LO1

P1

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

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

P2

PESTEL ANALYSIS

1- Political Environment

The political climate has a significant effect on John Lewis Ltd. due to the fact that recent
legislation has tightened the parameters of what may and cannot be done in accordance with
the law. Some of the regulations that have had an effect on its success over the long term
include the following: before selling any thing, the corporation is required to adhere to specific
guidelines, such as meeting ISO standards, and sell out good for the purpose that is known by
customers. 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. Regardless of the terms and
conditions, it is unacceptable to mislead or otherwise misinform the customer base for this
reason. (Licence, 2013) On the other hand, it also receives some benefits from the government,
such as a reduction in the tax rate on enterprises from 30 percent to 28 percent, which will lead
to create more profit from commercial operations.

2- Economic Environment
As a result of the shifts in interest rates that the entire nation is experiencing, the United Kingdom's
businesses are at risk of experiencing a recession. The second reason is that there is a lot of rivalry in
the UK, and as a result, everyone is coming up with a plan of giving incentives and packages to
attract clients from John Lewis Ltd. Because of this, it will be necessary for it to lower prices at
particular times.(Dafforn, Lewis and Johnston, 2011)

3- Environmental factors

In recent times, it has come to light that social workers have coerced businesses into reducing their
emissions and focusing their efforts on environmentally friendly practises. There is a lot of pressure
on John Lewis to decrease its carbon impact, which the company is being ordered to do. Recycling
paper and developing more fuel-efficient vehicles have led to a significant number of positive
benefits. It is anticipated that solar panels will be installed in the building in the near future.
(Blackburn and Smallbone, no date)

4- Social and Cultural

There has been a significant shift in the purchase pattern as well as the purchasing behaviour of
customers. They are prepared to spend money on branded products such as home appliances and
apparel, for example. John Lewis Ltd. has performed an excellent analysis of this shift, and as a
result, they have increased the number of employees working in the apparel department to meet
the growing demand among individuals of all ages.(Blackburn and Smallbone, no date)

5- Technological

A dynamic shift is taking place in the market as a result of the increasing influence of the internet on
the shopping behaviours of consumers. 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. The fact that John Lewis's suppliers can now make orders online, rather than
having to phone or leave messages, has been beneficial to both parties. As a result, the risk of
making a mistake when placing an order is significantly reduced. John Lewis benefits from this aspect
of the situation.(Dafforn, Lewis and Johnston, 2011)

6- Legal

John Lewis is an employee of a corporation that places a strong emphasis on ensuring that workers
over the age of 25 receive a minimum hourly wage of $7.20. No matter what the state of the
Company is in, it is required to provide timely salary payments.(Dafforn, Lewis and Johnston, 2011)

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)

M2 CRITICALLY EVALUATE THE INTERNAL ENVIRONMENT TO ASSESS STRENGTHS AND

WEAKNESSES OF AN ORGANISATION’S INTERNAL CAPABILITIES, STRUCTURE AND SKILL SET.

Internal Analysis:

An Inside Investigation is the course of an association looking at its inner parts to evaluate its assets,
resources, qualities, skills, capacities, and upper hands. This helps the board during the navigation,
system definition, and execution processes by distinguishing the association's assets and
shortcomings .So basically, an Inside Investigation empowers a firm to figure out what the firm can
do expanding inner capacity to oversee execution and change.

An Inside Examination in essential administration ought to act as the underpinning of any business
technique, and we'll tell you the best way to direct one and which apparatuses you have available to
you to lead an inside appraisal in essential administration.

list of the Internal Analysis tools:

 Gap Analysis

 Strategy Evaluation

 SWOT Analysis

 VRIO Analysis

 OCAT

 McKinsey 7S Framework

 Core Competencies Analysis

 + Download our Free Internal Analysis Toolkit! This contains excel templates of all of the
above tools!

Why conduct an Internal Environment Analysis?

An Interior Examination features an association's assets and shortcomings according to its
abilities, assets, and upper hands. When complete, the association ought to have a reasonable
thought of where it's succeeding, where it's doing affirm, and where its ongoing deficiencies and
holes are. The investigation gives the board the information to use the association's assets,
ability, and open doors. It likewise empowers the board to foster procedures that alleviate
dangers and make up for distinguished shortcomings and burdens.

At the point when your business procedure depends on genuine discoveries and not
suppositions, you can be sure that you're channeling your assets, time, human resources, and
concentrate successfully and productively.

Steps for conducting internal analysis:

Set forth the goal

The underlying step is to spread out the goal, this is essentially the reaction with respect to the
motivation behind why you're driving an Inside Examination. For example, the ideal aftereffect
of this Inside Examination is to ideate the UI bearing for the state of the art thing. This goal helps
you with remaining focused during the going with progresses.

Pick a format structure

The resulting step is to download our Free Inside Assessment Instrument reserve and pick
Within Examination Framework Configuration by and large agreed with the issue you're
endeavoring to handle and your goal.

Data assessment

Utilize all inside sources to bunch information to assist with achieving your goal. Concerning our
model from a higher spot, assessment would integrate talking client accomplishment managers,
engineers, etc to gain an unrivaled cognizance of the opening between the current and needed
future state of the UI.

Structure time

By and by you consider all of the data you accumulated from your investigation and execute it in
the picked structure. At the point when you have completed the framework impact the pieces of
information to most fitting reaction the subject of why you drove an Internal Examination.

Make your course of action

At the point when you have answered that request, take the pieces of information and make a
brilliant plan that enables you to show up at that fundamental goal. So by virtue of our goal, to
ideate the UI heading for the state of the art thing, the vision decree in our thoroughly examined
game-plan could be something like, to make a predictable UI that further creates client
experience through extended upkeep time.

Inner Analysis tools:

Put forward the objective

The hidden step is to fan out the objective, this is basically the response as for the inspiration
driving why you're driving an Inside Assessment. For instance, the ideal eventual outcome of this
 Inside Assessment is to ideate the UI bearing for the cutting edge thing. This objective assists you
with staying centered during the going with advances.

Pick a configuration structure

The subsequent step is to download our Free Inside Evaluation Instrument save and pick Inside
Assessment System Design overall concurred with the issue you're trying to deal with and your
objective.

Information evaluation

Use all inside sources to bundle data to help with accomplishing your objective. Concerning our
model from a higher spot, evaluation would incorporate talking client achievement chiefs,
engineers, and so forth to acquire an unparalleled insight of the opening between the current
and required future condition of the UI.

Structure time

Before long you think about each of the information you collected from your examination and
execute it in the picked structure. Exactly when you have finished the system influence the
snippets of data to most fitting response the subject of why you drove an Interior Assessment.

Make your game-plan

Exactly when you have addressed that solicitation, take the snippets of data and make a
splendid arrangement that empowers you to appear at that key objective. So by righteousness
of our objective, to ideate the UI heading for the cutting edge thing, the vision order in our
completely analyzed blueprint could be a like thing, to make an anticipated UI that further
makes client experience through broadened upkeep time..

LO3

P3

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

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.

M3:

Porters Five model:

Porter focused on that it's significant not to befuddle these five powers with additional momentary
elements, for example, industry development rates and government intercessions. As indicated by
Doorman, those are instances of brief variables, while the Five Powers are extremely durable pieces
of an industry's construction.

We should investigate Porter's Five Powers in more detail.

1. Competitive Rivalry:

The first of Doorman's Five Powers checks out at the number and strength of your rivals. Consider
the number of adversaries you that have, what their identity is, and how the nature of their item
contrasts and yours.
In an industry where competition is extreme, organizations draw in clients by reducing costs
forcefully and sending off high-influence showcasing efforts. This can make it simple for providers
and purchasers to go somewhere else in the event that they feel that they're not getting a
reasonable plan from you.

Then again, where serious contention is negligible, and no other person is doing what you do, then
you'll probably have enormous contender power, as well as solid benefits.

2. Supplier Power:

Providers gain power in the event that they can build their costs effectively, or lessen the nature of
their item. On the off chance that your providers are the ones in particular who can supply a specific
help, then they have impressive provider power. Regardless of whether you can switch providers,
you want to consider how costly it is do as such.

The more providers you need to browse, the simpler it will be to change to a less expensive other
option. In any case, in the event that there are less providers, and you depend vigorously on them,
the more grounded their situation - and their capacity to charge you more. This can affect your
benefit, for instance, assuming that you're constrained into costly agreements.

3. Buyer Power:

In the event that the quantity of purchasers is low contrasted with the quantity of providers in an
industry, then, at that point, they have what's known as "purchaser power." This implies they might
find it simple to change to new, less expensive contenders, which can at last drive down costs.

Contemplate the number of purchasers you that have (that is, individuals who purchase items or
administrations from you). Think about the size of their orders, and the amount it would cost them
to change to an opponent.

At the point when you manage a couple of smart clients, they have more power. However, on the off
chance that you have numerous clients and little contest, purchaser power diminishes.

4. Threat of Substitution:

This alludes to the probability of your clients tracking down an alternate approach to doing what you
do. It very well may be less expensive, or better, or both. The danger of replacement rises when
clients find it simple to change to another item, or when a new and helpful item enters the market
suddenly.

5. Threat of New Entry:

Your position can be impacted by likely opponents' capacity to enter your market. Assuming that it
requires minimal expenditure and work to enter your market and contend actually, or on the other
hand in the event that you have little security for your key advances, adversaries can rapidly enter
your market and debilitate your situation.

In any case, on the off chance that you have solid and strong boundaries to passage, you can
safeguard a great position and make the most of it. These hindrances can incorporate complex
conveyance organizations, high beginning capital expenses, and troubles in finding providers who
are not currently dedicated to contenders.

Existing huge associations might have the option to utilize economies of scale to drive their costs
down, and keep up with upper hand over novices.
On the off chance that it costs clients a lot to switch between one provider and another, this can
likewise be a critical boundary to passage. So can broad unofficial law of an industry.

Stakeholder matrix:

A stakeholder matrix is a graphic version of a stakeholder analysis. Creating a stakeholder matrix,

also known as stakeholder mapping, involves plotting stakeholders on an X- and Y-axis using two
intersecting variables. The grid identifies each variable as high or low, which creates four quadrants
of categories:

 High, low

 Low, low

 High, high

 Low, high

High power, low interest

These are partners who you normally need to keep fulfilled. This could be the CEO (Chief) of an
organization or a bookkeeping division worker who's liable for setting the spending plan. This
individual may not be straightforwardly engaged with your undertaking, yet their position can
provide them with a ton of impact over it.

Low power, low interest

This category includes stakeholders you probably need to monitor. For instance, you may need to
keep track of an employee you're managing or an outside consultant. This might be someone who's
contributing to the project in a primarily task-oriented or administrative capacity.

High power, high interest

Include stakeholders you want to manage closely in this category. They might be your direct
supervisor or the head of the department. Anyone who’s overseeing the direction of the project and
has an interest in its success is likely someone to manage closely.

Low power, high interest

This category includes people you probably need to keep informed. This might be someone from the
creative team or a senior employee from a different department. The project may heavily involve or
affect this person, but they have little control over its direction.

Ansoff Model:

Also referred to as the Ansoff matrix, due to its grid format, the Ansoff Model helps marketers
identify opportunities to grow revenue for a business through developing new products and services
or "tapping into" new markets. it's sometimes known as the ‘Product-Market Matrix’ instead of the
‘Ansoff Matrix’.

The Ansoff Model's focus on growth means that it's one of the most widely used marketing models.
It is used to evaluate opportunities for companies to increase their sales through showing alternative
combinations for new markets (i.e customer segments and geographical locations) against products
and services offering four strategies as shown.
  Market Penetration: How to sell more of your existing products or services to your existing
customer base?

 Market Development: How to enter new markets?

 Product and Development: How to develop existing products or services.

 Diversification: How to move into new markets with new products or services, increase your
sales with your existing customer base as well as acquisition.

The Competitive Profile Matrix (CPM)

is a tool that compares the firm and its rivals and reveals their relative strengths and weaknesses.

Understanding the tool

In order to better understand the external environment and the competition in a particular industry,
firms often use CPM. The matrix identifies a firm’s key competitors and compares them using
industry’s critical success factors. The analysis also reveals company’s relative strengths and
weaknesses against its competitors, so a company would know, which areas it should improve and,
which areas to protect. An example of a matrix is demonstrated below.

CPM Table

John Lewis

Critical Success Factor Weight Rating Score

Brand reputation 0.13 2 0.26

Level of product integration 0.08 4 0.32

Range of products 0.05 3 0.15

Successful new introductions 0.04 3 0.12

Market Share 0.14 2 0.28

Sales per employee 0.08 1 0.08

Low cost structure 0.05 1 0.05

Variety of distribution channels 0.07 4 0.28

Customer retention 0.02 2 0.04

 John Lewis

Critical Success Factor Weight Rating Score

Superior IT capabilities 0.11 3 0.33

Strong online presence 0.15 3 0.45

Successful promotions 0.08 1 0.08

Total 1.00 – 2.44

Critical Success Factors

Critical success factors (CSF) are the key areas, which must be performed at the highest possible
level of excellence if organizations want succeed in the particular industry. They vary between
different industries or even strategic groups and include both internal and external factors. In our
example, we have included 11 CSF, which is usually not enough. The more critical success factors are
included the more robust and accurate the analysis is. The following list provides some of the
general CSF, but the list is not definite and you should include industry specific factors in your
matrix:

Market Share Union relations Power over suppliers

Product Quality Skilled workforce Access to key suppliers

Clear strategic direction Location of facilities Efficient supply chain

Customer service Production capacity Supply chain integration

Customer loyalty Added product features On time delivery

Brand reputation Price competitiveness Strong online presence

Customer satisfaction Low cost structure Effective social me

management
 Financial position Variety of products Experience and s
in e-commerce

Cash reserves Complementary products Management qualifica

and experience

Profit margin Level of product integration Innovation in products

services

Inventory turnover Successful product promotions Innovative culture

Employee retention Superior marketing capabilities Efficient production

Income per employee Superior advertising capabilities Lean production system

Innovations per employee Superior IT capabilities Strong supplier network

Cost per employee Size of advertising budget Strong distribution network

R&D spending Effectiveness of sales distribution Product design

Strong patent portfolio Employee satisfaction Level of vertical integration

New patents per year Effective planning and budgeting Effective corporate so
responsibility programs

Revenue per new product Variety of distribution channels Sales per outlet

Successful new introductions Power over distributors Parent company support

Weight
Each critical success factor should be assigned a weight ranging from 0.0 (low importance) to 1.0
(high importance). The number indicates how important the factor is in succeeding in the industry. If
there were no weights assigned, all factors would be equally important, which is an impossible
scenario in the real world. The sum of all the weights must equal 1.0. Separate factors should not be
given too much emphasis (assigning a weight of 0.3 or more) because the success in an industry is
rarely determined by one or few factors. In our first example, the most significant factors are ‘strong
online presence’ (0.15), ‘market share’ (0.14), ‘brand reputation’ (0.13).
Rating
The ratings in CPM refer to how well companies are doing in each area. They range from 4 to 1,
where 4 means a major strength, 3 – minor strength, 2 – minor weakness and 1 – major weakness.
Ratings, as well as weights, are assigned subjectively to each company, but the process can be done
easier through benchmarking. Benchmarking reveals how well companies are doing compared to
each other or industry’s average. Just remember that firms can be assigned equal ratings for the
same factor.

Score & Total Score

The score is the result of weight multiplied by rating.

Growth Share Matrix Work:

The growth share matrix was built on the logic that market leadership results in sustainable superior
returns. Ultimately, the market leader obtains a self-reinforcing cost advantage that competitors find
difficult to replicate. These high growth rates then signal which markets have the most growth
potential.

The matrix reveals two factors that companies should consider when deciding where to invest—
company competitiveness, and market attractiveness—with relative market share and growth rate
as the underlying drivers of these factors.

Each of the four quadrants represents a specific combination of relative market share, and growth:

1. Low Growth, High Share. Companies should milk these “cash cows” for cash to reinvest.

2. High Growth, High Share. Companies should significantly invest in these “stars” as they have
high future potential.

3. High Growth, Low Share. Companies should invest in or discard these “question marks,”
depending on their chances of becoming stars.

4. Low Share, Low Growth. Companies should liquidate, divest, or reposition these “pets.”

As can be seen, product value depends entirely on whether or not a company is able to obtain a
leading share of its market before growth slows. All products will eventually become either cash
cows or pets. Pets are unnecessary; they are evidence of failure to either obtain a leadership
position or to get out and cut the losses.
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Christodoulou, A. and Cullinane, K. (2019) ‘Identifying the Main Opportunities and Challenges from
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Dafforn, K.A., Lewis, J.A. and Johnston, E.L. (2011) ‘Antifouling strategies : History and regulation ,
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Licence, C.C. (2013) ‘Directing democracy : Competing interests and contested terrain in the John
Lewis Partnership’.
Loorbach, D. et al. (2009) ‘Business Strategies for Transitions Towards Sustainable Systems’.
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