Strategic Management Plan: John Lewis Company's Environment Analysis

This report presents a strategic management plan focusing on John Lewis Ltd., analyzing its internal and external environments. It begins with an executive summary and table of contents, followed by an introduction highlighting the company's history and market position. The report utilizes PEST analysis to examine political, economic, social, and technological factors influencing John Lewis. A SWOT analysis identifies the company's strengths, weaknesses, opportunities, and threats. Furthermore, the report applies Porter's Five Forces model to assess the competitive environment, including the level of competition, threat of substitutes, threat of new entrants, and the bargaining power of buyers and suppliers. The conclusion summarizes the key findings, emphasizing the importance of understanding both internal and external factors for business growth and development. The report includes a list of references.

Running head: STRATEGIC MANAGEMENT PLAN
Strategic Management Plan (Assignment 1)
Name of the Student:
Name of the University:
Author’s Note:

1STRATEGIC MANAGEMENT PLAN
Executive Summary
This report intends to study the external as well as the internal environment of the company
John Lewis. To analyze the internal and external environments the PEST and SWOT analysis
frameworks have been used. Finally, the report will conclude with an analysis of the
competitive environment of the company through the framework of Porter’s Five Forces
model.

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Table of Contents
Introduction................................................................................................................................3
PEST Analysis...........................................................................................................................4
SWOT Analysis.........................................................................................................................5
Porter’s Five Forces model........................................................................................................6
Level of competition..............................................................................................................6
Threat of Substitutes..............................................................................................................7
Threat of New Entrants..........................................................................................................7
Bargaining Power of Buyers..................................................................................................7
Bargaining Power of Suppliers..............................................................................................8
Conclusion..................................................................................................................................8
References..................................................................................................................................9

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Introduction
The internal as well as the external environments form an important part of any
business organization or company. It is often seen that the internal environment can be
controlled by the company or by the business organization concerned. However, the external
environment is beyond the control of the company or the business organization. This report
intends to study the internal as well as the external environment which affect the business of
John Lewis Ltd. in the UK.
John Lewis Ltd., founded in the year 1864 and maintained by “John Lewis
Partnership”, is a “chain of high-end department stores operating throughout the United
Kingdom”1. The tag line of the company is "Never Knowingly Undersold"2. The company
has its business in England, Scotland and Wales and in the year 2008 was officially
proclaimed by “Her Majesty the Queen” as "suppliers of haberdashery and household
goods"3. The annual sales data of the company are provided by the below given figure-
1 'John Lewis | Ipads, Tvs, Furniture, Fashion & More' (John Lewis, 2018) <https://www.johnlewis.com/>
accessed 15 March
2 'John Lewis | Ipads, Tvs, Furniture, Fashion & More' (John Lewis, 2018) <https://www.johnlewis.com/>
accessed 15 March
3 'John Lewis | Ipads, Tvs, Furniture, Fashion & More' (John Lewis, 2018) <https://www.johnlewis.com/>
accessed 15 March

4STRATEGIC MANAGEMENT PLAN
Figure 1: Annual sales report of John Lewis Ltd.
Source: (John Lewis, 2018)
PEST Analysis
There are several factors which affect the external environment as well as the internal
environment of the company. A PEST analysis of the company would reveal the following
facts-
Political  The political climate of the United Kingdom where the company is
operational is a very stable and very congenial for trade and
commerce4.
 The Queen of England herself acknowledged the contribution of
4 'Essentials Of UK Politics' (Google Books, 2018) <https://books.google.co.in/books?
hl=en&lr=&id=1ubnCgAAQBAJ&oi=fnd&pg=PP1&dq=UK+politics&ots=dXBnzyxOTR&sig=PqOA_qpRQ5
0V92S_dRYXCw6LqVk#v=onepage&q=UK%20politics&f=false> accessed 15 March 2018

5STRATEGIC MANAGEMENT PLAN
this particular company in the year 20085.
 The UK government has decided to reduce the corporation tax from
30% to 28% which will help the company6.
Economic  The UK is still reeling from the effects of the recession7.
 The rise of the various e-commerce companies like Amazon, e-bay
and others poses a serious threat to the company8.
Social  The society of UK is a very conservative one and therefore, the
favors heritage. The company John Lewis, being an old one will
enjoy considerable success9.
 The UK people have become more conscious about fashion and this
can act as an opportunity to the company.
Technological  The business of the company has evolved since the introduction of
5 'Essentials Of UK Politics' (Google Books, 2018) <https://books.google.co.in/books?
hl=en&lr=&id=1ubnCgAAQBAJ&oi=fnd&pg=PP1&dq=UK+politics&ots=dXBnzyxOTR&sig=PqOA_qpRQ5
0V92S_dRYXCw6LqVk#v=onepage&q=UK%20politics&f=false> accessed 15 March 2018
6 Asda Lauches £35 Tuxedo In Attempt To Sew-Up Formal Attire Market' (Mail Online, 2018)
<http://www.dailymail.co.uk/news/article-494093/Asda-lauches-35-tuxedo-attempt-sew-formal-attire-
market.html> accessed 15 March 2018
7 Handbook Of Regional And Urban Economics' (Google Books, 2018) <https://books.google.co.in/books?
hl=en&lr=&id=lKEGBgAAQBAJ&oi=fnd&pg=PP1&dq=UK+economics+for+business&ots=4lhvlUBHDh&si
g=w8sOrqbZaNQHfUmGhmymzI2E5sM#v=onepage&q=UK%20economics%20for%20business&f=false>
accessed 15 March 2018
8 'Emarketing Excellence' (Google Books, 2018) <https://books.google.co.in/books?
hl=en&lr=&id=uBJb1xsGXqgC&oi=fnd&pg=PP2&dq=digital+marketing+marketing&ots=_s9jRHTt61&sig=h
zDph0LS9HzcWkFTCVSYEgPXTVw#v=onepage&q=digital%20marketing%20marketing&f=false> accessed
15 March 2018
9 Small Business And Society' (Google Books, 2018) <https://books.google.co.in/books?
hl=en&lr=&id=CW7bCQAAQBAJ&oi=fnd&pg=PP1&dq=UK+society+for+business&ots=VokcDHDJDk&sig
=51ItW1MpjPmIAkipaErM10OfMPc#v=onepage&q=UK%20society%20for%20business&f=false> accessed
15 March 2018

6STRATEGIC MANAGEMENT PLAN
the internet10.
 The company also provides online services in a bid to reach out to a
larger customer base.
SWOT Analysis
A SWOT analysis of the company John Lewis Ltd. would reveal the following facts-
Strength  Positive brand image
 The acknowledgement of the Queen of England of the company
as the "suppliers of haberdashery and household goods"11.
 Aggressive marketing and operational strategies
Weakness  According to a report, “John Lewis has recently started cutting
prices to match up the ever increasing competition. This may
devalue the brand”12.
 The company has often being criticized for its managerial
strategies.
Opportunity  Expansion in the third world countries
 Providing better e-commerce options to the customers.
Threats  Threat from the competitors like Amazon, Mark and Spenser, e-
10 Multinationals, Technology & Competitiveness (RLE International Business)' (Google Books, 2018)
<https://books.google.co.in/books?
hl=en&lr=&id=y56LAgAAQBAJ&oi=fnd&pg=PP1&dq=UK+technology+for+business&ots=cLVnrkYlZd&si
g=8xTGjsYcXNVzBNfOVeHs0oIXytE#v=onepage&q=UK%20technology%20for%20business&f=false>
accessed 15 March 2018
11 'John Lewis | Ipads, Tvs, Furniture, Fashion & More' (John Lewis, 2018) <https://www.johnlewis.com/>
accessed 15 March 2018
12 Asda Lauches £35 Tuxedo In Attempt To Sew-Up Formal Attire Market' (Mail Online, 2018)
<http://www.dailymail.co.uk/news/article-494093/Asda-lauches-35-tuxedo-attempt-sew-formal-attire-
market.html> accessed 15 March 2018

7STRATEGIC MANAGEMENT PLAN
bay and others13.
 Poor corporate governance
Porter’s Five Forces model
The competitive environment of the company has been analyzed using the “Porter’s
Five Forces model”. An analysis of the company as per the Porter’s Five Force Model would
reveal the following facts-
Level of competition
The “level of competition” which the company faces is extremely high. The company
John Lewis has several competitors like Tesco, Saintsbury’s, Zara, Mark and Spenser and
various others. In addition to these, there are e-commerce rivals like Amazon, e-bay and
others14. The company tries to differentiate the services provided by it by offering quality
products at brand money.
Threat of Substitutes
The company is facing a relatively higher amount of threat from the substitutes.
According to a report, “Notably, the key threat in substitutes in the food market is mainly
Waitrose, while Peter Jones and Marks and Spencer offer high quality apparel. Asda and
Tesco have also introduced less affordable alternatives and are even trading dinner jackets”15.
13 Asda Lauches £35 Tuxedo In Attempt To Sew-Up Formal Attire Market' (Mail Online, 2018)
<http://www.dailymail.co.uk/news/article-494093/Asda-lauches-35-tuxedo-attempt-sew-formal-attire-
market.html> accessed 15 March 2018
14 Asda Lauches £35 Tuxedo In Attempt To Sew-Up Formal Attire Market' (Mail Online, 2018)
<http://www.dailymail.co.uk/news/article-494093/Asda-lauches-35-tuxedo-attempt-sew-formal-attire-
market.html> accessed 15 March 2018
15 Asda Lauches £35 Tuxedo In Attempt To Sew-Up Formal Attire Market' (Mail Online, 2018)
<http://www.dailymail.co.uk/news/article-494093/Asda-lauches-35-tuxedo-attempt-sew-formal-attire-
market.html> accessed 15 March 2018

8STRATEGIC MANAGEMENT PLAN
Threat of New Entrants
The company faces a relatively lower amount of threat from the new entrants. It is to
be noted that most of the customers of the company are from the side of the royalty or higher
up the order and they have been taking the services of the company for decades. In addition
to this, the company does have a strong brand image which helps it to perform much better in
the business world16. Moreover, the cost of starting a new business in the UK is very high and
therefore, very few people actually get the opportunity to start their businesses in UK.
Bargaining Power of Buyers
The bargaining power of the customers is relatively high the options which are
available to them is relatively very high. Therefore, the company will have to follow effective
pricing strategy and also provide quality products to the customers in order to maintain their
position in the market.
Bargaining Power of Suppliers
It is to be noted that John Lewis is a company which manufactures most of the
products sold by it. The raw materials needed for the manufacture of those products can be
easily procured and this considerably reduces the bargaining power of the suppliers.
Conclusion
Therefore, from the above discussion it becomes clear that both the internal as well
the external environments contribute much to the overall growth and the development of the
company or the organization concerned. An analysis of the competitive environment also
16 Small Business And Society' (Google Books, 2018) <https://books.google.co.in/books?
hl=en&lr=&id=CW7bCQAAQBAJ&oi=fnd&pg=PP1&dq=UK+society+for+business&ots=VokcDHDJDk&sig
=51ItW1MpjPmIAkipaErM10OfMPc#v=onepage&q=UK%20society%20for%20business&f=false> accessed
15 March 2018

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reveals various facts which the companies need to follow to achieve growth and
development.

10STRATEGIC MANAGEMENT PLAN
References
Asda Lauches £35 Tuxedo In Attempt To Sew-Up Formal Attire Market' (Mail Online, 2018)
<http://www.dailymail.co.uk/news/article-494093/Asda-lauches-35-tuxedo-attempt-sew-
formal-attire-market.html> accessed 15 March 2018
'Emarketing Excellence' (Google Books, 2018) <https://books.google.co.in/books?
hl=en&lr=&id=uBJb1xsGXqgC&oi=fnd&pg=PP2&dq=digital+marketing+marketing&ots=_
s9jRHTt61&sig=hzDph0LS9HzcWkFTCVSYEgPXTVw#v=onepage&q=digital
%20marketing%20marketing&f=false> accessed 15 March 2018
'Essentials Of UK Politics' (Google Books, 2018) <https://books.google.co.in/books?
hl=en&lr=&id=1ubnCgAAQBAJ&oi=fnd&pg=PP1&dq=UK+politics&ots=dXBnzyxOTR&
sig=PqOA_qpRQ50V92S_dRYXCw6LqVk#v=onepage&q=UK%20politics&f=false>
accessed 15 March 2018
Handbook Of Regional And Urban Economics' (Google Books, 2018)
<https://books.google.co.in/books?
hl=en&lr=&id=lKEGBgAAQBAJ&oi=fnd&pg=PP1&dq=UK+economics+for+business&ots
=4lhvlUBHDh&sig=w8sOrqbZaNQHfUmGhmymzI2E5sM#v=onepage&q=UK
%20economics%20for%20business&f=false> accessed 15 March 2018
'John Lewis | Ipads, Tvs, Furniture, Fashion & More' (John Lewis, 2018)
<https://www.johnlewis.com/> accessed 15 March 2018
Multinationals, Technology & Competitiveness (RLE International Business)' (Google
Books, 2018) <https://books.google.co.in/books?
hl=en&lr=&id=y56LAgAAQBAJ&oi=fnd&pg=PP1&dq=UK+technology+for+business&ots