John Lewis

11 November 2018

    Introduction
    John Lewis is one of the most famous chain stores in the UK; its partnership owns the leading retail companies in UK – Waitrose and John Lewis. The first John Lewis shop was operated in 1864 in Oxford Street, London. John Lewis is known as ‘Never Knowingly Undersold’, this slogan has been in use since 1925(John Lewis partnership, 2018). John Lewis was highly recognised in the UK, and the most significant evidence is Her Majesty Queen Elizabeth had awarded its Oxford Street store as ‘suppliers of haberdashery and household goods'(John Lewis Achieved, 2009) on 1st January 2008. John Lewis Partnership has been working on household and fancy goods for a long time, which was adopting centre buying as the first department store group in the UK. Recently, this chain has been investing, and this included the renovation of Peter Jones that cost £107 million and completed in 2004 (Fiona W., 2004). The shop in Oxford Street was refurbished in 2007 at the cost of £60 million and is still the largest and flagship branch of the partnership. The refurbishment introduced ‘Place to Eat’ and a bistro and brasserie in the shop. In this essay, I will assess the strategies of John Lewis in terms of
    Review of strategy
    ‘How firms compete and what strategies they choose are important questions for the economy’ (Ormanidhi and Strings, 2008) and an essential decision has to be made to figure out the strategy of an organisation then obtain the required resources for the formulated strategy (Carl S. 1989). Strategy connects between the environment and organisation like values and goals with a business requirement to fulfil the consumer requirements from the outside environment. John Lewis’ strategies were made since 1928, that contain the future 100 years. John Lewis announced the responsibility to ensure the long-term sustainability of the Partnership as a co-owned business. Its strategies have three primary parts what lead the business towards 2028, and they are stronger brands and new growth; Better jobs, better-performing Partners, better pay and financial sustainability (John Lewis 2018).
    Resources, Competencies and Capabilities
    To summarize, John Lewis’ strategies regarding with its resources, internal environment, competencies and capabilities, and they are the foundation for making competitive strength and strategy. Resources are what the business have, competencies and capabilities are what the business can do, after clearly defining these two terms, the business can get the conclusion – what should the business do. Although the chain of department stores is a highly competitive market in the UK, but John Lewis Partnership has a powerful internal environment and ample competencies and capabilities to response the changing external environment. John Lewis Partnership is a ten retail firm in the UK and has the ability to become a leading retailer with its mature strategy.
    The most fundamental and obvious way to build stronger brands and make the business growth is to improve consumer satisfaction. But recently, John Lewis’ staffs complained that overdose of customer complaints which means its consumer satisfaction has been reducing with the time flow. I would suggest John Lewis to use workforce and warehouse management system to reduce cost and increase sales to make the profit. Therefore, the low-cost operation help John Lewis to maintain its slogan ‘Never knowingly undersold’ and decreasing the cost burden to consumers and provide goods at a better price (John Lewis 2018). This can offer customers the confidence to the business and maintain consumer’s trust and loyalty. Although a lot of rivals and potential competitors imitating John Lewis’ operation model but the consumers’ relationship and partnership according to the ability of the businesses to maintain its strengths of competition (Scholes K., et al. 2008). Besides, John Lewis should also focus on high growth areas and continuing to increase market share in order to follow its strategy. Since its operations, John Lewis launches a direct website, supermarket chains and department shops. John Lewis has recently invested restaurant, which started from its original and the most significant store in Oxford Street, London. These attempts present John Lewis desire to take part in the high growth field and they should keep practising. John Lewis expanded its market share by introducing an ‘Essential’ and ‘Value’ range to increase consumer groups and expand the areas of the operation.
    4.Internal environment
    The recent research shows, a firm’s ability to earn the profit and its productivity are both related with employees’ satisfaction, especially productivity with a variation of between 18% productivity and 19% profitability (Hobson 1998). As a result, John Lewis need to offer a better environment for Partners and employees to improve its profitability and market share. John Lewis is facing a huge issue on this this part, its employees’ morale is at the bottom of rock. Its staff announced that wages and training are barely above the standard and they cannot deal with some issues with John Lewis’ old IT system (Patrick C 2015). In light of this situation, I harbor the idea that John Lewis Partnership need to enhance the interaction with workers, develop the official equipment and system to ensure the efficiency of daily work; Increasing the salary and employee welfare to motivate workers. The partners are employees of the business as well; John Lewis need to offer promising employment, stability and security to its Partners. With the repaid development of the employee-owned business model, John Lewis Partnership managed a network of over 235 supermarkets and over 31 department stores and sold around 350 thousands goods out in 2000. Especially, launching online shopping site – Johnlewis.com and delivering products by Ocado online service, and this lead to the company became complex. John Lewis Partnership uses RedPrairie’s management system of workforce and warehouse to retain and build consumer loyal while improving efficiency to increase sales, promising the delivery speed and availability of products, this was another factor that supports the business’ competitive advantage of the strategy (John Lewis Partnership 2018).
    Firstly, the Partnership’s aim of the strategy was to ‘experiment in industrial democracy’ and to establish a ‘better form of business’ (John Lewis Partnership 2018). John Lewis should use the strength of the capability and resource to expand sources as a mature employee-owned business. The partnership should improve and maintain John Lewis’ strategic position as an excellent example of an employee-owned business model and a great retail company (Jown Lewis Partnership 2018). Besides, John Lewis’ long-term strategic aims were taking part in co-owned business to satisfy its Partners, maintain consumers’ loyalty through offering services, choice, honesty and value while gaining competitive advantages, strengths of business and actual influence, which helps the sustained development of John Lewis. John Lewis Partnership must prove the strengths of competitive behaviours and co-ownership and let the firm outperform from its rivals even traditional business to achieve those goals.
    5.Macro environment
    The effects from macro environment are usually defined as political, economic, social and technology. In this part, I will use the PEST model to analysis how do these four factors influence John Lewis. Regarding with political and economic, the UK government attempts to gain the ability of control environment of business to achieve and predict economic objectives. The Bank of England has set up interest rate at less than 2% since 2008 in order to get rid of the impact from recession. As a result, households can have more disposable income which leads to more consumption (Bain, 2009). The low raters stimulated John Lewis’ sales and help John Lewis to outperform in the recession. Its home technological and electrical sales increased by 13% in 2009, mainly are TV sales (Bain, 2009). Besides, although John Lewis’ products are relatively more expense because of its high quality, but it also has the ability to control the selling price to compete with its rivals and earn more profit. This is cause of the increasing living standard and income allow people to do more consumption and accept the small changes in price. Therefore, John Lewis’ total sales rose 8.2% in 2017 with its competitive pricing (John Lewis Partnership 2018).
    The British population has been continuously rising over the decade. According to the record of BBC news, the number of British newborns in 2011 is the highest number since 1971. Besides, the percentage of newborns is continue to climb these years (BBC news, 2012). This phenomenon stimulates John Lewis’ baby sales, nursery and toys because John Lewis is famous for its Lego, which is one of the most famous children game in the world. The success of baby sales is affected by the change of British age structure and demographic.
    With the rapid development of technology, internet just formed a new lifestyle for people to communicate by embracing social networks. John Lewis catches up with the new trend by launching its social media on famous social networks like Twitter and Facebook in order to keep in touch with consumers. Today, John Lewis Partnership has more than 400,000 followers in Facebook since it registered its Facebook account in 2010. John Lewis can use that in business purpose with this amount of potential consumers connect with the company and it is more effective and lower cost than other advertising. For instance, John Lewis can announce the period of sale and promotion to consumers by publishing new dynamics online to encourage consumption. The internet allows the business to maintain and develop even build relationship and connection with consumers.
    The in-store shopping is less attractive for people nowadays as they are busier, online shopping can replace the traditional way of shopping, which can help consumers to do the consumption at anywhere and anytime. Therefore, JohnLewis.com is an essential factor of John Lewis’ success. There was 23.2% increased sales in 2017 compared with the online sales in 2016, accounting for 30% to its total revenue (John Lewis Partnership 2017). These numbers present the huge improvement of John Lewis’ online sales. In addition, the information about the products what published on website by John Lewis can save consumers’ time for asking staff for advise and can also save the cost of salary and training of employees and reduce the risk of potential mistakes they could make. It achieved the ‘Best Online Retail’ in 2010 (John Lewis Partnership 2018), this achievement can maintain consumer loyalty and reinforce the business image.
    6.conclusion
    John Lewis Partnership’s success is close connected with its strategies, what present highly consistent between its strategic choice and the partnership. Both capabilities and resources are used to reach the aims. The choice of narrow focus and differentiation ensure the company can focus on the ability to improve and develop in order to provide more value to consumers. This leads to the increasing sales, profit and market share with the time flows, containing an increase in partnerships and strategic alliances as well. John Lewis Partnership has the ability to make the right decisions which the changing economic environment, like how they deal with internet age. John Lewis Partnership’s high quality products have already built an impressive brand and having a highly appraised word of mouth. Although it is becoming the leader of retail market in the UK, but the environment is changing all the time, thus John Lewis Partnership must be prepared for any situation it may faces in the future to preserve its reputation.
    Reference List
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    HYPERLINK ;https://link.springer.com/book/10.1007%2F978-0-387-76896-0; https://link.springer.com/book/10.1007%2F978-0-387-76896-0
    [Accessed on 3rd May 2009]
    BBC news (2012), ‘The population Bomb’, available at:
    HYPERLINK ;http://www.bbc.co.uk/programmes/p060xmnn; http://www.bbc.co.uk/programmes/p060xmnn
    [Accessed on 12 March 2012]
    Carl S. (1989), The Theory of Business Strategy, chapter 1 ‘Review of business strategy’, available at:
    HYPERLINK ;http://www.jstor.org/stable/2555656?seq=1#page_scan_tab_contents; http://www.jstor.org/stable/2555656?seq=1#page_scan_tab_contents
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    Fiona W. (2004), ‘Peter Jones revamp signs off Pentagram concept.’, available at:
    HYPERLINK ;https://www.highbeam.com/doc/1G1-118106242.html; https://www.highbeam.com/doc/1G1-118106242.html
    [Accessed at 2004]
    Hobson (1998), The relationship between business and its employee, chapter 4 ‘profitability and productivity’, 2nd Edition
    John Lewis Archive (2009), available at:
    HYPERLINK ;https://web.archive.org/web/20090715061210/http:/www.royalwarrant.org/directory/companies/john-lewis.html; https://web.archive.org/web/20090715061210/http://www.royalwarrant.org/directory/companies/john-lewis.html
    [Accessed at 2009]
    John Lewis (2018), ‘our strategies’, available at:
    HYPERLINK ;https://www.johnlewispartnership.co.uk/about/our-strategy.html; https://www.johnlewispartnership.co.uk/about/our-strategy.html
    [accessed at 2018]
    John Lewis partnership (2018), available at:
    HYPERLINK ;https://www.johnlewispartnership.co.uk/; https://www.johnlewispartnership.co.uk/
    [Accessed on 15 July 2009]
    John Lewis Partnership (2017), ‘John Lewis Partnership interim report’, pp6, available at:
    HYPERLINK ;https://www.johnlewispartnership.co.uk/financials/financial-reports/interim-reports.html; https://www.johnlewispartnership.co.uk/financials/financial-reports/interim-reports.html
    [Accessed on 29 July 2017]
    Ormanidhi and Strings (2008), Porter’s Model of Generic Competitive Strategies pp12, available at:
    HYPERLINK ;https://link.springer.com/article/10.2145/20080305; https://link.springer.com/article/10.2145/20080305
    [Accessed on 1st July 2008]
    Patrick C (2015), ‘how has John Lewis lost its way?’, available at:
    HYPERLINK ;https://www.theguardian.com/money/blog/2015/sep/12/has-john-lewis-lost-the-plot-complaints; https://www.theguardian.com/money/blog/2015/sep/12/has-john-lewis-lost-the-plot-complaints
    [Accessed on 12 September 2015]
    Scholes k., Jonson G. and Whittington R., (2008). Exploring Corporate Strategy: Text ; Cases, chapter 1-3, 8th Edition, Prentice Hall.

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