John Lewis Retail Strategy: A Comprehensive Strategic Management Plan

Desklib provides past papers and solved assignments for students. This project analyzes John Lewis's strategic position.

STRATEGIC MANAGEMENT PLAN
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Table of Contents
Introduction......................................................................................................................................2
Assignment 1...................................................................................................................................2
LO1 Influence of macro environment on the organizational performance.....................................2
P1 Application of proper framework for the analysis of macro environmental impact..................2
M1 Implementation of strategic management decision based on analysis......................................4
LO2 Determination of internal capabilities of firm.........................................................................5
P2 Application of appropriate framework to evaluate internal capabilities....................................5
M2 Identification of strength, weakness, skill set, and structure of organization...........................6
Assignment 2.................................................................................................................................8
LO3 Application of outcome of Porter's five forces......................................................................8
P3 Evaluation of competitive forces through porters five force model...........................................8
M3 Application of appropriate strategy for the improvement of competitive edge and position of
the firm in the market......................................................................................................................9
LO4 Application of different theories, model and concepts so as to understand the strategic
direction of the organization..........................................................................................................10
P4 Application of various model and theories for strategic theory, model and concept...............10
M4 Development of a strategic management plan having tactical and tangible objectives and
priorities.........................................................................................................................................11
D1 Interpretation of data and analysis of objective and tactical action.........................................12
Conclusion.....................................................................................................................................12
Reference list.................................................................................................................................13
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Introduction
Strategic management planning is a systematic approach used to set organizational tactical
objective, decision and goal to reach a certain valuable position in the market. Planning for a
management strategy requires resources, employees, and other stakeholders participated in the
planning process (Effing and Spil, 2016). Present study highlights the influence of macro
environment on the organizational performance. Identification of internal capabilities of John
Lewis in UK is also given an essential focus under this assignment. Evaluation of strategic
capabilities of this firm in terms of Porter's five force model is going too carried out in present
assignment. Strategic planning for a firm is going to make under this study.
Assignment 1
LO1 Influence of macro environment on the organizational performance
P1 Application of proper framework for the analysis of macro environmental impact
In order to analyze the macro environmental impact on the John Lewis ltd in UK, it is necessary
to carry a PESTEL framework. PESTLE model helps to understand the strategic positioning of a
business organization wanted to explore their network throughout the world (Satya et al. 2018).
As a corporate strategy manager, it is the responsibility to find relevant macro-environmental
factor upon the business process of John Lewis. This framework is as follows:
Political factor ● Static role of the political environment
of the retail business process
● Low rate of retail business resources
(30% with 2.75% GST)
● Retail price index (RPI) for inflation
is very low
Economic factor ● High capital investment for a retail
organization (65%)
● High income in the UK (89% of
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people are professional)
● Public funding opportunity for small
and medium-sized business
● High economic growth in Wales and
Britain
Social factor ● Modernization of customers
● High dependency on retail business for
regular usable items
● Attractive image of customers towards
an online retail business
Technological factor ● The big innovation in the retail
business
● Customers satisfaction approach by
incorporation green technology (More
than 78% of retail industry uses green
technology within the retail business
process)
● Digital communication facilities
Environmental factor ● Environmental Protection Act 1990 in
the business process
● Anti-air pollution law in Wales 2007
● Sustainability and integration of
business process
● Dumping process for hazardous
material management
Legal factor ● Adoption of Insolvency Act 1986
● UK Corporate Governance Code for
small and medium-sized business
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● The Employment Rights Act 1996
Table 1: PESTEL framework
(Source: Influenced by Satya et al. 2018)
M1 Implementation of strategic management decision based on analysis
Analysis:
From the above table, it is clear that Political factor has a significant positive impact on the
business process of John Lewis. As stated by Knezevic et al. (2016), low rate of retail business
resources (30% with 2.75% GST) makes it effective for business organization to earn huge
return overall small investment. Retail price index (RPI) of inflation is very low that have a
significant impact on the business process of John Lewis. Static role of political environment of
the retail business process is another important aspect that helps a retail business to achieve
customer’s satisfaction at a higher rate. Economic factor has a high positive impact on overall
production process of John Lewis.
High capital investment for retail organization (65%) and public funding opportunity for small
and medium-sized business has helped John Lewis to start their business with a suitable
approach. As mentioned by Ananda et al. (2016), high income in rate increases profit generation
opportunity of retail business firm. In UK 89% of people are professional, for this reason, they
strongly depend upon the retail business items. Social factor also has a positive impact on the
retail business method in UK. High dependency on retail business for regular usable items and
attractive image of customers towards online retail business has helped John Lewis to achieve
high satisfaction of theytr5 customers in UK region.
Technological factor has a strong positive influence on the retail business process of John
Lewis. More than 78% of retail industry uses green technology within the retail business process
that helps to achieve environmental sustainability as well as customer’s attraction. As mentioned
by Webb et al. (2018), digital communication facilities improve communication between form
and customers in both global and national level. Big innovation in the retail business is really
appreciable to improve the integration process of retail business. John Lewis is not an exception
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to this aspect; they also use green technology so that they can achieve innovation as well as
sustainability.
Environmental factor has a strong positive influence in the online retail business, method of
John Lewis. Environmental Protection Act 1990 in the business process and Anti-air pollution
law in Wales 2007 has a significant amount of influence in the retail business method of John
Lewis. According to Oldham and Astbury (2018), retail business requires environmental
sustainability so that carbon footprint can be reduced. Dumping process is used for hazardous
material management in the retail business process. Legal factor has a quite negative impact on
the retail business process of John Lewis. Adoption of Insolvency Act 1986 and the UK
Corporate Governance Code for small and medium-sized business creates pressure on the profit-
making process of a retail firm.
Based on the overall analysis it can be said that it is important to incorporate all governmental
legislation in the UK, strategic management decision of John Lewis. This decision can help to
maintain their profit margin. From the pestle framework, it is clear that PESTLE factors are
significant for the growth of the retail business of John Lewis. In case of John Lewis, they have a
better opportunity to broaden their business network throughout the world by taking advantage
of all these factors in UK (Johnlewis.com, 2019). It can also be said that strategic capabilities of
John Lewis is very high that can help the future to establish their unique entity in the world.
LO2 Determination of internal capabilities of firm
P2 Application of appropriate framework to evaluate internal capabilities
As a corporate strategy manager in John Lewis, it has been identified that there are huge
numbers of strength and few weakness of this retail firm. With the help of SWOT model, internal
strength and threat of the organization can be identified (Thomas et al. 2017). Following SWOT
framework helps to identify the skill set, structure, strength, and weakness of John Lewis.
Strength
● Presence of online marking tool
● Use of Robust growth strategy
Weakness
● Unstable profit margin
● Quick change in the retail change
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● Effective creativity and innovation
platform
● Innovative ideas of staffs
● High brand strength
● Lucrative offering of products in the
online service portal
● Skill development training to staffs
demand of UK customers
● Little presence in international market
Opportunity
● Growing demand of online service
facilities
● Extensive seasonal offers to customers
● Rising focus in the sustainable food
items
● Eco sponsorship
● Market entry scope in developing
country like Malaysia
Threat
● Rigorous business and employment
law in UK
● Presence of strong competitive rival in
retail market in UK like ASDA, ALDI,
Morrisons, and Tesco
● Development of substitute products by
start-up businesses
Table 2: SWOT framework of John Lewis
(Source: Influenced by Thomas et al. 2017)
M2 Identification of strength, weakness, skill set, and structure of organization
Analysis
From the SWOT framework, it can be found that there are rigorous strength of John Lewis over
the threat and weakness. This aspect has a positive impact on the overall retail business process
of John Lewis. As stated by Rezaee (2018), innovation and sustainability lead business to a
higher position. Use of Robust growth strategy and presence of online marking tool are the
primary strength of John Lewis that has helped them to achieve a high satisfaction from the end
of their customers. Effective creativity and innovation platform, innovative ideas of their loyal
staffs also have a positive impact on the retail business process of John Lewis (Johnlewis.com,
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2019). Lucrative offering of products in the online service portal has a greater impact on the
customer's satisfaction policy of this retail organization.
Market entry scope in developing countries like Malaysia and growing demand for online service
facilities are the primary opportunity of the business firm John Lewis. Extensive seasonal offers
to customers to help them to achieve a huge amount of profit from the retail business process of
UK. In order to achieve a high growth rate, this organization has set its skill to adopt eco
sponsorship so that they carry an important role in social development (Satya et al. 2018).
The unstable profit margin of John Lewis can be a weakness that can affect the future retail
business method of this organization. Quick change in the retail change demand of UK
customers puts a serious threat for this retail organization. As stated by Knezevic et al. (2016),
international marketing is more profitable than marketing in the national field. Little presence in
international market of John Lewis decreases their profit margin. Profit collapse of John Lewis
from the year 2012 to 2017 is the most important weakness for their retail business operation.
Figure 1: Profit collapse of John Lewis
(Source: Johnlewis.com, 2019)
Rigorous business and employment law in UK is a big threat for John Lewis. Presence of strong
competitive rival in retail market in UK like ASDA, ALDI, Morrisons, and Tesco is another
important threat that puts serious pressure on John Lewis (Johnlewis.com, 2019). New start-up
business is also growing in a rapid way that puts excessive pressure on the online retail process
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of John Lewis. Moreover, it can also be found that huge internal capabilities of John Lewis to
take entry into a newly developing country and lucrative season offers has made them very
attractive towards the eyes of their customers.
Assignment 2
LO3 Application of outcome of Porter's five forces
P3 Evaluation of competitive forces through porters five force model
As a corporate strategy manager, it is essential to identify the market position and competitive
edge of John Lewis in the UK retail business market. As stated by Azevedo and Barros (2017),
application of appropriate market strategy can help to achieve business goal. In present context,
analysis of competitive edge through porters five force model is carried out to identify the
market position and tactical objective of the firm.
Threat of substitute products:
Threat for substitute products is significantly low in case of retail market in UK. This affects the
retail business process of John Lewis positively. In order to reduce threat from substitute
products, John Lewis uses customer’s centric approach and even the development and sells
products as per the demand of customers. According to Satya et al. (2018), substitute products
meet similar customer needs in different ways. With the help of switching the cost of the service
and products, John Lewis reduces the threat from substitute products offered by start-up business
organization.
Bargaining power of customers:
It is directly associated with the profit margin of an organization. High bargaining power of
customers has a positive impact on the online retail operation of John Lewis. John Lewis is
rapidly innovating new attractive retail services and products so that customers can closely attach
all the time with the company. Customers are the primary notion to achieve a huge amount of
profit by an organization (Knezevic et al. 2016). This has helped John Lewis to achieve huge
customer’s satisfaction which in terms increases the proof of the organization.
Competitive rivalry:
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A threat for competition is very high for the retaining operation of John Lewis. Competitors are
principally responsible for providing enough pressure of the operational process of an
organization. Existing players in the UK retail market decreases overall market penetration of
John Lewis which in terms decreases the profit of the firm. For this reason, John Lewis has
focused on the partnership strategy with the competitors. As reported by Effing and Spil (2016),
innovation can help to bring differentiation in the business process.
Bargaining power of suppliers:
Bargaining power of suppliers is very high in UK. For this reason, John Lewis is getting
excessive pressure from external marketing environment to loss overall profit margin in retail
business. Powerful suppliers create pressure on the firm to adopt business resources at higher
prices (Ananda et al. 2016). Sometimes this can be a burden for an existing business
organization. This is the same for John Lewis. High bargaining power decreases the profit
margin of this retail organization.
Threat of new entrance of business:
The new entrance provides innovative and attractive ways to improve existing business process.
The entry of new retail business in the UK market puts a serious threat on the overall online
retail business process of John Lewis. New startup business often uses lower price strategy so
that they can attract the attention of customers in a very short period of time. According to Webb
et al. (2016), new entrance creates effective barriers for an existing organization. Moreover, a
high amount of new entrants can decrease the overall reputation of the organization.
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Figure 2: Porters’ five forces model
(Source: Created by author)
M3 Application of appropriate strategy for the improvement of competitive edge and
position of the firm in the market
In order to minimize the threat from substitute, John Lewis started to use partnership strategy
so that they can minimize the overall pressure from existing retailing process. As reported by
Oldham and Astbury (2018), application of proper partnership strategy helps to provide financial
security to an existing business firm. Application of these strategies can help to improve existing
situation of the organization.
John Lewis is striving for the achievement of sustainable differentiation so that they can
minimize threat puts by existing retail make plays. Moreover, John Lewis has also started to
develop new services and products so that they can deliver that to customers with a fair and
affordable range. They also use a lower cost strategy so that a huge amount of customers can
afford retails items. Product differentiation strategy helps to make customers more interested
to adopt such products which in terms increase the profit of the organization (Thomas et al.
2016). Use of sustainable production process helps to achieve environmental sustainability
which in tens increases the profit of the organization.
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ThreatofsubstituteproductsBargainingpowerofcustomersCompetitiverivalryBargainingpowerofsuppliersThreatofnewentranceofbusiness

LO4 Application of different theories, model and concepts so as to understand the strategic
direction of the organization
P4 Application of various model and theories for strategic theory, model and concept
Use of Porter's generic strategy can help to make effective strategic planning for the business
organization. There are mainly four approaches under the porter's generic strategy. These are as
follows:
Cost leadership:
Under this strategy, a firm uses lower prices than other organization in the marketing process.
The success of implementation of this strategy depends upon the internal structure and culture of
the organization.
Cost focus:
In order to narrow down the competition, cost focus strategy is more beneficial. Under this
strategy, the organization focuses to maintain unique balances between the customers demand
and service cost of the products (Azevedo and Barros, 2017).
Differentiation focus:
Market segmentation and market focus help to achieve huge profit from the retail field. This
strategy focuses to build strong brand loyalty that can help an organization to achieve a unique
position in the market.
Differentiation:
In order to achieve a huge return from the business process, it is essential to adopt a
differentiation strategy. This strategy helps to offer services to the same customers in different
ways. Differentiation of product and customers management style can help to earn huge market
establishment in the case of John Lewis. Tactical action of John Lewis lies on the incorporation
of a partnership strategy that can help to minimize market competition.
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