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Retailing

John Lewis

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John Lewis

Name

Institutional Affiliation

John Lewis

  1. Executive Summary

1.1 Background

John Lewis is a London-based group of retail stores that started operating in 1864. The corporation offers a wide range of products, including food products, home supplies, electrical appliances, and insurance services, among others. The company has workers who are considered shareholders, getting bonuses from the revenue the organization accumulates annually. John Lewis is regarded as one of the leading companies in the country, with 29 branches within the nation. The success is also attributed to the high-quality products the company sells as well as an excellent buyer experience while shopping. These qualities made the retail corporation be recognized as the largest retail store in the country in the year ending 2010.

1.2 Key Findings

Several strengths and weaknesses have been realized through the various analyses carried out by John Lewis. The corporation has had a boost in operations due to the increased market base. This is due to the various promotional activities that have been carried out together with the organization’s long existence. John Lewis has had highly skilled employees who have been excellent in performing company duties. This has been realized through comprehensive training of the employees and continuous motivation, which has led to proper service delivery to customers (SWOT and PESTLE, 2019). These strengths are important in giving John Lewis competitive advatages over its rivals. John Lewis has suffered a weakness in planning of funds, which has posed a threat to the efficient running of the company. The corporation also has a weakness when it comes to research and innovation of new products. This has made it hard for the organization to compete effectively with other industry players, reducing the company’s competitive advantage. Innovation is key for the growth of the organization, since John Lewis needs to be updated on the latest technologies that are applied in the retail industry. The corporation has utilized the opportunity of selling products through the online platform, and it has increased the revenue garnered by the firm. The firm has also formed international strategic partnerships with other organization. That has been crucial in increasing the market base for the organization in other states. John Lewis has undergone a threat of new entrants entering the industry. Some of these organization have a strong competitive advantage over John Lewis, reducing the market base for the company. This ends up affecting the profitability of John Lewis.

1.3 Main Recommendations

One of the main recommendations for the firm is to continue venturing into new markets, which will assist in promoting the brand, therefore, increased revenue. Another key recommendation for the organization is to uphold the innovation of new technologies. This will be beneficial in combating threats from the company’s competitors, giving John Lewis an advantage over the other players. The corporation should also maintain a good relationship with the media, since they are vital in promoting the business, and they can also be of a negative impact when good relationships are not maintained. Therefore, John Lewis should apply the mentioned recommendations to sustain leadership in the retail industry.

  1. Macro External Environment Analysis (PEST Analysis)

This analysis aims to look into John Lewis’ external environment, which directly influences the regular operation of the company, and the products the organization deals with. Political aspects influence the growth and profitability of the organization as normal operations are carried out. The firm has to consider several political factors that would affect daily operations as business goes on. John Lewis has to discuss the issue of price regulation as it plans to venture into other markets in the future. This will be key in determining the cost of selling the company’s products in line with the regulations provided by the government (Business Teacher, 2018). The company has to look into the political stability of the country operations take place since an unstable state would end up bringing losses to the company. Taxation rates also affect the running of the company in the country and even as it plans to venture into new markets. Low tax rates would increase the earnings of the company, while high rates would result in less profitability (Business Teacher, 2018). Corruption rates also impact the running of the corporation. High rates of corruption in the country would accumulate to losses, while when there are low levels of corruption, the organization will operate smoothly without interference. Political factors that impact the organization need to be understood critically to ensure efficiency in the business operations of John Lewis.

Economic aspects also affect the normal operations of John Lewis as a corporation. Issues including the degree of inflation, foreign exchange tariffs, and the rates of interests in the country may affect the organization negatively or positively as it runs businesses across the country. The firm should look into the policies financial bodies present, which impact the buying power of the market (Business Teacher, 2018). Good and adjustable policies with a healthy economic environment would raise the buying ability of consumers, which will result in higher sales for the company. Rigid systems would not lead to a healthy economic environment; therefore, negatively impact the revenue the organization makes. High rates of employment in the country also affect the running of the business since it would result in a better economy; therefore, profits for the organization. The level of education of the country also affects the organization in that, when the education levels are high, the employees in the company would have better output in terms of service delivery. When the education levels are low, the workers end up providing poor services to John Lewis’ customers. For John Lewis to continue being a market leader, the organization needs to analyze critically economic factors that would ensure success.

Social aspects also impact the operation of the company in the organization’s daily activities. The way people carry out their normal day to day activities influences the behavior of customers. Nowadays, most customers choose to do most of their shopping online due to the ease of the process (Farooq, 2017). This has impacted how John Lewis run businesses since some services are carried out on online platforms, considering the comfort of the company’s customers. There has also been a global sensitization on the use of renewable products for sustainability and preservation of the environment. The company has had to do away with some products that impact our surroundings negatively, which has resulted in reduced profits for the organization. The population of the country also affects the corporation. A high population would mean an increased customer base, and through proper advertisement, the company would end up attaining more revenue (Farooq, 2017). If the country has a low population, it would mean a low customer base, and for the company to attract more buyers, more emphasis on sensitization is critical to attracting the buyers. The levels of education in the country also has an impact on the running of John Lewis. Low levels of education affect the corporation negatively, while higher levels would improve the nature of the business, leading to more profits. Social factors need to be analyzed carefully by the organization to ensure more revenue.

Technological aspects influence the normal operation of the company in the business world. Technology has been an important aspect most companies have had to adapt due to its efficiency in service delivery to both customers and the company. The company should look into previous technological developments by other players in the industry. This will help John Lewis restructure the technology that operates in the organization to a better one to attain maximum value from the normal operations carried out. The speed at which technology diffuses into the company should also be considered. Low rates will end up affecting the corporation negatively since keeping up with rivals will not be easy. In contrast, high rates of adoption of new technology will mean the company will be compete favorably with other players in the industry (Business Teacher, 2018). John Lewis has to consider the effects the technology will have on the organization if adopted. If the technology has a negative impact on the company, it will be advisable for John Lewis to do away with it since it will end up affecting profitability. If the technology adopted improved the daily running of the business, then the firm will need to uphold it and benefit from it. If John Lewis utilizes the current technology to benefit the company, then more revenue will be guaranteed at the end.

  1. Micro External Environment Analysis

This study outlines the environment John Lewis is competing in with other industry players and how the company is positioned against competitors. The analysis considers the level of competition, which is always rising, forcing the organization to introduce cheaper alternatives (S, 2020). This analysis is essential for John Lewis since it will assist the company in making business strategies that will result in better performance. The micro external factors that affect the operation of the firm include customers, market intermediaries, competitors, suppliers, and the media.

John Lewis needs to consider the customers who buy goods and products from the organization. The company should analyze whether most customers are locals or international customers and what made the customers choose the organization to purchase products. This will impact the way the corporation will approach the customers and the methods of reaching out to them in terms of advertising, among other promotion methods. Buyers are also considered the main part of John Lewis as an organization (Pratap, 2020). Appealing customers as well as retaining them is essential for the organization since the more the customers, the more the profits. In contrast, fewer customers will result in less revenue for the company. John Lewis has to work with an approach that will aim to bring in new buyers and keep them, keeping in mind their requirements by giving services such as discounting and price hedging. If John Lewis considers the interests of the company’s customers, more buyers will be attracted and retained, which will bring about more profits.

Market Intermediaries is another micro external factor that influences the running of John Lewis as a firm. These intermediaries include other companies and individuals who help the organization in normal operations, including advertising and distribution of products to the final consumers. The intermediaries include financial bodies, distribution firms, and middlemen, among others. Since it is not easy reaching the final consumers, such agencies assist John Lewis in reaching them in their various capacities. The firm has to take into account the performance of such organizations and uphold those that promote the organization positively and do away with bodies that derail the company. The corporation also has to come up with the most efficient way of the intermediaries to deliver goods to the buyers, which will result in higher revenue for John Lewis (Chand, 2020). The organization should also look into working with intermediaries that are experienced in their field rather than developing one for experimental purposes. When analyzed correctly, intermediaries will be of great advantage to the success of John Lewis.

Competitors of John Lewis also externally affect the running of operations in the company, with the most common being differentiated goods that are sold from other competing organizations. For the organization to have a competitive advantage over other industry firms, John Lewis needs to carry out competitive analysis, considering other services the rival provides to customers (Chand, 2020). This will allow John Lewis to differentiate from the competitors, and the company can know how to deliver products and services differently in a way rivals do not provide. Factors such as pricing, product promotion, processes, as well as the people need to be comprehended as well as analyses carried out to determine the firm’s competitive advantage (Farooq, 2017). The corporation has to understand the strategies other players in the industry apply and how the rivals respond to changes in the external environment. When John Lewis analyzes the company’s competitors effectively, the organization will easily have a competitive advantage over other industry players.

Suppliers also impact the strategy of John Lewis, since they supply materials and products that are sold to buyers in the retail stores. When suppliers do not deliver products on time, sales will not be delayed and, therefore, more revenue for the organization. When products are not supplied on time, business operations in the company will reduce, which will result in low sales. Another aspect of suppliers that John Lewis should consider is the prices offered by suppliers for the products brought to the firm. Increased prices on products sold to the retail store will affect the marketing of John Lewis, which will result in increased product costs when sold to the customers. This will scare away customers and result in reduced sales due to the high prices (Oxford College of Marketing, 2020). John Lewis has to maintain a strong relationship with suppliers, as goods and services are provided to the retail shops. If this is achieved, John Lewis will easily counter competition offered by other retail shops in the industry.

The media also influences the operation of the corporation in the retail industry. Actions of the media are crucial in the running of the organization, and John Lewis should maintain an excellent relationship with them (Adam, 2018). When the media presents positive attributes of the company, businesses will be better, and when the media presents negative aspects of the firm, businesses will decline. John Lewis has maintained a better relationship with the media by creating a public relations section. With the introduction of social media, the organization can now reach buyers through online platforms. This has allowed the firm to have a more extensive market base and an improved image of the brand (Adam, 2018). This, in turn, has led to an increase in the company’s sales, therefore, generating more revenue. Newspapers have also been vital for the success of the organization since they can advertise and promote products, which has also proved to be a successful way of enticing new customers. John Lewis has to maintain a good relationship with the media as well as continue promoting products it deals with to continue upholding the company’s position in the industry.

  1. Internal Environment Analysis (SWOT Analysis)

This Analysis is an approach applied by John Lewis to carry out a situation analysis of the organization that will allow the company to compete effectively with other industry players. Internal factors in this analysis try to depict the strengths of the company together with the weaknesses the organization has, as well as the opportunities and threats faced (Dudovskiy, 2012). Analyzing all these will allow the company to improve businesses around the organization, which will lead to increased revenue.

The firm is a leading corporation in the retail industry, making the organization have several strengths that have ensured businesses to thrive. John Lewis has had highly skilled employees who have been excellent in performing company duties. This has mainly been realized through thorough training of the workers and continuous motivation, which has led to proper service delivery to customers shopping in the retail stores. The organization has also been successful in implementing new projects, which have resulted in increased revenue accrued by the organization (Rodrigo, 2012). The innovation of new goods to sell to the customers has also boosted the organization in growing into the big firm it is. John Lewis has also gained strength through successful expansion into new markets, which have assisted in spreading financial risks the organization faces. All these strengths have made the company have a competitive advantage over other industry players.

John Lewis has also suffered some weaknesses that have derailed the company and reduced the amount of profit gained. These areas of weaknesses need to be highlighted for the organization to work on them and improve the corporation’s competitive advantage in the retail industry. The organization does not spend funds appropriately due to poor financial planning. The company needs to improve on that by efficiently spending finances to avoid losses. The firm also has a weakness when it comes to investing and researching better technologies (Lifestyle and Retail, 2020). With the growth the organization has witnessed in the past few years, new technology is required to cope with the expansion. The corporation also has a weakness in the research sector, especially in innovation. This has made John Lewis not compete efficiently with other industry leaders. For maximum returns and efficient running of the company, John Lewis needs to emphasize improving the weaknesses highlighted, which will result in a competitive advantage over other firms.

There are several opportunities John Lewis can look to invest in, to allow the company to run businesses efficiently. With the reduced rate of inflation in the country, markets have become more stable, and many businesses are running effectively. The organization can have reduced interest rates to the buyers on various products, which will help attract more customers. The company can continue expanding markets in the online platform since many customers are present on social media. This is due to the convenience of shopping online, and many customers advocate for that. The organization can improve online service delivery by getting to know buyers more and meeting their wants (SWOT and PESTLE, 2019). There has also been a reduction in delivery costs. With this, the organization can work on decreasing the price of commodities sold to customers, which will attract new buyers to the company. When John Lewis considers all these opportunities, more revenue will be garnered by the company, thus a competitive advantage over competitors.

Several threats have faced the organization in the retail industry. Salaries of employees have been increasing steadily over the years, which can pose a threat to the profitability of the organization. Other industry players have been innovating new and better technologies that have improved services in those organizations. This presents threats to the competitive nature of the company since a lack of better technology will lead to reduced profits. Skilled employees have also been on the decline for a while now (Marketline.com, 2019). Due to this, the organization may lack efficient and competent employees in the future, which may lead to poor service delivery to the company’s customers. For John Lewis to continue being a leader in the retail industry, the organization needs to check on the threats faced to improve the efficiency of businesses carried out.

  1. Conclusion

John Lewis is considered an industry leader when it comes to retailing in the country, as well as globally. The long-time existence of the organization has been a massive factor for the success of the organization. Factors such as high revenue acquired by the company, good customer relations, increased online sales, and generally an expanded market have also been vital in the growth of the company. Despite the threats and weaknesses, the organization faces, John Lewis has continued to improved operations in the retail stores the company operates in. This has had a positive impact on the profitability of the corporation and, in turn, offering a competitive advantage over other players in the industry.

  1. Recommendations

The organization has to emphasize on several factors to improve on operations further. Some weaknesses and threats have derailed the organization, and they need to be addressed by the corporation. The company should continue expanding markets on the online platform since many customers are present on social media, which will increase sales and profitability. Increased online presence will mean more buyers, thus more revenue, which will lead to competitive advantages over the company’s rivals. John Lewis should also establish an effective marketing strategy in other regions outside the country. This will guarantee a wider market and, therefore, more profits. The organization should also improve on financial planning to avoid unnecessary spending of the funds accrued. Wastage of funds will lead to reduced implementation of various company strategies, resulting in less revenue garnered. From the numerous complains on customer service in John Lewis retail stores, the organization should work on improving service delivery to its customers. Satisfied customers will mean customers retained, leading to more earnings for the company. Finally, John Lewis should also continue innovating and applying the latest technologies in the industry, which will improve service delivery to the customers. When these recommendations are implemented, the business will realize increased profits, therefore, maintaining the leading position in the industry.

 

References

Adam. (2018, March 29). Scribd. Retrieved from John Lewis Marketing Report MBA 2017: https://www.scribd,com/document/375110854/John-Lewis-Marketing-Report-MBA-2017/

Business Teacher. (2018, November). Business Teacher.org. Retrieved from Pestel Analysis of John Lewis: https://www.businessteacher.org/pestel/john-lewis.php?vref=1

Chand, S. (2020). Your Article Library. Retrieved from Micro Environment of Businesses: https://www.yourarticlelibrary.com/business/micro-environment-of-business-6-factors-of-microenvironment-of-business/

Dudovskiy, J. (2012, November 25). Research Methodology. Retrieved from John Lewis SWOT Analysis: https://www.researchmethodology.net/john-lewis-swot-analysis/

Farooq, U. (2017, December 12). Marketing Tutor.net. Retrieved from Micro Environment definition, Factors & Example: https://www.marketingtutor.net/micro-environment-definition-factors-examples/

Lifestyle and Retail. (2020, April 26). Mbaskool. Retrieved from John Lewis SWOT Analysis, Competitors, Segmentation, Positioning and USP: https://www.mbaskool.com/brandguide/lifestyle-and-retail/9226-john-lewis.html

Marketline.com. (2019, October). Retrieved from John Lewis Partnership PLC: https://www.store.marketline.com/john-lewis-partnership-plc-strategy-swot-and-corporate-finance-report-2/

Oxford College of Marketing. (2020, February 6). Oxford College of Marketing. Retrieved from Impact of Micro and Macro Environment Factors on Marketing: https://www.oxfordcillegeofmarketing.com/impact-of-micro-and-macro-environment-factors-on-marketing/

Pratap, A. (2020, January 11). Notesmatic. Retrieved from Microenvironmental Factors Affecting Business: https://www.notesmatic.com/microeenvironmental-factors-affecting-business/

Rodrigo. (2012, October 2). Writpass. Retrieved from SWOT Analysis and Porter’s 5 Forces Analysis of John Lewis Partnership: https://www.writepass.com/journal/2012/10/swot-analysis-and-porters-5-forces-of-jojn-lewis-partnership/

S, S. (2020, February 3). Key Differences. Retrieved from Differences Between Micro and Macro Environment: https://www.keydifferences.com/differences-between-macro-internal-and-macro-external-environment.html

SWOT and PESTLE. (2019, December). SWOT and PESTLE.com. Retrieved from John Lewis SWOT and PESTLE Analysis: https://www.swotandpestle.com/john-lewis/

 

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