Analysis of internal business environment for John Lewis & Partner

Value chain model proposed by Porter

In 1985, Porter introduced the concept of value chain, he proposed this model for general purpose. Firms can use this model to analyse all of their activities and examine how they are attached (Smit, 2015). Value chain is the set of range of activities that companies operating in their sector performs in order to provide valuable goods or services to consumers. This concept comes through business management, which is described by Michael Porter in 1985, bestseller. The idea of this model is based on procedure view of businesses, seeing manufacturing company as system made up of subsystems. It is the conceptual notion of value added in sort of value chain, Porter suggested that firm is split into primary and support activities. Value chain model is the concept that help to examine the specific activities of company through which they can create competitive advantage and value. With the help of this model, they analysis of business internal environment is possible, it is considered as one of the most the easiest way to visually analyse organizations functions or actions to see how they create competitive benefits for themselves. Companies seeking competitive benefits turn to value chain concept to determine the chances for differentiations and cost savings in production cycle.

In context of ideal situation value chain model demonstrates that cost to create is far decrease than cost market bear, but it is become harder as consumers demand increase in complexity. Since Michael Porter introduced Value chain model, the communication and technology approaches have changed effectively in 1958. Even with innovation and growth, value chain model is still helping businesses to identify market opportunities and also help in gaining competitive differentiation. It streamlines the procedure that take goods from concept to market. Integral linkages is supported and good communication between indirect, support and direct elements. In value chain model of Porter produced in 1985, expanded Leontief's output or input concept by accenting connections between primary activities as well as secondary activities of businesses. Michael Porter value chain is the best framework for creating an analytic structure that adopt or follow interdependent actions from idea and raw material acquisition through manufacture and finally, into hands of consumers (Fagioli and et.al., 2017). It is defined as decision support tools, that is quite beneficial for organizations how wants to operate their businesses in globalization era. Primary activities includes, inbound, outbound logistics, operations, marketing sales and services. In additional to this, support activities includes, firm infrastructure, human resource management, technology development and procurement activities.

John lewis & Partners business familiar and operates in UK

John Lewis & Partners is the British organization which operates their chain of department stores, banking, financial services, Wait rose and partners supermarkets and other retail related operations in UK. The firm is owned by trust on behalf of all their worker known as partners. It is considered as the third biggest UK non traded business by sales, company broadened their marketing strategy towards all kinds of consumers, with launching of value range to John Lewis along with essential range of Wait rose and their business expansion. The owner of company opened it's first shopped that is drapery in London at 132 Oxford street, the had been bound at 14 to line draper in Wells (Robb, 2018). John Lewis & Partner started business acquisition procedure in 1933, where they acquire other retail businesses, buying Lance & Lance of Weston super mare and Jessop & Son of Nottingham. The most attractive thing about this organization is that their workers are called partners, they hold branch forums at every outlet which discussed local problems. Organization is mainly focusing on making good and effective employee relations, they give annual bonus to its staff members, akin to share of profit, which is calculated as percentage of wages with same percentage for all staff members. The purpose of John Lewis & Partner is to provide happiness of all their members through its worthwhile, they want to satisfy their consumers and workers that help in success of business within retail sector (Sullivan and Gouldson, 2016). They own Wait rose and partners, a high market supermarket chain which have 336 branches and 61,000 partners. John Lewis & Partner currently operate their manufacturing business, in Darwen, that is Herbert Parkinson. They operate 50 outlets across nation, they have 36 department stores, 12 John Lewis at home as well as shops at St, Pancras International.

Value chain model to analyse the internal environment of business

Value chain refer to operational and functional activities of company that add value to their target consumers (Ayers and Odegaard, 2017). This model is highly well-known in business world, here it is used to examine the internal environment of John Lewis & Partners operating their business in UK effectively with talented applicants at workplace. The value chain model is divided into two categories that is;

Primary activities-

Organization primary value chain activities is directly included in selling and manufacturing its products to target market. Analysis of primary activities improve performance of business environment as explained below.

Inbound logistics-

Developing strong relationship with suppliers is very essential for business as it helps to store, distribute and receive quality products. John Lewis & Partners is able to focus on each aspect of transformation from raw material into finished goods. They develop good and effective relationship with their suppliers that allow getting good raw materials. Some examples of inbound logistics is retrieving raw material, internally distributing it and element to strat production.

Operations-

When raw material arrives, analysing operational functions is very important, organization is able to process materials into final products and also capable to launch in wider market. Machining, testing, packing and assembling are the examples of operational activities that managed by John Lewis & Partners effectively (Storey and Salaman, 2017). With the help of manufacturing products and delivering quality goods to potential consumers, company is able to increase productivity and profitability as well.

Outbound logistics-

It includes the actions that deliver good to consumers by passing through various intermediaries. John Lewis & Partners is capable to transport and deliver their products across UK. It helps to gain competitive advantages and help to achieve organization business growth objectives.

Marketing & sales-

At this phase, company highlight the advantages and differentiation points of providing goods to potential clients. Producing good quality of products at affordable price is created value, the organization is able to distinctive feature of their products. Firm is capable to create their advertising plan and marketing strategies effectively. Company develop wisely and effective marketing activities that help to create brand equity.

Services-

Post and pre sales services provided by organization plays vital role in creating consumers loyalty, it helps to retain target clients with business for longer. Modern people consider post sale services as essential as promotional and marketing activities.

Support activities-

Firm infrastructure-

It denotes range of activities such as accounting, strategic management, quality management, handling legal matters and financing. John Lewis & Partners have effective infrastructure management that allow business to operate and optimize value of entire value chain. They have the power to control infrastructure activities such as overhead cost through making discussion with senior to strengthen competitive position within marketplace.

Human resource management-

John Lewis & Partners have strong and effective HRM, it helps them to reduce risk of employee turn over and competitive pressure based on commitment, skills and motivation of their workforce. With the help of having good human resource management at workplace, organization is able to work with skilled labour who are capable to contribute in procedure of achieving business objectives. Company is achieving their cost decreasing objectives by analysing training and hiring costs with their relative return.

Technology development-

In recent time, technology get advanced, almost all value chain activities either primary or support depend on technological support (Jones, Comfort and Hillier, 2016). Technological advancement in distribution, human resource activities, production and marketing needed company to recognize the importance of technological development. Management, paperless operation and administration of organization carrying out on IT systems, which is access through prevent servers and develop accessible flexibility in operation of overall business. The development and research department of John Lewis & Partner is distinguished into two categories that is product and procedure technological development activities.

Procurement-

It denotes processes in value chain included in buying inputs that range from machinery, supplies, equipment and raw material for manufacturing finished products. Company is focusing on their procurement activities effectively in order to optimize operational, inbound and outbound activities.

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Reflection based on usefulness of value chain model

Value chain model is quite amazing and beneficial tool which is mostly used to analyse the internal capability or strength of business, it helps to determine the abilities of organization to sustain within marketplace. While using this model, I was able to understand the overall internal environment of business. Here, I am analysing the inner atmosphere of John Lewis & Partners company, I make me able to get in depth information about its business strength and operational functions. When I used value chain model in my work, I realize that it is very flexible strategy tool, it is one of the big benefits of this concept. It helps to create and diagnose competitive benefits on cost as well as differentiation. I think that it help me in comprehension the entire work activities of company, it is very useful and helpful tool that I can use in further research or study. By using this model I can easily understand possible source of competitive benefits for business. It provides useful approaches for me to examine effectively and systematically where values may be included to companies. This framework is useful in that it determine the key components in manufacturing of services or products as well as areas in which value will be added in support of those primary functions. With the help of using this model, I believe that it is quite effective and beneficial in helping to understand different activities of John Lewis & partners in retail sector. The structure of value chain model is simple and clear, it helps me to learn and gain more knowledge about company activities, I can clearly consider their effectiveness and operational efficiencies. There are different benefits of value chain concept, which all outcome in my ability to optimize and understand activities of business that leads to their competitive advantages and increased profit level. It helps me to assure value created exceeds cost by firm, company is gaining competitive edge, their strategies related to business growth and success and plan to boost profit. In additional to this, With value chain model, I can easily and effectively determine those activities where company can quickly optimize effort, reduce cost, increase profitability and eliminates waste (Havice and Campling, 2017). Analysing activities also provide insights into components that create greater value to me.

CONCLUSION

From above analysis, it has been concluded that value chain model developed by Porter in 1985 is helpful and effective tool. It provides numerous benefits to company, as it help to analyse the internal abilities and capabilities of John Lewis & Partner which they can use to gain competitive edge and increase profit margin rather than before. Organization is using value chain analysis model, in order to develop their brand identity and select premium quality raw materials which they manufacture and present in front of consumers. Firm is able to achieve competitive differentiation by increasing or speeding up delivery of provided goods to target people.

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