Business Strategy Report: John Lewis's Macro and Internal Analysis

This report provides a comprehensive analysis of John Lewis's business strategy, examining the influence of the macro and internal environments on the company. The report begins with an introduction defining business strategy and its importance for achieving organizational objectives. It then delves into the macro environment analysis using PESTLE and Ansoff Matrix frameworks to assess political, economic, socio-cultural, technological, legal, and environmental factors affecting John Lewis. The report also explores the internal environment and capabilities of John Lewis through SWOT analysis, highlighting strengths, weaknesses, opportunities, and threats. Furthermore, the report applies Porter's Five Forces model to analyze the competitive landscape and identifies strategic directions for the company. Overall, the report offers a strategic plan for John Lewis to achieve its business objectives effectively.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
PROJECT 1......................................................................................................................................1
P1 Appropriate frameworks analyse the impact macro environment....................................1
P2 Organisation’s internal environment and capabilities.......................................................5
PROJECT 2......................................................................................................................................6
P3 Outcomes of an analysis using Porter’s Five Forces model to a given market sector......6
P4 Models, theories and concepts to assist with the understanding and interpretation of
strategic direction...................................................................................................................8
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business strategy can be defined as the organisation's high-level plan in order to reach
certain objectives of business. Strategies succeed while they direct to the growth of business, a
strong competitive position of business as well as strong financial performance. This can be
referred as the working plan of firm developed to accomplishing their prioritising objectives,
vision and competing successfully along with optimising financial performance with their model
of business. The strategies reflect their company's resources, strengths, vulnerabilities and
opportunities. A strategy should be unique beside of being the best as it carries out different
practices and functions to make the best out of practices. John Lewis is a high-end chain of
departmental stores functioning throughout the UK. It is owned and operated through the Lewis
Partnership (Ackermann and Audretsch, 2013). The purpose of this report is to evaluate the
influence of macro environment and internal environment along with its capabilities on business
of John Lewis Ltd. The project will also assess and apply numerous outcomes, theories, concepts
and models using Porter's Five Forces along with interpreting strategic direction available for
company. Hence, overall, report will be carrying out a proper strategic plan of referred
organisation in regard of achieving their business objectives in more adequate manner.
PROJECT 1
P1 Appropriate frameworks analyse the impact macro environment
Strategy can be defined as the scope and direction of a company over the longer time
period which attain the advantages for enterprise by their resource configuration within a
struggling environment, to attain requirements of market along with fulfilling expectation of
stakeholder. Strategies exists at numerous level of organisation but initially this is required for
organisation to emphasise overall operations of individual work in this. Strategic management is
complementation and formulation of the key objective and goals undertaken through
organisation's higher management on the owner's behalf associated with the resource
consideration as well as external and internal environment in which the company's compete
(Alsoboa and Aldehayyat, 2013).
The John Lewis Partnership is a British firm which operates numerous services such as
Waitrose supermarket and John Lewis departmental stores along with numerous financial
service, banking and other associated activities. The chain of departmental stores of John Lewis
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operates their business throughout the UK. It has more than 50 stores across Wales, Scotland and
England involving its flexible format and at home stores in the York and Exeter. While carrying
out a business strategy plan, this is fundamental for business organisation to consider the
activities and proper environmental analysis in regard of achieving business objectives of John
Leiws (Bentley, Omer and Sharp, 2013). Here are mentioned the external factors of environment
that influence the practices of macro environment of business through conducting PESTLE and
Porter's Five analysis discussed as below:
PESTLE ANALYSIS OF JOHN LEWIS
Through conducting PESTLE analysis, John Lewis can identify the macro environment
of their business organisation that can aid in developing strategies and plan of organisation in
better manner. This consist of major six components of external environment which has briefly
explained in the beneath discussed report:
Political Factor: In order to examine macro environment, PESTLE analysis is being
conducted of organisation in which the company exists. This strategy is assisting while
understanding the growing market which is possible, place and way for the concern. After the
Brexit this has become more complex for organisation to operate and enter the market of
European Nations. Though, the government of United Kingdom is deciding to reduce the
corporation tax up-to 28% which can provide numerous opportunities for the future of John
Lewis. International, national, directives and EU regulations are influencing the legislation,
employment and consumer rights etc. which influence on John Lewis as other companies.
Economic Factor: After the post Brexit and facing recession, the country's interest rates
changes rapidly. Rigid competition within each company of retailing sector are delivering more
employment opportunities and incentives to consumer. It will impact the prices of John Lewis
which have to driven down at main times (Cadle, Paul and Turner, 2010). The company need to
undertake the competitive pressure, pay level, demand and supply etc. at the consideration in
regard of achieving business objectives in more significant manner.
Socio-cultural Factor: Consumer shifting lifestyle and preferences correspond to
business opportunities. Consumer are becoming more materialistic in United Kingdom that has
carried out wide opportunities for the business of John Lewis Ltd. The company need to focus
over manufacturing the trending and more branded service to please and satiate their consumer.
But it is significant to undertake the healthy lifestyle, celebrity following and elements of ageing
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population of United Kingdom in regard of achieving business objectives and effective strategic
plan.
Technological Factor: Online shopping is one of the major recent trends that is affecting
the business of an organisation directly influencing over the approaches of selling services and
products (Curwen, 2011). The administration, management and paperless operation of
organisation can assist in carrying out the information technology framework which are
accessing by operation flexibility and securing server in the business operations.
Legal Factor: Legislations of country has been stiffen after post Brexit period in order to
control operations and create more healthy and safe environment in regard of consumer
production and rights of company's natural renewable resources in order to manufacture clothes.
This is also fundamental through the employment regulation changes along with process of
guarding trading standard.
Environmental Factor: Resources sources that are renewable in the manufacturing
process namely wool and cotton are environment friendly. These threats are considered in term
of legislative livestock penalty in regard of managing health and safety. A major emphasis over
the western organisation have been playing the major role in the large organisation in terms of
decreasing the carbon footprint as well as increasing the efficiency of energy. Company follows
the key approach of environment sustainability which is major key approach.
ANSOFF MATRIX
This can be considered as the product grid or market. According to this, major four
elements for developing this by matching up with new and existing commodities which can
direct numerous diversification and internal environment aspects.
In regard of understanding the strategy of market and compare the accomplishing market
demands, this can lead to better organisational environment which can help in developing
effective strategy of development in more efficient manner (D'Aveni, Dagnino and Smith, 2010).
Ansoff Matrix of John Lewis Ltd
A review of organisation's enviable status of growth discovered that they had been
accurately classified under the Matrix of Ansoff Vector. In the following , the major components
are categorised in context of John Lewis Ltd to assess macro environment which is discussed as
below:
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Market Development: Through entering new markets such as China, India etc. John
Lewis can serve as major growth driver of organisation's revenues as well as expansion strategy.
These markets are highly beneficial as these provide high opportunity of market. One of
recommended opportunity is global or international alliance with the local Asian market retailer.
This can be defined as the development methods along with exploit current competence and
resources (E. Dobbs, 2014). Through entering into partnerships or joint ventures in regard of
attaining large scale f economy and presence at international market, the company will seek for
expertise operation and local knowledge in order to amend their supply chain, operation skills
and product development in regard of delivering a effective experience of shopping to consumer.
UK maturing market, this create a proper sense of John Lewis to the venture into the global
context. In regard of managing proper growth of John Lewis, enterprise must venture in the
international market.
Product Development: This is asserted that competitor of John Lewis Ltd such as M&S,
Tesco etc. are offering the same substitutes of their services and product in their supermarket. It
is an essential strategy. Consumer have more interest choices while shopping from departmental
store of John Lewis which had dominate the market of United Kingdom to constantly enlarging
portfolio of product which has been major strategies operated through organisation. The
company is developing services marketed under their brand recognition which is fundamental to
create a proper environment for the company. As the company provide less choice in comparison
to their competitors companies, product development strategy can assist organisation in
achieving their business objectives in more significant manner.
Diversification: Beside market and product development approaches, John Lewis Ltd is
associating their strategies to retain their growth rate (Firnkorn and Müller, 2012). The company
is also developing more availability resources for organisation such as online stores to provide
diverged range of services. This company capitalise on their existing stores to kick start over the
supermarket service to further consumer services.
Market Penetration: One of the major success element of John Lewis is their ability to
provide high quality of product in less cost. Organisation capture large market share i.e.
strategically which is planned to trim carbon footprint fundamentally.
Thus, firm require to implement distinct plan and design of company which have helped
entire organisation in managing strategic position.
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P2 Organisation’s internal environment and capabilities
STRATEGIC CAPABILITIES
It can be termed as the enterprise abilities in implementing activities and strategies by
which this is created by organisation in relation environment of survive of business along with
developing value of firm. Information technology only focus over the organisation's strategy
which also highlight over the strategy of organisation aiming on the available resource of
enterprise. These set a accurate assessment model for evaluating the strategic capabilities of
organisation (Grover and Kohli, 2013). Each company try to analyse their weakness and strength
in regard of evolving their plan accordingly along with the leader in their sector. Hence, in
regard of analysing internal analysis here are mentioned adopted SWOT analysis method in
context of John lewis mentioned as below:
SWOT ANALYSIS OF JOHN LEWIS
SWOT analysis is one of the fundamental method which assist in shaping strategic
planning method utilised to assist an individual of company in identifying internal components
such as strengths, weaknesses, threats and opportunities for future development. John Lewis Ltd.
can outline their resources and identify their strengths and weaknesses through the assistance of
their macro environment analysis. Here are mentioned some of the major measures of
organisation discussed as below:
Strengths:
 John Lewis utilise a strong embodying brand qualities, value-for-money and practicality
promoting their consumer loyalty.
 John Lewis provide wide range of fashion rand to select from as well as also their own
brand companies.
 Also company offers proper option to shop online along with the international product
delivery.
 The organisation has more than 35,000 workers (Johnson, 2011). The chain is popular for their policies.
Weaknesses:
 The items cost are more higher than the supermarkets along with the grocery stores that
can restraint the limit of target group.
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 The product range offered is limited relatively to other organisation that restrain choice
for consumer.
Opportunities:
 Network expansion, product selection as well as reach to people through forming more
subways brand and flagship stores along with the growth strategy lines perused currently
in the organisation.
 Increasing parity purchasing power leading to developed lifestyles. Young professional who are living away from their conscious image and brand
recognition. Thus, their target group is developing fast.
Threats:
 Intense market competition from the supermarket, corner stores, grocery stores as well as
convenience stores are leading to the the competitive marketplace.
 The company lack of a better leader which can direct the entire organisation toward the
stake.
 Lack of extensive development can lead to the merger of various convenience stores as
per the competition law.
Hence, this can be claimed that numerous practices and activities are being determined
and conducted within working organisation which can assist in achieving business objectives in
more significant manner. Internal environment of referred company can easily identified and
determined through the assistance of SWOT analysis (Kernbach, Eppler and Bresciani, 2012).
John Lewis is large departmental stores chain which is operating their business in United
Kingdom. This is indispensable for company to conduct environmental analysis in more
significant manner in order to achieve business objectives in significant manner. This is also
assisting in the development of strategic plan effectively within the working organisation.
PROJECT 2
P3 Outcomes of an analysis using Porter’s Five Forces model to a given market sector
Porter's five forces can be defined as the simple but more effective tool used for
understanding the competitiveness of the environment of business as well as assist in identifying
potential profitability of strategy. This is more effective and useful plan which has assisted in
adjusting the strategy of organisation in order to achieve strong position of market along with
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identifying the weaknesses and strengths of organisation for long term profitability attainment.
John Lewis is has been functioning their operations of business from decades with a global
recognition and effective brand recognition within the company (Klettner and et. al., 2011).
Company have numerous strong competitor of organisations such as M&S, Tesco, Asda etc.
Hence, in regard of achieving business objectives, Porter's five forces is more suitable approach
that can assist in covering the entire market in more significant manner. Here are mentioned
major five components discussed here:
PORTER'S FIVE FORCES Competition Level: The competition level in company is extremely fierce. John Lewis is
certainly exposed to market competition as this trade not only drinks and food but also
household goods and apparel. This issue predicament is exacerbated through the referred
fact that firms are modifying into non-core hence developing extra competition. As per
the view of Porter, organisation pursue one of major three generic strategies at hybrid,
differentiation and low cost. In relation to this, John Lewis has made long tried
classification itself from the rival through placing themselves as more better quality
value-for-money recognition of brand. However, it has been greatly influenced through
trimming the cost of apparel which poses a hazard of de-valuing market brand as well as
losing specialisation scope. However, insurance and credit cards of John Lewis face wide
range of competition from the building societies and banks. Threat of Substitutes: Threat of substitution is relatively low as there is less clothes and
food substitutes in market. Major threat food market substitution which is majorly John
Lewis while M&S and Peter Jones offer high apparel quality. Tesco, M&S, Asda etc. are
the large competitor of organisation which have introduced less affordable product
alternatives as well as are even merchandising dinner jackets (Pagani, 2013). Hence, in
relation to this, threat of new substitutes of John Lewis Ltd is higher in the competitive
marketplace. New Entrants Threat: New entrants threat is low relatively. Due to massive investment
of capital needed in establishing a successful chain of stores. Also, retail industry is
comparatively mature and consider radically offering i.e. quite complex to perform in
cloth retailing. Entire main retailing companies have strong reputation of brand therefore,
the advantages from consumer dedication and loyalty as this becomes in increasingly
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fundamental in the homogeneous markets. Importantly, the market knowledge dearth
certainly for the global and foreign investor possess as barrier for new entrance of
market. The existing supermarket retailers are utilising entire available methods in order
to counter any market entrance such as litigation. Bargaining power of buyer: this is relatively high as this deliver high concentration
delivering more advantage indicting rules and tastes. Low and switching costs have
plenty of alternatives (Porter, 2011). Economy of United Kingdom is prospected to
decrease through mid 2013 compelling supermarket firms to reduce their cost and aim
over satiating more consumer demands.
 Bargaining power of supplier: The company has extensive market positioning with huge
turnover which creates the low bargaining power of provider or supplier of organisation
as they are not overly rely on single supplier. John Lewis Ltd are producing more better
products quality in regard of reaching the extensive range of consumer. The organisation
majorly merchandise their own products and services which make their reliability over
the supplier less than other enterprise. This refer to huge purchase of raw material along
with not finished commodities within the working organisation.
Although John Lewis maintained to win their financial crisis which they faced in the
early 2000. this is now facing a slowdown in their gain of benefits. It has been partially engaged
through their previous economic crunch in UK deploying their business in EU nations as well.
P4 Models, theories and concepts to assist with the understanding and interpretation of strategic
direction
Strategic direction define the course of activities and functions that can lead towards
gaining attention of company strategies which can be achieved. John Lewis has been doing
working with large market strategies and policies which is lower than expected as company has
taking strong place and location at the market area (Scholes, 2015). For evaluating and
understanding the whole strategies and policies of an enterprise, so the report will be used the
Bowman's strategic clock model that assist organisation for researching major things in better
manner.
Bowman's strategic clock model – This is one of the effective techniques and method
that can be used for marketing motive and this can be evaluating competitive firm to actual
position by measuring different services and offers of rivals. This is that model which was
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founded by David Faulkner and Cliff Bowman for describing three strategies of Porters generic
in better manner. This is that model which importance on the large competitor location and place
at the large market area. Along with this, the primary purpose of such theory is to examine and
analyse the actual position that are based on two major conception such as perceived value and
price. The model can be described as under:
Position 1 (low cost and low added value) – It is not the competitive business position
that provide effective services and facilities which are not different and also customers are
evaluating as very low price beside low value (Sumer and Bayraktar, 2012). This refers to
bargaining supportive strategy and policy which main motive is to compliance with the products
values at reasonable rate as compared with competitors.
Position 2 (Low price) – It will related with scale of economies model that required to
reducing the strategic cost for achieving with desired success and growth level in proper manner.
The lower profitability and productivity of effective products and gaining high output volume
that can able for increasing high amount of income and advantages. It often lead towards rate
among rivals in this industry.
Position 3 (Hybrid) – In this current condition and situation, lower rate can be
differentiated among desired goods and services that provided by an organisation. The main
motive of this firm is to convince their customers by purchasing goods at reasonable rate that
assist in developing proper positioning in the large market place.
Position 4 (Differentiation) – In this, the major motive of this position is to provide
different types of products and services so this will help in giving high level of value added
services and commodities to their potential buyers in better manner. The branding and best
quality of services will play an important role in this company. John lewis should spread
awareness about their creative goods among domestic as well as international customers
effectively.
Position 5 (Focused Differentiation) – The major role of this is to measure the different
services rate that can be preferable by customers for gaining high values in better way
(Tavitiyaman, Qu and Zhang, 2011). The strategic positioned has been adopted in the company
who will reach with their premium value whose main aim is to promote, distribute and
segmenting their goods and services.
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Position 6 (Hazardous High Margin) – This will define as high risk strategy for
positioning that can be determine towards high value of cost without providing any perceived
price for specific commodities. When customers continuously buying their desired products so
this will developing and making more advantages but still the customer can identifying accurate
goods at reasonable rate. This is short term and non competitive strategy.
Position 7 (Monopoly pricing) – In this situation, the monopoly condition of business
organisation, they do not required to focus on specific products and services where customers
have choice to left the buying effective goods and without any alterations. Along with this, there
are different countries where monopolies are restricted for operating and regulating for
protecting towards determines the cost to completing the desires and needs of the firm.
Position 8 (Market share loss) – In this position they can be refer as that recipe which
survive in the huge competitive market disaster. They need to considered the standard rate with
middle range of products and lower quality of services will lead towards loss to their potential
buyers and this will reducing the market share of an enterprise.
Strategic marketing plan – In an organisation, this is required for firm is to make
appropriate strategies and plans in proper manner. The company target the whole market place
where they can easily target large number of customers. Strategies – The major strategy of John Lewis company is to target those customers who
are afford to purchase expensive products. They are capture whole area where large
number of customers are coming for buying trending products and services. Objectives – The main objective of this firm is to make and develop innovative clothes
and designing goods and also spread awareness regarding their products at large market
place. They can identifying the latest customers trends which always change as per their
demand and needs. The business goal of John lewis firm is to identifying suppliers who
are developing and making designer products at reasonable and after that they can easily
their customers at expensive rate (Williams and Figueiredo, 2011). Along with this, the
another motive of this company is to gaining brand recognition and business can gain
important competitive advantages while customers are interested to pay higher rate of
specific products to the seller.
 Tactics – It is the set of choice and preferences to achieving whole goals and objectives
which help in taking specific actions and functions for implementing particular goods and
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