John Lewis Strategic Analysis

Brand Position according to Kotler & Keller is “the act of designing the company’s offer and image that will occupy a distinct and valued place in the mind of the target market”. John Lewis is positioned as a brand that has something for everyone to have for the lowest price between them and their competitors. They have lines of products for all ages, gender, sizes and species. They stay on top of their prices and have a price promise to match a product price if found cheaper elsewhere.

Threats * Seasonal Fluctuations and Highly Uncertain in Demand * Razor-Thin Margin With Majority of Clients * Stagnant Growth in the Meat Market and Retail Channel Segment

Threat of new entrants is relatively low. There are high barriers to entry in the discount retail market, including high capital costs, limited access to investors, and a largely crowded-out market place.

The overall threat of new entrants in the retail market is a high level threat as it is relatively easy and inexpensive to enter

Their short term objectives would be increasing sales. The vision would centre around employee co-ownership with the happiness of partners as the ultimate purpose. The mission is the satisfaction of employees. Finally, the value would be to represent the best possible choice, as a result of providing the best quality, trust and customer service.

Bargaining Power of Buyers: The bargaining power of buyers is high in the department store retail industry. The volume of buyers is high, and buyers are very price sensitive in this industry. The products are not highly differentiated, and there are numerous stores that offer the same, or similar, products, giving buyers the opportunity to search for the lowest prices and information. The industry has substitutes available in the form of specialty, differentiated products and stores. This increases the power of buyers,

The retail industry is saturated with substitutes, in part to low entry barriers. Online shopping and small boutiques stocking similar lines, brand names and designs provide David Jones potential customers with many substitutes. It is the David Jones experience that cannot be substituted; shopping in a large, upmarket department store. For the sector, substitutes are low.

The article further mentions, Sir Charlie Mayfield (2016) Chairman of John Lewis Partnership talking to the BBC on how the market is competitive and the company’s focus on future investment to improve its information and technology department, distribution network and staff pay. The author also claims that staff numbers would be cut as part

Companies are growing by bringing in new stores to new locations rather than come up with innovation in the terms of bringing the products to the consumer. As written in business insights, the industry is recession proof but personally we believe that the companies’ sales are

Bargaining Power of Customers: Tesco frequently consults their suppliers and discuss pricing arrangements. Tesco also ensures that all aspects of their supply chain benefit from their relations with Tesco.

The bargaining power of customers determines how much customers can impose pressure on margins and volumes.

The industry does not possess major threat from new entrants due to strong barriers to entry and strong competition for retail space. There is also a strong rivalry between competitors as limited space is being contested by major players alongside

The suppliers get the advantages of making their products be showcased for the consumers thru these retailing outlets. A wider scope of retail outlets could mean wider scope for the brand recognition of the seller’s products, that is why these retailing giants has more power than suppliers. But when it comes to distribution, having a strong supplier is important, the company be better over competitors when it comes to qualitative factors such as on time deliveries on their branches and wider network of

Threat of Substitutes: Few substitutes such as bars for hard liquor, restaurant for food, etc. The threat is low because product sold depends upon customers taste and preference and there is minimal product differentiation.

John Lewis uses profit sharing as the way of financial motivation combined a wide range of other valuable benefits, and in return have a low labour turnover which is half that most of their competitors.