Analysis Of Current Market Strategies Of John Lewis &partners By Using The Sostec Strategy Model

Executive Summary:

John Lewis & Partners is famous departmental stores that operates throughout the United Kingdom. Moreover, this brand also operates in Ireland and Australia. This company had been founded by John Lewis in 1929. It operates 51 stores in Wales, England and Scotland. It offers high quality products at lower price as compared to the other high street rivals. John Lewis & Partners has its headquartered in London. SOSTAC stands for situation, objectives, strategy, tactics and control. This model is highly preferred by today’s marketers in order to analyse the current situation, strategies and market position of the organisation. SOSTAC model is a useful business model that is used by marketers in order to conduct proper marketing and business planning. SOSTAC of John Lewis &Partners will assist its marketers to analyse its current business situation, objectives, strategies and tactics. Moreover, SOSTIC model will assist John Lewis &Partners to conduct proper action planning in order to operate its business in the international market such as in Singapore. Through using the SOSTAC strategy John Lewis &Partners is able to set the proper strategy that it can implement in parent country (UK) as well as in the international market. however, there are some benefits and limitations with these strategies, which can pose a potential impact on John Lewis &Partners business planning. Therefore, John Lewis &Partners needs to make proper market research on the foreign market before implementing the SOSTAC strategy. This report is going to use the SOSTAC model for analysing the market situation of John Lewis &Partners, the largest high-street supermarket chain in the UK.

Introduction:

SOSTAC is marketing planning model developed by PR Smith in 1990. SOSTAC stands for situation, objectives, strategy, tactics and control. This model is highly preferred by today’s marketers in order to analyse the currentsituation, strategies and market position of an organisation. This report is going to use the SOSTAC model for analysing the current market situation of John Lewis & Partners, the largest high-street supermarket chain in the UK. Through using the SOSTAC model, this report will analyse the strategies and tactics that John Lewis & Partners is going to apply in order to operate its business in chosen international market. This report will also analyse the usefulness of SOSTEC strategy that John Lewis & Partners has taken for operating its business outside the UK.

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John Lewis & Partners ’s marketing background:

John Lewis & Partners is famous departmental stores that operates throughout the United Kingdom. Moreover, this brand also operates in Ireland and Australia. This company had been founded by John Lewis in 1929. It operates 51 stores in Wales, England and Scotland. It offers high quality products at lower price as compared to the other high street rivals. John Lewis & Partners has its headquartered in London. Based on 2017 annual report, John Lewis & Partners has gained revenues of £3.78 billion and operating income is £243.2 billion. It has 38,100 number of employees across the UK. Through using strong market strategy John Lewis & Partners is able to grab 30% of the UK grocery market. based on the annual report of 2018, John Lewis & Partners has stored in every postcode of UK. The strategy that John Lewis & Partners applies in their home market (UK) are environment-friendly products, quality product and service, customer centred strategy, customer loyalty and the improve labelling (www.johnlewis.com, 2019).

Task 1:

SOSTAC of John Lewis & Partners:

SOSTAC model is a useful business model that is used by marketers in order to conduct proper marketing and business planning (Hasan Bisri et al. 2018). SOSTAC of John Lewis &Partners will assist its marketers to analyse its current business situation, objectives, strategies and tactics. Moreover, SOSTIC model will assist John Lewis &Partners to conduct proper action planning in order to operate its business in the international market such as in Singapore.

Situation:

Current market situation of John Lewis & Partners can be understood by analysing the impact of macro environmental factors that have a potential impact on business and marketing activities of John Lewis &Partners.

Macroenvironmental analysis of John Lewis & Partners:

Political
  • John Lewis &Partners operates in the UK, Ireland and Australiaand exposed to political framework of these countries
  • Risk of military invasion in Singapore and other countries outside the UK will affect John Lewis & Partners business
  • Inference of overseas government in retail industry and bureaucracy will badly affect John Lewis & Partners business
  • Importance of retail economic on the economic situation of Singapore will determine the success of John Lewis & Partners in this country
  • Impending legislation, tax rates and political instability in Singapore will affect marketing strategy of John Lewis & Partners
  • Import duty on goods and service on John Lewis &Partners in operating business outside the UK like Singapore
  • EU referendum and Brexit pose makes John Lewis &Partners investors and marketers face the hard situation in operating business within and outside the UK
Economic
  • Stability and type of economic standard in overseas countries like Singapore
  • The efficiency of the overall financial market in the host country. For example, whether John Lewis & Partners is able to raise its capital in the Singapore market.
  • Skill level of workforce and infrastructure in the retail sector in the outside UK
  • Education level, labour cost and productivity in the international market
  • Inflation interest and unemployment in the host country
Social
  • Culture, preference and behaviour of the customer in the international retails market
  • Skill level, education and individual perception of the customers in countries outside the UK
  • Buying behaviour and product preference of customer in the overseas market
  • An attitude such as health situation, personal behaviour and demand type of the local people in the overseas countries
Technological
  • Technologies fasten the product manufacturing and delivery process that increase competitive advantage for John Lewis &Partners outside the UK
  • Recent technological development in overseas market such as in Singapore, China, Japan, will increase the rivalries for John Lewis & Partners
  • RFID technology assist John Lewis &Partners intheUK as well as in the outside countries to improve the in-store experience for customers
  • For technologically advanced countries such as Japan, Singapore and China, John Lewis &Partners needs to implement more digitalisation in their operation.
Environmental
  • Weather and climate in the hostcountries outside the UK affect business strategies of John Lewis & Partners
  • Regulation on air and water pollution by the overseasgovernment have a potential impact on the overall business operation of John Lewis & Partners
  • Government's emphasis on waste management, recycling and eco-friendly product, will pose challenges for John Lewis &Partners marketers in overseas market
Legal
  • Anti-trust law by overseas government in international countries such as in Singapore
  • Discrimination law, copyrights, intellectual property law in overseascountries outside the UK will have a potential impact of John Lewis & Partners ’s business
  • E-commerce and consumer protection regulations in Asian countries such as Singapore.
  • Health and safety regulation, Data Protection Act and employment regulation in Singapore andotheroverseas countries outside the UK have a potential impact on John Lewis & Partners 's business operation.

Table 1: Macro environmental analysis of John Lewis & Partners

Objectives:

John Lewis & Partners ’s objective is as follow:

  • To become one of the reputed supermarket brands in Singapore with maximising shareholders wealth
  • To establish its marketing footprint in Singapore with having a strong marketing strategy and business operation planning
  • To get positive feedback from the local customer of Singapore within a year
  • To get a strong market position in the Singapore retail market
  • To maximise the sales revenue and growth in the Singapore market

Strategy:

John Lewis & Partners has taken important strategies for dealing with international business in the overseas market outside the UK. According to Saari (2017), business strategies o for the international market is important for the company in order to make its strong market position in the host country and to combat the potential competitive threats that are posed by the local marketers in the host country. In order to operate its business in the overseas market, John Lewis &Partners has taken the following strategies:

Building up community relations:

Strategic relation is processed through which firm makes strong interaction with local people in the host country in order to foster the mutual understanding, support and trust (Chaffey and Smith, 2017). This strategy is John Lewis & Partners 's one of the important strategies for achieving its objectives in the overseas market. In the host country outside the UK, John Lewis &Partners focuses on building strong connection with the local people in order to understand their taste, preference, culture and buying behaviour.

Joint ventures in the host country:

This is one of the important current market strategies of John Lewis &Partners in order to operate its business in the international market. According to Wijaya and Hermawan (2018), joint venture is an important way for business expansion and maximising the revenue growth for international organisation in the host country. John Lewis &Partners currently focuses on joint ventures in order to make global expansion in order to have sustainable business growth and economic development. For example, in Singapore John Lewis &Partners is going to make the joint venture with Samsung, which would assist this company to make a strong connection with local manufacturers and suppliers.

Foreign acquisition:

As stated by Quarcoopome (2017), the foreign acquisition is one of the important marketing strategiesfor the international marketers in which the firms can get the full authority over the business operation of other companies that are being acquired. Foreign acquisition is current strategy of John Lewis &Partners which will enable this company to acquire the other firms that are already doing well in the host country.

Greenfield investment:

The greenfield strategy is one of the important international market strategies that assist marketers to start new subsidiaries and then acquiring them fully (Hamed, 2016). Greenfield investment is type of Foreign Direct Investment that would assist John Lewis &Partners marketers to achieve highest degree of economic control over the foreign retail market. through the greenfield investment process, John Lewis &Partners aims to generate its potential brand image in front of the local people in foreign countries and international marketers. Moreover, through using this Greenfield strategy John Lewis &Partners can assist the government in host country outside the UK, to generate number of jobs that will improve the overall economy of the foreign country (www.johnlewis.com, 2019).

Strategic alliance and cooperation:

Strategic alliance and cooperationis the process in which the international firms can make a strong business relationship with local and international business in the host country in order to maximise their revenue and brand image. Through using this strategy John Lewis &Partners is going to build strong relation local marketers, suppliers and manufacturers in the host country in order to establish its business footprint in the new market (www.johnlewis.com, 2019).

Tactics:

In order to achieve the strategies that are taken by John Lewis &Partners, this company is going to focus on three important aspects such as product, price and place.

Product:

John Lewis &Partners focuses on offering a huge range of products to the customer in foreign market in order to cover demand if large number of people. It strictly maintained the high quality of each product in order to make long-term customer relations in the international market. John Lewis &Partners marketers focus on offering the products of its own brand in the host country in order to highlight its brand reputation and market image. Moreover,recentlyJohn Lewis &Partners isgoing to offer its international customer the 33 foodcategories that would assist the customer to meet theirdemand (www.johnlewis.com, 2019).

Price:

In order to implement the current international strategies, John Lewis &Partners focuses on offering the reasonable as well as the affordable price of its products. moreover, with maintaining the justified price of product John Lewis &Partners does compromise with the product quality. In international market, John Lewis &Partners focuses on maintaining strong collaboration with suppliers and manufacturers in order to reduce the excel price and costing of products (www.johnlewis.com, 2019).

Place:

John Lewis &Partners believes in using smart tactics in order to choose the proper place of opening its outlets in the host country. Its current market tactics are based on the thought that, crowded places with high and mediumstandard people is to be selected for opening the outlets. It generally focusses on metro areas, high street, towns and city centres. This is because in the crowded places in most countries the majority of the people can accessthe service and product of John Lewis &Partners.

Action:

The following action is going to be taken by John Lewis &Partners in order to achieve its objectives in the international market:

  • Conducting media campaigns in order to promote its product and service in the international market
  • Updating and design the official websites in order to provide the customer with proper information aboutJohn Lewis & Partners ’sproducts, service, brand reputation and quality
  • Sponsoring foods and grocery products in the host country in order to grab customer attention
  • Donation was given to the colleges, schools, local community in order to promote its ethical leadership values

Control:

Control in the process, in which firm can measure that actions and strategies that are taken place. In order to measure the usefulness of strategies that are developed and implemented by John Lewis &Partners in the international market, John Lewis &Partners currently uses different methods. One of the important methods of John Lewis &Partners is conducting a survey in order to see the response of local people regarding product quality and durability. Moreover, the survey assists John Lewis &Partners marketers to get proper feedback from local customer about the service and products. measurements would be taken byJohn Lewis &Partners in order to understand the image of the company in front of localcustomer in host country and gaining proper information customer loyalty.

Task 2:

Evaluating the effeteness of John Lewis & Partners ’s current SOSTAC strategy:

When it comes to evaluating the usefulness of John Lewis & Partners 's SOSTAC strategy in the UK, it is important to analyse the benefits and negative impact of this strategy on John Lewis & Partners 's current market position as well as a business process. One of the important SOSTAC strategies of John Lewis &Partners is strategic alliance and cooperation with local marketers in the parent country (UK) as well as in the foreign market. According to Järvinen (2017) strategic alliance and cooperation is useful for an international firm in order to strengthen the relationship with local marketers, manufacturers and suppliers. Through using this strategy in UK market, John Lewis &Partners is able to join together with another potential brand in the UK, in order to get the mutual benefits such as string relations with manufacturers, easy availability of products and raw material and proper coordination with the suppliers and dealers. Due to the strategic partnership with other brands in the UK, John Lewis &Partners loses some degree of control over the business. Moreover, the businesspartners of John Lewis &Partners have the authority to pose their controlling influence on John Lewis & Partners ’s business operation. For example, John Lewis & Partners -Clipper Logistics plc venture is one of the most appreciable strategies of John Lewis &Partners in order to maximise its international business, however, it has made some kind of conflict between the two partners regarding their unequal benefits, lack of control and comparative profit.

John Lewis &Partners has taken another important SOSTAC strategy for the UK and international market, building community relations. As stated by Nur’ainy et al. (2016), in order to build strong community relationship, the company needs to think beyond its profit and business growth and emphasizeon social, cultural and economic development of community. In order to establish its market footprint in the UK retail market, this strategy is highly useful for John Lewis &Partners.

Joint ventures and acquisition are taken by John Lewis &Partners as important SOSTAC strategy that is associated with merging with local brands and acquires the potential firms that are already doing well in the market. In the UK retail market joint venture and acquisition assist John Lewis &Partners to maximise its profits and extend its market boundaries. On the contrary, Floreav and Duica (2017) argued that, although joint venture and acquisition are considered as important for the international firms in order to expand their business, it can increase the high-level mismanagement, complications and controversies within the organisation. For example, John Lewis &Partners has taken strategy to make a joint venture with Malaysian retail market, in which the company is failed to maintain the partnership due to increasing complication for different culture, language, preferenceand economic standard.

Task 3:

Analysing whether the current market strategy of John Lewis &Partners can be implemented in the international market that is chosen in task 1:

Implementation of the aforementioned strategies of John Lewis & Partners ’s in Singapore is based on the current market demand, customer buying behaviour and market trend in the retail market in Singapore. the first SOSTAC strategy taken by John Lewis &Partners isbuildingcommunity relationships in order to strengthen the relationship with customer. According toNuutila (2018), building community relations is inevitable for the firm that is going to operate its business in the foreign country. This strategy can be implemented in Singapore, as it will assist John Lewis &Partners tohold its brand image in front of local people in Singapore. Similar to the UK market, John Lewis &Partners can build its community relation in Singapore with conducting its corporate social responsibility such as social and economic development if community, contributing to the poor children education and healthcare. On the contraryWood et al. (2016), argued that community relation is not only confined to the corporate social responsibility but also maintaining theethical and moral principles of firms such as maintaining quality of product and service and promoting trustworthyrelationship with customers. John Lewis &Partners does not compromise with its product and service quality, which is the reason behind being oneof the most trustworthybrands in the UK and otherinternational markets.

Another SOSTAC strategy that John Lewis &Partners applied in the UK market is the acquisition of the potential firms. This strategy could be useful in order to make proper business expansion in Singapore if the acquisition would provide a high level of benefits to John Lewis &Partners marketers. For example, through acquiring the potential brands that are already doing well in Singapore market, John Lewis & Partners marketers should ensure that they have full control over the business that they acquire, moreover the John Lewis & Partners marketers needs to ensure that the acquisition would assist them to enhance their strong market reputation and competitive advantage.

In order to analyse the usefulness of the other strategy, the joint venture method that John Lewis &Partners has taken for the international market, it is important to understand, whetherSingapore has such kind of potential brand that can provide the John Lewis &Partners propermutual benefits. As stead by Sutela (2017), joint venture is an important international business strategy through which the business partners get mutualbenefits. Through using this strategy John Lewis &Partners can make proper business relations with the potential brand in Singapore which assist this company to strengthen the relationship with local marketers, suppliers and manufacturers.

Conclusion:

From the above-mentioneddiscussion, it can be concluded that SOSTAC is an important international business model that assists organisational to conduct market planning in order to analyse its current market position. Through using the SOSTAC strategyJohn Lewis &Partners is able to set the proper strategy that it can implement in parent country (UK) as well as in the international market. however, there are some benefits and limitations with these strategies, which can pose a potential impact onJohn Lewis &Partners business planning.Therefore,John Lewis &Partners needs to make proper market researchon the foreign market before implementing the SOSTAC strategy.

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