Assessing the macro- and micro- environmental forces that explain the success of John Lewis
John Lewis is a chain of upmarket department stores in the UK. In accessing its success, I critically looked at the macro- and micro- environments of the organization. Here the macroenvironment comprises three major sections: the economic environment, the social and demographic environment, and the technological environment. The purpose of this essay is to assess John Lewis’s success, in relations to the forces within these sub-environments. Furthermore, I assess the links these forces have with John Lewis’s microenvironment.
The Economic Environment
Palmer & Hartley (2012) says that ‘Businesses need to keep an eye on indications of a nation’s prosperity’, (p. 10). This is due to the likelihood that during recessionary periods, people’s spending power on goods and services is likely to decline. This might not be the case with John Lewis, as its affluent customers have been ‘less impacted by the economic downturn’, (Dunkley, 2013). However, all customers are likely to become more concerned about whom they spend their money with. Andy Street, the managing director of John Lewis says that ‘When money is tight you’re far more likely to think about who you spend it with…the results are based on one word above all else, which is Trust’, (Rowley, 2012). Street then talks about the success of John Lewis in this economy saying ‘In an economic climate which continues to be volatile, to have achieved these results is testimony to the strength of the John Lewis brand’, (Ruddick, 2013).
Here the success of John Lewis arises from two main reasons. The first is John Lewis’s main target audience, which consists of the more affluent customers who have proved to be resilient in this economic climate. The organization is able to maintain its success, as their customers’ spending power remains constant regardless of the trends in the economy. The second
References: 1) Batty, D. (2012) John Lewis chief calls on government to tax multinational companies properly, The Guardian. Available from: http://www.guardian.co.uk/business/2012/nov/15/john-lewis-chief-fair-tax-plea 3) Butler, S. (2013) John Lewis to extend online shopping empire via thousands of corner stores, The Guardian. Available from: http://www.guardian.co.uk/business/2013/feb/21/john-lewis-online-shopping-collect 5) Dunkley, J. (2013) Snow-hit John Lewis worries Britain’s retailers, The Independent. Available from: http://www.independent.co.uk/news/business/news/snowhit-john-lewis-worries-britains-retailers-8467334.html 7) Palmer, A. and Hartley, B. (2012). The Business Environment. 7th ed. Berkshire: McGraw-Hill Education. 8) Rowley, T. (2012) Andy Street’s John Lewis is a quiet victor of the recession, The Telegraph. Available from: http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9542412/Andy-Streets-John-Lewis-is-a-quiet-victor-of-the-recession.html 10) Ruddick, G. (2013) John Lewis sales rise over Christmas, The Telegraph. Available from: http://www.telegraph.co.uk/finance/9775437/John-Lewis-sales-rise-over-Christmas.html