Business Environment Analysis of John Lewis Partnership - Semester 1

This report provides a comprehensive analysis of the business environment, focusing on John Lewis Partnership. It begins by defining different organizational types: private, public, and voluntary, and examines their purposes, legal structures, and sizes. The report then delves into the scope of these organizations, using John Lewis Partnership, NHS, and Oxfam as examples. It analyzes the vision, mission, and stakeholders of each organization. The analysis extends to interdepartmental relationships within an organization, emphasizing how departments like HR, marketing, and finance contribute to organizational objectives. Furthermore, it explores the impact of the macro-environment on business operations through PESTLE analysis and conducts an internal analysis using SWOT to identify strengths and weaknesses. The report concludes by examining the interrelation between macro-environmental factors and a company's internal strengths and weaknesses, providing a holistic understanding of the business landscape.

Business and
Business
environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1: Types and Purposes of private, public and voluntary organisation......................................1
P2: Size and scope of different organisations.............................................................................3
TASK 2............................................................................................................................................6
P3: Interrelation between different organisational departments and their linkage with
organisational objectives.............................................................................................................6
TASK 3............................................................................................................................................7
P4 Impact of Macro Environment ..............................................................................................7
TASK 4............................................................................................................................................9
P5: Internal analysis of organisation for identification of Strength and Weaknesses.................9
P6: Interrelation of macro-environmental factors with company's strength and weaknesses...10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business environment includes internal as well as external factors which affects and
influences the sustainability and profitability of the organisations irrespective of the fact whether
operated at local or global level. Internal factors consists of employees morale, shareholders
support, managerial decisions etc. whereas external factors includes political, economical, social,
technological etc. Such influencing factors either make negative or positive impact on the overall
performance of an organisation thus it is more important for management to analyse such
influencing factors more carefully through various techniques such as PESTLE, SWOT etc. The
present assignment is based on John Lewis Partnership which is located at London, UK engaging
in providing multiple number of products such as clothing, watches & Jewellery, furniture,
financial services and many more. The project report describes the types of organisations in
addition with their scope, size, mission, vision, legal structure, SWOT and PESTLE analysis
along with their positive and negative impact, interrelation between various departments and
their role in achieving organisational goals.
TASK 1
P1: Types and Purposes of private, public and voluntary organisation
The organisations irrespective of the fact whether operated at local or national level get
much influenced by business environment which are complex and contingent in nature. There are
different types of organisations such as private, public and voluntary which are exist into market
to contribute more in the growth of GDP in terms of paying huge taxes as well as enhancing
standard of living of people through creating them lots of employment opportunities (Aithal,
2016). They are followed different legal structures due to having distinct nature. The brief
explanation of such types of organisations are given as under:
Private company:
It is a company which is owned and controlled by private individuals with a clear
objective of generating profits. It mainly focuses on offering quality instead of lowering prices so
that their products and services maximises their standard of living. Apart from this, the company
has facing some restrictions from the government such as they are prohibited to allot shares
directly to the public.
John Lewis Partnership is privately owned company operated by John Lewis and Partners
at London, UK. It is engaged in offering wide range of products such as furniture, clothing,
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financial services and many more due to which it has attained third largest private company by
sales in the year 2016 according to the Sunday Times.
Purposes of John Lewis Partnership:
 Maximising the satisfaction level of their employees as it is owned in trust for its
members.
 Maximum return to the partners on their investment.
 Achieving huge customer base across worldwide.
Public sector organisation:
It is an organisation which is owned and operated by government authorities through
subscribing more than 51% of shares in company. It came into existence with a clear objective
i.e. maximising standard living of people through offering healthy and quality products at an
affordable prices. Therefore, it is also known as Non-Profit organisation (Helms and Nixon,
2010).
NHS is a public sector organisation or NPO which exist at global market with their health
related services with an objective of serving maximum number of people who cannot afford to
get proper medical related services. It gets maximum support from government due to having
their maximum contribution towards welfare of society.
Purpose of NHS:
 Serving people with dignity and respect.
 Visiting at multiple number of nations to serve maximum number of needy people.
 Promote health fitness programs to prevent any diseases.
Voluntary organisation or NGO:
It is an organisation which is owned and controlled all business activities by number of
volunteers. It includes big businessmen, trustees, celebrities etc. They are grouped with an
objective of enhancing the livelihood of people through rending them welfare services at free of
cost.
Oxfam is an example of voluntary organisation whose main aim is eliminate poverty
through offering needy and poor people the basic necessities of life at free of cost. Thus, it act as
a charitable trust who conduct various functions such as disaster relief, advocacy, policy
research, pro-migration (Karagiorgos, Drogalas and Giovanis, 2011).
Purpose of Oxfam:
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 Securing life of people through investing money in fulfilling their basic needs of life.
 Creating awareness about importance of education through conducting programs at
different locations.
 Providing long lasting solutions to eliminate poverty.
Legal structure of Private company:
Private companies includes sole proprietorship, partnership, limited liability company etc.
which has followed different legal structures described by government (Leih, Linden and Teece,
2014).
Sole proprietorship: It is most least difficult and least managed type of association with
less legitimate start up expenses. In this, one individual is a proprietor of organization who
control and works all business capacities and took choices exclusively. Henceforth, the benefits
and business pay are saddled as close to home pay. The burden of such organization is
accomplishing boundless risk which indicate that sole proprietor is just at risk to pay all
obligations, claims, charges against the business.
Partnership: It is additionally generally most straightforward type of association because
of having greatest help from various accomplices occupied with working and controlling
business exercises. Support can be in type of money related or administrative. The profit
generated by them are taxed as personal income and partners are conveying boundless obligation
for all obligations and expenses against association (Osterwalder and Pigneur, 2010).
Limited Liability organization (LLC): It comprise of at-least two individuals in which
one is proprietor who is conveying boundless risk while different individuals are at risk upto the
degree of unpaid offer cash-flow to organization. Members took interest in an LLC in exchange
for a percentage ownership interest.
Legal structure of NHS: The lawful structure of NHS is significantly represented by the
National Health Service Act, 2006 in which promote changes are made by health and social care
act, 2012. It has immense effect on the structure of NHS.
P2: Size and scope of different organisations
Every kind of organisation are having different size and scope due to having distinct
nature and objective. Size is related with scale of operation of organisation whereas scope is
related with the possibilities of expansion or sustainability of business in future period of time.
Private, public and voluntary organisation follows distinct legal structure according to the rules
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and regulation defined by government. Stakeholders plays a major role in increasing size and
scope of organisation by giving them various kinds of support such as financial, managerial etc.
It includes employees, customers, shareholders and community as a whole. It is briefly explained
under the below:
Size: John Lewis Partnership is well established brand through out the world. The
company has generated over 3.8 billion British pounds as sales revenue till end of January 2018
(Annual sales revenue of John Lewis in the United Kingdom, 2018). Along with this has attained
more than 85,500 employees in the year 2018 which is huge in figures . Thus, these all has
increases the size of company.
Scope: According to Sunday Times, John Lewis Partnership becomes the third largest
UK private company by sales in the year 2016. It appeals strongly to middle and upper class
people due to which the company can easily sustain in market for longer period of time. John
Lewis Partnership is providing multiple number of products such as clothing, watches &
Jewellery, furniture, financial services and many more which increases their scope of
sustainability..
Vision: The vision statement of John Lewis Partnership is “To become one of the largest
retailer company of UK” by sales so as to maximise the return on partner's investment”.
Mission: The mission statement of John Lewis Partnership is “happiness of all members,
through their worthwhile, satisfying employment in a successful business”.
NHS (Public company)
Size: NHS positioned among best five world's biggest workforces. It was first set up in
the year 1948 and utilized in excess of 1.5 million working for the development and extension of
an association. It is worked in various number of countries therefore the size of organization is
substantially greater.
Scope: NHS is occupied with serving million of clients with their health related medical
services. Offering dental and optical care services in their offerings which drives association to
capture huge share of the overall industry. Because of their offerings health related services at
sensible costs it builds the sustainability of association in market world.
Vision: The vision statement of NHS is "to deliver health, better care and better value" in
order to make individuals' life more healthier (Savrul, Incekara and Sener, 2014).
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Mission: The mission statement of NHS is “to provide quality of care to every person
every day”. For this, they are able to reaching its services to the maximum number of people.
Oxfam (Voluntary association)
Size: Oxfam has possessed 20 beneficent associations which are existing in market to
dispense with poverty from the nation. It was established in the year 1942 through taking help
from numerous volunteers. It serves greatest number of countries which expands their size in
aggressive market.
Scope: Oxfam is performing several functions, for example, poverty eradication, support,
debacle help, strategy research and master relocation because of which serving a great many
individuals. In this manner, the extent of Oxfam to manage in market is high (Teece, 2010).
Oxfam is offering needy and poor people the basic necessities of life at free of cost. Thus, it act
as a charitable trust who conduct various functions such as disaster relief, advocacy, policy
research, pro-migration.
Vision: The vision of Oxfam is to see the world free from neediness because of which
they persistently giving their contribution in improving the work of each person.
Mission: The mission of Oxfam is to discover ideal arrangements which help them to
lessen destitution and enhancing life of individuals.
Stakeholders Analysis: It is a gathering which keeps enthusiasm for the working of
business and furthermore have capacity to impact the security of association either in positive or
negative way. It includes partners, clients, financial specialists, network in general. An
association can sustain in market for longer time frame just on the off chance that it have greatest
help from their partners therefore it is critical for management of John Lewis Partnership to
communicate with them on consistent basis. Here are the list of stakeholders alongside their
interest for an association:
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 High power – fascinated people such as CEO or higher authority
 High power – less fascinated people such as shareholders
 Low power – less fascinated people such as employees
 Low power – fascinated people such as customers.
TASK 2
P3: Interrelation between different organisational departments and their linkage with
organisational objectives
Illustration 1: Organisational Chart of Company
Source:Organisational Chart of Company, 2013
The departments such as marketing, finance, human resource, IT etc. play an essential job
in making development and progress of an organisation in aggressive market (Organisational
Chart of Company, 2013). The best expert of association comprising investors, CEO and Board
of Directors are assigning roles and responsibilities subject oversee and screen business works in
order to continue ahead in the opposition with their opponents. A multinational association for
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example, John Lewis organization need to understand the value of their departments which is
further explained as under:
HR Department: It is the division who perform diverse jobs and duties, for example,
recruitment of workers, examination of employee’s performances, fixation of pay rates and so
on. To hire talented candidates for company, it requires most extreme help from the market
department with a specific end goal to attract candidates in bunches of job applicants through
utilizing different promoting strategies, for example, social media, Newspapers and so on.
Consolidated contributions of both division drives organization to accomplish higher
productivity in future time-frame (Pingali and Roger, 2012).
Finance department: It is a department who is liable to help organization in keeping up
their money related position in market through overseeing and raising assets from various
sources, for example, financial institutions, banks and so forth. It drives different divisions to
execute their business exercises in more successful and productive way. For example, production
department of John Lewis Partnership requires budgetary help in securing progressed and
acquiring updated technologies to be used in manufacturing process so that quality item can be
delivered. Accordingly, all different departments are particularly subject to fund office in
execution of business exercises which in results higher productivity and maintainability.
Marketing Department: The marketing department is the department which is
responsible to promote the company at global level with marketing plans. For this, marketing
manager needs to prepare the budget after analysing the fund availability. Thus, this requires the
maximum support from the finance department to imply the plans with more effective and
efficiently. And both the department of John Lewis Partnership are very supportive to achieve
the goals of company.
IT Department: The department which capture and records the all information related to
employee, funds invested by other departments. This helps the management of John Lewis
Partnership to make an effective decision for the future plans. IT department provides the
information to the HR department, relating to employees performance, so this makes easy for HR
manager to give the rewards on the basis of their performance (Elliot, 2011).
Thus, all department of John Lewis Partnership are very supportive to each other in order
to drive the business effectively and efficiently.
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TASK 3
P4 Impact of Macro Environment
Macro environmental factors are those which influence the company's decision making, it
also affect the strategies and performance of an organisations. These factors include Political,
Economic, Social, Technological, Legal and Environmental, which affect the company's
performance directly or indirectly thus need to analyse by John Lewis Partnership which are
given as under:
Political: Political factors are those which are basically related with government rules
and regulations, as these rules and regulations vary with the government changes. Political
factors include tax regulations and laws regarding the consumer protection etc. which can
influence the overall performance of John Lewis Partnership. Positive: Trade reforms by the government can help John Lewis Partnership to take the
advantage of global market.
 Negative: If tax reforms done by the government, than the increase tax will affect the net
profit of the company due high tax expenses.
Economical: These are the factors which connected with the goods, services and money of the
organisation. This factor can affect the purchasing power of the consumers. To expand the
business of John Lewis Partnership it requires to analyse the economics related factors in order
to estimates the future earnings (Cavusgil, 2014). Positive: John Lewis Partnership operates its business in UK, as the UK has the very
effective and stable economy and highest GDP also. So the trade reforms can help John
Lewis Partnership to get FDI and increase its outlets. Negative: Economy factor include exchange rates, John Lewis Partnership is doing
business globally, so fluctuations in exchange rates can clearly make affect the profit
margins of the company.
Social: Social factors are directly related with the taste, preferences and interest of customers and
society as a whole also. So the changing taste can clearly make an impact on revenues of John
Lewis Partnership.
 Positive: The John Lewis Partnership provides new and stylish products to its consumers
at reasonable price, therefore it will automatically increase the buying behaviour of
customers and it will result in increasing revenues of John Lewis Partnership.
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 Negative: As in today's dynamic world, taste of customers changes everyday so if John
Lewis Partnership would not be able to fulfil the customers demand then it can leads to
low sales and low margins.
Technological: As world is full of innovation, so an upgraded technology needed in every
organisation. So it is essential for the John Lewis Partnership also to upgrade its technology to
get better returns (Business Environment. 2018).
 Positive: As if company makes the investment in its existing technology then it can
helpful for them to increase the sales also. For an example if John Lewis Partnership
starts the e-commerce website, then it will be easy for their customer to buy the products
and get updated with latest trends also. And overall it will increase the sales of John
Lewis Partnership.
 Negative: As technology up-gradation requires huge investment, so if company fails to
implement it effectively then company have bear the huge loss.
Legal: This is related with legal laws and policies, these rules and regulations advise the
company to work considering these rules and regulations. So it is necessary for John Lewis
Partnership to analyse this factor. Positive: As some laws related to employment such as Equal Right act helps in
maximising the working behaviour of employees which results the maximum
contribution from them.
 Negative: There are penalties which can be imposed to John Lewis Partnership by the
government in non compliances of such acts.
Environmental: These are the laws which connected with the environment, which helps in
protecting the environment from the business activities. So it is necessary for John Lewis
Partnership to evaluate these factors. Positive: As if John Lewis Partnership use the eco-friendly equipments to do the
business then it will minimise the wastage and protect the environment also.
 Negative: If the environment is affected due to the production activities of John Lewis
Partnership, then it can be a danger situation for John Lewis Partnership.
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TASK 4
P5: Internal analysis of organisation for identification of Strength and Weaknesses
For the management of John Lewis Partnership, it is essential to evaluate the strength
and weaknesses so to take the corrective actions, to maximise its share in the market (What
SWOT Analysis is in simple words, 2016). Through the help of SWOT analysis it can be done.
SWOT Analysis which are explained as under:
Strengths Weaknesses
 Strong brand image.
 Aggressive marketing strategy
 Strong supply chain network at global
level.
 Charging an affordable prices as
compared to other brands.
 As cutting the prices can devalue the
brand.
 Price earnings ratio is law as compare
to its competitors like Mark and
Spenser.
 Lack of transparency and poor
managerial incompetence is infuriating
many big investors.
Opportunities Threats
 As if John Lewis go according to
market trend then it can attract
consumers.
 Do more collaboration with celebrities
in order to increase sales of their
products and services?
 As selling online provides a great
opportunity to increase its sales.
 A deep competition from the corner
stores, supermarkets and grocery stores
is threat for the John Lewis.
 Instability of government causes threat
to company.
 As poor corporate governance in the
company might lead to falls in interest
margins.
P6: Interrelation of macro-environmental factors with company's strength and weaknesses
It is essential for John Lewis to connect their strength and weaknesses with the macro
environmental factors such as political, social, economic etc. which helps the company to find
out problems and their solutions also. It is describes as follows:
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Political: Political factors are those which can influence the John Lewis Partnership performance
due to changes in the government and changes in their rules and regulations. Strength: Favourable import export policy can help the John Lewis to maximise the
market share at worldwide. Weakness: The changes in government can increase the corruption level, so there is
possibility that John Lewis could also face this problem.
Economical: This factor helps businesses to evaluate the economic issues that are bound to have
an impact on business. These factors are, inflation, interest rates, economic growth etc. These
should be analysed by the John Lewis in order to know the impact of these on the company. Strength: Taking into consideration growth rate of UK, UK has the highest GDP, and
financial soundness are also high in UK. Thus if John Lewis open more outlets in UK, the
n company can get good response. Weakness: The company John Lewis, makes the investments in under developed
economy, then that could leads to loss for company (Chavis, Klapper and Love, 2011).
Social: It is connected with tastes and preference of individual and society as whole. This can
make the impact on the demand of John Lewis products, as consumer taste changes very
frequently. Strength: The products offered by the John Lewis at affordable price, increase their sales
day by day. And increased sales resultant an increased revenue. Weakness: The company John Lewis does not follow the trends, then they can lose their
customers.
Technological: The innovation is key to success, in this innovative world. So for the company
John Lewis it is compulsory to evaluate this factor to get benefit out of this. Strength: The company John Lewis has enough fund to spend it on technology
advancement. So, adopting online based business for online offers, it helps in grabbing
the customers globally.
 Weakness: It requires the huge expenditure and qualified and experienced employees for
implying and for continuous updating of web. Lacking at this part could make the
company weak financially.
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CONCLUSION
It has been concluded from the above project report that business environment is loaded
with complexities because of having internal and external variables which can influence business
activities of association in either negative or positive way. Associations incorporates private,
public and voluntary which are performed to accomplish distinctive aims and targets. PESTLE
and SWOT examination are additionally required to be conducted keeping in mind the end goal
to investigate outside and inner factors separately.
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