How well does John Lewis motivate its employees?
The Head Manager of the John Lewis believes that ‘partners’ are the most important element which leads to the success of the John Lewis. It also believes only people can lead to the expansion of the market share too. Therefore, apart from the salaries they have had; every March, all permanent partners receive a special cash bonus on a democratic basis that everyone receives the same percentage of salary. That is to motivate them as recognition of contribution towards the company. The Head Manager of John Lewis believes that only people can make a difference to the company, without people, nothing can be done. So, the company emphasizes on highly motivated their employees. It provides excellent fringe benefits to its employees such as free life assurance, non- contributory pensions, shopping discounts on all department store lines and most of the Waitrose lines. Moreover, nearly all the permanent employees receive around 4 weeks holidays start from the first year they work in John Lewis.
Herzberg’s motivation-hygiene theory concentrated on satisfaction on work. According to Herzberg, certain factors tend to lead to job satisfaction; they were called motivators, while other factors giving rises to dissatisfaction were called hygiene factors. Some examples of motivation factors are recognition, responsibility, achievement etc. and some examples of the hygiene factors are company policy, salary and working conditions. Herzberg points out that hygiene factors can only serve to prevent dissatisfaction, but the motivators can create real job satisfaction to the employees. It seems that the motivated employees in John Lewis can be best described by the Herzberg’s theory, since the working environment is excellent; all employees receive fair salaries and fringe benefits from the company. These are known as the hygiene factors of the Herzberg’s theory. Moreover, apart form the part- time workers, there is a chance to promote to a senior position in the company, that’s the recognition in the motivation factors; all workers can receive a certain degree of decision making power according to their positions, this is known as the ‘responsibility’ in the motivation factors which leads to job satisfaction.
The company cares about its employees a lot, not only on the financial incentives, but it also places so much emphasize on supporting a range and wide interests. For the education, it provides many vocational courses for the partners to join in order to enhance their personal skills. Recreationally, it has a partnership club in which all partners can join in activities like golfing, trout fishing, tennis, swimming etc. Therefore, it is strongly believes that efficient communication with the employees as well as highly motivated them can make a success to the company as all employees are willing to take part in the business and make a contribution to it.
Communication with the customers
According to the Q&A with the manager, the company usually communicates with its customers through the monthly statement by the account card for the customers. Moreover, there are many shopping guides which are available for the customers to take one in any John Lewis department stores.
What are John Lewis’ competitive advantages in the retail business?
Based on the information provided by the John Lewis Merchandise Manager in Kingston:
According to the interview with the Merchandise Manager of John Lewis, the success of John Lewis is due to the good services provided to the customers, well-motivated employees, as well as the honesty of the company since it carries out the ‘Never Knowingly Undersold’ policy. John Lewis has a well establish reputation, the company also makes its own products like bed linens and fabrics, and therefore, the company can sell its products to the customers at a reasonable price. Moreover, John Lewis also produces innovative products by its own brand name in the beginning of each season. Porter (1990) says that ‘a firm can create competitive advantage by perceiving or discovering new and better ways to compete in an industry and bring them to market, which is ultimately an act of innovation’.
Based on the information obtained from the brochures and leaflets of John Lewis
- ‘Never Knowingly Undersold’
It means if any customer can buy the product more cheaply in any shop that you have just bought in John Lewis, they will refund the difference to the customers. This policy even applies when other competitors are during the sale periods.
According to Kotler (1996), ‘An advantage over competitors is gained by offering consumers greater value, either through lower prices or by providing more benefits than justify higher prices’. It believes that John Lewis is the first company that carries out the ‘Never Knowingly Undersold’ policy in the United Kingdom in order to screen out the other competitors.
That’s the main reason why they can retain the existing customers as well as the reputation, besides; this can also enhance customers’ confidence towards the company.
-‘Professional advice’
The staff of the John Lewis are all professional, they will not ‘hard sell’ their company’s product, instead they will just provide helpful and honest information on the products only because they don’t want to dissatisfy their customers. They don’t want the customers to go away and thus, they want all customers to come for the second time.
-‘Excellent shopping environment’
The clean shopping environment provided by the John Lewis Company enable the customers to have a comfortable environment when buying things and have no pressure to buy.
-‘Free extended guarantees on electronic appliances’
Besides, in order to enhance the customers’ confidence on John Lewis products, they have set up the free extended guarantees on most of the electronic goods such as television, DVD players, personal computers etc. Most of the guarantees are 2 years or more, if your product has breakdown while in normal use, they will arrange the repair free of charge. According to Cole (1996), it suggests that nowadays customers are buying the benefits of a product, rather than the features of the products. As John Lewis offers extended guarantees on the electronic appliances, based on the result of the customer questionnaires on 30 general public people, 41% of the interviewees buy electronic appliances in John Lewis, it contributes to the largest number of consumers when compare to other kind of products in John Lewis. This is one of the strategies to remain the high reputation and to kick out its competitors.
What are the negatives aspects on John Lewis?
According to the interview with the manager, people often buy the home wares instead of the clothes. This is due to insufficient range of clothes for people to choose (especially for the young consumers); for example, people prefer to go to Marks and Spencer to buy the fashion clothes rather than go to John Lewis. The manager said there is a big problem in the fashion retailing. He said John Lewis is famous for the home wares but not the fashion.
Secondly, according to the Q&A with the manager, the electronic products in John Lewis are often out of stock, this is due to the insufficient supply from the suppliers. He has received a large amount of complaints from the customers due to this problem.
Thirdly, when compare to other retail companies such as Bentall Centre, Debenhams, and Marks and Spencer, their opening hours are longer than John Lewis ,especially on Thursday, in which all other companies close at 9p.m. on that day, but John Lewis close at 8p.m.
Lastly, the company believes that since John Lewis has a good reputation over a century already, it is not necessary to put a great emphasis on advertisement; it believes that ‘word of mouth’ is more important. However, according to Cole (1996), advertisement can encourage potential customers to buy the products as well as maintain loyalty of existing customers. As a result, it seems that John Lewis can further encourage more new customers if it places more advertisement on the mass media such as TV, radio and magazines.
Analysis from the information obtained
Based on the questionnaires obtained from the customers, 37% feel excellent on the products they buy in John Lewis; 63% feel satisfied with what they buy. 67% of the interviewees say that the products are reasonably priced; the others think that the products are too expensive. About the customer services, 77% of the interviewees think that there are enough tills open when customers want to purchase things and 80% of them say that there is enough staff available when they need help.
Secondly, according to the customer questionnaires, most of the people (41%) buy electronic products in John Lewis, followed by 23% of people who buy kitchen wares and sports equipment;10% of the people would buy the toys in John Lewis and there is only 3% of the people who have bought clothes in John Lewis.
Thirdly, 40% of the interviewees go to John Lewis because there are a large variety of products for them to choose, 23% of the interviewees go to John Lewis because it has a good reputation, 20% of them say that the customers services are good and 17% of them go to John Lewis due to its good availability in location.
On substitution, 37%of the interviewees say they will not look elsewhere for similar products; 27% will go to Bentall Centre to look for substitution; 20% of the interviewees will go to Marks and Spencer and 10% of them will go to Debenhams, the remaining percentage either go to Dixons and Heals.
Lastly, according to the result of the customer questionnaires which are based on 30 people, there are quite a lot of things that John Lewis need to improve; 17% of the interviewees say that the variety of food in the cafeteria is not enough, the problem in fashion clothing also contribute to the same percentage; 10% of them say that there is not enough advertisement for John Lewis, 10% of the interviewees think that the opening hours of John Lewis should be prolonged; there is also 10% of the people believe that John Lewis should carry a price cut too. The remaining 37% have no ideas on this question.
From the questionnaires, it can be seen that most of the people don’t like to buy clothes in John Lewis, and the reason they go to John Lewis is because it has a well- known reputation and variety of products. Moreover, 63% of the interviewees will go to other companies and look for substitution, which means John Lewis still need to get improvement in order to expand its market share.
How can John Lewis maintain its market share?
According to the interview with the manager, the manager said that it is necessary to identify which products can contribute to a good profit, eventually; the company will concentrate on producing or improving the quality of that product and sell it such as bed linen is the best selling items in John Lewis, the company will concentrate on improving its qualities rather than the qualities of the clothing.
Besides the retail shops all through the United Kingdom, they also carry out the online shopping recently (). It is a very convenient web site; thousands of products are available to buy in this web site by using most of the credit and debit cards. They also offer free delivery services to the customers too. I have also tried to buy some gifts for my friends by using this web site, the procedures are very clear and easy to understand, the company provides the instruction menu leaflets on how to use this online shopping web site which you can get it from every floor of the John Lewis department stores; so that the customers can still buy their products after they have gone home.
According to the interview with the Merchandise Manager of John Lewis department store, the company tends to expand and set up more department stores in the near future.
Conclusion
Based on the information obtained, it seems that John Lewis Partnership is one of the most successful company in the United Kingdom, its well motivated partners as well as the competitive pricing scheme makes the company has a sales increased by 6% to 2.3.bn this year when compared to the year 2002. It’s ‘Never Knowingly Undersold’ policy and the excellent shopping environment makes John Lewis still be competitive in the market. However, as there are more companies entering the market, John Lewis should diversify its product lines in order to be competitive, it also needs to upgrade the standard of the fashion retailing so as to kick out the competitors like Marks and Spencer in which its fashion retailing is more favourable than John Lewis.
Moreover, it seems that the advertisement for John Lewis is not enough, in order to maintain the market share and increase the reputation; it suggests that John Lewis should put more emphasis on advertising, or it can use sponsorship like Vodafone sponsor David Beckham to use its new phones, it can increases the publicity and enhances sales too.
Finally, 22 out of 27 John Lewis department stores are opened 6 days a week only, and by the end of the year, 8 of the department stores will be open 7 days a week. It believes that John Lewis should prolong the opening times of all department stores, but not just only 8 stores; since other companies like Bentall Centre, Debenhams, Marks and Spencer, all of them open 7 days a week and late until 9p.m. on Thursday.
