Strategic Analysis of Amazon and John Lewis: A Comparative Study

This report provides a comprehensive strategic analysis of Amazon and John Lewis, two prominent players in the retail sector. The study begins with background information on both organizations, including their visions, missions, goals, and stakeholder relationships. It then delves into the strategies employed by each company, utilizing models such as the Ansoff matrix to assess market penetration, product development, market development, and diversification strategies. The report further discusses the advantages and disadvantages of these strategic directions for both organizations and their stakeholders. A comparative analysis is conducted to determine which organization's strategy is more successful in the current market environment. Finally, the report offers suggestions for strategic improvements for both Amazon and John Lewis, concluding with a summary of the key findings and recommendations.

Strategic management
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Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Provide background information on the two organisations to be ‘critically’ reviewed in the
comparative study.(Amazon & John Lewis)(vision, mission, goal, stakeholders) (Environment
resources, )..............................................................................................................................3
Background of Amazon...................................................................................................................3
Background of John Lewis..............................................................................................................5
TASK 2............................................................................................................................................6
Through various models and theories analysis and discuss the strategies which are currently
used in organisation................................................................................................................6
TASK 3..........................................................................................................................................15
Discuss the advantage and disadvantage to the organisation and its stakeholders related to
pursuing this strategic direction............................................................................................15
TASK 4..........................................................................................................................................15
Conclusion based on the evidence researched and define which organisation strategy is the
most successful in the market trading environment.............................................................15
TASK 5..........................................................................................................................................16
Provide options for organisation related to how they can improve their strategy................16
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................19
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INTRODUCTION
Strategic management is determined as a ongoing planning, assessing and monitoring all
necessity of business organisation that is useful in achieving goal in timely manner. Due to
change within environment of organisation will need company to regularly change its strategy
for success and growth. The processes of strategic management Assists Company to take stock
of present situation, determined strategy, deployed them and assess effectiveness of executed
administration strategy. According to case study, organisation work in environment of major
change. The biggest sector is determined as a most challenging sector is High Street retail sector.
The well-known brand of High Street struggling to survive disappeared totally this result in
empty outlets on High Street and different job losses. In this report, there is a discussion
regarding background of two organisation named as Amazon as well as John Lewis. The
strategic model is used in order to conduct different operations of business organisation and also
analyse internal as well as external environment of organisation. In addition to this, there is a
discussion regarding strategies which is used within organisation and the conclusion which is
based on market research related to strategy that is helpful in achieving objective. Apart from
this, in this report, there is a discussion regarding strategic options for every organisation and
how they can resolve them in an appropriate manner (D’Cruz, 2018).
TASK 1
Provide background information on the two organisations to be ‘critically’ reviewed in the
comparative study.(Amazon & John Lewis)(vision, mission, goal, stakeholders)
(Environment resources, )
Background of Amazon
Amazon is determined as an international technology organisation that emphasizes on E-
Commerce, digital streaming as well as Artificial Intelligence and so on. This company was
founded by Jeff Bezos in year of 1994 and they focuses on providing superior quality product
like fire tablet, fire TV and so on in order to satisfy its user. It is also determined as a disruption
related to well-established sector by technological innovation & mass scale. It is considered as a
world's biggest online market. Amazon is biggest internet organisation through income in world.
It is considered as a second largest private employer in US and determined as a most valuable
organisation. In year of 2020, Amazon has highest International brand valuation. In addition to
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this, it is analysed that the company as success at time when retail is determined as a hardest hit
factor in context of trade as well as profitability. The Amazon has sight now on High Street start
their business with small grocery outlet and well known system which provides seamless value
chain advantages to its user. Therefore, the company possess success on High Street and assess
that online and are still brand that is survived and fighting back. Thus, the Amazon possess
lucrative slice related to accumulation during pandemic waiting to spend. Amazon focuses on
grabbing individual person in order to perform work in an appropriate manner (Doz, 2017).
The mission of Amazon is to provide superior quality of goods and services according to
need of customer. They focus on provide user lowest possible cost, the best prevailing selection
& utmost convenience. Therefore the Amazon focus on attract customer towards e-commerce
facility in order to satisfy their need.
The vision of Amazon is to achieve leading position around the world.
Objectives
The Objective of Amazon is to increase sales by 20% in upcoming 6 months
The other objective is to increase profit margin by 15% in 3 months.
Goal
The goal of Amazon is to serve user through online as well as physical stores and
emphasis on selection cost and its convenience. And their focus is on finding or assessing
anything that they need to buy by using online source and also endeavour to provide it.
Stakeholders
The detailed assessment of stakeholder of Amazon is to assess both internal as well as
external stakeholder of Amazon. Its stakeholder has varying degree of effect on strategic & non
strategic decision & their influence is not similar and they do not possess same power as well as
interest in organisation. The primary internal stakeholder of Amazon is officers, director,
subordinate, and shareholder and so on. Its top officer is determined as a president & chairman of
board and chief executive officer is web services & worldwide consumer. The stakeholder is
determined as a most powerful stakeholder related to Amazon the influence operation in an
appropriate manner. The primary stakeholders of organisation are Jeff bezos. Amazon possess
different kind of external stakeholders user online source, local communities and government
above 197 million users, visit website every month the individual person possess Amazon Prime
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membership in USA and it they spend online made Amazon take complaint of customer
seriously.
Environmental resources
The main purpose of Amazon is to achieve net zero carbon shipment by sustainable
procedure, development increase investment within electrification renewable energy and so on.
Transportation is determined as primal Amazon operations of organisation and determined is a
net zero carbon by 2040. There are different kind of environmental resources in Amazon that is
very important for our lives around the globe like freshwater, medical plants, oxygen, mineral as
well as food and many more (Ethiraj, Gambardella and Helfat, 2016).
Background of John Lewis
The John Lewis partnership is determined as a British organisation that operates within store
its banking services and also retailing related activities. This organisation was founded in Oxford
Street London by John Spedan Lewis in year of 1929. The company provide different kind of
product such as clothing, jewellery, cosmetics, and house wares, audiovisual and so on. The
revenue is around 10.15 billion and net income is 146 million around the globe. There are approx
83000 employees operate their functions within business organisation.
The mission of John Lewis is to offer products and services according to need and want of
user. Their purpose is to achieve goal and objective of company in order to satisfy them.
The vision of company is accomplishing leading position across the world.
The objective of organisation is to increase sales by 10% in 3 month
The company is to enhance profit by 15% in 2 month.
Goal The goal of John Lewis is happiness of all members through useful employment in
successful organisation.
Stakeholders
There are different kind of stakeholder that focuses on shaping vision and fulfilling
corporate social responsibility it involve Association, customer, subordinate, partners,
government, trade Association, supplier, local community as well as NGO They are the
stakeholders who focuses on finding innovative method in order to reduce balance effect unit of
organisation along with financial success and continue to make more appropriate business as
well as sustainability. Therefore, there is different kind of stakeholders of John Lewis in which
they operate their company in an appropriate manner (Hitt, Ireland and Hoskisson, 2016).
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.
Environmental resources
The environmental resources include material, service & information that provide
valuable to society. Clean, air land as well as water are determined as environmental resources as
capability of land and water in order to observe waste product of society. In addition to this, the
main focus is to provide opportunity and focuses towards social responsibility during the period
of time. Their main focus is to use resources for fulfilling social responsibility and increase their
living standard during the period of time (Moutinho and Vargas-Sanchez, 2018).
TASK 2
Through various models and theories analysis and discuss the strategies which are currently used
in organisation.
Strategy- It refers to a plan which is used by an organisation for effectively allocation of
their resources and for the support of infrastructure, production and various other activities of
business (Al-Dhaafri, and Alosani, 2020). Strategy will play an essential role in the growth and
development of company as because it will provide a clear direction to company which will
assist in successfully achievement of organisation goal. In context of both Amazon & John
Lewis both will adopt an effective strategy which will assist them to face the various market
challenges and achieve the organisation growth.
Ansoff’s growth strategy-
This matrix is also known as market expansion grid. It is a tool which is used by an
organisation for effectively analysis and plan their strategies for achieving higher growth. It will
include four important strategies which will help in the growth of organisation and effectively
analysis the risk associated with each strategy. In context of both the selected company, various
strategy included in this matrix is discussed below:
Market penetration- Main focus of this strategy is on enhancing the sales of their
products in the existing market. In this strategy selected company will attract more and more
customers towards their products in the existing market with the objective of increasing their
market share (Alexandri and Pragiwani, 2019).
Product development- It focus is on introducing new product into an existing market. In
context of both Amazon and John Lewis, as per this strategy the firm will develop a new product
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or service to effectively cater the existing market. This strategy will require an extensive research
and development for the expansion of the company products range. This strategy is only apply
when the firm have strong understanding of their current market and able to innovate new things.
Market development- It refers to a business strategy in which an organisation main
focus is on entering into the new market by using their existing products. In context of both the
selected company, as per this strategy they will enter into the new market with their existing
products. This will help an organisation to increase the revenue for company by expanding their
target market (Asmussen, and et. al. 2021).
Diversification- This strategy will focus on entering a new market with the introduction
of new products. As per this strategy a firm will enters a new market with a new product. This
strategy will consider as more risky strategy as because both the market and product are newly
developed. This strategy will assist both the organisation in achieving higher revenue and also
expand the customer’s market segment.
In context of Amazon, it is evaluated that company will adopt the market penetration
strategy as because with the help of this strategy company is able to increase the sales of their
products by attracting more and more customers towards company. It was analysis that company
will decrease the price of their existing products for attracting their customers and also increase
the promotion & distribution efforts which will assist in the attracting more and more customer’s
towards company and increases the profitability for company (Mezhouda, 2019).
In context of John Lewis, it is evaluated that company will adopt the market development
strategy in which they will promote their existing product in the new market. With the help of
this strategy selected company is able to expand their market segment by entering into the
foreign market. This will assist company by enhancing the sales of their products as because the
market six of company will increase (Chae, Song and Lange, 2021).
Analysis- Business analysis is an important concept for an organisation. As it is a
disciplined approach for introducing and effectively managing the change in an organisation.
Business analysis is used to identify and articulate the need for change in the organisation
operations & facilitate the change. In context of selected company it was analysis that they will
adopt various strategies of framework for analysing the environment, culture and expectation and
resources of company. For analysing these factors various strategies are discussed below:
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Environment analysis- It was analysis that any change in business environment will directly
influence the growth and success of their business. For better analysing the environment
companies will used PESTLE analysis (Cudny, 2019).
PESTLE Analysis- It refers to a framework which is used by an organisation for analysing the
effect of various environmental factors which will directly influence the working and
profitability of company. In context of both the company their environmental analysis re
discussed below:
Factors Amazon John Lewis
Political It refers to an external
environmental factor which
define the influence of change
in the political condition of a
country. In context of selected
company, political party
stability of developed
countries like U.S.A and
European countries will
provide various growth
opportunity to company. Other
than this increasing
governmental effort on cyber
security will also help in the
development of company
(Dahiya, and et. al. 2021).
In context of selected
company, it was analysis that
rising market of UK will help
company to achieve higher
growth. The government of
UK will decided to reduce the
corporate tax which will help
John Lewis to rise their profit
in future (Daiser and Wirtz,
2021).
Economical This factor is related to the
economic growth of a country,
inflation, interest rate, disposal
income of people. In context
of Amazon, the economic
stability of U.S and European
countries will provide the
It was analysis that this factor
has a negative influence on the
growth of business as if
country will faced the
situation of recession
company will face problems.
Other than this it was analysis
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favourable support to
company growth. This is
because major part of
company shares will cover in
that market. Other than this
the disposable income of their
customers are also high which
will increase the sales and
profitability of company
(Dyck, 2018).
that increasing competition in
retail sector will also
negatively influence the profit
of company (Ferreira, Coelho
and Moutinho, 2020).
Social This environmental factor will
define the social trends and
values in a country. In context
of selected company, It was
analysis that now a days the
online buying habits of
customer will increase which
will be an opportunity for
company.
In context of selected
company, it was analysis that
changing customer’s
preferences & lifestyle will
provide various opportunity to
business. John Lewis will
introduce more branded and
latest fashion products to their
customers.
Technological It refers to an external
environmental factor which
define that any change in the
technology will influence the
productivity of company. In
context of Amazon their
higher efficiency in IT
resources will help company
to better manage their business
operations but increasing
cybercrime rates will also
reduce the working of
Internet shopping is the main
trend for the retailing industry
will directly influence sales
approach. Paperless
operations, and business
operations are carried out on
IT systems, which are access
through secure servers &
make available flexibility in
the business operations.
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company.
Legal This factor will define the
various legislations of
government. In context of
selected company, it was
analysis that company will
effectively follow all
legislation of government.
Rising product regulation will
help company to improve the
customer safety and security
which will assist them in
achieving better customer’s
loyalty.
In context of selected
company, it was analysis that
national legislation will stiffen
for health & safety both in
terms of consumers right and
production of own natural
renewable resources for
making cloths (Haski-
Leventhal, 2018).
Environmental This factor will not more
influence the growth of
selected company as because
Amazon will also focus on the
sustainability and increasing
the popularity of low-carbon
lifestyles will provide
opportunity to company (Jin
and et. al. 2018).
In context of John Lewis, the
renewable source of resources
are used in production process
such as cotton and wool are
very environmental friendly.
This will help company to
achieve better growth.
Culture and expectation analysis- In context of both the companies for better analysing
the culture of their organisation they will use Charles Handy’s model of organisation culture.
This model will define that culture of an organisation will influence the behaviour of
organisation. This model will include four type of organisation culture which are discussed
below:
Role culture- This type of culture will characterized by organisation which have a high
degree of formalization and high degree of centralization, such as bureaucracies. In this formal
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rules & procedures and a well-defined organisational hierarchy which is clearly understood and
tightly enforced (Khashei Varnamkhasti, and et. al. 2018).
Task culture- These organisations are characterized by a high degree of centralization
but a low degree of formulization. They are typically quite flexible and results oriented. They are
mostly work on a project basis.
Power culture- It was a highly formalized organisation but often lacking centralization,
such a firm is likely to have a highly charismatic leader who communicates directly with people
and expect quickly & agile responses. Entrepreneurs are typically associated with this culture, as
are small agile business capable of operating in a turbulent environment.
Personal culture- This is a culture lacking in formalization of centralization, and is
likely to centre on a work environment which is self-directed and status driven. Professional
services firms in stable and predicative environment such as accountancy or insurance benefit
from this type of culture. Main benefit of this type of culture is that an individual will operate on
a self-motivated basis so need limited from structure (Linnik and et. al. 2020).
From above discussion on the organisation culture factor it was analysis that John Lewis
has a subsequent power culture and the power of amazon will distribute into a few. While both
company will have same role culture. As per the task culture people are turned into teams to
solve major issues.
Resource analysis- For success of an organisation it is important that company will
effectively analysis their competitive resources which help the organisation in achieving the
competitive advantage in market. In context of selected company they will use VIRO framework
for better analysing their important resources.
VIRO Model-
It refers to a framework which is used by an organisation for better analysing the
resources and capabilities for determine their competitive potential (Morozko, Morozko and
Didenko, 2018). This framework will include four concepts which are valuable, rare, imitable,
and organised. In context of Amazon and John Lewis, this framework is discussed below:
Amazon VIRO model-
Resources Valuable Rare Imitable Organised
Human
resources
Yes No No No
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Financial
resources
Yes Yes No No
Global brand
image
Yes Yes Yes No
Artificial
intelligence
capability
Yes Yes Yes Yes
From above table it was analysis that selected company will achieve competitive
advantage in market with the help of their artificial intelligence capability. Other this by
effectively organised their brand image company will also achieve its benefit (Niemand and et.
al. 2021).
John VIRO model-
Resources Valuable Rare Imitable Organised
Human
resource
Yes No No No
Distribution
network
Yes Yes No No
Patents Yes Yes Yes No
Financial
resource
Yes Yes Yes Yes
From the above discussion it was analysis that financial resources of selected company
are very valuable, rare, imitable and also fully organised. Company will achieve competitive
advantage in market with effective use of their financial resources (Noto and Noto, 2019).
Implementation- For better resource allocation, design and structure of organisation, &
effectively managing the change, various strategies will be implemented by organisation which
are discussed below:
Resource allocation- It was analysis that allocation of resources are both a one-time and
continues process. It was analysis that implementation of a project will require the allocation of
resources. It refers to the division of resources that are used in the implementation of strategy in
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