What is John Lewis partnership?
John Lewis partnership is a visionary and successful way of doing business, boldly putting the happiness of partners at the centre of everything they do. The outcome of nearly a century of endeavour to create a different sort of company, owned by partners dedicated to serving customers with elegance and fairness. All 71, 196 staff are partners who own 28 John Lewis department stores, 213 Waitrose supermarkets, an online and with catalogue business, (John Lewis direct-john Lewis. com), a direct services company (Greenbee), three production units, and a farm with a turnover of nearly £6 billion last year. Partners share in the benefits and profits of a business that puts them first and the partnership follows its seven business principles – purpose, power, profit, members, customers, business and relationships.
Mission statement
Mission statement addresses the question where does it belong to in the business. The John Lewis Partnership’s reputation is founded on the uniqueness of its ownership structure and commercial success. Its purpose is ‘ the happiness of all our members, through their worthwhile, satisfying employment in a successful business’, with success measured on its ability to sustain and enhance the position both as an outstanding retailer and as a thriving example of employee ownership.
Partnership Strategy
Partnership strategy is based on three interdependent objectives – partners, customers, profit – which together will make its successful business.
Partners should gain personal satisfaction by being members of a co-owned enterprise in which they have worthwhile, secure and fulfilling employment and confidence in the way the partnership conducts its business.
The partnership should recruit and retain loyal customers through their continued trust and confidence in our reputation for value, choice, service and honesty.
The partnership should make sufficient profit to sustain our commercial vitality and distinctive character, allow continued development and distribute a share of profits each year consistent with partners’ reasonable expectations.
Environmental Factors
As ROBSON(1997) conveys environment analysis takes an important part towards increasing the quality of strategic decisions considering relevant features well before making an irrevocable decision.
Social –
Fairtrade, certifies producers against internationally recognised trading standards. Fairtrade items generate a guaranteed price to cover production plus a ‘ social premium’ to be reinvested in suppliers’ businesses or local communities.
Recruitment, retention and training- Partnership aims to attract and retain the best people who share the values.
Traceability- Having full traceability of products, and their ingredients or components, is critical to success and to consumer confidence.
Product safety- Ensure the integrity of products and the application of the best standards in safety, quality environment and animal welfare.
Animal welfare- Waitrose is committed to providing the best conditions for animals at all stages of the supply chain and to combating cruel practices.
Environmental –
Energy and emissions- committed to tackling the issue of Climate Change and have set a public target of reducing CO2 emissions by 10% by 2010
Packaging and waste- The Partnership’s longstanding objective is to reduce waste wherever possible, and to reuse or recycle more of what they produce.
Economic –
As a business based solely in the UK, the Partnership is particularly exposed to any economic downturn which could affect consumer spending, most notably in the Department Store business.
Political –
The Partnership remains sensitive to the regulatory environment in which it trades in order to ensure ongoing compliance with key regulatory requirements around planning, trading, tax and competition.
SWOT Analysis
The importance of performing a SWOT analysis is that, no business should take a high risk strategy if there are any significant weaknesses foreseen. Performing a SWOT analysis may consider in,
What are the weak/strong products, divisions, attitudes etc.?
Are there any gaps/opportunities?
Are there any dangers/threats needs to be protected?
Are we strong in the right way to exploit the opportunity?
Considering the above facts a SWOT analysis has taken place to mark the right opportunity.
Strengths & Weaknesses
The Partnership has many strengths such as committed and experienced Partners; the ability to trade well even when conditions were difficult. It had also come through a very difficult period with its integrity and the trust of customers intact. However, it had not been plain sailing as profits has been hit hard particularly in John Lewis. Sales in Waitrose have been more resilient but the division has fought hard by turning up the volume on price and the cost of that investment.
As Partnership Chairman Charlie Mayfield reports, Profits could be down this year but their financial position remained strong. Their financial strategy is conservative as borrowings and mortgages are low comparing to competitors. This is due to the fact that they have planned and were able to cope with difficult economic periods. They also have good relationships with banks, but it has to be maintained to ensure their continued support in the future. However, plans for growth cost money and the business needs to consider how much more it could afford to invest when operating profits on under pressure.
Opportunities & Threats
Clearly sales have been under threat during recession periods and there were risks around the operational side of the business. A biggest threat seen was the collapse of banking sector. John Lewis partnership didn’t seem to be affected by it but still since it has not ended yet there is a caution of lending money from banks. Apart from it, implementing new products and multi-channelling occupied the ongoing of business.
Organisational Structure & Its Decision Levels
Partnership council
Partnership has a clear and streamlined management structure which means decisions could be taken very quickly. The Partnership Council symbolizes its democratic structure and represents the strategic level governing authority. Signifying Partners as a whole, most of its members are elected by Partners. Its main role is to hold its management to account, to influence policy and to make key governance decisions. Partnership Board has ultimate responsibility for issues of major policy and for allocating the financial and other resources of the business. To a large extent its role is keeping the Partnership true to its principles – both in terms of the vitality of its commercial progress and its distinctive co-ownership objectives.
The Council should retain its three vital decision-making powers:
to elect the Trustees of the Constitution and five directors to the Board
to change the Constitution, with the Chairman’s agreement
to dismiss the Chairman.
Managing the business
This starts with the two divisional Management Boards, who have clear responsibility for developing a strategy for the ongoing development of our John Lewis and Waitrose businesses and then for seeing through its implementation in accordance with an approved business plan. Said two divisions share the Partnership’s principles in the managerial level and a common approach to doing business, but they are substantial businesses in their own right.
The establishment of the Management Boards clarified the responsibility they carry for the trading operations of the business. They are accountable to the Chairman for their performance, and they derive their authority from the Partnership Board’s approval of their business plans.
Waitrose Management Board
The Waitrose Management Board is accountable to the Chairman for its performance and it derives its authority from the Partnership Board’s approval of its business plan.
John Lewis Management Board
The John Lewis Management Board is accountable to the Chairman for its performance and it derives its authority from the Partnership Board’s approval of its business plan.
Partnership Services
Partnership Services represents the knowledge level and designed to meet the Business plan and Partner needs with simple, efficient services, enabling a growing and successful Partnership.
Partner
Being a partner with a shared responsibility for the partnership and a drive to put its success first is a different aspect compared to operational levels in other organisations. Further partnervoice is the local avenue for Partner opinion and is the means by which Partners can provide feedback, question management on branch, raise their own issues and be consulted.
Types of Decisions Made at Various Levels
Multi-Channel Retailer –
Level
Type of decision
Type of IS
Benefits to organisation
Link to the mission
Strategic level
Build multi channel retail
ESS- sales forecast for 3 years.
Improvement of profit margins and expanding the organisation.
Partners could be stretched and develop their career.
Management level
Budgeting
Cost analysis
MIS- Annual budgeting on channels
DSS- analysing cost in implementing and maintaining channels
Knowing the spending
In finding the best possible way to suit the business
To build a successful business
Knowledge level
Designing modern trends
KWS- designing channel workstations
Best possible way to suit the business
Sustain as an outstanding retailer
Operational level
Schedule employees
TPS- Training and development
Processes daily activities smoothly
To sustain as a business
IS Recommendations –
Strategic level – management of performance as a whole where how it could meet the expectations of organisation
Management level – performance report against the spending.
Knowledge level – design performance indicators
Operational level – pay reviews.
International Expansion –
Level
Type of decision
Type of IS
Benefits to organisation
Link to the mission
Strategic level
International expansion
ESS-prepare 5 year forecast in sales
Growth in the partnership internationally
Partner satisfaction
Management level
Budgeting
Pricing analysis
MIS- annual budgeting on expenditures
DSS- determine prices
Keep track on expenditures of the company.
Towards the company profit margin.
Success of the business
Knowledge level
Market analysis
KWS-analysing retail market
Acquire the best opportunities.
Sustain in the business
Operational level
Process orders
TPS-processing and tracking of orders.
Process routines
Success of the business
IS Recommendations –
Strategic level – franchise internationally
Management level – franchise budgeting forecast reports
Knowledge level – analysing markets for franchise
Operational level – keep up the standards as a franchiser.
Increase Marketing –
Level
Type of decision
Type of IS
Benefits to organisation
Link to the mission
Strategic level
Increase Marketing
ESS- 3 year sales forecast
Increase of sales
Sustain of the business
Management level
Marketing budget
Cost analysis
MIS-issuing marketing budget
DSS-analysing costs towards marketing
Manage marketing budget
Find best possible for the company
Enhance the position in the market
Knowledge level
Design marketing trends
KWS-market analysis
Attract customers to drive sales
Success of the company
Operational level
Display marketing adverts
TPS-point of sale
To drive more sales
More sales more bonus
IS Recommendations –
Strategic level – economic trends of a country’s condition in a given time period
Management level – sales analysis and sales reports.
Knowledge level – design products to suit the economic trend. e. g. to suit economic crisis
Operational level – production order of the new designed product.
Expansion In UK –
Level
Type of decision
Type of IS
Benefits to organisation
Link to the mission
Strategic level
Expansion in UK
ESS-prepare 3 year operating plan
Bring more sales, profits
Enhance the partnership
Management level
New budgets for new stores
Costs in expansion
MIS-spending budgets for annum
DSS-contract cost analysis
Make most of it towards the future
Keep within budgets
Sustain of business
Knowledge level
Design
KWS-engineering workstations
Keep up standards
Towards success of the company
Operational level
Enter, process orders
TPS-order process
Make sales
More sales more profit, bonus
IS Recommendations –
Strategic level – profit forecasts, sales trend forecast
Management level – sales management, sales analysis
Knowledge level – market analysis
Operational level – training & development
Ethical Issues
Climate change –
Reduced overall CO2 emissions by 16%
Waitrose are investing £55 million over five years to replace refrigeration equipment and improve efficiency
Improved shop energy efficiency by 15% in John Lewis, 19% in Waitrose
Investigated alternative, lower carbon fuels for vehicles
Founder member of the Environmental IT Leadership Team, a cross industry user group aiming to develop more sustainable IT strategies
Packaging, waste & recycling –
In 2007-08, John Lewis recycled 4, 490 tonnes of waste (39%) and Waitrose 21, 500 tonnes (49%)
Waitrose reduced carrier bag usage by 30% this year
John Lewis have introduced a number of carrier bag initiatives
Waitrose are committed to reducing packaging and are introducing recycled & recyclable materials.
In John Lewis, all new paper and card packaging uses either recycled or FSC-certified material.
Waitrose’s anaerobic digestion generates ‘ green energy’ from food waste from 5 stores
Building and operating sustainable shops-
Signed up to the BCSC Sustainability Charter
Each building project now starts with a Sustainability Action Plan
Working to identify ways to improve the sustainability impacts of the design and construction of interior fixtures and fitting
Over 90% building waste was recycled during the fit-out of John Lewis Leicester
All new Waitrose in-store graphics are made from paper or card, making them fully recyclable, and signage equipment is fully deconstructable so it can be recycled at the end of its life.
Supplier relationships
The Partnership have provided suppliers with a Responsible Sourcing Supplier Workbook to give suppliers a better insight into our Responsible Sourcing Code of Practice.
Through day-to-day contact, John Lewis’ highly trained buyers give suppliers a helping hand in meeting the terms of our Responsible Sourcing Code of Practice
Sustainable products-
78% of the garden furniture FSC certified
John Lewis’ ‘ We Can Make a Difference’ promotion covered more than 600 biodegradable, organic, energy-efficient, Fairtrade, recycled and sustainable products
Waitrose stock 180 Fairtrade lines and Fairtrade sales rose by 76% in 2007
Waitrose are the only UK retailer to insist all British fruit and vegetable growers adopt the LEAF certification standard
Waitrose local and regional sourcing sales increased by 58% to £21 million in 2007-08
Improving the customer experience –
Ranked first for service in the Verdict customer satisfaction index for 2007
Focusing on reporting and sharing details of any customer complaints, so that we can learn from such feedback
All new John Lewis Partners currently receive an induction and lots of on-the-job training. This year, we are investing more in training Partners
Chairman Charlie Mayfield appointed to the UK Commission on Employment and Skills (UKCES).
Health & nutrition –
Over 1, 000 products now carry the Food Standards Agency (FSA) ‘ multiple traffic light’ labelling on their packaging, and all recipe cards and publications carry key nutritional information per serving.
‘ Waitrose Education’ invests approximately £400, 000 a year educating young people about nutrition and food.
The online Nutrition Advice Service provides customers and health. professionals with help and advice on a wide range of food issues
Supporting our communities-
Partnership’s contribution to charities and communities in 2007-08 was £6. 2 million.
All Waitrose shops support local charities and community groups nominated by customers through its new Community Matters scheme.
Partners have raised £138, 000 for Wallace and Gromit’s Children’s Foundation, this year’s John Lewis Charity of the Year.
Waitrose Partners donated 4, 221 hours and John Lewis Partners 22, 500 through the Golden Jubilee Trust scheme.