ansoff matrix is defined as the matrix which is used by the company for managing
different strategies and planning of the company. In context of John Lewis, it is concluded that
this company has effective strategic planning that is helpful in managing company's functioning.
It is essential for the organisation to have good management so that there is good strategy for the
company's success. The different type of strategies included in the John Lewis are mentioned
below -
Market Penetration: This is known as the growth strategy. The main aim of this strategy
is to provide emphasis on the existing product or service of the company. This includes
managing of present marketing strategies effectively. This kind of strategy is helpful in
managing work effectively. This kind of strategy is helpful in increasing the number of loyal
customers of the company. This provides great impact on the number of customers of company.
Market penetration will help John Lewis in enhancing its market share.
Market expansion: This is also known as as market development. As per this strategy,
it is seen that business can grow and develop by offering new innovations in the existing product
of the company (Wheelen, and et. al., 2017). The company has effective and innovative chance
of gaining attraction of customers by entering into new places and innovations. Market
expansion helps companies to grow their business effectively. When sales and profits are
increased, company's will be able to manage their work effectively.
Product expansion: This is the type of strategy that includes growth strategy. This
defines that new products are launched in the existing market. John Lewis is helped by the
product expansion as it provides help in meeting the customer's needs and demands. This
strategy helps in increasing profits and revenue earned by the company. In context of John
Lewis, it is concluded that growth strategy is helpful in gaining access to any new segment.
Diversification: This business growth strategy focuses on the occurrence of new product
and service in market. This is very risky as there are high chances of failure which are associated
with the diversification in different type of the world. John Lewis can use strategy of doing
marketing in effective manner. It is essential for the company to organise plans and several
marketing campaigns for doing great business.

From the above mentioned strategies, it is concluded that market penetration is the best
strategy that can be used by the company. John Lewis is having huge number of loyal customers.
It is efficient for this company to manage work and launch new products within market. IN this
way, company is able to capture more number of customers in less time. By emphasising on the
existing product's features, the marketers are able to provide various opportunities for John
Lewis in market. This is helpful in increasing the sales and revenue earned by the company.
.M4
John Lewis is an American brand that is involved in providing high end department
stores. This brand is involved in selling general merchandise as the part of employee owned
mutual organisation. The first store of this company was opened in 1864. there are approximately
51 stores of this company all over the world.
Aim: The main objective of this company is to increase the efficiency level of the
business operations and activities.
Vision: The vision of John Lewis is to become the best clothing and apparels company of
the world.
Mission statement: To offer high quality products with value addition to ensure high
satisfaction to people.
Strategies: The strategies used by John Lewis in managing business operations is to
expand market share by launching new product or service in market. This company must provide
new clothes that are according to the new trends and fashion.
Goals and Objectives: The goal of this company is to maximise profits and make more
money.

D1
Illustration 1: Leading 10 retailers based on sales in the United Kingdom (UK) in 2017/18
(Source: Leading 10 retailers based on sales in the United Kingdom (UK) in 2017/18, 2019)
From the analysis of given graph, it is concluded that within the retail sector, Tesco is the
leading company in context of profit making. This is analysed from this table that Tesco is
having huge revenue and profits. In this way, they are able to capture various international
markets in effective manner. This company generated revenue of approximately £38.7 billion in
the year 2017-2018. From this graph, it is concluded that the position of John Lewis in the UK
retail sector is fifth. The strategy of market penetration is helpful for the company to expand
market share of the company (Leading 10 retailers based on sales in the United Kingdom (UK)
in 2017/18, 2019). This strategy enables to maximise profits and sales of the company. John
Lewis is an organisation that has to adopt various marketing strategies for developing
competitive advantage within market. John Lewis is able to manage work by expanding into new
markets. John Lewis is able to launch new products in market for gaining attention of the
customers. John Lewis is able to attain its goals and objective for becoming a successful leader.
CONCLUSION
From the above discussion, it is concluded that business strategy is helpful for individuals
to do the activities and tasks in effective manner. There are different models which are used by

companies to analyse external and internal factors that affects business operations. It is essential
for the company to analyse various elements that help in attaining goals and objectives of the
company. Also it is concluded that strategic plans are developed in companies by analysing
various plans and capabilities of the company.

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Online
John Lewis & Partners targets greater store efficiencies with Paragon Live Management. 2019.
[Online]. Available
Through:<https://www.paragonrouting.com/en-gb/press-releases/post/john-lewis-
partners-targets-greater-store-efficiencies-paragon-live-management/s>.
John Lewis PESTEL Analysis. 2019. [Online]. Available
Through:<https://businessteacher.org.uk/pestel/john-lewis.php>.
John Lewis pledges to reduce carbon emissions. 2017. [Online]. Available
Through:<https://www.furniturenews.net/news/articles/2019/03/759522198-john-lewis-
pledges-reduce-carbon-emissions>.