Business strategy is defined as a procedure through which an organisation is able to create plans and strategies of high level in order to attain goal and objectives in effective as well as efficient manner (Alsudiri, Al-Karaghouli and Eldabi, 2013). By this company is also able to gain various advantages such as competitive advancement, expansion of business, increase in financial status and customers bases and many more. Organisation which is selected for this assignment is John Lewis Ltd. Which is founded by John Spedan Lewis in year 1929. Its headquarter is at Oxford Street, London, United Kingdom and they are operating its business in retail industry. Products offer by respective company are clothing, watches, jewellery, giftware, cosmetics, furniture, food, beddings and many others. Topics which are going to be disscussed in this report are analysis and evaluation of market on micro and macro environmental factors. Along with this it mentioned strategic plans in order to evaluate environment evaluation.
P1 Applying appropriate frameworks analyse the impact and influence of the macro environment on a given organisation and its strategies
For conducting and running business in effective manner companies need to evaluate its macro environment factors by which they are able to know external factors which affect respective company. John Lewis Ltd conduct PESTEL analysis for evaluating and analysing their macro environment factors.
It refers to technique which is use to analysis external or macro factors of an organisation which help them in developing strategies accordingly as well as effectively. There letters stand for Political, Economic, Social, Technological, Environmental and Legal. Explanation of PESTEL analysis in context of John Lewis Ltd is given below-
Political: Respective company decide to enter into United Kingdom market part of European Union. In Europe market barrier or limitation is very less sue to which companies can enter into market easily, which is seems as competitors for John Lewis Ltd. Due to this government of UK take decision to reduce corporation tax from 30% to 28 % which is helpful for respective company to enhance profitability in future basis (John Lewis PESTEL Analysis, 2019). By adopting political factor in effective manner respective company is able to conduct their business operations and functions in effective and appropriate manner. But rules and regulation of government change according to requirement due to which John Lewis Ltd also have to develop strategies accordingly.
Economical: United Kingdom economic is dealing with recessions due to which sensitive situation occur for changing interest rate. In order to deal with thissituations all companies of retail sectors needs to offer products and services at low price to their customers (Bharadwaj and et. al., 2013). This situation also influence business and operation of John Lewis Ltd, they also have to reduce their price of products and offer discounts to customers most of time. When John Lewis Ltd develop products accordingly they able to attract more customers with their pricing strategy. But it is very difficult for respective company manager to change strategies accordingly.
Social: Social culture and lifestyle of society change on the regular basis which is opportunities for a business to attract customers by offering new products and services. That helps a company in increasing their customers bases and profitability. John Lewis Ltd introduce and offers new and trendy products in order to attract and please customers in effective manner. By this company able to introduce new products according to change in trends and demand of customers in order to enlarge their customers bases and profitability. It is also threat for a company to develop or make changes according to competitors, otherwise customers shift to another company. Due to this factor currently respective company able to develop products and services in effective manner according to changing demand of society.
Technological: It refers to internet shopping which is offered by John Lewis Ltd in order to reduce wastage of paper and attract customers for shopping any time and at any place. Respective company also use advance technology in order to manage their administrations and operations in effective and efficient manner. By this respective company able to adopt new technology which make their work easy and effective. But sometime adopting new technology is costly for a company which affect their budget and other activities.
Environmental: Now a day many retail company taking step for making environment cleans. John Lewis Ltd adopt technology and strategies for reducing their carbon footprint (PESTEL Analysis of John Lewis, 2019). Along with this they use recyclable papers and energy in order to reduce pollution from environment and make it effective. By this company able to develop products which is more skin friendly and environment friendly in order to attract more customers. But due to this John Lewis Ltd have to invest more money in adopting these techniques.
Legal: While operating in retail sector John Lewis Ltd ensure all legalisation related to health and safety for customers as well as employees. For this respective company use natural renewable resources for manufacturing clothes (Chang, 2016). Along with this they take care of employees by ensuring safety and proper equipment’s. By adopting legal factor in effective manner John Lewis Ltd can run it business in effective and appropriate manner. But regular change in legal factors affect decision making of respective company manager.
P2 Analyse the internal environment and capabilities of a given organisation using appropriate frameworks
For analysing internal environment John Lewis Ltd conduct SWOT analysis and VRIO analysis, by this they also able to know their capabilities in effective and efficient manner.
· Respective company have strong brand image which attract and encourage customers for purchasing products.
· John Lewis Ltd also have strong online presence with attractive and treading designs.
· They develop and maintain effective and efficient employee’s relation in order to motivate and retain them for long run.
· Respective company offer executive and treading products ranges to customers.
· John Lewis Ltd lack behind in international business experience.
· They are also lacking in effective and appropriate marketing strategies (John Lewis SWOT Analysis, 2019).
· Respective company is also lacking in competitive advancement at a market place.
· John Lewis Ltd can expand their presence in international marketplace.
· They can also design and develop new, creative and unique selling strategies or proposition.
· Respective company can also develop new products ranges.
· John Lewis Ltd can expand or grow demand by developing private labels in effective and appropriate manner.
· Sometime respective company may face negative impact of new rules and regulations.
· The major threat of John Lewis Ltd is there competitors such as Marks and Spencer, ASDA, TESCO Plc. And many more.
· Respective company also have threat of failure if they expand in new and different culture.
After conducting SWOT analysis for evaluating micro environment factors John Lewis Ltd do VRIO model in order to identify company capabilities.
This model use by an organisation in order to identify and evaluate its capabilities. Through this which company identify their vision statements and decide objectives, analysis internal and external analysis and many more (Eaton and Kilby, 2015). Evaluation of VRIO model in context of John Lewis Ltd is given below:
What is the result?
Competitive advantage for temporary basis
To identify capabilities John Lewis Ltd decide to analysis four factors that are global presence, products, software and employees.
It refers to those factors which are valuable for an organisation and by which company is able to attain goal and objectives in effective and appropriate manner (Iacob, Quartel and Jonkers, 2012). Valuable factors of John Lewis Ltd are-
Global presence: Global presence of respective company is very effective and broad. Due to which they are able to gain effective competitive advancement in proper manner.
Products: Products which are offer by this company are of good quality with latest trends designs which attract customers on huge basis.
Software: It refers to software which is use by John Lewis Ltd in order to manage and operate there function in effective and safely manner.
Employees:I t refers to staff who help respective company in attaining goal and objectives in effective and efficient manner.
It refers to those factors of an organization which are rare and due to which company gain competitive advancement at a market place(Jocovic and et. al., 2014). In context of respective company global presence is not rare because there are various other companies in marketplace who have equal global presence. Rare produce is -
Products: Products which are offerby respective company are of best quality and according to latest trends. So it is hard for any other competitive company to copy it in effective manner.
Software: It refers to software which is developed and use by John Lewis Ltd in order to maintain records and software in secure manner and it is rare because it is develop according to need of company.
Employees: Employees of respective company are rare because every employees have their own skills and knowledge which help in attaining goal and objectives in effective and appropriate manner.
It refers to those products and services which are not imitable or copy by an competitive company (Lawton, 2017). In context of respective organisation products are not imitable because it can be copied by any other in order to gain competitive advancement. There are some factors which are not imitable-
Software: Software which is use by respective company are develop by respective company according to their need so it is hard to copy for any competitive company.
Employees: It refers to effective and efficient staffs of John Lewis Ltd which cannot be copied by any company in order to attain goal and objective in effective manner.
It refers to those factors which needs to organized in very little aspects and it help a company in order to attaining goal and objective in effective manner. Software of John Lewis Ltd need to be organised on time to time basis.
Employees: It is those factors which only need to be organized when any change occur in an organization. Such as employer plan training and development activities in order to attain goal and objectives in effective as well as efficient manner.
P3 Applying Porter’s Five Forces model evaluate the competitive forces of a given market sector for an organisation
Porter's five forces model refers to a tool that is use by a company for evaluating and determining level of competition at a marketplace. By this analysis manger and leader of an organisation is able to develop strategies and plans in effective manner (Li and Tan, 2013). Moreover, through this company is able to enhance their profit as well as customers bases. Mainly it is based on operations, structures, products and services, work conducted and many more. John Lewis Ltd conduct market evaluation by using porter's five force model, whose explanation is given below: -
Threat of new entry- It refers to situation which consist of how easy a company can enter into a particular marketplace. If that particular industry is profitable and has very few or little barriers and legislation, then huge companies and enterprise want to establish and expand their business operation in that particular industry. In context of John Lewis Ltd threat of new entry is low this is because it is not possible for new company to build themselves like respective company in less time duration (John Lewis -- the five competitive forces, 2019). Respective company is also consider in top 10 retail company at United Kingdom marketplace.
Threat of substitutes-It refers to condition when there is huge availability of same products and services which is offer by a particular company. In this there is threat of buyer switching from own company to another, where they get quality products at low price. In this case power of buyers is high when they find more substitutes of a particular products. In context of John Lewis Ltd threat of substitutes is low because there are vary less company who offer quality products at affordable price which attract customers.
Bargaining power of customers- It is a condition when a buyer has power to ask for quality products at low price. This can be possible when there are various substitutes of a product is available. In this production of an organisation get affected, when they manufacture products at low price then customer’sexpectation get affected and if the product quality products and sale it at low price then profit of that company get influenced. In respect of John Lewis Ltd bargaining power of customers are high because there are companies at marketplace which offer same products and services in effective price. Due to which company has to develop strategies and products which is more attractive and effective.
Bargaining power of suppliers-It refers to a situation when there is less suppliers of a particular products and services at a marketplace. In this situation power of suppliers is high and if there are more suppliers then power of supplier are low (McGrath, 2013). In this situation supplier can ask more money for low quality products due to which production cost of a company get affected. In respect of John Lewis Ltd bargaining power of suppliers is low because there are very few suppliers with whom respective company supply there products. Along with this management of respective company maintain and establish effective relationship with supplier in order to get products in effective and appropriate price.
Competitive rivalry- It is a situation when there are various companies who offer same products and services in respect to particular compa According to this company, they develop appropriate and effective strategies and plans by there managers able to analysing strength and weakness. In context of John Lewis Ltd threat of competitive rivalry is high because there are large number of respective company competitors who offer same products and services to customers. Such as ASDA, TESCO Plc and many more.
So it is responsibilities of respective company manger and leader to develop strategies and plans by considering all factors which are discussed above. By this they able to conduct business as well as sustain at marketplace in effective and efficient manner.
P4 Applying a range of theories, concepts and models, interpret and devise strategic planning for a given organisation
For analysing and evaluating market and after it developing strategic plan and strategies John Lewis Ltd conduct analysis by conducting Ansoff Matrix. Whose explanation is given below in context of John Lewis Ltd:-
It is a technique or method that a company use to design and develop strategies and plans for getting growth in future or expand business in appropriate and efficient manner (Murthy, 2012). This method is generally used by executives, senior managers, marketers and many other who develop strategies and plans for staff, so that they conduct work in efficient and proper way. Managers of John Lewis Ltd conduct analysis by respective method in order to identify which is method is more appropriate and effective for expand business. Explanation of different steps of Ansoff Matrix in respect of respective company is given below:-
Diversification: In this matrix an organisation introducesnew products at a new market in order to enlarge their customers bases and profitability ratio in effective and efficient manner (Oestreicher and Zalmanson, 2013). When John Lewis Ltd expand or diverse themselves at market then profit of brand get boost by which goodwill of company also get increased. To get better outcome respective company has to do various activities such as identifying potential customers, develop effective advertisement strategy and many more.
Market development: In this company expand theirbusiness in new market by developing new segment in order to target more and more customers in effective manner from different group or section. When respective company want to there market they will work at multiple components mode, in which they they expand more new market with same products which they are offering in other places. By this John Lewis Ltd able to enhance customer’s bases for existing products.
Product development: It is a strategy in which a company develop a new innovative products for existing market in order to attract and retain customers in effective and appropriate manner. In context of respective company,they develop new innovative and creative products which attract customers on huge ratio. By this method customers also get encourage for visiting stores to check out new products which increase there footfalls.
Market penetration: According to this strategy or matrix company try to expand and sustain there business operation and function with existing products at existing marketplace (Peng, 2017). In case of John Lewis Ltd for expanding in existing market with existing products, company will increase there promotional and advertising activities which help them in covering more and more potential customer. That will directly enhance profitability and market shares of respective company in effective way.
By determining and analysing all matrix of respective method for John Lewis Ltd product development is most effective and appropriate method. This is so because they are currently dealing in western clothings and if they introduce more range they able to attract more and more customers. For this respective company can develop new products such as they can introduce traditional products ranges. That help in attracting those customers who prefer traditional clothings.
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From the above discussed point it can be evaluate and conclude that, for developing and running a business in effective manner a company's owner needs to conduct market analysis in order to develop business strategies. For analysis of internal market company can conduct SWOT analysis and VRIO analysis. Along with this in order to evaluate macro factors an organisation can conduct PESTEL analysis. After evaluating micro and macro factors of environment company must conduct evaluation of competition at a market place by using Porters five forces model. Moreover, for developing strategic planning for conducting work in effective and appropriate manner an organisation can use porters generic model. By all this company management able to conduct and develop strategies for their business operations and functions in effective and efficient manner.
Alsudiri, T., Al-Karaghouli, W. and Eldabi, T., 2013. Alignment of large project management process to business strategy: A review and conceptual framework. Journal of Enterprise Information Management. 26(5). pp.596-615.
Bharadwaj, A. and et. al., 2013. Digital business strategy: toward a next generation of insights.
Chang, J. F., 2016. Business process management systems: strategy and implementation. Auerbach Publications.
Eaton, D. and Kilby, G., 2015. Does Your Organizational Culture Support Your Business Strategy?. The Journal for Quality and Participation. 37(4). p.4.
Iacob, M. E., Quartel, D. and Jonkers, H., 2012, September. Capturing business strategy and value in enterprise architecture to support portfolio valuation. In Enterprise Distributed Object Computing Conference (EDOC), 2012 IEEE 16th International (pp. 11-20). IEEE.
Jocovic, M. and et. al., 2014. Modern business strategy Customer Relationship Management in the area of civil engineering. Applied Mechanics & Materials, (678).
Lawton, T. C., 2017. Cleared for take-off: structure and strategy in the low fare airline business. Routledge.
Li, Y. and Tan, C. H., 2013. Matching business strategy and CIO characteristics: The impact on organizational performance. Journal of Business Research. 66(2). pp.248-259.
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