Contents

Contents..................................................................................................................................3

Company Overview...................................................................................................................4

Introduction............................................................................................................................4

History of the Brand...............................................................................................................4

Internal & External Analysis John Lewis’ Business Model......................................................5

John Lewis’ Business Model.................................................................................................5

Performance and Revenues....................................................................................................5

SWOT Analysis of John Lewis Partnership...........................................................................6

Core Competences of John Lewis Partnership.......................................................................7

PEST Analysis of UK Fashion Industry and John Lewis Partnership...................................8

Porter’s Five Forces Analysis of John Lewis and Fashion Industry......................................9

Strategy for Future Expansion – Ansoff Matrix......................................................................10

SAF Criterion for Future Business Development................................................................13

Conclusion................................................................................................................................14

References............................................................................................................................15
Company Overview

Introduction

John Lewis partnership is a British departmental store that operates the retail chain of John

Lewis & Partners and supermarkets of Waitrose & Partners. Other than these, brand also runs

other retail services related to finance and banking sector. The company has a good

reputation and operates as a model of upmarket. The primary customer base of the brand is

upper and upper-middle class in the UK. The company operates on their core principles of

providing quality and keeping their products sustainable and eco-friendly. The ethics and

sustainability policy of the company has been redesigned recently and it attracts the particular

segment of the consumers that has preference towards climate change and eco-friendly

manufacturing practices.

It has been witnessed that despite generating huge revenue in other sectors, John Lewis

partnership is unable to obtain sustainable growth and development in their fashion sector.

Reason behind this downfall is the drastic impact of COVID-19 pandemic. According to a

BBC report over the past 80 years, this company is facing a challenge of change in taste

among customers (BBC, 2022). It can be stated that owing to this aspect this company is

facing significant challenges in maintaining revenue.

History of the Brand

The first store of the brand was opened by John Lewis senior in 1864. The brand acquired the

Peter Jones store in 1905. The success of the enterprise is because of the struggle and hard

work of John Spedan Lewis who was the son of John Lewis senior. In the early stages of

business, John Lewis stores and the Peter Jones stores were not very successful and through

making innovative changes to motivate the human resource, John Spedan Lewis made the

companies to grow successfully. By looking into the history of the brand, it can be said that
the company has innovative spirit of implementing new ideas in manufacturing and human

resource departments from the very early stages of business.

Internal & External Analysis John Lewis’ Business Model

John Lewis’ Business Model

The business model of John Lewis is customer centric and it operates with the moto of “get

close to customers”. The partnership plan of John Lewis administers the trends in the market

and changing shopping habits that are needed to be incorporated and allows the customers to

adopt digital, virtual or online shopping experiences. The slogan of John Lewis Partnership is

to ‘making value and quality more accessible’ to people. The different products range that

John Lewis partnership offers under different categories offer different products and qualities

that are long lasting and affordable for cost conscious customers.

Performance and Revenues

John Lewis has been performing quite reasonable during the past few years. The recent

revenue recorded for the company shows an approximate revenue of 10.8 billion British

pounds for the year ending in January 2022. The increase in the revenues of the brand are

steady since past ten to twelve years. Figure 1 below shows the revenues of the company for

past decade.
Figure 1: Annual revenues of John Lewis Partnership in UK (source: Statista.com)

SWOT Analysis of John Lewis Partnership

SWOT analysis is one of the tool to analysis the health of a company and to assess the

strategic positioning of a brand in an industry/market. The strengths and weaknesses in the

SWOT analysis provides the internal analysis of the company whereas, opportunities and

threats provides an external analysis of the industry. The SWOT matrix for John Lewis

Partnership is presented as below;

Strengths
 Brand image of a posh and upmarket
retail chain
 Wide range of products under various
brands
 Multiple accommodating options for
shoppers to shop online, digital, Omni
channel etc.
 Accommodation for international
delivery
 Huge work force with over 30,000
employees, (mbaskool.com)
 International presence in Australia and
Weaknesses
 Limited international presence
 Limited brand awareness in the west
and in Europe
 Less competitive in prices, compared
to super markets and specialized retail
brands.
 Highly diversified product lines and
complex management of retail and
logistics
 Ireland
 Annual revenue of more than 10 billion
British pounds
Opportunities Threats
 Increase in the target consumer
segment of the brand, young  Economic instability across the world,
professionals with brand consciousness especially in Europe
 Improvement in the purchasing power  Increased competition from corner
of upper class and hence improved stores, retail brands and supermarkets
opportunity of sales  Laws and rules regarding competition
 Market expansion to other regions and and merger of small brands
countries across the world
Table 1: SWOT analysis of John Lewis Partnership

Core Competences of John Lewis Partnership

John Lewis Partnership is an upmarket brand and it offers quality and affordable price to its

target customer segments. The target audience of the brand is upper and upper-middle class

people and mostly young professionals. The core competencies the John Lewis has to operate

in a highly competitive market are precisely discussed below;

Value and Quality: John Lewis Partnership offers affordable quality in fair prices that are

targeted to offer affordable price. The customer base of the brand appreciates the offers of the

brand due to quality and affordability.

Accessibility through digital and virtual means: The brand has a keen eye on the changing

habits of shoppers and it is evolving the shopping options according to the changing habits of

the customers. The digital and virtual options to shop and get the products delivered improve

accessibility of the brand to customers.

Customer Experience: The brand has pledged to invest more than one billion British pounds

to invest on its online, on phone and physical stores shopping experience. The aim is to

provide customers with a “fantastic experience” of shopping. The brand is also aiming to

save over 300 million British pounds every year through this investment.
Sustainable and ethical: The recent policy of the brand pledge to have zero carbon emissions

by 2035. Although, the target is very ambitious, but, it can play its role in the short-run to

attract a specific customer base.

“Made to last” movement: The brand has launched a movement that is called “made to last”

that promotes the quality and durability of the products. With the movement, the brand

marketed the quality of its products and promoted that the products offered by the brand are

more durable and consumers tend to like them for relatively longer period of time.

PEST Analysis of UK Fashion Industry and John Lewis Partnership

Political Factors

John Lewis is a large enterprise and is currently operating in over 55 countries around the

world. For an operation that big, changing political dynamics and policies can impact in a

great deal. The dynamics of trade between UK and Europe post-Brexit and the changing

world trade dynamics in Russia-Ukraine war can impact the company’s revenues. Also,

Covid-19 also forced countries to revisit their trade policies. Political stability and stable

trade policies are important for a company like John Lewis to perform well in the industry.

Economic Factors

Economic factors that matter in the fashion retail industry are currently volatile. The rising

inflation worldwide and changing tax rates and duties have great impact on business

dynamics of fashion retail industry since the changes in these economic fundamentals impact

the overall consumer purchasing power and disturbs the consumer segments. The current

economic pressure on almost all the economies of the world have been pushing the business

down and imposing an overall recessionary pressure. The economic situation is therefore

rather tough and John Lewis and other fashion retailers need to operate carefully in the

current economic scenario.

Social Factors

The policy line of John Lewis is quality, durability and sustainability. The social trend in

fashion industry is rather different and apparently, a sizable segment of fashion consumers

tends to prefer fast fashion products. However, the other segment of consumers is also

growing and the sustainable and eco-friendly products are also a demanded product line.

With changing trends, many local and small brands also appeared to be benefitting from the

changing market dynamics.

Technological Factors

Technological innovations are helping businesses to improve their accessibility and

profitability in a great deal. The innovative technological innovations in the recent past has

improved the accessibility of consumers and businesses both. The use of social media and

other digital channels to approach and promote products have proven to be very useful for

businesses. However, with improved technological innovation, the opportunity to enter in the

industry has also increased and many small fashion retailers have also been operating through

digital means and capturing a sizable share of the market.

Porter’s Five Forces Analysis of John Lewis and Fashion Industry

Threat of New Entrants

Joh Lewis Partnership has competition with other large retailers like Tesco, Amazon,

Morrisons, Debenhams, Asda or Marks and Spencer. The products the John Lewis sell are

mostly targeted to the customer segment that is upper and upper middle class. To target this

customer segment, huge investment is required and the fashion industry that is already highly

competitive. Given the facts, the threat of new entrants in the completion of John Lewis is

low.

Threat of Substitutes
The overall product line of John Lewis Partnership comprises of products that are demanded

by customers in routine and customers tend to get the economical choice of product that they

can find in the market. In this regard, the availability of substitutes in the market is not very

difficult but, other big competitors in the market can target John Lewis’ market share. The

threat of substitutes is moderate.

Bargaining Power of Customers

In the fashion retail industry, bargaining power of customers is low. For other product lines

that John Lewis offers the bargaining power of customers can be low to moderate since there

are many competitors in the market and thus, consumers have a little control on the price.

Bargaining Power of Suppliers

In the case of John Lewis, the bargaining power of suppliers is low. Since John Lewis

outsource most of its manufacturing to local manufacturers and thus, it can easily renegotiate

its suppliers and have the lowest price for supply.

Competitive Rivalry

The major competitors of John Lewis are Mark and Spencer, Ada, House of Fraser etc. The

rivalry in the industry is not very prominent but, these competitors have approximately

matching product profiles and price ranges which increases the rivalry. The changes

occurring in the industry are also easily replicated and thus, the rivalry among the

competitors of John Lewis increases with that.

Strategy for Future Expansion – Ansoff Matrix

Ansoff matrix is a management tool that provides the different strategic options to the

entrepreneurs regarding changing market dynamics and how to exploit new opportunities.

The main purpose of the Ansoff matrix is to schedule different options that a business has and
it helps the management to choose the appropriate strategic option for business expansion

when an opportunity arises. Figure 2 shows the basic structure of Ansoff matrix. Detailed

strategic options for John Lewis are discussed in following paragraphs.

Figure 2: Ansoff Matrix for Strategic business expansion

Market Penetration

This is the business expansion strategy that involves the least probability of risk and the

entrepreneurs can choose to utilise this option without having to be very careful. Market

penetration strategies involves promotion of existing products in the existing markets that the

business is already covering. In the case of John Lewis, participation in different festivals and

cultural and social events and occasions can be a fruitful strategy to enhance sales and

revenues. The brand can also offer discounts at various occasions like Christmas etc. to

engage with customers and to enhance the overall sales. Promotion of the offers and existing
products is the key tool that market penetration strategy requires the brand to follow. Since

John Lewis has a very wide product range, it can offer different products in bundles that can

be very useful and can earn usable revenues.

Market Development

Market development is a bit riskier option for expansion that a business can choose. It refers

to promoting existing products and product lines that John Lewis has. As a strategy in market

development, John Lewis can choose to enter new geographical locations. The suitable

strategy for John Lewis is to open new outlets in UK where there is less coverage of the

brand. Expansion to Asia and Europe is also a very bright opportunity that John Lewis can

explore.

Product Development

This strategy involves launching of new products in the existing markets. The strategy that

John Lewis can use is to incorporate new products that are now previously sold or add new

variants or close substitutes of these products. The product development strategy for John

Lewis essentially requires to study the trends and consumer preferences regarding the product

category and specifically for the alternate goods. Also, John Lewis needs to work out the

timing of launching new products since success of new products at any store require proper

research and study of the market and consumer base as well.

Diversification

Launch of new products in new markets is essentially the diversification strategy. The

diversification that John Lewis can perform can be vertical or horizontal. The brand can enter

into other product categories as well that would require more research but, it can be very

useful for the sake of expansion into other industries. The main source of company’s

revenues would remain the same however, the overall business can vary to other product
categories and can enhance the profitability of the brand. For the sake of diversification, John

Lewis can launch new products in sportswear, hosiery etc. and improve its consumer base.

The other option that John Lewis can work on is the launch of new products in fast moving

consumer goods, (FMCG) that are already offered by many brands in the competition.

SAF Criterion for Future Business Development

The future business development of John Lewis can be done in one or more of the strategies

proposed under the Ansoff matrix. However, to implement a strategy, entrepreneurs must

know how successful a strategy can be. To assess this, SAF strategy model is used that

evaluates a strategy in terms of its sustainability, acceptability and feasibility. To be

successful, a strategy must fulfil all three criteria.

In the case of John Lewis, different strategies in terms of market penetration, market

development, product development and diversification are discussed under the Ansoff matrix.

The business expansion strategy for product development is not feasible since the product

lines and other categories at John Lewis are already diversified. Adding more products

without proper research can be devastating. The expansion strategy for market penetration is

already in progress at the Joh Lewis Partnership. The company has been engaged in

designing new promotion strategies to capture maximum market share. The marketing

strategy designed by John Lewis was launched in late 2020 and it has proven to be

successful.

The two remaining expansion strategies are market development and diversification.

Diversification can be a good strategic option for Joh Lewis, since it has a very strong

financial profile and it can diversify its product categories along with expanding business to

new markets. However, the current worldwide inflation and international political situation

does not warrant the feasibility of diversification strategy for business expansion for John

Lewis.
The strategy that John Lewis should implement for future business expansion is market

development. This strategy can be implemented in multiple folds. As discussed in the

explanation of Ansoff matrix, John Lewis can choose to expand its business to other

geographical regions, or, it can utilise other means of doing business including the digital and

online business and e-commerce. The company has a very efficient online store however, the

Omni channel strategy applied by the company needs to be updated and linked with the

physical stores. John Lewis was one of the few stores who had online presence before the

beginning of Covid-19 and it benefitted a lot from it. since then, the emphasis of the brand is

on online sale and physical stores and sale have been found neglected. The expansion

strategy must encounter the connectivity of physical and online stores at all check points so

that the consumer can benefit from the service and overall the business can increase its

revenues.

Conclusion

The report discusses the strategic position of John Lewis Partnership in the fashion retail

industry and highlights the strengths and weaknesses of the firm in the context of the

industry. The internal and external analysis of the brand and the industry is conducted with

the help of tools like SWOT, PEST and Porter’s 5 forces model. After analysis of the

strategic position of the company, strategic options for the brand are discussed in the light of

Ansoff matrix. Different strategic options are briefly discussed and then evaluation of these

strategic options is conducted using the SAFe criteria model. The report concludes that John

Lewis should choose to engage in market development strategy through digital means and by

expanding business across geographical boundaries.

References

Al-Azzam, A.F. and Al-Mizeed, K., (2021). The effect of digital marketing on purchasing
decisions: A case study in Jordan. The Journal of Asian Finance, Economics and Business,
8(5), pp.455-463.

BBC (2022) Inside John Lewis. Available at: https://www.bbc.co.uk/programmes/b00rhgx0

Hickman, E., Kharouf, H. and Sekhon, H., (2020). An omnichannel approach to retailing:
demystifying and identifying the factors influencing an omnichannel experience. The
International Review of Retail, Distribution and Consumer Research, 30(3), pp.266-288.

LEU, J.F. and MASRI, R., (2021). Omni-Channel Retailing and Digital Business: A Case
Study in Malaysia. The Journal of Asian Finance, Economics and Business, 8(4), pp.403-412.

MCKINSEY (2020) Adapting to the next normal in retail: The customer experience
imperative. Available at: https://www.mckinsey.com/industries/retail/our-insights/adapting-
to-the-next-normal-in-retail-the-customer-experience-imperative

STATISTA (2019) Omnichannel and digital in-store: leading retailers in the UK 2019,
Available at: https://www.statista.com/statistics/1026200/leading-retailers-omnichannel-and-
digital-in-store-capabilities-united-kingdom-uk/

STATISTA (2021), Consumer attitudes towards looking out for leaflets for best offers in the
UK 2020, Available at: https://www.statista.com/statistics/1126320/consumers-looking-for-
leaflets-for-best-offers-in-the-uk/

STATISTA (2021), John Lewis Partnership revenue in the United Kingdom (UK) 2009-
2021, Available at: https://www.statista.com/statistics/420173/john-lewis-partnership-
revenue-united-kingdom-uk/

STATISTA (2021), John Lewis products purchased in Great Britain 2013-2020, Available
at: https://www.statista.com/statistics/312692/john-lewis-products-purchased-uk-by-clothing-
product-type/

STATISTA (2022), Digital ad spend in the United Kingdom (UK) 2017-2021, Available at:
https://www.statista.com/statistics/293937/digital-advertising-expenditure-in-the-united-
kingdom/#:~:text=In%202021%2C%20digital%20advertising%20spending,in%20the
%20UK%20in%202019.

Vieira, V.A., de Almeida, M.I.S., Agnihotri, R., da Silva, N.S.D.A.C. and Arunachalam, S.,
(2019). In pursuit of an effective B2B digital marketing strategy in an emerging market.
Journal of the Academy of Marketing Science, 47(6), pp.1085-1108.

Willmott, H., (2020). On research methodology. The Journal of Organization and Discourse,
1(1), pp.1-4.

Yrjölä, M., Spence, M.T. and Saarijärvi, H., (2018). Omni-channel retailing: propositions,
examples and solutions. The International Review of Retail, Distribution and Consumer
Research, 28(3), pp.259-276.