Strategic Analysis Of John Lewis: Success In Retail Sample

Introduction : Strategic Analysis Of John Lewis: Success In Retail

To increase a company's rivalry, strategic administration involves a structured method of setting goals, and processes as well as setting of business objectives. Attain these goals, entails the effective use of workers as well as resource deployment. The British business John Lewis Partnership plc is well-known for running Waitrose & Partners supermarkets as well as department shops. It is also well-known for offering financial services as well as banking, among various retail-related businesses. To create strategic plans that work, organizations in the ever-changing retail sector must carefully manage internal as well as external components. This study examines the John Lewis Partnership, a well-known retailer in the UK, using Porter's 5 Forces as well as PESTLE studies to evaluate outside influences. A SWOT evaluation is used to look at internal impacts, as well as the McKinsey 7-S Model is used to analyze the strategy plan while making sure it is in line with external forces. A balanced scorecard and strategy map is used to evaluate the plan's efficacy and identify its advantages and disadvantages. The purpose of the suggestions is to support the strategy plan for enduring achievement in the cutthroat retail industry.

MAIN BODY

What external environmental factors have influenced the organization’s strategic plan?

The assessment takes into account external environmental problems and makes use of technologies like Porter's five forces analysis and PESTLE analysis.

PESTLE Analysis

A macro level perspective of a business atmosphere can be obtained through the use of a PESTLE study. Politics, economy, society, technology, law, as well as the environment are all represented by the abbreviation PESTLE. An organization can gain insight into the factors that might impact an emerging company or sector by using this analytical technique.

Porter's five forces Analysis

These variables affect the profitability of a business and include the number as well as the strength of competitors that are in the market, the possibility of new competitors, the negotiating power of vendors and consumers, and the availability of replacement items. Designing a corporate strategy to improve its competitiveness can be facilitated by applying the Porter's five forces.

The threat of new entrants- Huge initial investment, economies of scale, as well as well-established brand recognition, is examples of entrance barriers (John Lewis Porter Five Forces Analysis, 2023). Nonetheless, entrance barriers have decreased in the Internet retail market.

The bargaining power of buyers- Internet-based platforms offers customers a multitude of options and facilitates effortless comparisons. Customers now have a lot more negotiating power, which puts stress on service both in price and quality.

The bargaining power of suppliers- Even if John Lewis uses a variety of suppliers, their influence may be increased if they focus on a few main ones (Goyal, 2020). Nonetheless, due to its size, the retail sector permits terms to be negotiated.

The threat of substitute products- The retail industry must contend with ongoing innovation as well as a wide range of replacement goods. John Lewis faces serious pressures from alternative shops and internet shopping.

The intensity of industry competition- Competitive pressure in the retail industry, online as well as offline, breeds aggressive pricing and marketing battles. Several retail stores, including Marks and Spencer, as well as Amazon are among the main rivals.

What internal environmental factors have influenced the organization’s strategic plan?

The acronym SWOT examination, referring to strengths, weaknesses, opportunities, and threats is a process used to determine and assess both inside and outside, possibilities as well as risks. It plays a crucial role in directing operations both now and in the years to come, supporting the formulation of the strategic objectives of a company.

Analyze the organization’s strategic plan in light of these internal and external environmental factors.

The McKinsey 7S Model is used to analyze the John Lewis Partnership’s strategy plan while taking into account both inside and outside environmental concerns.

Strategy- By bringing the organization into line with social and ecological patterns, the strategic plan successfully recognizes the significance of sustainability (John Lewis (United Kingdom) Mckinsey 7S Analysis, 2022). Another indication of a forward-thinking strategy is the emphasis on multichannel shopping and diversity. The strategy might be more explicit regarding the way it plans to handle fierce competition and unstable economic conditions, even though sustainability and diversity are positive qualities. A clearer digitization plan can be advantageous.

Structure- The organization demonstrates flexibility in response to shifting customer pReferences by being in line with the multichannel strategy. An innovative structural component that promotes a favorable workplace environment is the worker ownership concept. An explanation of the way the framework fosters creativity and rapid choice-making could be included in the plan. In particular, more attention needs to be paid to the way the staff member ownership model influences the organizational culture as well as structure.

System- An understanding of the significance of structures in the retail environment is shown in the focus on tech as well as the expansion of e-commerce. It is appropriate that investments in technology infrastructure are emphasized (Mehdikhani, 2019). Although technology developments are mentioned in the plan, it would be helpful to have more details about the structures that are going to be updated or executed. A comprehensive plan for digital change could provide this part more substance.

Skill- the employee ownership model is one way that the focus on worker skills is made clear. The dedication to equitable employment practices is in line with what society expects. More information about current efforts for skill development, particularly in light of technology improvements, should be included in the strategy. A clearer statement of the company's strategy for providing staff with the abilities they will require in the future would be helpful.

Style- The common ideals align with contemporary client demands, especially those that are sustainability-related. Positive organizational styles are compatible with a dedication to moral corporate conduct and equitable employment (Kabeyi, 2019). The strategy might highlight how a strong leadership style fosters creativity, manages shift, and presents a compelling vision for the future. Deeper insight would come from a more thorough examination of leadership philosophies and how they affect company culture.

Staff- Employees’ loyalty and happiness are positively impacted by the worker ownership concept. It is also admirable that they are committed to diversity as well as ethical hiring procedures. An explanation of the way staff growth fits into the strategic objectives of the company could be included in the plan. A clearer link between staff development as well as the achievement of the company would bolster this component.

Shared values- The John Lewis Partnership’s achievement may be largely attributed to its fundamental principles, which include honesty and customer-focus (Cao, 2019). However, given the changes happening within the retail sector, the strategic plan’s focus on encouraging creativity and flexibility as shared principles among staff members needs further examination. For execution to be successful, the workforce must understand the necessity of transformation.

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A strong link between the McKinsey 7s framework’s elements and the overall strategy of John Lewis can be seen. A company that can change internally as well as is conscious of external environmental issues is demonstrated by its focus on long-term viability ownership by workers, as well as an omnichannel strategy. Nevertheless, the strategy may be improved in a few places. The efficacy of the plan might be improved by incorporating specifics such as a more thorough digitization tactic, clearer links between organizational culture as well as leadership style, and an in-depth examination of the way shared principles influence decisions.

Evaluate the effectiveness of the organization’s strategic plan in achieving its objectives.

The company's strategic plan highlights several advantageous features that are adequately reflected in the strategy map and balanced scorecard. Initially, the company's mission and values as well as its strategic plan are well aligned. Prioritizing sustainability, worker ownership and equitable employment practices aligns with the company's identity and demonstrates a dedication to ethical company practices, as indicated in the strategy map (George, 2019). Furthermore, the company's diverse product offering, as shown by the balanced scorecard, helps to stabilize revenue by demonstrating flexibility in response to shifting customer demands and technology developments via a strong omnichannel footprint. In the context of John Lewis, Measures of retention and engagement among workers also show that the distinctive employee ownership model has a beneficial effect on staff satisfaction and organizational culture. The company's standing among ecologically conscious customers is further enhanced by its concentration on sustainability, which is seen as an asset. Key performance indicators associated with sustainability activities, including reducing the environmental impact and using sustainable sourcing are tracked by the balanced scorecard.

The company's drawbacks are illustrated in the strategy map and balanced scorecard, which are part of the strategic plan. Initially, as the strategy map points out, one difficulty with the digital change plan is its absence of clarity. The plan acknowledges the value of technology, but it might be far more effective with a more thorough and specific path for technological advancement and adoption (Haseeb, et. al, 2019). Furthermore, there are challenges in reaching a worldwide market share due to a restricted foreign expansion plan, as indicated by the balanced scorecard. Indicators about efforts to expand internationally and success metrics in those areas might be beneficial additions to the scorecard (Fuertes, et.al, 2020). The strategy map indicates that there is a demand for more specific plans for uniqueness and rivalry in a highly competitive marketplace, which is an additional area that needs improvement when it comes to handling intense rivalry. The balanced scorecard might also benefit from the addition of quantitative measures about continuing employee development programs since this would provide a clearer picture of the way staff abilities connect with organizational objectives, even though the model's good aspects are recognized.

Provide recommendations for improving the organization’s strategic plan in light of your analysis.

Here are some suggestions for improving the company’s strategic plan were discussed below:

Boost the Clarity of Digital Change- To strengthen the digital shift to improve clarity, the strategy plan should include a more thorough and targeted digital change roadmap. To make sure that technology is seamlessly integrated throughout the organization, clearly outline the innovations that need to be implemented, their implications and a deployment schedule.

Implementing an International Expansion Approach- Focus needs to be placed on incorporating a strong foreign expansion strategy into the strategic plan (Mathew, et.al, 2020). Overcoming the constraints of a market that mainly focuses on the UK requires comprehensive market analysis, the formation of alliances, as well as the incorporation of quantifiable targets for worldwide market share.

Measurable Indicators for Staff Development- By incorporating quantifiable and precise measurements into the strategic plan firm would become able to evaluate the success of continuous staff growth programs. Establish an obvious link between organizational goals and employee skill development to improve employee productivity and flexibility.

Strategic Emphasis on Distinctive Value Offering- By Providing a more detailed plan for uniqueness as well as competition in the fiercely competitive retail industry inside the strategic plan (Rossmann, 2019). To stay ahead of the competition, prioritize innovative ideas, distinctive value proposition, as well as customer-focused projects.

Detailed Description of Leadership Style- Give an expanded account of leadership styles along with the way they affect organizational culture to improve the strategic plan. Give a clear explanation of the way leadership encourages innovation, handles modifications, and supports the organization's long-term goals to guarantee a unified and motivating leadership style.

CONCLUSION 

The report concludes that an examination of the John Lewis strategic plan demonstrates a strategy that is in line with the organization's goals and values, placing a strong emphasis on employee ownership, sustainability, as well as a wide range of products. The 7-S model offers a thorough analysis of internal components and highlights advantages like employee ownership and company image. More straightforward strategies are necessary for possibilities such as worldwide growth and digital shifts, though. The benefits are demonstrated by the balanced scorecard and strategy map, but they also draw attention to the necessity for more detailed strategies in areas including technology and global reach. It is suggested that the digital shift be made clearer, that a strong strategy for foreign expansion be put in place, that staff growth be measured, and that a comprehensive plan for competition is provided. With these enhancements, the strategic strategy will be strengthened for long-term achievement in the cutthroat retail market.

REFERENCES

Books and Journals 

• Cao, H. and Chen, Z., 2019. The driving effect of internal and external environment on green innovation strategy-The moderating role of top management’s environmental awareness. Nankai Business Review International, 10(3), pp.342-361.
• Christodoulou, A. and Cullinane, K., 2019. Identifying the main opportunities and challenges from the implementation of a port energy management system: A SWOT/PESTLE analysis. Sustainability, 11(21), p.6046.
• Fuertes, G., Alfaro, M., Vargas, M., Gutierrez, S., Ternero, R. and Sabattin, J., 2020. Conceptual framework for the strategic management: a literature review—descriptive. Journal of Engineering, 2020, pp.1-21.
• George, B., Walker, R.M. and Monster, J., 2019. Does strategic planning improve organizational performance? A meta?analysis. Public Administration Review, 79(6), pp.810-819.
• Goyal, A., 2020. A critical analysis of Porter’s 5 forces model of competitive advantage. Goyal, A.(2021). A Critical Analysis of Porter’s, 5.
• Haseeb, M., Hussain, H.I., Kot, S., Androniceanu, A. and Jermsittiparsert, K., 2019. Role of social and technological challenges in achieving a sustainable competitive advantage and sustainable business performance. Sustainability, 11(14), p.3811.
• Kabeyi, M., 2019. Organizational strategic planning, implementation and evaluation with analysis of challenges and benefits. International Journal of Applied Research and Studies, 5(6), pp.27-32.
• Mathew, R., Bonilla-Martin, E., Santana, D. and Gonzalez, E., 2020. Untangling the history and procedures of strategic planning. Planning for Higher Education, 48(4), pp.25-34.
• Mehdikhani, R. and Valmohammadi, C., 2019. Strategic collaboration and sustainable supply chain management: The mediating role of internal and external knowledge sharing. Journal of Enterprise Information Management, 32(5), pp.778-806.
• Nandonde, F.A., 2019. A PESTLE analysis of international retailing in the East African Community. Global Business and Organizational Excellence, 38(4), pp.54-61.
• Rossmann, D., 2019. Communicating library values, mission, vision, and strategic plans through social media.
• Online
• John Lewis (United Kingdom) Mckinsey 7S Analysis. 2022. [Online]. Available through: <https://embapro.com/frontpage/mckinsey7scoanalysis/20175-john-lewis>
• John Lewis (United Kingdom) SWOT Analysis / SWOT Matrix. 2022. [Online]. Available through: <https://embapro.com/frontpage/swotcoanalysis/20175-john-lewis>
• John Lewis Porter Five Forces Analysis. 2023. [Online]. Available through: <https://www.mbaskool.com/five-forces-analysis/companies/18350-john-lewis.html>
• PESTEL Analysis of John Lewis. 2020. [Online]. Available through: <https://www.ukessays.com/guides/pestel-examples/john-lewis-pestel-2021.php>