Strategic Management Plan: Internal Analysis of John Lewis Retail

This report presents a strategic management plan for John Lewis, a major UK retailer. It begins with an introduction to strategic management and the company's background. The first project critically evaluates John Lewis's internal environment using SWOT and VRIO analyses to identify strengths, weaknesses, resources, and capabilities. It also examines the influence of the macro-environment using a PESTLE framework, considering political, economic, social, technological, legal, and environmental factors. The second project applies Porter's Five Forces model to analyze the competitive landscape, assessing the threats of new entrants and substitutes, the bargaining power of buyers and suppliers, and the intensity of competitive rivalry. The report concludes with a strategic management plan, incorporating tactics and strategies for the company's future. The analysis aims to provide insights into John Lewis's market position and strategic direction, emphasizing its strengths and addressing potential challenges.

Strategic Management Plan

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
PROJECT 1......................................................................................................................................3
Critical evaluation of the internal environment and capabilities of the organization..................3
Influence of macro environment on John Lewis and its strategies..............................................7
PROJECT 2......................................................................................................................................8
Porter's Five Force Model for competitive analysis....................................................................8
Strategic management plan..........................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Strategic management plan is a document which consists of organization's goal,
priorities, resources which are communicated within organization. With the help of such model,
company also identify the forward way which in turn improve the performance of a company.
The present study is also based upon John Lewis, deal in retail sector and offer range of products
at affordable price. The report will determine its internal environment and capabilities of an
organization by using different models and to identify the competitive advantage, Porter five
force model will be used. Moreover, study will also explain the strategic management plan for
John Lewis which contain tactics, action and strategies.
PROJECT 1
Critical evaluation of the internal environment and capabilities of the organization
Internal environmental analysis helps in determining the key internal factors which has
contributed towards the success of the organization and of which it can undertake the advantage
for the purpose of implementing the strategic business strategies. This helps in successfully
meeting up with the organization's aims and objectives (Phadermrod, Crowder and Wills, 2019).
In order to effectively carry out the strategic management of the company, it is essential to
determine the key strength and weaknesses of the company which can be done through internal
environment analysis (SWOT). For the purpose of determining its capabilities, VRIO analysis is
being used which is provided below.
SWOT Analysis
Strength
 It is the highly recognized and top most
retail store in UK.
 Offers wide range of brands to chose
from and in addition, it has its own
brands as well.
 It provides an option to purchase online
and also provides international delivery
as well (Quezada and et.al., 2019).
 Company is having highly experienced
team of employees which are 35,000 in
Weaknesses
 In comparison to the other retail brands
and super markets, the range of
products is limited.
 Price of its products are high which
results into limiting the target group.
 Ineffective marketing strategy.
 The company provides a premium
range of products which makes it
revenue decline due to the high priced

number.
 The company has made strong
investment in its R&D which has
helped it in attaining the high
innovation.
products.
Opportunities
 Targeting more young professionals
whoa re working away from home and
are also brand conscious can be the
strong target group.
 Rise in the disposable income resulted
into improvement in standard of living.
 Expansion of product portfolio
involving the green products and the
environmental friendly services.
Threats
 The major threat is of robbery attempts
which has caused concern in respect to
the security.
 The high competition in the market like
the grocery stores and the other branded
retail stores is a big threat.
 Varying exchange rates can affect the
price of its import.
VRIO Analysis
Resources Valuable Rare Inimitable Organized
Strong global
presence
✔
Use of
progressive
technology
✔ ✔
Unique product
portfolio
✔ ✔
Distribution
system
✔ ✔
Brand recognition ✔ ✔

Valuable: The company is having valuable worldwide presence which is has resulted into
creation of strong market position and gaining recognition all across the world. The unique
product portfolio of the company is also valuable as it distinguishes itself from the other firms
within the industry. The recognition it has gained has helped the organization in attaining higher
revenue and profits.
Rare: The technology used by the John Lewis is rare as not all the organizations have
implemented it as it requires huge amount of investment. Along with this, the brand recognition
of the company is also rare as it is difficult to gain such name and recognition. Such rare
resources have added benefits to the business which results into effectively meeting up with the
business requirements and also taking competitive advantage over its rivals (Gürel and Tat,
2017). The product range of the company is also rare as it is might not be possible for the other
company to easily copy the same or create the same portfolio.

Inimitable: The distribution system of John Lewis is inimitable as it has been developed over a
long period of time and involved large expenditure in the research and creation of its distribution
system. This makes it nearly impossible in respect to the imitation. Therefore, this results into
enhancing its capabilities in order to effectively meet with the changing business requirements
and market trends.
Organized: The technology and the distribution system of the organization is very well-
organised and structured. In respect to the technology, the company has implemented the latest
technology which helps in drawing the attention of the customers, Also, the use of technology is
very organized like the objective for which the technology is being implemented.
These are the key capabilities and the internal factors which has supported the company
in further business expansion and improvement along with taking competitive edge over others.
Influence of macro environment on John Lewis and its strategies
In order to determine the macro environment factor, Pestle framework has been used that
assists to identify the external environmental factors. This in turn assists to determine how macro
environment affect the strategies of a company. These are as mentioned below:
Political factor: This factor deals with the political stability of the country and this in
turn also affect the overall performance of a company as well. Such that Brexit affect UK in
adverse manner and that is why, it will somehow lead to affect the profitability of a company
(Achinas and et.al., 2019). Further, uncertainty in import and export also affect the strategies
developed by John Lewis. Therefore, company has to meet the defined aim by lower down the
prices (to manage increased tax rate) which in turn attract customers towards it.
Economic factor: Company performance is interrelated to the economic growth of a
country. Such that due to pandemic, economy of UK is decline and this cause direct impact upon
the performance of quoted company. Also, due to increase in interest rate of a country, customer
spending is decreases which will cause direct impact upon the business performance. Apart from
this, John Lewis is operating at global level and that is why, it provides range of job
opportunities to many customers that also contribute towards an economy of a country.
Social factor: It is relied upon the perception of people towards any brand and as
customers are looking for better products and services, that is why, it is necessary for the
company to focused upon such products. Also, if customer found same product at low cost, then

they easily shift towards another brand which affect the profitability of a firm. That is why, John
Lewis keep conducting marketing study in order to analyze the need of customers and then
product the products accordingly (Fozer and et.al., 2017). This reflects that social factors might
affect the overall business performance, but quoted firm developed strategies in order to maintain
the brand image.
Technological factor: It is deal with advance technologies and as per the current era,
companies are using range of advance technologies in order to stay ahead in the competition.
Similarly, John Lewis is also uses online applications in order to sell their products to customers.
Along with this, its research and development department is also conduct survey which in turn
leads to generate the same output that helps a firm to improve productivity (Alam and et.al.,
2019). Apart from it has been critically evaluated that due to cybercrime, most of the information
can be leaked and that is why, effective techniques must be used in order to minimize the issue.
Legal factor: The factor is deal with the laws and legislation that helps a business in its
smooth functioning. Also, as the company is operating at global level and that is why, it
complies with different employment act, sales of goods act that assists to improve the brand
image at global level. Further, during recruitment, company is also ensured that it do not
discriminate the employees on any basis, otherwise it might affect the overall performance of a
company. That is why, it is necessary for the company to complied with all the laws so that it
might not affect the overall performance.
Environmental factor: This factor deals with the environmental factor in which company
also ensured that it uses sustainability act so that it will not cause any negative impact upon
environment. Further, it also uses sustainable practices that assists firm to improve the
environment which includes stop using plastics, as it non-renewable material that cause damage
to an environment (Kristinae and et.al., 2020). On the other side, climate change also affects how
quoted business operates and offer the product that also leads to improve the environment. Thus,
ensure that all the sustainable products are used by the company otherwise it affects the overall
performance in opposite manner.
PROJECT 2
Porter's Five Force Model for competitive analysis
Threat of new entrants (low)

The threat of new entrant is low as the fashion retail market in UK is already occupied
with the top brands and in addition to this, it requires huge amount of investment for the purpose
of setting up the chain. The existing firms are clenching over the market share and the new firm
to entry required relevant knowledge and research. Thus, threat of new firm entering the market
is low.
Threat of substitute products (high)
Apparently, the chances of substitute products is high in respect to the food and cloths
which is mainly because of its key competitors offering high quality products (Sánchez-
Cambronero, González-Cancelas and Serrano, 2020). These products are more affordable in
comparison to the products of John Lewis which results into making this threat high.
Bargaining Power of Buyers (high)
Currently, the consumers are provided with the large number of options to choose from
which results into increase in the power of buyers. In respect retail industry, the switching cost is
very low along with number of alternatives. The UK economy is growing very slow thus, it
requires retailers to cut the prices. Thus, the power of buyers is high which can pose as a threat to
John Lewis.
Bargaining Power of Suppliers (moderate)
The power of suppliers is relatively moderate as the company is less dependent upon the
suppliers as it also sells its own products. In addition to this, there are various independent
suppliers in the industry and also involves the small operators (Hudson, 2017). This results into
weakening of the power of suppliers. The company can find other suppliers who offer the same
material at the lower price, therefore, the bargaining power of suppliers is low.
Competitive Rivalry (high)
The retail sector faces intense competition within the leading companies and that is why,
it faces tough competition within market. Such that Sainsbury, Tesco and Marks & Spencer are
considered some top rivalry who makes competition stiff. Also, due to offering innovative
products, differentiation makes John Lewis one of the top firm to deal in the international
market, also stay top in the competition as well.
Strategic management plan
Executive summary: The present strategic management plan is based upon John Lewis in
which company is entering into new market with its existing products that helps a business to

operate globally. For that, different models will be used in order to identify the strategies used so
that it helps to stay head in the competition.
Company overview: John Lewis is UK's largest employee owned business who deal in
retail sector and provide range of products at affordable rates. It has number of employees and
stores who operates at global level, due to its high quality products offering, company is able to
maintain the high brand image internationally.
Vision: Company offer product at unique manner and that is why, it inspires range of
new customers towards it due to its outstanding service.
Mission:The mission of a company is to satisfy the employment in successful manner by
measuring its ability to success and enhanced the position as an outstanding retailer.
Bowman's Strategy Clock model-
These are 8 strategies that helps to find out what policy is needed for company to
positioning its products in new market-
Low pricing and Value added- John-Lewis is company that is well-known in UK
however company want to enter in to market, so they can reduce prices to face competition.
Low price- Focus is only to provide product that have low price than competitor to make
themselves establish and that slowly company can increase prices.
Differentiation- John Lewis has a wide range to product in its basket, company may use
same for new market. Moreover, customer always look for wide rage of product from company
so it can be a good strategy for them.
Hybrid- In is combination of two strategies use first is low price and differentiation
which can be useful for company because they have both wide range of product with low price
(Oldman, and Tomkins, 2018). It will attract more customer and help to succeed in new market.
Focused on Differentiation- In this main focused is on differentiation of product and not
on prices, it can be high (Moktadir and et.al., 2020). This will be not good for company
moreover, it can lead to failure due to high prices' customer may not willing to shift on new
product.
Risky High Margins- this directly related to high price and that will increase risk of
failure. However, some times company may be benefited with this it creates brand image for
company in the mind consumer.

Monopoly Pricing- company need to set prices less than the competitor, because in this
market monopoly is crated by them of product. John-Lewis are in forced to set low price than
competitor to survive in market and become established.
Loss of market Share- For any company it is the worst case to positioning in this
company's market share is declining, so they start thinking about new market.
Ansoff Model-
This is a strategies planning, known as product or market expansion techniques in this
product/ market is analysis for growth opportunities. It is a kind of matrix in which business
strategies for expansion are analysed, there are four main strategies of this model-
Market Penetration- In this main focused on capturing more customer to increase
market share in existing market. There are many techniques that can be used by John-Lewis to
increase customers-they can decrease prices, more promotion, distribution increment and some-
time acquiring competitors to make monopoly in market.
Product Development- Company may look to develop a new product according to the
need for consumer in existing market to attend high growth (Ukko, and et.al., 2019). It is a big
task to be followed moreover, company need to make research and development team for that. It
will take time for introducing new product in market and need many effort form management
and marketing team.
Step to be followed-
 creating research and development department/ team to recognize need of consumer and
increase capabilities to make it possible.
 There can be strategic alliance or partnership with horizontal or vertical for easy
functioning.
Market Development- This is directly related to entering into new market for
development and expansion plan it will enable firm to get successful. John-Lewis company is
planning to enter in Ireland that can be good for them. Strategies for marketing development are-
Focus on attracting new costumer, pricing policies, competition etc.
Diversification- A firm entered into new market with wide range of products and
different pricing policy. It will be risky task for company to face because market is new and
products are also available in variety that may lead to mismanagement in manage them. Some-
time it also wrongs interpretation made about market and unrelated diversification is done.

For John-Lewis which is planning to expand its business activities a new product
development with entering into new market will be beneficial. It will allow them to capture new
customer due to new market and new product will allow them to create own brand image.
Porter generic strategies: It is used to identify the competitive advantage gain by the company
with a scope of activities for which a firm seek to attain the same. There are three main strategies
which can be used by the organization such that:
Cost leadership:It is designed in order to offer products at lower cost so that it helps the
business to established effectively within new market. In the context of John Lewis, it establishes
in Ireland with new organic products that helps to stay ahead in the competition (LESTARI and
et.al., 2020). This strategy helps company to increase the profit margin by maintaining current
cost and also offer product at low cost will helps to become more competitive.
Differentiation: In this, business focus on differentiating their products from competitor
with an aim to attract range of customers towards it. This is possible when company uses unique
and innovative product that helps a business to improve its brand image and uses its current
resources in an effective manner (McAdam, Bititci and Galbraith, 2017). Further, it helps to
increase loyalty of customers and opening new marketing channels with advance features that
assists to grab attention of many customers towards it.
Cost focus: In this company focus upon the niche market wither industry or geography in
order to become an expert in delivering high quality products. For that, company is tie up with
different companies in order to generate loyal customers towards it. That is why, this strategy
helps to become a leader within an industry.
Among all, John Lewis uses cost differentiation strategy that helps to offer new product
within new market and grab attention of many customers towards it. With the help of such
strategy, company generate new customers who are loyal towards a firm and also improve the
financial performance by maintaining the brand image at international level.
CONCLUSION
By summing up above report it has been concluded that to identify the internal
environment of a company, SWOT and VRIO frameworks has been used that examine internal
capabilities of John Lewis. Also, to identify the influence of macro environment factor, Pestle
has used which identifies that there are many factors that affect overall performance of a

company which includes political, environment, economic and social. Moreover, to examine the
competitive advantage of a company, Porter five force model has been used and the strategic
management plan also contain different frameworks and tactics that helps John Lewis to operate
successfully in different country.