Business Strategy and Competitive Advantage: John Lewis

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Strategic Management Plan
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Executive summary
In this study, strategic management plan and its influences have been discussed briefly. The
organisation that has been selected for the said purpose is John Lewis Ltd, UK. PESTLE analysis
of the country has been done in this study in order to identify the external environmental
conditions of the country. SWOT analysis has been conducted to understand the inner strengths
and weaknesses, further opportunities and threats of the concerned organisation. Few models and
theories have been mentioned in the study to identify the strategic management plan and its
direction. In addition, a strategic management plan of the concerned organisation has also been
produced.
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Table of Contents
Introduction......................................................................................................................................4
Assignment 1...................................................................................................................................5
PESTLE and SWOT analysis of the organisation and an analysis of the organization’s
capabilities.......................................................................................................................................5
Analysis of the competitive environment using Porter’s Five Forces model..................................9
Assignment 2.................................................................................................................................12
Evaluation of the different types of strategic directions available to the organisation..................12
Justify and recommend the most appropriate growth platform and strategies..............................13
Produce a strategic management plan with strategies, objectives and tactics...............................16
Conclusion.....................................................................................................................................19
References......................................................................................................................................20
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Introduction
In order to achieve the desired outcomes, positive and useful strategies should be taken into
consideration. In business sector, the organisations also need to make proper business planning
for their business development. Business strategy means the planning by which an organisation
can operate its business to get the best productivity and profitability in the business market.
Business strategy should be made for long term so that the organisations can avail the long term
benefits. Proper business strategies help the organisations to stay competitive in the market with
its improved business activities.
John Lewis Ltd is one of the famous retail public limited organisations in UK. The organisation
was established in the year 1864 and it was founded by John Lewis. Headquarter is located in
London, UK. It provides various range of products to the customers like home and kitchen
appliances, men, women and kids’ apparel, electrical products, sportswear and many more (John
Lewis & Partners. 2019). Over 38000 workers are working within the organisation. It has the
departmental stores all over the country.
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Assignment 1
 PESTLE and SWOT analysis of the organisation and an analysis of the
organization’s capabilities
The organisation needs to have the overall knowledge of the places in which it operates its
business. It is necessary to identify the external environment of the respective country in which
the organization is presently existing or willing to expand in future for making further business
plan.
PESTLE analysis
Political The government of UK has taken some
positive and effective decisions which have
helped the country to remain stable politically.
However, Brexit issue has created little
turmoil recently and political environment has
become unrest (Masood et al., 2016). Though,
it can be identified that this issue can make
some opportunities for the organisations to
introduce new thoughts and business ideas in
order to stay in the competitive market. The
rate of corporation tax for organisations’
profits also has been on the higher side which
can minimize the company’s profitability.
John Lewis has to face some difficulties due
to the unrest situation of the country’s
political condition.
Economical UK is in the fifth position globally as per
nominal GDP is concerned. The government
of the country has taken few serious decisions
in order to avoid any issues in the economy.
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However, there are some issues which have
been disturbing the economic condition of the
country. The minimum rate of wage of the
people has not been increased as compare to
the product price (Sammut‐Bonnici and
Galea, 2015). Inflation rate was 3.1% in the
last month of 2017. The concerned
organisation has faced some problems during
the pricing strategy of its product.
Social United Kingdom has the population of over
65 million in the year 2017 as per the survey
report of the Office of National Statistics.
Multicultural activities and lavish lifestyles of
the society have encouraged the several
organisations to make their footstep in the
market of the country. John Lewis has been
providing variety range of products according
to the tastes and preferences of the society and
it has helped them to increase their
acceptability in the consumer market.
Technological UK has become one of the leading countries
in terms of advanced technology. The
business organisations are introducing new
innovative ideas through the new software and
technology in order to provide the best
services to the customers. The sector of
technology in the country has been developing
and almost 30 billion GBP has been invested
since 2011 (Iacovidou et al., 2017). However,
the country is running behind the countries
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like USA, Japan, South Korea and others.
John Lewis has made full use of the new
technology and software to increase their
productivity and service quality. The work
performances of the employees and the
managements are monitored by the
organisation with the help of technology as
well.
Environmental The environment of the country has been
affected by the economic activities. The
country has taken positive initiatives to
minimize the negative influences on the
environment. The government, newspapers,
local council and others have participated in
the campaign of reducing the country’s
pollution level. The concerned organisation
needs to reduce the level of carbon footprint
from the environment. Sometimes, critical
weather conditions also increase the
difficulties for the organisation in operating its
business.
Legal The government has introduced few legal
policies for the business sector which all the
organisation needs to follow. The
Employment Act has been introduced in 1996
by the government for protecting several
rights of the employees such as paternity and
maternity leave, holiday pay, minimum wage
and others. The act of Equality 2010 has been
introduced for maintaining the gender equality
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within the workforce at the time of hiring and
promotion. John Lewis has been following
these rules within their workplace and it has
helped the organisation to build the level of
employees’ satisfactory.
Table 1: PESTLE Analysis
Source: (Created by author)
SWOT Analysis
By analysing the external factors of the country, the concerned organisation can analyse its inner
strengths and weaknesses and identify the further opportunities and threats.
Strengths
● John Lewis provides wide range of
products to the customers through
their various shopping outlets.
● The organisation offers online
shopping facility to the customer so
that the more customers can easily
avail its products without going to the
stores.
● The company has the strong
management team who produce the
best performances within the
workplace.
Weaknesses
● The organisation mainly operates its
business in UK. So, it has no such
international presence.
● The product prices are likely to be on
the higher side so that the customers
can start thinking to shift to the
cheaper ones.
● It has started reducing the product
prices recently in order to stay in the
competitive market but it may affect
on the brand value.
Opportunities
● The developed society of the country
produces the growing demands. So,
Threats
● The several competitors such as Marks
and Spencer’s, ASDA, Arcadia and
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the organisation has the opportunity to
introduce new products such as
healthy foods and others in the market
which can make them unique as
compare to others.
● The organisation has made the
planning to enter in the market of
Australia and Ireland. It has further
opportunity to make its footsteps in
different business markets of different
countries as well.
others are the main threat for John
Lewis.
● Natural calamity, sometimes, has
produced troubles in the business
operation of the respective
organisation.
Table 2: SWOT Analysis of John Lewis, UK
Source: (Created by author)
 Analysis of the competitive environment using Porter’s Five Forces model
The competitive market environment needs to be analysed for the concerned organisation in
order to identify the company’s market position.
Porter’s Five Forces
Competitive rivalry
In the sector of retail in UK, the competition in the market has been massive (Fernie, et al.,
2015). John Lewis has been providing the variety of products to the large base of the community.
However, the prices of the products are likely to be on the higher side comparatively to the
others. This must be the matter of concern for the management of the company as they feel the
customers may start thinking to shift to other ones. The organisation has started recently to
minimize their product prices but by doing that, they are creating the threats of being devalued.
Threats of Substitutes
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Threats of substitutes for an organisation can be created when the customers can avail the
substitute products and services with reasonable prices from other organisations (Wheelen et al.,
2017). In the perspectives of UK business market, no such major substitutes are there to cloths
and foods. So, the threats of substitutes are comparatively low for the concerned organisation. It
can be a useful factor for the organisation in making the price strategy. The management of the
organisation may feel that the customers do not have that opportunity to shift to the other
retailers.
Threats of new entrants
Threats of new entrants for an organisation can be created at the time when new organisations
make their presence in the business market. When they start to provide the best quality and
innovative products to the customers in reasonable prices, the existing organisation of the same
sector may start to feel the urgency in its business planning for staying in the market (Aithal,
2017). In perspective of John Lewis, the threat of new entry is comparatively low. One of the
main reasons is the huge amount of capital investments in the business operation. John Lewis has
the high customer loyalty as the customers are happy to avail the products of the concerned
company. The organisation has been offering different types of products to the customers so that
there are less chances of getting threats from the other emerging organisations.
Buyers’ bargaining power
Buyers or customers are the powerful force in the business market. The organisations have to act
according to the demand of the buyers. United Kingdom has the large consumer market. In the
retail market there are few organisations that are operating. John Lewis, as a retail organisation,
has made the market reputation by providing the best quality of products. The customers can
make their choices to buy their desired products from the variety of products that it is offering.
However, the concerned organisation has offered its products relatively higher prices than the
others.
Suppliers’ bargaining power
Bargaining power of the suppliers can make an effect on the business operation of an
organisation. Suppliers can sell low quality of raw materials to the organisation in high prices
with the power of bargaining (Ayers and Odegaard, 2017). John Lewis does not overly depend
on the suppliers because it sells its own products or brands mainly, so that, the organisation only
buys the raw materials from the suppliers. The organisation has the large number of suppliers
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which enable them to switch anytime if one supplier offers high price for supply. So, the
bargaining power of the suppliers is comparatively low in view of John Lewis.
.
Figure 1: Porter’s Five forces Analysis
Source: (Rabetino et al., 2017)
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Assignment 2
 Evaluation of the different types of strategic directions available to the organisation
Strategic direction means the process or idea in which an organisation needs to apply for making
the strategy of business operation (Gans and Ryall, 2017). This helps the organisation to make
strategy for long term and get the benefits in their business for long term as well. There are few
types of strategic direction.
Mission
It describes the business purpose of an organisation. An organisation needs to make mission for
its further business activities (Marcus, 2017). The mission should be stated by the organisation
after analysing the consumer market. Generally, the organisations make their mission statement
by giving the priority of providing high quality products to the customer instead of cost saving.
Vision
Vision depicts the identification of an organisation’s future position in the market. It is very
essential for an organisation to have a clear vision statement in order to achieve the desired
mission. Vision of a company is associated with the customers, products and services, market
conditions, culture, technology, employees’ concern, brand image concern and many more
(Albrecht et al., 2016).
Culture
Culture of an organisation depends on the expectations, behaviours and norms. An organisation’s
culture is hard to change but it acts strongly to maintain strategic direction of the company.
Organisations need to build a good working culture in order to develop the performance of the
departments. It helps the organisation to build the manpower as the employees feel comfortable
to perform within the workplace.
Principles
Principles are mainly the guidelines through which an organisation can set the direction of
business strategy (Morden, 2016). It includes the variety range of policies also. With the proper
principles in the strategic direction, an organisation can have better outcomes, faster business
development and healthy market position.
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