Business Strategy Report: John Lewis, UK Retail Sector Analysis

This report provides a comprehensive analysis of John Lewis's business strategy, focusing on its operations within the UK retail sector. The report begins with an introduction to business strategy and then delves into a PESTLE analysis to evaluate the external factors influencing John Lewis, including political, economic, social, technological, legal, and environmental factors. A SWOT analysis is then conducted to assess the company's internal strengths and weaknesses, as well as external opportunities and threats. The report also incorporates a VRIO analysis to evaluate the resources and capabilities of John Lewis. Furthermore, the competitive environment is analyzed using Porter's Five Forces model, followed by an identification and justification of the company's existing and potential competitive advantages. The report then moves on to devise valid strategies and tactical objectives to achieve overall strategic goals. Finally, the report critically evaluates different strategic directions available to John Lewis, recommends appropriate growth platforms and strategies, and evaluates methods for monitoring the chosen strategies to ensure success, including the use of Ansoff Matrix. The report concludes by summarizing the key findings and recommendations. This assignment is a valuable resource for students studying business strategy, offering insights into real-world applications of strategic management tools and frameworks.

Business Strategy
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INTRODUCTION...........................................................................................................................3
Part A...............................................................................................................................................4
PESTLE and SWOT of the organisation and an evaluation of the organisation’s resources and
capabilities..............................................................................................................................4
Analysis and critical evaluation of the competitive environment using Porter’s Five Forces
model....................................................................................................................................11
Identification and justification of the organisation’s existing and/or potential competitive
advantage..............................................................................................................................13
Devise valid strategies and tactical objectives to achieve overall strategic objectives-200.13
Part B.............................................................................................................................................13
Critically evaluate the different types of strategic directions available to the organisation-200
..............................................................................................................................................13
Justify and recommend the most appropriate growth platform/s and strategies..................15
Evaluate ways and means by which the chosen strategy/ies can be monitored in order to
ensure success.......................................................................................................................15
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................17
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INTRODUCTION
Business strategy is defined as a course of action in addition decision that all together
provides an effective direction to company through which they can perform their operations in
order to generate value (Ali and Anwar, 2021). Business strategy mainly aim towards allowing
organisation to capture attention of large base of audience through which company can
accomplish their business goals as well as objectives in effective way, while assuring high
profitability and competitiveness. Furthermore it has been identified that business strategy
effectively offers assistance to company strategic as well as competitive edge that allow
organisation to have competence over other rivals in industry.
Present report has been conducted on John Lewis which is a leading organisation operating
it’s functioning in the provinces of United Kingdom in retail industrial sector. This organisation
offers wide range of products and services in the segment of furniture, food, clothing, jewellery,
cosmetics and more. Present report includes PESTLE, SWPT and VRIO analysis through which
capabilities of organisation can be identified in effective way. In addition to this Porter’s five
forces is also included in this report along with Ansoff Matrix in order to identify strategic
options available for company that helps in devising strategic management plan.
Part A
PESTLE and SWOT of the organisation and an evaluation of the organisation’s resources and
capabilities
PESTEL Analysis
Pestel analysis is a strategic technique through which company can evaluate external
elements that can affect organisations smooth business operation. This analysis will also allow
for organisation to formulate efficient strategies in order to conduct business operation
(Bhattacharyya and Thakre, 2021). This analysis includes elements related to political,
economical, social, technological legal and environmental. Mentioned below pestel analysis of
John Lewis the method is being conducted:
Political:
John Lewis is operating its business services as a leading premium retail store in the
provinces of United Kingdom. There are a number of trade policies such as export and import
along with regulations of country that impact upon business operations of this company. This
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organisation is performing their business services in more than 55 countries worldwide in which
government plays major role in organisations strategic operations. It has been identified that due
to the outbreak of Covid-19 there are number of uncertainty and changes prevails in foreign trade
policies. In this it is essential for John Lewis to be agile in their actions, as to stay strong in
market, as politically stable country provides profitable business opportunities. John Lewis is a
retail store and having outlets that deal with beauty, cosmetics etc. which directly deals with
consumers which required right government regulations. In this with the help of an abiding
political factors company can successfully strive and can operate their business in country.
Economical:
The factor includes elements such as tax duty, inflation and more which led consumer to
shift their spending habit. During covid-19 lockdown John Lewis have suffered due to shutting
down of stores that decreases its sales (Caballero-Morales, 2021). However with improvement in
situation it is essential for organisation to make shift in their strategies in order to influence
attention of consumers with different promotional tactics. It has been identified that
macroeconomic condition in stabilizing which is increasing consumer spending. In this company
with the help of taking advantage of economic Strategies and number of subsidies and relieves
provided by United Kingdom government to retail sector organisation can gain profitability.
Social:
With the changes in behaviour and societal tradition consumer are tend towards buying
more rigorously and often. In addition to this it has been identified that demographic element
impact the lifestyle and choice of attitude towards brands and products. It is essential for John
Lewis to emphasize more upon hygiene, quality and safety of their products with the help of
segmentation, targeting and positioning strategies (Claro and Esteves, 2021). Along with this
company is also required to understand consumer’s needs and further make strategies
accordingly in order to influence needs and demands of consumers. However it has been
identified that due to increase in local and private label there is negative impact and increase in
competition for respective organisation. In this, John Lewis with the help of taking advantage of
its unique selling proposition can gain more competitiveness.
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Figure 1: Pestle analysis
Technological:
Technological innovation is happening in each and every industrial sector. It is essential
for organisation to go digital in this internet savvy world. In this John Lewis by making
investment and artificial Intelligence and mobile technology can get relevant data about
consumer and can influence their mind set (Gkoltsiou and Mougiakou, 2021). Along with this
company with the help of partnering with digital companies with the help of the digital business
strategy can effectively meet needs and demands of consumers. Along with this during the time
period of Covid-19 John Lewis with the help of taking advantage of innovative strategies can
offer their products with safety standard and high quality.
Environmental:
It is important for band like John Lewis to emphasize up on environmental factors in
order to gain sustainable competitive advantage. There are some of environmental elements like
waste management, reducing carbon footprint, recycling and greenhouse emission which is
required to imprecise upon by organisation. It has been identified that John Lewis has already
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made lot of initiative to reduce wastage with the help of natural packaging with the help of 70%
recycle material (OUR VALUES. 2021). Company also decreased their plastic hanger waste and
encourage consumers to bring their own bags. Company is required to emphasise upon most
sustainable business practices in order to gain lead in market.
Legal:
This element is playing important role for organisations especially operating their
services in retail luxury industry. It is essential for John Lewis to emphasize upon all the laws
associated to this industry such as safety laws, consumer privacy law, discrimination and
antitrust law and more. It is essential for company to make sure that consumers are protected
from any form of unlawful practice. Company is required to follow consumer privacy regulation
through which they can enhance trust level of consumers towards the brand. Lawful business
practices to allow organisation to enhance their market share and competitiveness. Negligence of
this will make company to face many legal obligations and penalties.
SWOT Analysis
Strength Weakness
 John Lewis is having strong brand
image in retail industrial sector that
encourages and attract consumer
towards their services and products
effective.
 Organisation is also having eye catchy
and trending designs comparatively to
other competitors.
 John Lewis emphasize upon sustaining
valuable employee relationship in order
to retain them for longer period of time.
Work force effectiveness is one of the
most important strength of John Lewis.
 Respective organisation is having wide
range of product ranges that are
 John Lewis invests comparatively less
in digital marketing and other digital
platforms comparatively to other rivals
in industry.
 Company also lacks in having
sufficient knowledge related to
international business strategies that
affects their global business sales ratio.
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trending and helps company to
maximize their share in market
segment.
Opportunities Threats
 John Lewis is having opportunity in
making heavy investment in digital
marketing and other digital platform in
order to influence large base of
consumer base on national, local and
international level.
 Company have opportunity to develop
and widen in new resourceful as well as
exclusive selling strategies in order to
assure market competitiveness (Mishra
and Yadav, 2021).
 Company can also introduce new
product ranges in order to gain
competitiveness over rivals.
 John Lewis is having opportunity to
enhance demand by making
introduction of personal label in
valuable and suitable way.
 John Lewis is facing threat from the
uncertain factors due to the outbreak of
Covid-19 that bring new rules and
regulation and can affect smooth
operations of company.
 Company also have threat from other
competitors like Tesco PLC, Marks and
Spencer and more.
 Organisation is also having threat
related to collapse if they maximize
their business operations as per new as
well as diverse culture.
VRIO Model
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Factors Valuable Rarity Imitable Organized What is the
result?
Global
presence
Global
presence
- - - Competitive
Disadvantage
Products Products Products - - Partially
competitive
Software Software Software Software - Competitive
advantage for
temporary
basis
Employees Employees Employees Employees Employees Competitive
advantage
Valuable: This factor includes those components which render help to an association in
accomplishing its objectives and destinations inside time. Valuable components of John Lewis
Ltd are:
Global presence:
The presence of this organization inside worldwide market is solid successful and wide. It
allows organisation to gain competitiveness over other rivals in industry in an effective manner.
Products:
Excellent products made by utilizing the most recent advancements are offered by
organization to clients (Onyama, 2021). With the help of this company maximises its consumer
base.
Software:
John Lewis Ltd utilizes software for adequately overseeing and working things in the
attractive way for accomplishment of authoritative objectives
Employees:
The staffs of John Lewis works in a way that gives help to association in accomplishing
specified focuses in opportune way.
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Rarity: It alludes to such parts of the organization which are uncommon and offers organisation
competitive advantages. Corresponding to John Lewis, worldwide presence is not discovered to
be uncommon on the grounds that various other enormous scope substances have a worldwide
presence. John Lewis rare elements are:
Products:
Products offered by this association are as per the most recent patterns and advancements,
accordingly, it is difficult for some other organization to handily duplicate them
Software:
The product utilized by John Lewis Ltd for upkeep of records and execution of tasks is
uncommon on the grounds that it is created according to the prerequisites of substance.
Employees:
The work forces of John Lewis are rare as they have their own arrangement of abilities
and skill which helps association in accomplishment of hierarchical destinations in a viable way.
Imitable: It alludes to those assets of organization which cannot be duplicated by rivals. For
John Lewis, items do not hold this element as the patterns and innovations with which these are
created can be utilized by rivals moreover.
Software:
Software utilized by John Lewis are planned and created as per hierarchical necessities,
consequently, it is difficult to be replicated.
Employees:
The abilities and information on staff are exceptional to people attributable to the
preparation gave to them and their own qualities, consequently these cannot be duplicated by
rivals.
Organized:
It very well may be alluded to as the components which are required to be coordinated in
a precise way to achieve authoritative objectives and targets (Phan, 2021). John Lewis software
must be updated at regular period of time to address the issues of association thus it does not fit
this criterion.
Employees:
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The staff of organization possibly must be organised in a situation when a change
happens inside hierarchical premises like conduction of instructional courses by business.
It has been evaluated from the environment internal environmental analysis of John
Lewis that there is certain strength that provides advantage to company in number of ways. It has
been identified that organisation employees act as it's one of the most important resources which
is imitable, valuable, rare and organised. Furthermore, it has been underlined that organisation
lacks in efficient marketing initiatives as well as strategies that affect them to reach towards
wider audience. Furthermore it has been identified that due to the presence of competitors like
ALDI, Marks & Spencer, LIDL, TESCO, ASDA, company face threat upon its higher
profitability and large consumer base.
Analysis and critical evaluation of the competitive environment using Porter’s Five Forces model
Porter’s five force analysis is defined as a specific tool through which organisation can
evaluate competition swelling in market segment. In terms with John Lewis with the help of
taking advantage of this model actual competitiveness in industrial sector can be identified with
the help of this John Lewis can execute their Strategies and operations in efficient way:
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Figure 2: Porters 5 forces
Threat of new entrants
The threat of new entrants in United Kingdom is comparatively low as in this
geographical segment consumer behaviour is basically inclined towards established as well as
respected stores. However it has been identified that there is time to time entry of new entrants
such as ALDI and Lidl those who are competing with John Lewis on price segment in United
Kingdom (Pylak and Kogler, 2021). It has been underlined that in departmental store business
threat of new entrants is comparatively low, as in this organisations are required to make
investment of high cost of capital. Along with this main reason behind low threat of new entrants
is that investors are not having full knowledge about market segment. This can provide
significant opportunity for John Lewis in which they can take advantage of innovation and can
offer new products and services to gain more competitiveness.
Threat of substitutes-
In retail industrial sector there is intense competition between leading companies which
can affect business operations of John Lewis. This makes high threat of substitutes. Competitors
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like Tesco and Sainsbury's are significantly diversifying into clothing and household goods. It is
essential for John Lewis to overcome this competition by shifting their pricing strategy from
premium prices to low cost. However it is essential for John Lewis to maintain their product
quality as negligence of this can affect consumer mind set.
Bargaining power of customers-
Bargaining power of John Lewis suppliers is relative low as company is having number
of suppliers through which they acquire raw materials and other resources. Furthermore it has
been underlined that suppliers always want to work with leading organisation like John Lewis.
This provides opportunity for company through which they can enhance their sales and can earn
good turnover. In this company by enhancing quality of their raw material especially in sector of
textile in which they can purchase high quality raw material can enhance their brand
competitiveness.
Bargaining power of suppliers-
There is high bargaining power of consumers in retail industrial sector. It has been
underlined that due to increasing competition from organisations like Sainsbury, Tesco and
more. John Lewis is facing high competition due to their premium pricing strategy. In order to
gain consumer attention John Lewis is required to switch towards low price products with low
price strategy. In this company is required to consider all the factors in order to overcome price
war. In addition to this it has been identified that due to the outbreak of covid-19 retailers are
subjected to lowering the prices in order to influence consumers to buy their products and
services (Ullah, Arslan and Puhakka, 2021). Furthermore it has been underlined that John Lewis
profitability is mainly dependent on United Kingdom market as they are having low international
presence.
Competitive rivalry-
Threat of substitute is high in retail industrial sector as in this consumers have number of
options to purchase as number of organisations are offering their services and products on
discount basis. It has been identified that organisations like Tesco and Asda keeps on offering
their production services on discount rate basis in their departmental stores, as stock clearance
sale. Along with this due to the outbreak of covid-19 low disposable income also affect premium
pricing strategy of John Lewis that make consumers to go to the stores like Tesco over respective
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