Analysis of John Lewis Performance in the UK Market - Research Paper Example

In the UK, the retail industry forms the largest and most widely used service industry with a GDP contribution of 8%. Expectedly, several other retail chain companies build up to form the sector; John Lewis is one of them.

From early 2009 to date, several retail companies in the UK market have been announcing their closure or administrative adjustment due to poor performance. John Lewis too experienced negative sales and at one point in the year 2009, it was below the average of the British Retail Consortium. During this time, John Lewis experienced a serious fundamental difficulty in the UK market. Even though the company had a massive rational affinity, its emotional affinity as well as popularity was dwindling.

The result was that the retail shop underwent a period of relatively low share of the wallet of its target customer. For the past few years, John Lewis has developed and implemented an assortment of resources aimed at giving it a competitive advantage over other retail shops in the industry. (Barney, 1991) the Resource-Based Review (RBV) argues that companies and organizations should put more investment in the capabilities and resources that they deem, able to propel them towards achieving a sustainable and realistic competitive advantage hence boosting their performance.

Resources can be defined as stocks of available factors owned by a firm (Amit et al, 1993). On the other hand, ‘capabilities’ is defined as the ease of an organization to coordinate different tasks while using the available resources to attain a set objective (Helfat et al, 2003). John Lewis developed a more sophisticated e-commerce website that has advanced functionalities and services than those of its competitors. The company management ensures the online store is frequently updated with product information as it may appeal to potential customers.

Additionally, John Lewis embarked on a serious online campaign and social network marketing. For instance in Dec 2009 the Christmas period, the company introduced more sectional and emotional ads that generated huge leads to back to the online store as well as physical store visits. Its ad campaign named ‘Never Knowingly Undersold’ has made the company outperform in the UK retail norm for increasing public brand appeal. Figure 1: John Lewis Performance trend. Adapted from John Lewis Partnership Annual Reports and Accounts 2013 as a result of the changes, John Lewis has significantly continued to grow since 2009 to date. Even though the market has been posting several challenges, the company has recorded a growth of up to £3.78bn (see figure 1). Its growth sale per every square foot is recorded to have increased by an average of 4.1% while the total sale for like recorded an increase of 10.5%.