SWOT Analysis and Porter’s 5 Forces analyses of John Lewis Partnership

Table of contents


This paper looks at John Lewis, a top retailer in theUKand a very successful brand in the EU region as a whole. It scans the environment in which John Lewis operates while scrutinizing the attractiveness and competitiveness of the retailing industry in theUnited Kingdom(Porter’s Five Forces analysis). The SWOT analysis is done to bring in to light the retailer’s strengths and weaknesses and to expose any opportunities that it can capitalize on and the possible threats it may stumble upon in the process of further development.


Since its inception in 1864, the John Lewis brand has grown in to one of theUK’s leading departmental stores and enduring brands. John Lewis boasts the only remaining traditionally English brand with a focus on quality, value-for-money and practicality (John Lewis, 2008). John Lewis specializes in selling food and drinks, clothes and household goods. In addition, John Lewis has recently diversified into financial services such as insurance and credit cards. During the early 2000’s, the company experienced serious financial crunches due to tribulations with its supply chain and poor product offerings with the worst time being at the year ending March 31, 2001 when its profits were recorded to be as low as ?2.8m on revenue of more than ?8bn (John Lewis, 2008).

However, the retailer managed to turn its fortunes in the preceding years following changes in the management and has since attained a remarkable growth in profits due to rigorous cost cutting, promotions, widespread store refurbishment and aggressive marketing (Economist, 2012). Thus, profit before tax (?997) and net profit (?860m) for the year ending March 31, 2011 were at their highest since 2001 (John Lewis, 2012). However, following the credit crisis in the US and the difficult trading environment in the UK over the 2010 Christmas period, the company’s sales growth saw a marked slow-down and its shares plummeted almost overnight (Economist, 2012). John Lewis has recently gained the title of “bell-weather” in theUKretailing industry, which means that if John Lewis is besieged, the whole sector is also struggling to stand on its feet. To this end, the SWOT analysis below looks at the environment in which John Lewis is operating, bringing in to light the company’s strengths and weaknesses while exposing the opportunities that the institution can capitalize on and the possible threats it may lurch in to in the process of further growth.

SWOT Analysis


John Lewis enjoys a strong brand of embodying qualities, practicality and value-for-money promoting its customer loyalty (John Lewis, 2012).John Lewis profits have been growing steadily since 2001 and the cash position was very strong as at the year ended 31 March 2011 marking a decade of enormous economic growth (M&S, 2011).The highly qualified management team has being greatly praised for having reversed John Lewis fortunes in the last decade.John Lewis aggressively markets itself and has recently used celebrities like as their brand ambassadors.


John Lewis performance slipped over the 2010 Christmas period. While all retailers practically underperformed during this time, John Lewis was the most exposed. At the time of writing, the share price was 361p with the 52-week low of 367p and high of 759p, which means that John Lewis M&S had lost more than 50% of its value during the year (Sunday Times, 2011).
Similarly, the price/earnings ratio of 9.4 is very low as compared to that of its competitor’s i.e Mark and Spenser. The price/earnings ratio is the key indicator of investor assurance in a company.
John Lewis has recently started cutting prices to match up the ever increasing competition. This may devalue the brand.
The company has been recently criticized for fuelling accusations of poor managerial incompetence, corporate governance and lack of transparency infuriating many large investors (Nugent and Hawkes, 2012).


The idea of developing markets to Asiapresents large opportunities for John Lewis.
Designing of trendier clothes would attract young and potential customers to its stores.
Online sales provide a great opportunity since online margins are higher citing extensive growth from online companies like eBay.
The adoption of healthy lifestyles by customers presents an opportunity to sell healthy foods and sports gear.
Growing insurance and credit card industry. The industry has been on an upward trend over the past decade. Considering that John Lewis has a division that contributes over 23% of its total revenue dedicated to this segment, it is likely to reap significant benefits if this opportunity is fully utilized.


Currently, John Lewis target group are older customers usually over 45 years. This might pose as a risk in the future due to the fact that today’s 20-30 year olds will still stay trendy after 10-20 years and might be reluctant to shop in John Lewis, especially taking into consideration the desire for people to look younger nowadays (The Economist, 2012).
Jeremy Paxman shaped a storm of negative publicity when he criticized John Lewis underwear due to lack of support (Nugent and Hawkes, 2012). Even though it is considered that every third woman and fifth man in the UKbuys John Lewis underwear, the publicity may have an adverse effect on sales.
The stated poor corporate governance in the company might lead to a fall in the interest margins and reduced revenues accrued from the cash equity business. Such declines may lead to a situation whereby clients lose their confidence on the company’s ability to meet its financial obligations. In addition, a decline in returns indicates that the group lacks the ability to deploy its resources to profitable ventures.

Porter’s Five Forces

Level of competition

Competition in the retail industry sector is extremely fierce. Predicament to this problem is exacerbated by the fact that institutions are diversifying into non-core turfs thus creating extra competition.
John Lewis is particularly exposed to competition as it sells not only food and drinks but also apparel and household goods. This leaves it vulnerable to competition from giant supermarkets such as Tesco, Asda, Sainsbury’s and clothes retailers such as Next, Topshop, Marks & Spencer and Zara.
Porter (1985) wrote that “companies pursue one of three generic strategies: low cost, differentiation or hybrid”. In this regard, John Lewis has long tried to distinguish itself from competition by placing itself as a higher quality value-for-money brand. However, this has being greatly affected by the cuttings in apparel prices which poses a risk of de-valuing the brand in the market and losing the scope of specialization.
However not a key business for John Lewis, the John Lewis credit cards and insurance face a lot of competition from banks and building societies.

Threat of Substitutes

Apparently, there are no major substitutes to food and clothes. This makes the threat of substitutes relatively low.
Notably, the key threat in substitutes in the food market is mainly Waitrose, while Peter Jones and Marks and Spencer offer high quality apparel. Asda and Tesco have also introduced less affordable alternatives and are even trading dinner jackets. In this regards, the threat of substitutes is relatively high.

Threat of New Entrants

The threat of new entrants is relatively low. This is due to the massive capital investments required in setting up a successful chain store. Also, the retail industry is mature and a new entrant in the market would consider offering something radically new, which is quite difficult to do in cloth retailing.
All key retailers have strong reputable brand names therefore benefits from customer loyalty, which becomes increasingly important in homogenous markets.
The existing retailers are firmly clenching on to their market shares and would use all available methods to counter any new entrants i.e. litigation.
Importantly, the lack of market knowledge – particularly for foreign investors-possess as a barrier to new entrants.

Bargaining Power of Buyers

Is relatively high. The buyer’s concentration is high giving them an advantage in dictating tastes and rules.
The switching costs are low and there are plenty of alternatives.
The UKeconomy is prospected to slow down by mid 2013 forcing retailers to cut down prices and focus more on customer needs.

Bargaining Power of Suppliers

Is rather low. John Lewis being a large company listed with a huge turnover, suppliers always want their products on the retailer’s shelves in order to reach a large customer base enjoyed by John Lewis.
Unlike other stores, John Lewis is not overly dependent on suppliers as it mainly sells own branded products. This means that it largely buys raw materials and not finished goods, which is favourable for margins.


Although John Lewis managed to conquer its financial crisis in the early 2000’s, it now faces a slowdown in its profit gains. This has being partly contributed by the past economic crunch in theUnited Stateswhich spread to Europe and to theUKmainly (ABC News, 2008). As the spending power of consumers decreases, customers get more cautious and start to shop around more for cheaper products (John Lewis, 2012). Even though John Lewis has a lot of strength to help maintain its leading position in the UK retail market, it should also be on the verge of managing its weaknesses and be particularly cautious with regard to any form of bad publicity that may tarnish its name. John Lewis should consider all possible means of maintaining investor relations and consider reforming its executive management to improve its corporate image. Developing in to other markets and online sales present great opportunities and John Lewis should not vacillate in embracing them.


Calculate the price
Make an order in advance and get the best price
Pages (550 words)
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Upload your instructions
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with MyStudyWriters
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
See why 20k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
Human Resources Management (HRM)
Customer 452773, June 25th, 2023
Criminal Justice
The paper was not accused of plagiarism and was written very well. I will let you know the grade once it is graded. Thank you
Customer 452671, April 26th, 2021
Social Work and Human Services
Although it took 2 revisions I am satisfied but I did receive it late because of that.
Customer 452603, March 25th, 2021
Business and administrative studies
great job as always
Customer 452773, February 26th, 2023
Criminal Justice
This has been the greatest help while I am recovering from an illness. Thank your team so much.
Customer 452671, May 2nd, 2021
Human Resources Management (HRM)
excellent work
Customer 452773, July 3rd, 2023
Business and administrative studies
Excellent job
Customer 452773, March 9th, 2023
Business and administrative studies
Thank you for your hard work and effort. Made a 96 out of 125 points Lacked information from the rubic
Customer 452773, October 27th, 2023
Human Resources Management (HRM)
excellent job
Customer 452773, June 25th, 2023
excellent job made a 93
Customer 452773, March 22nd, 2023
Business and administrative studies
Customer 452773, March 3rd, 2023
Business and administrative studies
excellent paper
Customer 452773, March 3rd, 2023
Customer reviews in total
Current satisfaction rate
3 pages
Average paper length
Customers referred by a friend
15% OFF your first order
Use a coupon FIRST15 and enjoy expert help with any task at the most affordable price.
Claim my 15% OFF Order in Chat

Sometimes it is hard to do all the work on your own

Let us help you get a good grade on your paper. Get professional help and free up your time for more important courses. Let us handle your;

  • Dissertations and Thesis
  • Essays
  • All Assignments

  • Research papers
  • Terms Papers
  • Online Classes
Live ChatWhatsApp