John Lewis, one of subsidiaries of John Lewis Partnership (JLP), launched its first store in London’s Oxford Street in 1864. The company then has implemented the organic grown approach, pursuing a dynamic business and corporate strategy. It has been successful by making the right strategic decisions thorough effective operation (O’Regan and Ghobadian, 2012). By 2012, the firm becomes the largest multichannel department store retailer in the UK, with 30 department stores and 9 John Lewis at home, providing Fashion, Home, Electronic products and Home Technology assortment. It publicised that profit before tax in 2012 was £15.8 million, almost triple of that a decade ago (John Lewis plc interim report, 2012). However, success cannot only be measured in term of finance, but also in term of stakeholders’ happiness. John Lewis achieved Britain’s Favourite Retailer Awards for the fourth consecutive year in 2011 and many other awards. This paper is about to use environmental forces to explain the achievements of John Lewis over 150 years. The work contains mainly three parts: macro-environmental force focusing on four points, then moving to two elements in micro-environment and conclusion. Macro-environmental forces
Macro-environment is also known as external environment which affects business decision in various ways and which can impinge not only on the transformation of the firm, but also on the process of resources acquisition and on the creation and consumption of output (Worthington and Britton, 2009). These forces can shape and moderate the behaviour of all stakeholders in the market including competitors, suppliers, customers and employees. The macro forces are often organised into political/legal, economic, ecological/physical, social/cultural and technology (Kotler et al., 2010, p.154). In order to clarify its influence effectively, the economists arrange them into few models such as PESTEL, DEEPLIST. This paper will apply the PEST model to consider: Political, Economic, Social-cultural and Technology impacts on the success of John Lewis. Political and Legal
In order to predict and achieve economic objectives, the government attempts to have some control over business environment. To recover the economy from the recession, the Bank of England has historically set up the interest rate at less than 2% since 2008. It aims to persuade consumers that saving money is less attractive as less interest is received and it also reduce the payment on mortgages and other loans. Homeowners, hence, have more discretionary income, resulting in spending on other consumer goods (Bain, 2009). Moreover, the low rate which means little in return, will increase consumer confidence in purchasing because cost of goods bought in credit is poorer. Although the majority products in John Lewis are highly income elasticity like electrical and furniture goods which are more expensive comparing to them of other retailers such as Debenhams, the low interest boosted the sales of the stores, thus greatly help performing during the recession. The electrical and home technological sales in John Lewis rose up by 13% in 2009, mostly from TV sales (Bain, 2009). Since 2012, British government has encouraged companies to practice Employee Share Ownership Plan (ESOP) which is giving shares to employees with the aim of urging motivation, thus growing and improving productivity (BBC News, 2012a). This strategy has been already practiced by Sir John Spedan Lewis, founder of JLP, many years ago and present as a unique figure of JLP. The declaration of Nick Clegg, Deputy Minister of Britain, of JLP as a typical example of excellent employee owned company that is having a great performance and contribution towards the UK economy, has been again strengthened. Since government mention of JLP as a successful model of ESOP, it can augment the reputation of the Partnership. In term of specific effects on John Lewis Department Store, this honour is an enormous promotion...
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