Business Management Report: UK Retail Industry and Strategic Analysis

This business management report provides a comprehensive analysis of John Lewis & Partnership and the UK retail industry. It begins with an introduction to strategic management and the importance of environmental analysis. The report then delves into the UK apparel market, followed by a PESTLE analysis examining the political, economic, social, and technological factors influencing the industry. Porter's Five Forces framework is used to assess the competitive landscape, evaluating the bargaining power of buyers and suppliers, the threat of new entrants and substitutes, and the intensity of rivalry. A value chain analysis explores John Lewis & Partnership's primary and support activities, identifying key areas for strategic improvement. The report concludes with a discussion of Porter's generic strategies, including cost leadership, differentiation, and focus, and suggests appropriate adaptations for the company to achieve future success. The reflection highlights the usefulness of the Porter's Five Forces model in understanding the business environment and its limitations.

Business Management

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Introduction
Strategic management is the continuous planning and monitoring, analysing the environment
to develop the strategies. The company has to analyse the environment to develop the
strategies in order to gain the objective. There are many tools are used to analyse the
environment such as Porter’s Five Forces Framework, PESTLE Analysis, Value chain
analysis, and many others (Dobbs, 2014). In this report, John Lewis and Partnership has been
taken into consideration to analyse the environment of the company as well as the retail
industry. John Lewis & Partnership is a department store which operates throughout the
United Kingdom. It was established in 1929 in the United Kingdom. The company has the 51
stores in England, Scotland and Wales. The company earns the operating income with the
amount of £243.2 million with the help of 38100 employees (John Lewis & Partnership,
2018).
In the beginning of this report, UK retail market will be discussed. Later on, PEST Analysis
and porter’s five forces will be used to analyse the environment of the company. Porter’s
generic strategies will be analysed so that the company will get the success in the future.
UK apparel sector market
The apparel market of UK has been growing continuously over the last few years. In the
2018, the market value of the industry is 60.7 billion euros. With the market value, the annual
expenditure on clothing, sales volume and the other values will increase with the 57.8 billion
pounds in 2017. The majority of the demand of the industry comes from women rather than
the men. There are many brands that hold the high market value in the market such as ASOS,
Marks and Spenser and many others. There are many consumers who prefer the buying
clothes in the physical shops with the per cent of 71.2. But the sale of clothing in internet has

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been also increases with the continue rate of 56% in 2017. The apparel market of the UK is
growing with the number of enterprises in the last five years (Statista, 2018).
(Source: Statista, 2018)
PEST Analysis-
Political
It has been seen that the political uncertainty disturb the retail market of UK. The market of
UK exists from the EU that made it difficult for the retailers industry. It is difficult for the
retailers to effectively plan the life beyond the Brexit. There are many brands that have their
agreements come to an end due to which the prices are rises and the companies face the
heavy loss (Hamilton-Hart, and Stringer, 2016).
Economical
The population of UK has been rising continuously year by year and reach at 62.2 million in
2010. There are many women than men having a longer life expectancy due to which the
population is increases. The GDP rate of UK is also increases with the annual rate 1.3% in
the annual chain. The country ace the deflation period with the rate of 4.6% due to which the
transportation cost is decreases. The industry has a benefit of reducing the cost of

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transportation because it has high cost services. The unemployment rate of UK is increases
with the rate of 68.1% to 1.53 million. The increasing unemployment rate affects the entire
economy. Increasing unemployment rate means decreasing the purchasing power of
consumers. The demand of the consumers is reduces due to low purchasing power and
negatively impact on high growth of the industry (Computer World UK, 2013).
Social
It has been seen that the taste of the consumers is changing with the passage of time. It is
difficult for the industry to adopt the new changes with the passage of time. There are many
consumers who does not prefers the fashion trends and wants the old material which is
require for it. The demand of those consumers is decreases due to adopting the new trends by
the industry. It is difficult for the industry to take care of the demand of both the types of
consumers in the market.
Technological
It has been founded that the retail industry adopts the new technology in the economy in
order to high growth of the market. The market uses the technology by distributing the goods
and services to the consumers through online. The industry developed the many websites and
applications to fulfil the demand of consumers through online. The industry can use the new
technology in buying, selling and weighing the products. New technology helps the
consumers to compare the prices with the different websites and with a single click they fulfil
their demands. New technology develops the mind of people and brought them closer to each
other. The demand of consumers is increases with the high rate that has a positive impact on
the industry (Morden, 2016).

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Porters Five Forces Framework
Bargaining power of buyer
It has been seen that the bargaining power of buyer is high due to high competition in the
industry. It is observed that the buyers can easily switch their demand due to low cost of
switching and the high plenty of alternatives. The market focuses on the customer needs due
to which the produce the plenty of product with the different prices which attracts the large
number of consumers (Doz, 2017).
Bargaining power of supplier
The bargaining power of suppliers is low due to high quality of material. The big companies
require the high quality of material due to which they did not prefer to switch with the new
suppliers. The companies deal with their existing suppliers due to high quality material as
they want to sell the branded product in the market.
The threat of new entrants
The threat of new entrants is low due to high capital requirement. The retail industry requires
the huge capital to enter the market. High goodwill value of the exiting companies is the
other factor of low threat of new entrants. It is difficult for the new entrants to enter the
market and beat the exiting companies (Ortega, Jalón, and Menéndez, 2014).
The threat of substitute
The threat of substitute is low due to no major substitute of clothes. Clothes are the necessity
of the consumers and there is no other alternative to replace.
The threat of competitors

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It has been seen that the industry has low threat of competitors due to low threat of new
entrants. The high goodwill value of the existing companies is the other reason of low
competitors. It is difficult for the companies to enter in the market and beat the exiting
company that is why the industry has low level of threat of competitors.
Value chain Analysis
The analysis classified into parts to analyse the market such as Primary Activities, and
Support Activities
Primary Activities
Inbound Logistics
It has been seen that the John Lewis & Partnership has the nature of storing, distributing and
receiving the material. The company store the raw material in the warehouses to protect them
for destroys. The company has 31 stores to distribute the raw material in the different areas
and reach at the consumers (Wheelen, Hunger, Hoffman, and Bamford, 2017).
Operations
The company currently operates the one manufacturing business. The company manufactures
the textile to operate the business in the market. The company manufacture and sales of
furnishing textiles under the trade name of Jonelle. As well the company also sell the fabrics,
curtains and many others (Mudambi, and Puck, 2016).
Outbound Logistics
The company announced the six more stores and distribution centre of Morrisons. The
company adopts the warehousing activities, and distributing activities to store and distribute
the goods. The company distribute the product across the UK from the various distribution
centres.

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Marketing and Sales
The company adopts the new technology to promote the products through the advertisement
during the year. It also promotes the products through the creative advertisements that the
company makes every year. The company uses the games platform to spread the awareness
of the brand so that the large number of consumers attract towards the product.
Service
The company provide the excellent services to the customer that is why it is famous brand in
UK market. It earned the high revenue due to which they decide to distribute the excellent
services to the customer by providing them discount on the special occasions.
Support Activities
Firm Infrastructure
The company infrastructure is appropriate which helps to operate the business in the higher
level. The company adopts the warehouses to protect the material, financial professor to
handle the accounts and finance. The company has flexible infrastructure which helps it to
operate in the market and grab the high market shared (Hill, Jones, and Schilling, 2014).
Human Resource Management
The company has 83000 of employees who help them to achieve the objective. The human
resource management of the company is motivated, employee retention, recruitment and
employee deployment. Human resource management focuses on the goals and implement the
strategies to achieve the objective of the company. Human resources are the main asset of the
company which hold the development (Shabanova, Ismagilova, Salimov, and Akhmadeev,
2015).

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Procurements
The company build the strong relationship with the suppliers to buy the quality of services. It
cannot switch with the other suppliers due to high quality of services. The company sell the
brand product that is why it does not switch with the other suppliers.
Technology
From the above discussion, it has been seen that the company use the technology to promote
the products in the market. It promotes the products through internet so that the large number
of consumers attracts towards the goods and services of the company. The company also use
the technology to produce the quality of product in the market. The company produce the
fabric product with high quality due to which it can use the high technology (Rothaermel,
2015).
Porter’s generic strategy
From the above analysis it has been seen that the company has to adopt the strategy in order
to achieve the objective. The company has to follow the porter’s generic strategy so that it
can earn the high revenue. The Porters generic strategies contain the three strategies such as
cost leadership, focuses and differentiation strategies. It is an appropriate method in response
to external environment.
Cost leadership strategy
As the above discuss, the retail market of UK is affected by the inflation and deflation period.
Now days, the deflation is increases due to which it is difficult for the company to compete
with the competitors. The company has to set the prices so that the company can grab the
high market share by beating the competitors. The company has to implement the cost

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leadership strategy so that it can provide the products to the consumers in low prices (Banker,
Mashruwala, and Tripathy, 2014).
Differentiation strategy
It has been seen that the retail industry has less threat of substitute due to which the
consumers attracts towards the company. The company has the opportunity to implement this
strategy to develop the product little bit differ from the others. The company has to introduce
the new product thrice in a year. It is beneficial for the company to produce the differentiate
product in order to achieve the objective. It is also beneficial for the consumers to get the new
product in the year (Moon, Hur, Yin, and Helm, 2014).
Focuses
The company has to implement these strategies by combining them then it would be
beneficial and helps it to achieve the objective. The company attracts the large number of
consumers by reflecting the low prices as compare to the others with the different quality of
services. The focus strategy helps the company in order to earn the high revenue and grab the
high market share by attracting the large number of consumers (Grant, 2016).
Reflection
I believe to use the Porters Five Forces in order to analyse the external environment of the
company. It was so beneficial for me at the time of analysing the external environment. There
are many advantages I felt about this model. The model is based on the ideal of competition
which helps me to analyse competition threat for the consumers. It is difficult for the
company to analyse the opportunity and threat but by using this model it is easy for me to
identify the threat and opportunity. I believe that this model helps to analyse the current
position of the company and obstacle in the way of growth of the success. The information

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collect from this analysis helps me to recommend the appropriate strategies in order to
achieve the objective (Moreno-Izquierdo, Ramón-Rodríguez, and Perles-Ribes, 2016). As
compare to other models, it is best model that I found for the analysis of external
environment.
There are also some limitations due to which it is difficult to analyse the whole information. I
found that this model is not applicable to handle the accounts of the company. I believe that
this model is beneficial for the company to analyse the current position but it founded that it
fails to found the financial position. The financial position of the company does not analyse
by this model that is why I can said that it is difficult to identify the appropriate position of
the company. At time of analysing the environment, it is founded that the model used by me
is focuses on the two or three factors without focusing on the others.
Conclusion
From the above analysis, it has been concluded that the Apparel Retailers subsector of UK
has the opportunity to grow in the market. John Lewis & Partnership came under the retail
industry of UK market. The analysis states that the company has less threat of competitors
and substitutes. Low level of threat reflects the more opportunity for the company in order to
grab the high market share. As per the PEST analysis of the industry, it is founded that the
industry has high opportunity to grow in the market. As per the value chain analysis, it is
observed that the company has excellent infrastructure and human resources to operate in the
market. From the above analysis, it has been recommended that the company has to adopt the
cost leadership and differentiation strategy in order to achieve the objective. There are many
benefits and limitations founded while using the Porter’s five forces. It has been concluded
that the company will grow in the near future.

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