LO1 Analyse the impact and influence which the macro environment has on an organisation and

its business strategies.

P1 Applying appropriate frameworks analyse the impact and influence of the macro environment
on a given organisation and its strategies.

Company: John Lewis Ltd

John Lewis is a publicly traded corporation that owns a chain of department shops that are
exclusively located in the United Kingdom. Since 1929, the brand has been in business, and ever
since then, it has provided clients reasonable pricing in order to compete with other companies. The
company now sells a variety of products, ranging from toys to fashion items to electrical goods.
Because of this, it is challenging to state that this brand is aimed solely at one particular age range. It
is the largest retailing store in the UK, and they are dedicated to offering its consumers with high-
quality goods. In the past, the firm had not been enjoying strong financial numbers; but, after
making some changes to its management team, it has experienced some fantastic results. After a
change in management, the company's earnings continued to show steady growth.

Macro environmental analysis

A large scale climate alludes to the generally speaking, more extensive economy and the powers
influencing it versus a microenvironment, which centres around a particular area or district's
economy. There are macroeconomic circumstances or elements that influence how all organizations
work, which, thusly, influence the economy in general. By and large, macroeconomics manages:

 Spending
 Cost levels
 Total creation

To decisively deal with an organization, examiners frequently play out a DEPEST examination, which
recognizes the demographical, natural, political, monetary, socio-social, and mechanical elements in
the large scale climate that can influence how organizations work.

 Demographic Factors:
Demographic powers at last include human populaces that belittle
organizations and add to the economy. There are various measurements that should be
examined with regards to demography, including age, orientation, size, occupation, and
need. John Lewis is affected by the geographical norms of the people of England & Wales.As
most the people there demand and like different goods as compared to the perpole living in
the other regions of the world.

 Political Factors:
Businesses are always limited by the political environment in which they
exist. Laws and governments regularly shape how a company can operate and even have
sway over the markets that companies can serve. John lewis is operating in a relatively
stable political environment as there is no such political disability in UK. But as being the ex
member of Europe and major of its activities ar also related to people of Europe as well
therefore it is likelihood that due to its exit from the European union it might effect its
activities and operations as well. This company has responded appropriately by
implementing a number of adjustments, such as increasing the amount of training it offers
 staff to the point where they are knowledgeable about how to get products to market. They
shouldn't lie to customers by overstating the benefits of a product that don't actually exist.

 Economic Factors:
Economic factors affecting the macro environment relate to forces that
affect how consumers spend and their purchasing power. John Lewis is also affected by
some economic factors as well like the rate of inflation and the level of unemployment and
the people spending patters and the level of income they are earning as well as their
disposable income as well. This company has responded appropriately by implementing a
number of adjustments, such as increasing the amount of training it offers staff to the point
where they are knowledgeable about how to get products to market. They shouldn't lie to
customers by overstating the benefits of a product that don't actually exist.

 Socio-Culture Factors:
Various social orders and social gatherings are described by various
necessities, which are much of the time in light of various guiding principle and inclinations.
Societies frequently foster a gathering mindset, which passes along guiding principle and
general convictions

 Technological Factors:
In macro environment organizations are more likely to be influenced
by the advancement in technology and the innovation in the modern world. Nearly
everyone in the world owns a smartphone, tablet, or laptop that can quickly and easily be
connected to the internet. It exerts a serious impact on individuals and societies and their
ability to patronize companies freely. John Lewis customers may now purchase online after
the company launched an online gateway that just requires them to register on the website.
They also have the ability to provide comments and file complaints using that portal. In light
of this, the IT department has taken the necessary precautions in order to solve any
problems that may arise during an emergency

It is vital to separate what every one of the elements involves to find out about the variables that
shape how organizations work, and, in this manner, shape the full scale climate.

Before developing any kind of plan, I made the choice to first carry out a macro analysis, which is my
role as a manager in a corporation. The purpose of carrying out this research is to ensure that the
strategy won't be affected negatively by any changes that take place in the external environment. As
a result, doing a PESTEL study before to developing any plan is highly recommended.(Licence, 2013)

LO2 Assess an organisation’s internal environment and capabilities

P2 Analyse the internal environment and capabilities of a given organisation using appropriate
frameworks
SWOT ANLYSIS

1. Strengths
I. It has a well-known brand name and a high percentage of repeat clients who are loyal to
the company.
II. Since 2001, there has been a significant increase in earnings, and this trend is expected
to continue, albeit at a more gradual rate.
III. A labour force that is exceptionally well-trained and skilled, and which makes a
beneficial contribution to the company's overall success.
IV. Strong internet presence across several social media platforms, point four

2. Weakness
I. A consistent lowering of prices as a result of increased competition, which causes
consumers to have doubts about the items' quality.
II. Accused by several investors of failing to maintain adequate levels of business
transparency

3. Threats

I. It is anticipated that both possible direct competitors and indirect competitors will enter the
UK market.

4. Opportunities

I. Opportunities on a global scale and undeveloped markets worldwide

II. The company's presence online will have a positive influence on its performance since it will
attract a greater number of potential consumers. (Christodoulou and Cullinane, 2019)

LO3 Evaluate and apply the outcomes of an analysis using Porter’s Five Forces model to a given
market sector

P3 Applying Porter’s Five Forces model evaluate the competitive forces of a given market
sector for an organisation

Porter’s Five Forces model

The specifics of Porter's model, along with its constituent parts, are presented in the following:

1- Threat of New Entrant

Because John Lewis is such a well-known brand name in the retail business, it has a substantial
presence in the market. Because the retail market requires large investments to be able to
provide competition to such major brands, one can not anticipate a big surge of competition on
the same scale as in other industries.(Paranque and Willmott, 2014)

2. Threat of Substitute
 When it comes to the retail business, customers often prefer to make their purchases in-store
rather than online. Despite the fact that there is a tendency toward technology in the globe,
there is yet no alternative to the practise of purchasing clothing.(Blackburn and Smallbone, no
date)

3. Bargaining power of supplier

Because John Lewis is such a well-known brand and works with such a large number of vendors,
the price is surprisingly affordable. If one of this company's suppliers wanted to raise prices on
his end, the business would investigate the possibility of purchasing from other suppliers.

4. Bargaining power of customers

It is high since consumers these days have a lot of options to choose from. They have a wide
variety of options, which, along with their comparatively cheap switching costs, allow them to
take advantage of John Lewis's various attractive bargains and packages. (Alnama and Dess, no
date)

5. Level of competition

The retail business is one that features intense levels of rivalry. Other brands can take customers
away from John Lewis by giving deals and discounts in conjunction with holidays and other
special events.

Next step will be to make series of efficient strategies for Company based on PESTEL, SWOT and
PORTER’S MODEL.

LO4 Apply models, theories and concepts to assist with the understanding and interpretation of
strategic directions available to an organisation

John Lewis is a company that has broadened its operations and offers a wide variety of products in
categories such as home and garden, products that appeal to both women and men, electronic
goods, toys, and sporting goods. As a result, it is necessary for it to work diligently on the strategic
strategy for marketing direction.

After doing an analysis using Porter's Five Forces Model, John Lewis is in a position to work on three
tactics that will provide them an advantage over their competitors. The following is a rundown of the
three strategy directions:

1- Cost Leadership

The furniture and fixture division of John Lewis's company is a good candidate for the cost
leadership approach. The corporation can pursue economies of scale and adopt vertical
integration, which means the company will become the provider of its own product, in order to
 put this plan into action. The fact that it is capable of overcoming various costs and reducing
duplicate costs that are linked with operations is one of the benefits. As soon as the company
has eliminated its unnecessary costs, it will be able to provide its consumers with products that
are priced affordably, which will result in increased client loyalty. Second, a corporation can
work excessively with technology so that all of their business activities can be completed totally
on the internet. (Loorbach et al., 2009) This can be done as part of the adoption of a cost
leadership plan.

2- Differentiation

It is also able to pursue a differentiation strategy in the varied product range that it offers.
Customers might be given the option of customisation as a means of helping the company
accomplish its differentiating strategy. A client may visit the shop and place an order based on the
characteristics that he seeks in a good or service. Along with the ability to command higher costs for
individualised services, this is a perfect chance to attract additional potential consumers. They are
able to achieve their objective of differentiating themselves by offering individualised service in
conjunction with charging higher costs.(Peng, By and Meyer, 2000)

3- Focus:

Combining distinctiveness with an emphasis on cost leadership is what this approach entails. By
employing this method, John Lewis is able to reveal untapped sectors in which rivals have not yet
arrived and provide items to its own specialised customer base.

This is how the directional strategies that were described before may assist me in becoming
successful in the industry.(Nandonde, 2019)

Growth Platform and Strategies

A business will identify the growth platform with the objective of increasing its earnings and
revenue. Both a tactical and a strategic growth strategy would be included in it. These are the two
growth strategies that would come with it. Depending on the complexity of the strategy, the
implementation of strategic growth initiatives often takes between four and six years. In most cases,
less than a year is required for tactical preparation.(Vallati and Grassi, 2019)

There are three issues that need to be answered before implementing a growth platform strategy.

Mentioned below

1. Where the company wants to be

2. Where the company is right now

3. How to get company there

At the moment, John Lewis is the most successful retail shop in the United Kingdom, with 31
departmental locations. The company is successful because it carefully considers what its clients
want and then delivers high-quality products in response. The corporation has decided to pursue a
policy of diversification, and it will now be operating in the foreign currency, internet, credit card,
and insurance markets.

After conducting study on the topic, it has been determined that the firm should concentrate its
efforts on developing a plan that addresses the principal three areas known as customising service,
unique goods, and the provision of new services. The creation of a new product would be the ideal
option since it would appeal to a new target or potential audience. (Paranque and Willmott, 2014)

Second, in order for a firm to experience growth, it should investigate unexplored markets,
particularly those that rival businesses are still working to penetrate. The advantage would be that if
the firm made its position in that secret untapped area, then it would be very difficult for a new
company to create its place in that area. This would be beneficial.

Thirdly, in order for the firm to experience growth, it may analyse the latent demand that is now
there in the industry and then begin selling its products to certain niche markets. The benefit would
be that the corporation would be able to charge higher rates from the niche market.

P4 Applying a range of theories, concepts and models, interpret and devise strategic planning for a
given organisation.

Strategic Plan For John Lewis

Situational Analysis:

It was discovered in the first assignment's SWOT analysis that this firm's business would be drawn
worldwide; however, this potential has not been taken advantage of as of yet. This discovery was
made despite the fact that this company already does business on a global scale. Because the market
in the UK is deemed to be oversaturated, increasing your exposure to markets in other countries
might assist you overcome this challenge.

Objectives for John Lewis

This organization's goal-setting process has been guided by the SMART concept in order to achieve
optimal results. Components of SMART objectives include being reasonable, having a time limit,
being explicit, being quantifiable, and being achievable. The goals are designed to ensure that there
is a worldwide presence in both developing and developed nations.

1. To achieve an annual growth rate of 15 percentage points from international markets

2. In order to guarantee that thirty percent of the company's total profits would come from outside
markets

3. To be regarded as a trustworthy brand by consumers by the year 2019

Marketing Strategy for John Lewis

When it is proposed that this firm should have a worldwide footprint, the nation that would fit best
for embracing its goods is China. This is because the market is still not saturated in China, and an
advantage of cheap labour can be obtained by doing business there. Because it sells things at high
costs, its target consumers will be those who make a lot of money, and it will provide them with
premium goods and services.
In this particular nation, the age band of 25 to 45 encompasses both males and females who have
achieved significant levels of financial success. It is necessary for this brand to enter the market with
an association of success, prestige, and social position in order for it to become popular in China.
Because China is seen as a society that places a high emphasis on status and social class, this strategy
will be helpful for the brand.(Licence, 2013)

A variety of marketing strategies, including public relations and advertising, will be utilised in the
process of brand marketing. The faces that will be used in advertising will be those of well-known
celebrities and businesspeople who have earned a good reputation.

Tactical Plan for John Lewis

In order to successfully break into the worldwide market, a strategic plan will be developed and
carried out using the marketing mix technique.

1. Product

Research is absolutely necessary before visiting a new country since the products that are eaten
and requested in the UK will be different from those consumed and demanded in other foreign
countries. Research is also vital because a significant initial expenditure will need to be made
before beginning this endeavour.

2. Price

There will be an entry for John Lewis as a brand associated with prestige, social standing, and
accomplishment. As a result, one approach that will be utilised in pricing, and high prices will be
charged, is distinction.

3. Place

The location has selected the busiest street in the area, which features an abundance of retail
establishments, making it simple to estimate the size of the possible customer base.

4. Promotion

It is being considered to make considerable use of technology for marketing because it will not
result in much expense to the firm, and the audience that is being targeted has a big presence
on social media.

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internet adds value E-Business Strategies and Internet Business Models : How the Internet Adds
Value’. doi:10.1016/j.orgdyn.2004.01.004.
Blackburn, R. and Smallbone, D. (no date) ‘BUSINESS STRATEGIES AND PERFORMANCE For the
Department of Business Innovation and Skills ( BIS ) John Kitching Sarah Dixon Contents EXECUTIVE
SUMMARY .......................................................................................................... i’.
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’.
Dafforn, K.A., Lewis, J.A. and Johnston, E.L. (2011) ‘Antifouling strategies : History and regulation ,
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Loorbach, D. et al. (2009) ‘Business Strategies for Transitions Towards Sustainable Systems’.
Nandonde, F.A. (2019) ‘A PESTLE analysis of international retailing in the East African Community’,
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