John Lewis Case Study

1689 Words7 Pages
History of the company The John Lewis Partnership is a company that operates the John Lewis department store, Waitrose supermarkets and numerous other services such as banks and resale businesses. The company is owned by a trust in the name of all its employees, who have a voice on the business strategy and receive a slice of the annual profits. The JPL group is the third largest non-traded group in the UK. The company has its origins in London in 1864 with a small silk, wool and sewing shop opened by John Lewis in Oxford Street. His sales philosophy was to buy good quality goods and then resell them at a very competitive price. Soon the store expanded, he rented the adjoining rooms and later also in Holles Street; also expanding the range…show more content…
In fact, Spedan considered the happiness of the employees and the alignment of their goals with those of the company, the strategic weapon for a prolific company. His idea of repaying employees with company actions, making them the "partner" of the company, and sharing dividends with them was also the first step towards success. Other improvements to the condition of the staff were: set up a third week of paid vacations, provide the dormitories of employees above the store of hot and cold running water, and in 1918 began publishing newspaper every two weeks informing the staff of how the business was proceeding. In 1919 he set up a worker’s council, whose first decision was to pay salaries weekly instead of monthly. Attention to employee welfare is still very important nowadays, to the point of being one of the strategic points on which the company is based. Fostering a better working environment means better employee performance and therefore better pay. The increase in productivity is directly proportional to the sales and therefore to the profits per employee, which, obtaining greater satisfactions from the work, contribute more intensely in their role. The "partners" then receive a salary higher than the market because they are more committed than the market performance. Lately, due to a period of company crisis, employees have seen, for the…show more content…
Moreover, in October 2010 the company obtained the recognition of the best website, thus beating Marks & Spencer. The image of the chain is high-end and attracts more mid-high-end buyers. In any case, JLP has recently decided to expand the categories of customers served, introducing the "Value" product range to John Lewis and the "Essential" range of products at Waitrose, thus increasing the business. Another strategic market move by JLP was to supply the Ocado web supermarket (currently one of the largest online supermarkets) of Waitrose branded food products and John Lewis branded non-food products. Despite the efforts to increase profits in recent years, sales have fallen. In order to cope with this, the company had to cut the staff's annual bonus for the fifth year in a row, making it reach the lowest level in the last 64 years. The company ruled that this year their 85,000 workers would share a £ 74m bonus, equivalent to 5% of the current pay. Bonuses equally divided between all partners, from the leading executive to the cashier, all receive the same bonus. Sir Charlie Mayfield, JPL chairman, said this was a "challenging year". The profit of the company in fact in the last year has dropped by 77% reaching to be of 103.9m. The main cause of this collapse is due to the payment of one-time charges to cover redundancy and restructuring
Open Document