Swot Analysis Of John Lewis

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John Lewis is a well-known high-quality chain of department stores, with 43 shops established throughout Great Britain. John Lewis employ 90,000 staff members, who are all also partners within the company. At the end of every financial year all workers are entitled to a ‘bonus’ which is a percentage of the company’s annual gross sales. Globalization has allowed John Lewis to offer international shopping and deliveries of a limited amount of small products to 33 countries across the world. Brazil is one country that is missing from the list. As brazil has a population of 201.03 million people, which is more than 3 times more than the UK population which currently stands at 63.9million. John Lewis could benefit widely by gaining such a large…show more content…
Brazil stands in the 17th position for being the country with the greatest inequality. The GDP of the country is high at $2.2 trillion, but it’s not distributed fairly amongst the population, therefore the rich are getting richer but the poor are getting poorer. In 2002 the richest 20% of the population received 30 times more wages than the poorest 20% of the population . Since 2002 the level of inequality has decreased from 60.7 Gini to 51.9 Gini in 2013. (Gini is the index of the distribution of income among individuals of the population within an economy) . John Lewis must be careful as to where they would establish themselves within the financially divided economy of Brazil. Another economic issue for John Lewis is that Brazil has a very high interest rate of 11.25% , this means that the people of Brazil can’t easily take out loans from the bank as the repayments they would face would be too expensive for them to pay back. Compared to the UK’s interest rate of 0.5%, Brazil’s high 11.25% could attract foreign investors as they stop investing in their low interest countries and invest in Brazil to get larger…show more content…
The same goes in Brazil, where the VAT rate is 19%, which is close enough to the UK rate, therefore John Lewis won’t have to drastically adjust the pricing in the developing country. The Brazilian currency is much weaker than the British Pound, £1:R$4.08 (17th Nov, 2014) meaning that the products should be more costly in Brazil, but because of the low running cost (wages, rent, utilities) they can be lowered. Wages in Brazil are relatively low, especially compared to the wages in the UK. £6.50 is the minimum hourly wage in the UK, whilst the Brazilians work out their minimum wage on a monthly basis, which is R$724. Based on the Brazilians working 8 hours every day their hourly wage would be R$3.23 per hour which is £0.80. John Lewis would benefit largely from establishing themselves in the Brazilian market, as a result of the wages being lower in Brazil, the staffing cost for John Lewis would also be lower. By establishing themselves in Brazil, they could manufacture much cheaper as some goods are cheaper in Brazil e.g. utilities (water, electricity), fuel . Transporting goods would be cheaper because the main sectors of Brazil’s economy are oil and electric power . Unemployment in Brazil has decreased from 5.2% to 4.9% which means that there are currently 9.9 million people who are jobless in Brazil at the moment
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