Wednesday, April 3, 2019
John Lewis Partnership Analysis
tin hobo Lewis federation analytic thinkingThis account centralizees on the strategicalal formulation of commode Lewis fusion in sign phases of the firms online run, Ocado the online serve up that delivers Waitrose groceries) and the online shopping (johnlewis.com) web situation development from the 2000 to 2010. In the basic instance, account of the fellowship exit be briefly discussed, together with the main activity, mart share, break stakeholders and to a fault fiscal completely overview of the union. Secondly, the assignment of its generic system by exercise ostiariuss determine of generic dodge leave be clearly defined. This will follow the discussion of the key activities that underpin the chosen generic strategy, a assess grasp analysis and how the added abide by creates a distinctive competency which leads to combative returns of the short letter.Companys overview keister Lewis was first founded in 1864 by rump Spedan Lewis partnered with his two brothers in Oxford Street, London. Waitrose joined the confederation in 1937 as a range of a function of 10 specialist food, followed shortly in the John Lewis partnership is Greenbee which is now c wholeed John Lewis Insurance and partnership card (John Lewis Partnership, 2010).Main activities of the phoner include providing customers with high quality groceries and non grocery items such as galvanic goods, furniture, fashion, flowers and to a fault financial services such as insurance and conviction card services. As wizard of UKs top ten retail merchants, the company has near 31 John Lewis and 235 Waitrose supermarkets, an online and catalogue business, a direct services company, one production unit and a farm and continues to grow at a rapid pace (John Lewis Partnership, 2010).John Lewis Partnership argues to have a breezy and successful way of doing business, boldly putting the happiness of Partners at the meaning of everything it does (John Lewis Partnership, 2010). It strives to differentiate itself from competitors by big 100% self-will to partners who are withal durable staff of the company who are committed to serve customers with wiz and fairness.(John Lewis Partnership, 2010, Bloomberg Business Week, 2010, Hambrick Fredrickson, 2005, Times Online, 2008).In addition, due to the Partners dedication and hard work, the company was ranked as the 3rd of the top 100 biggest privately possess companies in the UK during the year 2008 (Times Online, 2008) despite the saving downturn which led to send away one rank from previous year (Times Online, 2008). However, in the survey conducted by Which? revealed that in January 2009 John Lewis was ranked at the top of the list and too was voted as the Britains favourite retailer in 2010 the UK Consumer Satisfaction Index from the make up of Customer Service (ICS) (John Lewis Partnership, 2010).Never Knowingly Undersold is the companys motto that has been drug abused over 75 eld, to pro mise customers that the company will always sell the final price in town (John Lewis Partnership, 2010, Bloomberg, Business Week, 2010).Charley Mayfield, the chairman of John Lewis partnership reports a strong realizeance within the first six calendar month of 2010, an increase of gross sales by 12.4% and direct dinero by 15.1% compared to last year (London Stock Exchange, 2010). Mayfield further reported a market share gain and strong branch in some(prenominal) John Lewis department store and Waitrose, one of the most notable increases was the underlying operating profit which rose by 59.4% (Bloomberg, Business Week, 2010) despite of the credit crunch. The benefits and net income gained from the business are shared equally among partners who are also permanent staff and co-owner of the business (John Lewis Partnership, 2010).The Formulation of strategy Strategic aimsStrategy is defined as the direction and scope of an placement over the long term, which extend to return in a changing environment (Scholes et al., 2008). It is important for all organisations to have a strategy as without it, time and resources can well be wasted (Hambrick Fredrickson, 2005). Organisations should analyse the competitive position of the market, formulate strategic aim then acquire the call for resources for implementing those chosen strategies (Porter, 1980).Furthermore, it is possible for the organisation to increase its resources and capabilities through sharing and generation of knowledge, learning and redeployment of actual resources in a new and more effective ways (Steve B. Alex H., 2007, Barney, 1991).In 1929, the founder of John Lewis partnership gave up the ownership of the company to the employees for the pop the question of balancing the employees happiness and successful business (John Lewis Partnership, 2010). John Lewis (2010) had an ambitious quite a little of co-ownership by making employees happiness whilst developing steady business profit at t he same time. This assertion has left a remarkable mercantile history and is as alive today as it was 80 years ago (John Lewis Partnership, 2010).In addition, the founder created a governance system that is both commercial and democratic which will allow the company to gain competitive advantage by moving ahead quickly and also giving voice to every Partners who also co-owned the company (John Lewis Partnership, 2010).A recent resume conceded that the more satisfied workers are with their jobs, the better the company is likely to perform in terms of profitability and particularly productiveness (Hobson, 1998) with a renewing of between 19% profitability and 18% productivity which are accounted in the way people are managed (Hobson, 1998, Steve et al.). According to the John Lewis partnership (2010) financial statements as shown on Table 1 below, illustrates that the business has grown significantly over the past 10 year, the turnover increased by 50% and net profit were also inc reased by 96% over the past 10 years. Therefore, the findings of the study (Hobson, 1998) conceded with the process outcome of John Lewis (2010).At the onset, the strategic aim of the partnership was to experiment in industrial state and to establish a better form of business (John Lewis Partnership, 2010).As first movers of employee owned-business place, the partnership takes advantage of the resource and capability extending sources as the company was already in maturity. The resources that the company possessed extended the advantages of co-ownership structure that the partnership needed to beat and enhance the strategic position as an salient(ip) retailer and a thriving example of employee ownership (John Lewis Partnership, 2010).Many public field workers are now consider utilising John Lewis employee owned-business model after John Lewis staffs who are also partners embrace a big bonus of 15% that is equivalent to almost twice of monthly salary whilst public arena worker s are threatened for a job loss due to presidential term spending cuts (Julia, 2010). Therefore, the companys key strategic aims were built around the capabilities that employee owned-business model creviceed for creating added dedicate to partners and customers (John Lewis Partnership, 2010).However, the long term strategic aims of John Lewis partnership were to give face-to-face satisfaction to Partners by becoming members of a co-owned enterprise, have customers loyal by giving value, choice, service and honesty, and create real influence over running(a) lives whilst sustain business strength and gain competitive advantage which will allow continued development. To achieve these aims John Lewis Partnership would have to acquaint the benefits of co-ownership and competitive behaviours that will differentiate the company from its competitors including outperforming the stodgy companies.Internal Analysis Generic strategyHow firms compete and what strategies they choose are important questions for the economy (Ormanidhi Stringa, 2008) and a vital decision have to be made in order to determine the generic strategy of a business (Porter, 1980). In the case of John Lewis Partnership the choice was relatively simple. Although the Partnership desire to create a happy working environment, the key to competitive advantage lay in the real influence over working lives whilst providing added value and unrivalled service to the customers.The employee-owned business model for the retail venture entailed employees ownership and responsibilities for the business success by delivering the right experience for all customers whilst generating meshwork for the partners to share. In effect, John Lewis Partnership is a top ten retail company in the UK. It operates department stores, supermarkets mountain chain and John Lewis Direct website which focus on home and giftware that have been ranked UKs top online shopping destinations consistently. A well known for its hig h customer satisfaction rating, upmarket chain targeted middle to upper class customers. However, the Partnership expanded its marketing strategy and has recently introduced a Value and Essential range to target all types of customers (John Lewis Partnership, 2010).The ability and competency to engage customers loyalty and institutionalise by providing outstanding value, choice and service, the more customers would be retained and attracted to their departments, supermarkets and websites. The key to achieving this was to differentiate the benefits of co-ownership and partners behaviours against rivals including conventional retail companies.The key differentiators were to widen security, stability and fulfilling employment for the Partners who are also permanent employees of the company. Another compelling differentiator was the lower prices John Lewis could offer using Never knowingly undersold slogan. It was the first mover retailer to offer its customers the confidence that p romised the customers cheapest price in the town. This principle has been used to monitor competitors and impose own price if being undersold. Thus, this allows the Partnership to retain customers loyalty and trust by giving them confidence that they will never purchase akin product elsewhere which is undersold and if that is the case, then the customer is guaranteed to get a refund.As the employee-owned business model continue to grows in a rapid pace, in 2000 the Partnership successfully managed a network of over 31 study department stores and over 235 supermarkets stocking around 350,000 products. Particularly, the launch of Ocado online service that delivers Waitrose groceries and online shopping site (Johnlewis.com) led the business to be complex. The Partnership incorporate the use of RedPrairies store and workforce management system in order to build and retain customer loyalty whilst increase sales growth by exploit efficiency, ensure the product availability and speed delivery. This was another differentiator that underpinned the companys strategy for competitive advantage.John Lewis Partnership noticed that the cost reduction, sales growth and make the business profitable can be gained through the use of warehouse and workforce management system. Thereby, this allows them to practice Never knowingly undersold slogan thus reducing the cost burden to customers and offer products at a lower price. The Partnership and customers relationship depends on the ability of the company to sustain its competitive advantage (Scholes et al., 2008) despite many potential rivals imitating their business model (Pearce Robinson, 2008).Internal Analysis Value chain analysisThe value chain analysis focuses on how much value an organisations activities add to its products or services compared to the costs incurred in utilising resources in the productive process (Scholes et al., 2008, Raypor, 1995). Rayport (1995) further states that efficiency and effectiveness can be improve significantly if managers redesign their privileged and external processes by doing value chain analysis. As value chain analysis helps managers to focus attention on configuring and coordinating resources on those activities that pass water the product in the most efficient and effective way (Scholes et al., 2008, Pearce Robinson, 2008). Porter (1980) states that in order for the company to achieve competitive advantage, the managers should focus on two main areas when conducting a value chain analysis, one is the identification of the activities in which the company should perform and also the configuration of the firms activities that best enables added value to the product and allows the firm to compete.As previously mentioned, John Lewis Partnership can be described as a retailing company conducting its businesses online and in store. Primary activities have been described as directly concerned with the origination and delivery of product and services (Sholes, 2 008, Porter, M. 1980). Thus, the key value adding activities that is associated with John Lewis Partnership can be identified using Porters Value Chain model (1985) are inbound and outbound logistics. Service can be added to these as ultimately, the success of the business model is determined by the superior service provided to customers.The use of warehouse and workforce management system allows optimisation in people, inventory and equipment to create a more agile, efficient and least dissemination and also focus on performance culture. The Partnership in return, sees the productivity increased by 16%, labour costs reduced by 8%, enhanced stock availability, 40% improved of warehouse order picking and also delivery time decrease by 25%. Thus, the support activity underpinning the added value is in technology development. The ease of use system allows the company to cut overheads thus led to business growth and value-added developments that increase customer service and also when combined with other attributes as illustrated earlier creates a distinctive capability that rivals find difficult to teammate and hence lead to a competitive advantage.ConclusionThe strategic aims of John Lewis Partnership depicts high level coherence between the partnership and the strategic choices, resources and capabilities that have been used to achieve its aims. The strategic choice of differentiation/ delimitate focus has enabled the company to focus on developing capabilities that improve performance and add value to customers. This, in turn, has led to the exponential growth of the business throughout the period 2000 to 2010 evidenced by increasing market share, turnover, profit, (as shown on Table 1) including increase in sales of products and services and strategic alliances and partnerships were also increased. Therefore, the key findings of the work clearly show that a competitive advantage has been achieved.