John Lewis Strategic Analysis
John Lewis Partnership Strategic Analysis APPENDIX (A)| Vision-Employee co—ownership with the happiness of partners as the ultimate purpose. (1)| Mission-Satisfying employment in a successful business. (1)| Value-Best possible choice, quality, trust, value and customers services. (1) | Corporate objectives-achieve success for John Lewis for building sustainable business for the long term, generating partnership value through consistent profitable growth, whilst marketing sure that our customers can always trust us to do the night time. | Appendix B|
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Political 1-The government regulation(2)2- changes in tax laws (3a)3-Special tariffs (4)4-Enviromental protection law (5)5-Political condition foreign countries (6a)| Economical 1-Intrest rate (14)2-Inflation rate (14)3-Availability of credit (15)4-Unemployment trend (3b)| Social and Environment1-Immigration rates (12)2-Buying habits (10)3-Ethical concern (13)4-Pollution control (3b)| Technology1-Life style (7)2-Speed of distribution (8)3-Creating new product and services (9)4-Changing new entry barriers (10)5-Internet or E-commerce(11)| Legal| How it Affects John Lewis Partnership| Arising VAT to bring the price increase that difficulties to retain customers. -Oil price rises as Libyan unrest may increase John Lewis production costs. | -Sale will decrease and less credit will be available. -Inactive rate of aged 16-64 in January 2011 was 23. 3% -(15)| Waitrose sale of tobacco will fall. -Customer are likely to shop less and supply chain will affect-Reduction of energy usage may affect production, transportation and storage. | Quick service and online advertisement will Arise the cost. Waitrose must spend on this technology to be able serve its customer as fast as possible| | APPENDIX (D)SWOT Analysis | Strengths 1- Distinctive business model (1)2-Local merchant suppliers (1)3-Strong community involvement (1)4. Exceptional quality (16)| Weaknesses 1-Price positioning as customer continue to trade down (17)2- Frequent product recalls (5b)3-Misprensative commercial will tarnish brand name| Opportunity 3- acceptance of private label market (20) 1-Inrenet shopping rowing (18)2- demand for organic products (19)| S. O: 1. John Lewis and Waitrose brand acceptance will help it to expend its market online easily| W. O 1. Acceptance of private label are expected to grow 40. 2% by 2011, so price wouldn1t be a problem| Threats 1- Recessionary climate 2-Vat increase to 20% (3)3-Substitue products more easily because of intense competition | S. T 1. Employees are the owner of John Lewis; their commitment will help to exist in the competition| W. T 1.
In recession time more care should be taken to provide quality productAnd not to lose customers confidence| APPENDIX (E)Porter Five Forces | Threat of entry (Low) 1. Brand acceptance 2. Huge customer satisfaction (21) 3. Unique business model (1) 4. Quality is the main barrier to entrants. | Threat of substitutes(High)-Too many food &fashion retailers-Low switching costs-Specialist retailers of electrical & households like Curry’s, Comet and IKEA| Power of buyers(High)- 1-Brand, Quality and Customer service prevents John Lewis from high customer bargaining power. 16,20)2-Price matching of 1000 products with Tesco will lower the power (6d)| Power of suppliers(Low) -1. Own Textile factory Herbert Parkinson and a farm on the Leckford Estate. (1)2. Food suppliers power is low as there is many alternatives Branded electrical of LG, Siemens, Bosch, Panasonic has more bargaining power. (22)| Competitive rivalry (High)- Strong competitors like Tesco, M&S, House of Fraser, IKEA with relatively- high market share -High exit barriers -Rapid retail market Growth.
Volume of retail sales grew by 1. 9% in January2011 compared with December (23)| APPENDIX (B) Mendelow’s Stakeholder Mapping| Key players: (high Power, high interest) All employers are Partners that they are the key players, so they should be look after with care. (1| Keep Satisfied: (high power, lower Interest): government of UK, local authorities, regulatory bodies, and trade associations should keep this group satisfied meeting their standards and requirement to avoid them in john Lewis activities. 1)| Keep Informed: (lower power, high interest): suppliers, loyal customers of JWP and Competitors should keep this group informed about the activities of JLP to avoid them joining the people with high power to affect the JLP activities. (1) | APPENDIX (F) BCG’S Matrix| Market Share| Market Growth| HighLow| High Low| | | Star- 1-Waitrose market share is 3. 2% (24)2-online business in2. % (24)3. Ocado where Waitrose product are sold is2. 2% (24)4. John Lewis at home very good profit margin6. 9% (24)| Question mark- 1-John Lewis insurance2-Green bee phone and broadband| | | Cash cow- 1- john Lewis department stores market share of 21. 5% (24)2. Department stores market growth is law. | Dog-| APPENDIX (G) Porters Value Chain Analysis| Primary activities- 1-mechandise standard departments and buying team work together to ensure branded Products are safety and meet standard. 1)2- Multichannel approach – internet shopping, call centres, home deliveries, convenience stores. (1)3- marketing and sales: online, TV advert, marketing campaign (1)4- After sale service- Guarantee and warranty, Online free delivery. (1)| Supportive activities- 1- Training and development to give the best customer service (1)2-Management training schemes aimed to retain high calibre managers (1)3-ITQ Programme For IT Department (1)4- Procumbent: innovative buying team, merchandisers secure and purchase stock at the lowest cost possible. (1)| |