Business Strategy Report: Analyzing John Lewis's Operations

This report provides a comprehensive analysis of the business strategy of John Lewis, a high-end department store operating in the UK. The report begins with an introduction to the company and its strategic objectives. Task 1 focuses on the influence and impact of macro-environmental factors, employing a PESTLE analysis to assess the political, economic, social, technological, environmental, and legal factors affecting John Lewis. Task 2 delves into the internal environment and capabilities of the organization, utilizing SWOT and VRIO analyses to evaluate its strengths, weaknesses, opportunities, and threats, as well as its valuable, rare, inimitable, and organizationally supported resources. Task 3 examines the competitive environment using Porter's Five Forces model to analyze the competitive landscape. Finally, Task 4 explores the application of models, concepts, and theories in organizational planning, culminating in a strategic marketing plan. The report concludes with a critical analysis of the information presented and offers strategic recommendations for John Lewis.

BUSINESS
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
P1: Influence and impact of different macro environment factors of a business organisation4
M1: Critical analysis of macro factors to determine the management decisions...................6
TASK 2............................................................................................................................................6
P2: Analysis of internal environment and capabilities of the organisation............................6
M2: Critical evaluation of internal environment and the capabilities....................................9
TASK 3............................................................................................................................................9
P3: Analysing of competitive environment of a organization................................................9
M3: Appropriate strategies to improve competitive edge and market position...................11
TASK 4..........................................................................................................................................11
P4: Models, concepts and theories that are helping in organisation planning......................11
M4: Strategic marketing plan...............................................................................................14
D1: Critical analysis of information.....................................................................................16
CONCLUSION...................................................................................................................17
REFERNCES.................................................................................................................................18

INTRODUCTION
Strategies are the basic action plan that is used by organisations in order to achieve some
specific objectives. They are very useful for a business their desired objectives. It is helpful for
achievement of objectives that are laid down in organisation. The report is based on John Lewis
that is a high end department store (Johnson, 2016). It is operating through Greta Britain. It is a
brand that is involved in selling of general merchandise in this employee owned organisation. It
was founded in the year 1929. These are strategies that have to be formulated for achievement of
overall targets. This report consists of different topic such as SWOT, PESTLE, Porters five force
model etc.
TASK 1
P1: Influence and impact of different macro environment factors of a business organisation
Business is functioning in a fast changing environment. There are some factors that are
providing opportunities & threats for business organisation in John Lewis(Anwar,. and Hasnu
2016). This type of analysis is done for developing an understanding of such macro environment
factors as discussed below:
PESTLE Analysis of John Lewis:
Political: These are some of the factors that are related to political environment of a
country. In UK, there is some political action that is also posing a positive and negative impact
on functioning of organisation such as john Lewis (Kara, 2018.
Positive: There has been a decrease on corporation tax that is from 30 percent to 28
percent that is very helpful for John Lewis in enhancement of their overall share of profits
incoming period of time (Leischnig, Woelfl and Ivens, 2016.
Negative: There can be a negative impact on functioning of organisation such as UK is
part of European Union and there has always been a increase in threat from various corporation
who arte of similar industry as John Lewis which can lead to a difficulty in survival for John
Lewis in coming time period.
Economic: There are certain economic factors that are related to economy of UK such
factors also impact functioning of organisations (Lyneis, 2020). Such as in case of John Lewis
there are certain factors as mentioned below:

Positive: There can be situations such as low interest rates that may lead to increase in
benefits for organisation if there is decrease in interest rates as there will be easy to availability
of funds.
Negative: There is a situation of recession and economy of UK is very sensitive to
various changes like factors of interest rates (Miles, 2019). High competition also in this retail
sector can lead to may lead to lot of changes that ahs to be made continuously by organisation
such as John Lewis.
Social: These factors are related to changing social patters of people living in society. It
consists of various factors such as changing preferences of people.
Positive: there is a shift of consumer preference in terms of change lifestuyel of people as
theer is more opportunities consumers are becoming more materialistic (Moseley III, 2017)
Negative: Many times increase in more brands leads to a social behaviour in which
people start preferring those brands that are offering products at low prices may be they ignore
quantity at such point. So John Lewis gets affected because of such factors as they do not offer
products at much lower prices.
Technological factors: Technological factors are those that are related to changing
technology in the external environment (Ofosu-Boateng. and Jiping, 2020).
Positive: New technological improvements are very helpful in making a work more easy
and leads to flexibility on overall functioning of a organisation. In john Lewis it helps in saving
lot of time that can be invested in other productive areas of operation by their staff members.
Negative: Technology is changing very fast and there has to be lot of investment that has
to be done on such adoption of new technology to survive in high competition environment. So,
it leads to a situation of high financial investment that is being done by john Lewis and company
gets affected in form of low working capital.
Environmental factors: Every business is functioning in external environment and all
such factors contribute by providing them with all necessary resources that are critical for
survival of a business organisation.
Positive: The resources that are renewable in nature such as wool and cotton are
environmental friendly and are leading to contribution of john Lewis in a positive manner as they

are nit posing any harm to the external environment that adds to a positive point to their brand
image
Negative: There are many process that are not much environmental friendly such as use
if plastic that has to be minimised and lot of efforts in terms if high investment of resources has
to be done by Jon Lewis to find various alternatives for such measures.
Legal factors: There are certain rules and regulation that are compulsorily imposed on a
organisation to ensure its timely and proper functioning by legal authorities of a country.
Positive: There has been a legislation of health & safety that has to be compulsorily
adopted by John Lewis as they have to take care of consumer protection rights. All such legal
rights lead to increase in consumer trust for such brands.
Negative: There are many strict regulations that have to be followed and may lead to a
situation of lot of policies and measures that have to be adopted by whole workforce in John
Lewis it may result into high regulations.
M1: Critical analysis of macro factors to determine the management decisions
Macro environment has some factors that are very important for developing an
understanding of different factors that can impact organisation. In case of John Lewis
management is making adequate attempts to reduce the negative impact of such factors and then
maximise the opportunities that are represent in such external environment. All these macro
environmental factors re very important for developing a detail understanding of how this is
going to impose a understanding on the overall macro environment which can have both positive
& negatively impact on its process of strategies making and overall functioning.
TASK 2
P2: Analysis of internal environment and capabilities of the organisation
Strengths Weaknesses
 John Lewis is one of the upmarket
retail stores that are having presence in
 The overall range of products that are
being offered by this brand is mainly

UK.
 They are offering a wide range of
fashion brands so that they can choose
from it and also assist in their own
brands.
 There is a huge workforce of 35000
employees who are working in this
organisation.
 There is a chain of john Lewis present
in different parts of world that is very
famous and well known because of
their policy “Never knowingly
undersold”
limited if compared with other super
markets that are a weakness for this
organisation.
 The prices at which John Lewis is
offering its products to their customers
is generally very high and it leads to
switching of their customers to similar
brands who are offering products at
comparatively cheaper and lower rates
with similar amount of value provided
in their products.
Opportunities Threat
 There is a opportunity of increasing
sales of John Lewis as there has been
rise in purchasing power parity of
people living in UK. Such instances are
increasing overall base of customers
very fast.
 There is a opportunity of expansion
network for John Lewis as they can
expand and establish their stores in
those areas where they are presently not
having any stores.
 There is a presence of a threat from
supermarkets, stores and other types of
convenience stores.
 There is also increased threat from
different types of convenience stores.
VRIO analysis is basically a framework that is also used for making a internal assessment of
these factors such as value, rareness, imitability and organisation. It is basically a framework that

is used mainly for development of understanding of the resources that are giving a organisation a
completive advantage.
Value It consists of those resources that are very
important for an organisation. In case of John
Lewis there are four different resources such as
distribution network, wide range of products,
competent workforce and established brand
image. All these are major four resources that
are very helpful in functioning of organisation
and thus are valuable for every organisation..
Rareness It is basically an attribute which is concern
with such resources that are some resources
that are very rare. In case of John Lewis, there
are some resources that are very rare such as
their brand image, wide variety of products and
overall network of distribution of products.
These three are majorly those resources that
are very rare for a organisation and competent
workforce is something that is not very rare for
a organisation.
Imitability There are some resources that cannot be copied
or adopted by any organisation such as brand
image of john Lewis and their distribution
network these both are the two resources that
cannot be easily be adopted or copied by any
competitors.
Organisation It is essential for a organisation that they are
making it easy for john Lewis to get a
competitive advantage. Brand image is
something that is very helpful for john Lewis

in establishing a competitive advantage and
this valuable. Rare and not easy to imitated by
their competitors. So that there is overall cost
benefit and also long run survival in the
market.
After, making detailed analysis that in john Lewis there are some resources such as their
goodwill and brand image that has been established and is helping this organisation in having a
competitive advantage.
M2: Critical evaluation of internal environment and the capabilities
Internal environment consist of different factors that can have a impact on functioning of a
organisation. These factors are to be in control of the organisation. John Lewis is a very large
organisation that is having sufficient resources so that overall objectives can be achieved. From
the internal analysis it can be said that there are some skills, structures an internal capabilities
that can help in smooth functioning of the organisation.
Internal capabilities
 It is related to resources such as qualified staff.
 It is helping in dealing with situations of business, such as more number of legislations.
Internal structure:
 There is requirement of communication skills in John Lewis.
 Higher compensation will help in dealing with situations of employee turnover.
Skills Set:
 There will be requirements of skilled workforce in John Lewis that can help in dealing
with such business situations.
 There can be some internal conflicts that are very common and can lead to smooth
operations of organisation.
TASK 3
P3: Analysing of competitive environment of a organization
Porters Five Force Model John Lewis
Porters five force model published by Michel porters in his book ‘’Competitive Strategies.’’ This
model use to analyze the competition of an organization. It helps in determine the profitability,

strengths and weaknesses of the business. Porter’s model is applicable on all type of industry.
John Lewis use porter’s model to analyze the competitive advantage and profitability of the
company. John Lewis is the UK’s famous retail brand and face high level of competition in the
retail industry to analyze and evaluate the strategies they use porters five force model.
 Level of Competition: - This model help in analyzing the level of competition faced by
companies this brings competitive advantage for the companies. Along with this model
analyze the competitor’s offers, strategies, product and services. John Lewis faces high
level of competition in retail industry (Gürel and Tat, 2017). They have large market
shares so this is an advantage to the company there few other competitors have this
advantage. They also try to expand their business to increase the level of competition in
the market. There market image is strong because of their unique products. They need to
increase the production services to give the competition in the market.
 Threat of New Entrant: - A company also affected by the new entrants in the market.
Now days it is easy for competitors to get enter in the market and give effective
competition. Companies with strong brand image and with good strategies give high
level of competition to the new entrants. John Lewis gives high level of competition to
the new entrant with their good market strategies (Gattorna, 2017.). Company’s
distribution network is not so strong so it is simple or easy for new entrants. John
Lewis focuses on creating new and innovative products to create threat for new
entrants.
 Bargaining power of customer/buyer: - Customers have power to drive the cost of the
products and services from high to low (Farren,, Kinney and Crotty, 2017). It depend
on the number of customer a company have and companies always try to increase the
number of customer by attract them through their creative products and services. John
Lewis unique product service their customers not have alternative product option this
decrease the bargaining power of the customer. Company also provide good quality of
products this attracts the customers.
 Bargaining power of suppliers:- Suppliers also affect the input cost of the companies.
There are few suppliers in the industry and this affect and derive cost of the companies.
John Lewis has good range of suppliers as compare to their competitors that’s why

there supplier have weak bargaining power. John Lewis is the important customer for
their supplier.
 Threat of Substitutes - Products and services used by the customer at the place of
company’s products and services is create threat of substitutes. Companies with
innovative and creative goods and services have fewer substitutes in the market. There
are few substitutes in the market of John and Lewis (Crotty, Kinney. and Farren, 2017).
They provide good quality products and also there products are different and unique in
the market. This increase profitability and strength of the company.
M3: Appropriate strategies to improve competitive edge and market position
There are different strategies that can be used for achievement of a competitive advantage
for a effective market position. John Lewis will be using strategies such as innovation and cost
leadership.
In terms of cost leadership so that they can produce products at lower prices that can
further help them in offering products at comparatively lower prices. It will result into gaining of
a competitive advantage.
Innovative strategies will be used in terms of opening of new discounting stores that can
also help in increasing of the present market share of this organisation. It will also result in
creation of an effective market position.
TASK 4
P4: Models, concepts and theories that are helping in organisation planning
Bowman's strategy Clock:
There is use of Bowman strategy clock by many organisation so that they are able to achieve
a competitive advantage. It is a clock that consists of some strategies that can be adopted by a
business organisation. In case of John Lewis this strategy is discussed below:
 Low price & Low added value: In this strategy there is low prices and low value that is
being offered by a organisation in their products (Chen, Eshleman and Soileau, 2017)
Usually a company is in position 1 at this strategy.

 Low price: in this strategy there is low cost at which products are being offered by a
organisation in this particular strategy a organisation is willing to become a price leaders
by offering products at low cost so that they can have a pricing advantage as compared to
other competitors
 Hybrid: In this strategy there is a mixed strategy that is sued by companies such as there
is mix of both pricing strategy by offering products at affordable prices. At same time
there is a differentiation policy in which some differentiation is also present in such
products to persuade customers to make purchase of these products
 Differentiation: In this strategy there are efforts made to increase the value that is being
offered to customers as a complete differentiation in the products that is offered to
customers (Bel and Binder 2017)
 Focused differentiation: It is a strategy where the main aim for creation of a different
position and increasing customer satisfaction by providing them with high value. It is a
aim that there has to be achievement of a premium advantage so that customers can be
target by making use of some different promotional strategies.
 Risky high margins: It is a risky strategy in which a organisation is willing to take high
risks. In this there is no value that is different but only taking of high risk that has to be
assumed by organisations Barik and Kumar, 2018)
 Monopoly pricing: it is a strategy in which monopoly is assumed by a organisation as
they are creating products that are not offered by any other organisation. It is a method in
which prices can be offered by a organisation and consumers are not having any option
part from purchasing of products
 Loss of market share: In this strategy a position is assumed by companies in which
there is loss of market share as company is not able to offer products according to
customer requirements.
From above discussion, It can be said that the most suitable strategy for John Lewis is to
make use of hybrid strategy as it is combination strategy that can help in achievement of
increased sales and high profits.

M4: Strategic marketing plan
Strategic marketing plan:
Strategic marketing plan is used in case of John Lewis as discussed below:
Vision: Vision of John Lewis is “To provide high quality products and increase
satisfaction of their customers”
Mission: The mission of john Lewis is “To measure their success with help of ability to
sustain and enhance their market share “
Objectives: The objective in present scenario is to increase market share of John Lewis
by a 10 percent in coming time period of two year that is by year 202 (Anwar and Hasnu, 2016)
Tactics: Tactics are those that are formed by an organisation so that they can sue it for
achievement of objectives in given period of time as mentioned below:
Product Products strategy in case of John Lewis is that
they are willing to fulfil all the needs and
requirement of their target segment of
customers in given period of time (Trevino
and Nelson,., 2016).
Price John Lewis is making use of a strategy of
prices that is not penetration by they are using
price skimming strategy. In this particular
strategy prices are not much lower but
accordance to quality of products that are
provided by this brand (Vallati and Grassi,
2019)
Place John Lewis is a brand which is [resent across
different parts of world and they are having
wide presence in UK at different prime
location so that customers can access to its
services more easily and become easy for them
to purchase its products.

Promotion Promotional strategies of John Lewis is
approaching their customers as they are willing
to promote their product by use of some i
innovative strategies such as they are using
digital media platforms like face book, linked
in that is helping them in enhancement of their
customer base (Yuliansyah, Rammal and
Rose, 2016.). It is also helpful in making
groups of similar interest and informing people
about new offers and promotions that they are
using to attract more customers.
Implementation: In the implementation step there is made sure by the management that
there has been proper implementation of above made objectives by the organisation. In case of,
John Lewis it is responsibility to allocate resources in such a manner that a specific budget is
prepared to be allotted for achievement of objectives
Evaluation: In this step a complete evaluation is done that all the planned objectives are
being achieved in the manner specified. It helps in finding if there have been any gaps in the set
standards and actual performance achieved by John Lewis.

D1: Critical analysis of information
Interpretation of the collected information is also very helpful in making a external analysis of
development of objectives and other tactical directions:
 Competitive position can be very helpful for John Lewis and in availing of opportunities
for affecting the buying behaviour of their customers so that sales can be enhanced.
 Technological improvement can also be helpful in creating different opportunities such as
there must be implementation of artificial intelligence it can lead to high cost but can
provide advantage in given point of time.
 Political stability is also very helpful in creation of more opportunities as there is use of
various strategies such as major diversification and market development that is helping in
more opportunities that will be created.
Strategic direction:
◦ More focus on market penetration strategy
◦ Innovative technology has to be adopted in present scenario/
Objectives
▪ Increasing the overall share of market by a percentage of 5 in coming time period
of two years
▪ Improvement of profitability percentage by 10 percent
Tactical decisions:
▪ Providing long run training to employees
▪ Making a long term analysis so that change can be adopted successfully

CONCLUSION
It is said from above discussed points that every organisation has to make some strategies
that can help them in their long term survival. They are impacted by various external factors that
can be understood with help of PESTLE analysis and internal factors that are understood by
SWOT analysis. Porter’s five forces are also a analysis that is being developed for understands
the basic five forces that are part of macro environment of every business organisation. Such
frameworks are used for analysing these factors in more detail as that their impact can be
noticed. Strategic plan is further prepared for purpose of its implication in achievement of some
specific targets to be fulfilled in course of business.

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