SWOT Analysis

Weaknesses

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
competitors i.e Mark and Spenser. The price/earnings ratio is the key indicator of
investor assurance in a company (Arnold, 2002).
John Lewis has recently started cutting prices to match up the ever increasing
competition. This may devalue the brand (The Economist, 2012).
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).

Opportunities

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 (John Lewis, 2011).
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.

Threats

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 todays 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 (John Lewis, 2012).
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 companys 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.

Conclusion
Although John Lewis managed to conquer its financial crisis in the early 2000s, 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 (BBC, 2012).
 1. One of the most upmarket retail stores in the UK
2. Offers wide range of fashion brands to choose from and also their own brands.
3. Also offers option to shop inline along with international delivery
4. The company has over 35,000 employees
Strengths 5. The chain is known for its policy of "Never Knowingly Undersold"

1. The range of items offered is limited compared to super-markets which limits the options
available to consumers.
2.The prices of items are higher than supermarkets and grocery stores which might limit the
Weaknesses target group

1. More young professionals living away from home and are brand and image conscious.
Hence their target group is increasing fast.
2. Increasing purchasing power parity leading to improved lifestyles
3. Expand network, product selection and reach to people by opening up more flagship
Opportunities stores and subway brands along the lines of their growth strategy currently being pursued

1. Robbery attempts and other threats lead to high priority security concerns for property
loss as also safety of employees working late into the night.
2. Intense competition from corner stores, supermarkets, grocery stores and host of other
convenience stores.
3. Competition laws an lack of large scale development space leading to merger of many
Threats convenience stores.