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Microsoft Word - Corporate Strategy1

Microsoft Word - Corporate Strategy1

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Published by mattstewartis9589

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Published by: mattstewartis9589 on Oct 18, 2010
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Page 1
Resource Audit of Waitrose SupermarketsMatthew Stewart
Page 2
The John Lewis Partnership is a top ten UK retail business incorporating 26 John Lewis DepartmentStores and 197 Waitrose Supermarkets; in addition, it has a significant online shopping presencethrough Johnlewis.com, WaitroseDeliver, and Ocado, of which the partnership owns approximately20%. Further divisions of the Partnership include a direct services company (Greenbee: sellinginsurance, tickets and travel), a textiles manufacturer and a 4,000 acre farm. In the year to April2008, total turnover was £6.8 billion.In contrast to a typical PLC, where traditionally the key goal is to maximise shareholder value, thePartnership is:
‘dedicated to the happiness of staff through their worthwhile secure and satisfying employment in asuccessful business’ 
John Lewis Partnership Annual Report and Accounts 2008, p1.
In all, the Partnership employs approximately 70,000 “Partners” who collectively own the businessthrough shares held in trust for their benefit, where benefit is held to be “the sharing of gain,knowledge and power” (John Spedan Lewis, cited by Street, 2005).
In 2008 each partner was awarded with a bonus of 20% of their annual salary: the highest inrecent years.
The Partnership has very transparent corporate communication and it is part of themanagement’s responsibility to inform partners of the company’s activities and performance.
Partnership executives are accountable to a network of elected councils, formed of partnersfrom all areas of the business. The councils have recently voted to reduce the qualifying period fortheir non-contributory final salary pension scheme from five to three years (Finch, 2008). The councilultimately has the power to remove the Partnership’s Chairman from office.In providing partners with these benefits see Fig 1, the Partnership seeks to secure commitmentfrom its members and believes that: Figure 1. ( Source JLP CSR 2008)
“the commitment of partners to the business is aunique source of competitive advantage whichhas underpinned more than 75 years of  profitable growth and a reputation amongst customers and suppliers unparalleled in the UK Retail industry” 
John Lewis Partnership AnnualReport and Accounts 2008, p1
Regardless of the area of the business, value,choice, service and honesty, are seen to becrucial to the Partnership’s success. In 2007 and2008 Waitrose and John Lewis were the top tworetail companies in Vedict’s CustomerSatisfaction Index. (Verdict, 2008)
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John Lewis and Waitrose share ideology, corporate structure and a number of central departments,but they retain their own identities by independently operating in what could generally be describedas the “department store” and “supermarket” sectors of the retail market. The definition of thesesectors is, however becoming increasingly blurred as supermarkets in particular, diversify in to manynon-food areas previously the preserve of the specialists and the department stores. This has beendriven by Tesco and Aldi in particular (Johnson et al 2006) and is demonstrated in the four Waitrose“food and Home” branches, which in addition to their usual assortment also sell a wide range of John Lewis’s bestselling homeware, electrical and electronics lines. To complicate things further, afood hall has recently opened in John Lewis’s flagship Oxford Street branch, selling a wide range of Waitrose’s premium lines.According to Johnson et al (2006), Physical, financial, human and intellectual resources form theFoundations of strategic capability. This paper will seek, through the use of the PESTEL, Porter’s FiveForces and SWOT analysis to assess the resources of Waitrose and identify which, if any, giveWaitrose a strategic advantage in the Supermarket sector.Waitrose and John Lewis are inextricably linked within the “John Lewis Partnership”, and so thispaper will refer to “Partnership” when statements pertain to both divisions and “Waitrose” where astatement is unique to Waitrose only.
Within the Macro environment it is likely that today’s unprecedented economic climate will impacton every influence within the PESTEL framework. In his most recent Treasury Committee statement(25
November 2008), Mervyn King, The Governor of the Bank of England stated:
“In the past two months, a remarkable set of events has transformed the outlook for the UK and global economies” 
The same grim statement summarises the events as:
“the most serious financial crisis since the outbreak of the Great War.... The flow of lending tohouseholds and businesses has been severely disrupted. Confidence has been badly affected....there was a significant fall off in demand coming into the fourth quarter.... the UK economy  probably entered a recession in the second half of 2008... unemployment has been rising at its fastest rate for seventeen years.,,, Oil prices have collapsed by around two thirds since thesummer, and the price of metals on world markets has halved.” 
King, 2008
The fallout from the financial crisis has led to significant changes in government policy. In the sixmonths to December 2008 the UK government has effectively nationalised a number of largebanks, reduced stamp duty on house sales, reduced interest rates to their lowest point in 57years and reduced VAT by 2% (bbc.co.uk). Each measure represents an attempt to prop up thefailing economy.

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