international marketing

ae2- Final Report

Executive summary
This report follows on from the international marketing proposal suggesting a transnational
expansion of John Lewis PLC into the international market of Kuwait; operating within the
department store subsector and online.

The proposal has been developed through a detailed analysis of the market, the
organisation and its resources using models including a PESTEL analysis, SWOT analysis,
positioning matrix and Porters Diamond model. These models illustrate the competitive
strengths of both the market and the organisation. John Lewis resources and competencies
have also been identified in order to determine whether the organisation can obtain a
competitive advantage in the new market.

Continuous urbanisation and the increasing development of shopping malls have greatly
supported the growth of the retail sector in Kuwait, with 29 international retailers entering the
market in 2008. The risks organisations need to consider when operating an international
strategy have also been identified namely political, commercial and economic risks.

It has been determined that John Lewis will enter the Kuwaiti retail market by means of
franchising. To do this several strategies, SMART objectives and key actions and issues
have been confirmed, identifying how suitable, feasible and acceptable the expansion is.
This has been done by the development of the 5Cs model, the SAFe criteria, TOWS
evaluation and a balanced scorecard. Performance indicators have also been suggested in
order for the company to determine how successful the expansion has been.

The report also discusses the development approach in which the four key elements of the
marketing mix have also been developed to suit the expansion. The strategy will implement
a standardised but adapted product range and take a market oriented approach to pricing.
Moreover, John Lewis will utilise both ATL and BTL methods of marketing, including
television and social media to promote the franchise.

By: Amanda
Dankwa
Contents
Strategic analysis of the organization....................................................................3
Environmental analysis........................................................................................... 3
PESTLE Analysis............................................................................................... 3
Competitor Analysis............................................................................................ 4
Porters 5 forces............................................................................................... 5
Analysis of the Risks........................................................................................... 6
Resources and competence analysis........................................................................7
Porters Diamond Model...................................................................................... 7
Resource Mapping.............................................................................................. 9
SWOT analysis................................................................................................. 9
Strategic Choices.................................................................................................... 11
Internationalisation Strategy..................................................................................11
Entry Mode Strategy......................................................................................... 12
International Marketing Strategic Plan.....................................................................14
Strategic Objectives.......................................................................................... 14
Strategic Choice............................................................................................... 14
Segmentation targeting and positioning................................................................14
Key Actions...................................................................................................... 15
Implementation................................................................................................. 17
The 5 Cs of strategy execution...........................................................................18
Issues with implementation................................................................................ 19
Evaluation....................................................................................................... 19
Balanced scorecard....................................................................................... 20
Development Approach............................................................................................ 22
Product............................................................................................................. 22
Price................................................................................................................. 22
Place................................................................................................................. 23
Promotion......................................................................................................... 24
Message Strategy.......................................................................................... 24
Mixed media communication strategy...........................................................24
Conclusion........................................................................................................... 25
References........................................................................................................... 26
Appendix (if required).......................................................................................... 26
 Strategic analysis of the organization

Environmental analysis
PESTLE Analysis
The framework of a PESTEL analysis is an incremental tool to determine factors that can
impact an organisation in its macro environment. The table below depicts the opportunities
and threats John Lewis could face entering the international market of Kuwait.

POLITICAL

There have been investments in the public sectors including retail as a means to
reduce Kuwaits reliance of oil based income. Continuous urbanisation with the general
infrastructure of the country and the increasing development of shopping malls have
greatly supported the growth of the retail sector. (Oxford Business Group, 2016)
Agreements between the UK and Kuwait have doubled bilateral trade between the two
countries between 2015 and 2017. This means importing and exporting can be efficient
for John Lewis. (Gov.uk, 2017)
Kuwait is the most liberal country in the Gulf, which often appeals to international
retailers entering the market, including John Lewis.
Its pro- western stance however has created persistent tension between the ruling Al-
Sabar family and the opposition. This has in the past slowed down agreements on
budgets and big ticket commercial agreements; with the potential to disrupt the ongoing
growth in the retail industry. (BBC News, 2017)

ECONOMIC

Kuwait's oil-dependent economy is facing a notable slowdown, following a recent drop

in global oil prices. Asset growth in Kuwait's banking sector is projected to remain
subdued according to a report by BMI. This is negatively affecting business and
consumer confidence levels, forcing households to re-allocate their spending priorities
on essential goods and services. (Arabian Business, 2017).
Due to high spending power of the population, this will potentially have little impact on
the retail industry.

Public-private projects worth $27bn have been issued as of march 2015, to improve
infrastructure across a number of sectors and deepen the countrys economic growth
potential, especially outside the oil sector. (Trade Arabia, 2016).
Improvements in the roads, ports and general infrastructure will make for efficient
logistics for the organisation.

SOCIAL

Kuwait boasts one of the highest standards of living in the world with a GDP of $44,000
and is home to a high population of high net worth individuals. (International Monetary
Fund, 2015)
High spending power and disposable income is important to all the players in the retail
industry including John Lewis.
The demographics of Kuwait is another factor likely to benefit Kuwaits retailers with the
 population expected to grow by CAGR of 2.8% between 2015 and 2020. (Euromonitor,
2015).
The growth of demand in the retail sector is largely influenced by Kuwaits youth
population, who in 2010 accounted to 60% of the population and was projected to grow
annually by 3%. (Rotabi, 2010).
TECHNOLOGICAL

Kuwait has one of the largest shipping industries in the Persian gulf. This is beneficial
to the retail industry as well as John Lewis as importing and exporting is easier.
(Arabian Business, 2015).
Technology is relatively under developed in the Gulf region; however with an internet
penetration rate of 80%, there is a substantial market for online retailers.
John Lewiss online store will appeal to Kuwaits young and tech savvy consumers
because it is easy and convenient.
ENVIRONMENTAL

The transaction shares of the commercial real estate sector total had nearly doubled by
the end of 2014, from around 10% of total sales in the fourth quarter of 2013 to 22% for
2014. (OBG, 2014).
The availability of retail space in Kuwait has increased drastically in recent years due to
increasing development and investment in the retail space pipeline by the government.
Being green by means including recycling is not a priority in Kuwait (Kuwait Times,
2017). John Lewis however pledge to sustainable materials and methods wherever
possible.
LEGAL

Companies and partnerships in Kuwait must generally be at least 51% owned by

Kuwaitis. 100% foreign investment is however permitted for companies established for
the purpose of direct investment and countries in the Kuwait Free Trade Zone. (Baker
Tilly International, 2016.)
According to Kuwaiti Commercial Law 68 of 1980, it is against the law for a foreign
company to establish a branch or do any commercial activity in the country, without
going through local agent or distributor. (GCC Legal, 1980). This is a small barrier for
an organisation as established as John Lewis.
John Lewis must also adhere to various Kuwaiti employment regulations including a 48
hour work week, monthly or biweekly salaries and eight holidays a year where an
employee is entitled to with full payment including one day on Ascension Day, two days
for Eid Al-fitr and two days for Eid Al-adha. (Kuwait Labour Law, 2017).

Competitor Analysis
A variety of both international and domestic brands account for the booming and lucrative
retail industry of Kuwait. In the sub segment of department stores, domestic brands include
The Lulu Centre, Al-Mutawa and Al-Khatib Retail Co, Al Ostura and Co-op society stores; set
up by the Kuwaiti government and account for 70% of retail trade in the country. (Trade
Arabia, 2015).

Rivalry is a strong in the sector due to a strong consumer demand of premium or middle
market goods, indicating global competitive success. There is high new entrant potential in
the sector with domestic rivalry resulting in the need for international markets. The growing
demand for a quality international retail experience has been acknowledged by competitors
in John Lewis home market including Debenhams, Marks and Spencer and Harvey Nichols.
American Luxury department store Bloomingdales also announced entry into Kuwait as part
of a strategic partnership with Al Tayer Group LLC (due to cultural differences between USA
and the Middle East) by the end of 2017. (Luxury daily, 2016).
The perceptual map below depicts John Lewis prospective and current competitors, placed
based on Price and Quality determining how premium the brands are perceived overall.

Porters 5 forces
The table below summarises the competition in Kuwait in reference to Michael porters 5
forces of competition.

Threat of Threat of Supplier Buyer Competitive

 new entry substitutes power power rivalry

MEDIUM MEDIUM MEDIUM HIGH HIGH

Even though Competitors in John has a There is a There are lot
gaining john Lewis well- high demand of direct and
market share home market functioning for luxury and indirect
can be such as supply chain premium competitors in
difficult, new Debenhams made up of goods in the the Kuwaiti
entrant and marks and domestic Kuwaiti retail retail market
potential is spencers have and market
high due to entered the international
high demand. market suppliers

Analysis of the Risks

In international marketing, it is important to determine the risks unique to a country before
entering the market; a fundamental step in building and monitoring an international portfolio.
Global Edge Insights gives Kuwait a Low to Acceptable risk with a rating of A3. Changes in
the volatile political and economic environment can give rise to occasional difficulties for
organisations with corporate default probability acceptable on average. (Global Edge
Insights, 2017)
Analysis of the economic, business/commercial and political climate of Kuwait is vital to
prevent an unexpected loss of investment for the organisation.

Economic Risk

Generally, Kuwait is said to be well protected from the global economic crisis, however
a recent significant drop in oil prices saw the countrys first budget deficit in 15 years.
(Gov.uk, 2017)
Asset growth in Kuwait's banking sector is projected to remain subdued. (BMI, 2016)
This is said to negatively affect business and consumer confidence levels, forcing
households to re-allocate their spending priorities on essential goods and services.
(Arabian Business, 2017)
Risk level- LOW
The Kuwaiti Dinar is the highest rated currency in the world, meaning there is a currency
risk due to the falling value of the sterling. Managing foreign currency can be difficult due
to fluctuating exchange rates. This has the potential to affects cost of production or net
profits. Risk level- HIGH

Political Risk

Kuwaits turbulent political scene has little impact on doing business in Kuwait however
political disputes have slowed down decisions on big ticket contracts and commercial
agreements. This can potentially affect the ongoing development of the retail industry
Risk level- LOW
Bribery and corruption is an issue in Kuwait with a Transparency CPI Score of 41, despite
being illegal. A British company can be liable for the conduct of a person who is neither a UK
national nor a body incorporated formed in the UK; with current cases in Kuwait of British
companies under investigation for irregularities in relation to gaining contracts in Kuwait.
(Gov.uk, 2017).
John Lewis needs to conduct extensive research to identify suitable and trustworthy
sponsors/ partners for initial entry into the market.
Risk level- MEDIUM

Commercial Risk

Kuwaits Business and competitive climate can be improved, being ranked 104th out of 189
by the World Bank. The private sector in Kuwait is largely dependent on expatriate labour
and government spending, which amid dropping oil prices and a decrease in government
expenditure has led to a relatively weak business environment. (Gov.uk)
Risk level- LOW
The decrease in government expenditure and subsidies gives unionised Kuwaitis the right to
strike. This right however is not extended to expatriate workers, who comprise of a majority
of the work force. (Kuwait Labour Law, 2016).
Risk level- LOW

Resources and competence analysis

Resource analysis is a strategic planning tool that takes into account the resources required
by an organisation to implement its strategies and the competences required to effectively
use said resources. ((Doole and Lowe, 2014).

Porters Diamond Model

Used as part of the strategic planning process, the four sectors of Michael Porters diamond
of national advantage, as listed below, explain how industries become competitive in
particular countries and why they outperform others. (Porter, 1990)

- Factor endowments relates to countries availability of skills and resources.

- Demand conditions relates to nature of the demand in the market of the chosen country.

- Related and supporting industries are in reference to the presence, absence and quality
of industries that will enable the organisation to manage inputs more effectively

- Firm strategy, structure, and rivalry relates to the conditions in the countrys governing of
how companies created, organised and managed; and the rivalry between them.

The figure below shows the four sectors as listed above, in relation to Kuwait and John
Lewis.
 Firm Strategy, Structure and Rivalry:

John Lewis business model of shared ownership is in

diametric opposition to the way organisations operate in
Kuwait, with a PDI score of 90. (Hofstede, 2017).

There is high new entrant potential in the sector with

domestic rivalry resulting in the need for international
Factor Endowments markets. Demand Conditions

Kuwait is located in proximity to other gulf markets, and attracts

millions of affluent shoppers a year from neighbouring countries.
There
English is widely spoken in Kuwait, which benefits as a barrier to entry for international markets
international Thehowever
retail industry in Kuwait has seen a significant amount of
retailers including John Lewis. (Gov.uk) as Kuwaits Commercial Law 68 of 1980 prohibits growth with retail sales projected grow by 6% annually
international businesses from operating without an agent.to 2020 despite a back drop low oil prices. (Arabian
through
(GCC Legal, 1980). Business, 2015).

The government has announced an investment of 71 billion on

infrastructure projects, and recent investments in the retail
pipeline contributed to the country being the highest Middle This demand is fuelled by the wealthy and youth market, with
Eastern country on the retail development index. (A.T. Kearney, a GDP of $44,000 per capita and half of the Kuwaiti
2016). population under the age of 25. (Gov.UK).
Related and supporting industries

Kuwait has one of the largest shipping industries in the

Persian Gulf. This benefits John Lewis because
Kuwait has a strong workforce made up of mostly expatriates, According
importing and exporting will be easier allowing for to an article by the Kuwaiti Times, Kuwaitis and
who account for 70% of the total population. (Al Than, 2017)
more efficient distribution. (BMI, 2016) expatriates alike looking for a quality international retail
experience, and will be intrigued by John Lewiss classic
British heritage. (Kuwait Times, 2016).

Kuwaits population is set to increase from 4 million Government

to 5.40 In 2008 alone, 29 international retailers entered the Kuwaiti
Investments in the retail space pipeline
million by 2029, with an annual growth of 3% in thehas seen a 22% increase of transaction sharesmarket.
youth in the (Rotabi S, 2010).
segment. (Euromonitor, 2015.) commercial real estate sector. (OBG, 2014).
Resource Mapping
The strategic capability of an organisation is largely dependent on a combination of its
threshold and unique resources. Threshold resources are the minimum necessary
resources required for an organisation to operate in a given market. Unique resources are
the resources an organisation has that will give them a competitive advantage in the market.
These resources are difficult for competitors to obtain or imitate. (Johnson et al, 2008).

The table below shows the originations recourses and competencies, vital in assisting the
organisation to achieving a competitive advantage in order to compete in the Kuwait market.

Threshold Resources Unique Resources

- John Lewis has the financial capital to - The John Lewis brand reputation as a
support the organisations operations strong British brand

- A well-functioning supply chain - Strong relationship with its suppliers

- Large production capability - Innovation and dedication to responding to

- Human resources shopping habits

Threshold Competences Core competencies

- John Lewis organisational culture - A vision of long term sustainability

SWOT analysis
The table below is a SWOT analysis that depicts the strength and weaknesses of John
Lewis and the threats and opportunities the organisation could face in reference to entry of
the international market of Kuwait

Strengths Weaknesses

John Lewis has a strong British brand and will
appeal to the liberal mind-set of consumers in
Kuwait.
The organisation specialises in premium retail and
will cater to the shopping habits of consumers.
John Lewis is diversifying its target market to cater
to men and a younger demographic. (Retail week,
2012).
John Lewis currently operates only in its
home market and has no experience
internationally. Initial entry to a new
market can be difficult. (Doole and Lowe,
2014).
John Lewis runs a risk on failure in new
markets due to massive cultural
differences between the UK and Kuwait.
(Hofstede 2017). See appendix 1.

Strong relationship with its suppliers. (John Lewis,

2017).

Innovation and dedication to responding to

shopping habits. (John Lewis, 2017).
 Opportunities Threats
60% of Kuwaits population is under the age of 25, Competitors from the home market such
and is rising at 3% annually, driving the need for as Marks and Spencer, Harvey Nichols
high end retail. (Rotabi, 2010). and Debenhams are well established in
Kuwait.
There have been increasing investments in
infrastructure and the retail space pipeline in Lack of experience in the complicated
Kuwait. (Arabian Business, 2016). Middle Eastern market.
Domestic rivalry in the Kuwaiti retail sector has Kuwaiti Commercial Law 68 of 1980
created a demand for international brands. prevents business operations from
(Arabian Business, 2015). international brands without an agent.
(GCC Legal, 1980).
Conclusions
John Lewis currently operate only within its home market with no international experience. Due
to massive cultural differences, extensive research will need to be carried out to navigate in the
complicated yet valued market of the Middle East. The Kuwaiti legislation (Law 68) forbidding
foreign companies from operating without assistance from a local agent or distributors seems to
benefit the organisation in this case, due to lack of knowledge and experience within the region.
(Doole and Lowe, 2014).

John Lewis specialises in premium retail and will appeal to the shopping habits of the Kuwaiti
population, who are continuously seeking a quality international retail experience. The
organisations bid to secure a higher percentage of younger consumers by constantly launching
new products aimed at the demographic will prove beneficial in entry into the Kuwaiti market.
The rise of the retail industry has been fuelled by the strong demand from the growing youth
market, who accounted for 60% of the population in 2010. The retail sector in Kuwait is
expected to be positively influenced by the overall demographical trend, with the population
expected to increase from 4 million to 5.40 million by 2029. (Euromonitor, 2015).
Strategic Choices
Internationalisation Strategy
Internationalisation covers all marketing activities coordinated by an organisation that aims
to direct the flow of its goods and services to consumers or users in more than one nation
for a profit. (Cateora et al, 2000).

This can take many forms including exporting, licencing, franchising and strategic alliances;
which can all pose varying degrees of risks to an organisation. An internationalisation
strategy is required when an organisation aims to expand across national boundaries
beyond its domestic market. (Brassington and Pettitt, 2006).

The figure below shows the four main internationalisation strategies positioned based on the
degree of pressure to lower costs and pressure for local adaptation.

John Lewis currently only operate in its home market; however the suggested strategy for
internationalisation is a transnational strategy. This means that overall, John Lewis can offer
a standardised product range as detailed customisation will not be necessary; due to the
liberal mind set of Kuwaiti consumers; allowing the benefits from economies of scale.
Additions or amendments however to the product range can be made to cater to the unique
needs and trends of the Kuwaiti market.

This strategy will also enable the organisation to adapt its practises due to opposing cultural
differences, to stay in line with local condition in the country. (Swart, 2012)

The business model of shared ownership for John Lewis for example cannot be replicated in
Kuwait as with a power distance score of 90, companies in Kuwait typically have a strict
hierarchical system. (Hofstede, 2017).
The basis of a transnational strategy as defined by Stonehouse is a global vision but with
customised implementations for local markets and regions. (2010)

The table below shows advantages and disadvantages of a transnational strategy.

Advantages Disadvantages

John Lewis can benefit from the
economies of scale
The organisation can adapt its policies
to the Kuwaiti market
The organisation is able to increase
knowledge flows and learning
Overall, standardisation poses a risk of
failure due to contrasting cultural
differences between westernised and
non-westernised markets.
There must be a balance between the
local and global goals for the
organisation.

There will be an increased Unique managerial challenges in

employment rate in the host country fostering knowledge transfer

Entry Mode Strategy

An entry mode strategy are the channels organisations employ to gain entry in an
international market. The chosen mode of entry can have a significant impact on the
organisations performance in the chosen country, with each strategy presenting varying
degrees of risk, levels of control, commitment of resources and return on investment.
(McDonald et.al, 2002)

The figure below shows the different types of entry strategies placed based on the extent of
investment and risk and the degree of ownership and control.
Exporting is a low risk, low control; but flexible mode of entry into an international market.
Trade agreements between Kuwait and the UK has seen an increase of bilateral trade from
2 billion to 4 billion in the last two years. (Gov.uk, 2017).

Licencing, another low risk, low control mode is entry is when a contractual agreement is
made between two companies allowing the foreign firm the right to use a patent or registered
brand, a royalty, trade secret or to manufacture the proprietors products. (Doole and Lowe,
2015).

Due to cultural differences and legislations in the Kuwaiti corporate law, John Lewis will need
to form a business relationship with a seasoned player in the Kuwaiti retail industry; in order
to have physical operations in the Kuwaiti market. The American department store
Bloomingdales aims to enter into the Kuwaiti market in 2017 with a strategic alliance with Al
Tayer Group LLC. ( Al Tayer Group, 2016).

A strategic alliance is an agreement between two or more parties to pursue a set objective
whilst maintaining independent organisations whereas a joint venture is when two
companies invest into a third jointly owned company sharing technology, information and
risk. (Barlett, 2008).

Alternatively, the competitors in John Lewis home market namely Marks and Spencers and
Debenhams have gained entry into the Kuwaiti market by means of franchising; the chosen
entry mode.

Franchising is when semi-independent business owners (franchisees) pay royalties to a

parent company (franchisor) in return to sell its products and services and identified with its
trademark. (Scarborough, 2008).

John Lewis has no experience with the complexity of Middle Eastern practices, therefore the
core benefit of franchising is an expansion overseas with minimal investment and minimal
risk. The franchisee will be a current player of the Kuwaiti retail industry and will be well
versed in Kuwaiti law and policies, enabling John Lewis to gain valuable knowledge and
avoid common mistakes. Franchising is often more consistent with multi-domestic strategies
and is considered as one of the fastest-growing entry mode strategies (Cateora and
Graham, 2005; Alon, 2006).

The organisation can offer stock, training and advise however the franchisee will hold all
risks of failure. (Bennet and Blythe, 2002).
The table below shows advantages and disadvantages of franchising.

Advantages Disadvantages

Well selected franchisees will bring: It can be difficult to control the

financial investment and
managerial capabilities
knowledge and experience of the
Kuwaiti retail industry
Franchising will be low cost as minimal
investment will be required
Foreign legislation is more accepting of
franchisees as they are legal owners of
the business
operations of a franchisee.
Maintaining John Lewis brand
image might be difficult
Conflicts and legal disputes are likely
The physical proximity of Kuwait, as
monitoring, evaluating and on-going
assistance will be required

The franchisee holds all financial risk

International Marketing Strategic Plan

Strategic Objectives
Objective 1: To recruit the most suitable and trustworthy franchisee from the Kuwaiti retail
industry by conducting extensive research by December 2017.
Objective 2: To find the most suitable location to cater to the market segment by May 2018.
Objective 3: To open the first John Lewis international franchise store in Kuwait by June
2019.

Strategic Choice
Franchising
This provides the opportunity to further open international stores, increase the return on
capital employed and gain market share within Kuwait. (Ghauri and Cateora, 2006)

Segmentation targeting and positioning

Kuwait boasts one of the highest standards of living in the world with a GDP based on
purchasing power parity of $48877.77 per capita, and is home to a high population of high
net worth individuals. With an urban population of 2.4 million, the capital; Kuwait city
accounts for almost half the population of the entire country of Kuwait. (World Bank). Its
tourist centric liberal atmosphere makes it an attractive market place for retailers and the
ideal geographic segment for a John Lewis store.
The most attractive segment to target is the youth population; as it is identifiable, sizable,
accessible, stable responsive and actionable. (Doole and Lowell, 2014).
`The organisations bid to secure a higher percentage of younger consumers domestically by
constantly launching new products aimed at the demographic will prove beneficial in entry
into the Kuwaiti market. The rise of the retail industry in the region has been fuelled by the
strong demand from the growing youth market, who accounted for 60% of the population in
2010. The retail sector in Kuwait is expected to be positively influenced by the overall
demographical trend, with the population expected to increase from 4 million to 5.40 million
by 2029. (Euromonitor, 2015).
With an internet penetration of 80% in Kuwait, there is a substantial market for online
retailers. John Lewiss online store will appeal to Kuwaits young and tech savvy consumers
because it is easy and convenient.
Despite being home to prospective competitors Debenhams and Marks & Spencer, the ideal
location for a John Lewis store in Kuwait would be The Avenues mall. Attracting over 20
million visitors a year, it is located in SoKu, (an acronym of South Kuwait) inspired by the
New York Soho, a district aimed at the hip & trendy youth visitors. The location is highly
regarded as the model place for modern shopping carrying an array of youth brands and
bringing together modern fashion, art exhibitions as well as local and international
restaurants and cafes
John Lewis is positioned with the middle market with a USP of high quality products and high
level of services amounting to its value proposition. This appeal to the shopping habits of the
Kuwaiti population, who are continuously seeking a quality international retail experience.

Key Actions

1. Recruit a franchisee

- The organisation will have to determine the most suitable franchisee through
interviews, negotiations and ultimately the signing of legal documents certifying the
franchise agreement. It is essential for both the franchisee and franchisor to create
an agreeable contract forming the business relationship (Ghauri and Cateora, 2006).

2. Set restrictions for franchisee

- It is sometimes very difficult for franchisors to control the operations of its

franchisees. It is therefore very important that restrictions are set during the
negotiation stage of the agreements, to prevent future issues that might taint John
Lewis brand image.

3. Obtain all necessary permits

- The franchisee will be mostly responsible in obtaining the necessary permits to

operate in the industry due to the complex corporate structure of Kuwait. Local
legislation positively affects franchisees as they are legal owners of the business.

4. Find suitable location

- Despite the franchisee being ultimately responsible for the location of the franchise,
John Lewis must have an input; because the location will connote certain perceptions
of the brand to the consumers.
 - The location must be appealing and easily accessible to the target segment.

5. Allocate training for franchisee

- The organisation will be responsible in training the franchisee to be able to

appropriately project and maintain the John Lewis brand appropriately in the new
market. The training and support of a franchisee is essential to ensure the success of
the venture. (Bradley, 2005).

- It is vital that the franchisee is trained on the codes, conduct and principles that make
the John Lewis brand; such as customer service.

Action priority

Complete all legal procedures to create a franchise in Kuwait.

Resources

i. HR team

ii. Financial team

iii. International franchise team

iv. Support management

v. Supplier management

vi. Head office

Success Criteria

a. Franchisee recruited

b. Opening of franchise store

Implementation
The implementation of the strategic plan will involve a number of personnel, as listed below;
whom all need to take specific action to align operations in the new direction. There must be
a lot of communication between the organisation and the franchisee in order to determine
and deadlines and clearly allocate responsibilities.

A. The owners of the organisation- The John Lewis partnership

1. Managing director/ project manager- to formalise the franchise agreement and

Create action plan including time schedule to enter the market

2. HR manager- Allocation of training for franchisee

3. Finance manager- Allocation of funds for finance activities when implementing the
international strategy (Hollensen, 2007).

4. Marketing manager- Responsible for the understanding of consumer behaviour in the

international market to create successful and effective marketing strategies (Doole
and Lowe, 2012).

B. The international franchise team

1. Legal requirements and permits needed in order to operate

2. The acquisition of a suitable location

3. An HR manager for the recruitment of staff and to ensure employment law

regulations are met. (Bennett and Blythe, 2002).

4. Warehouse and supply manager

5. Marketing manager
The 5 Cs of strategy execution
The framework of the 5 Cs of strategy execution as pictured below is a tool comprising of
five elements believed by MacLennan to enable firms to effectively execute a strategy.
(2010).

Causality- This element of strategic execution explains that organisations must undertake
certain actions to achieve its objectives in order to be strategically successful. Cause and
effect reasoning such as the recruitment of a project manager to begin to actively recruit a
franchisee is the first step for the implementation of the transnational strategy.
This act of translating conceptual objectives into concreate activities can bridge the cognitive
gap between ideas and actions that often appears in many organisations.
Criticality- Large organisations such as the John Lewis partnership undertake a large
number of activities every day, making them incredibly complex systems. The appointment
of a project manager will be vital in this execution of strategy to focus attention and
resources reducing this complexity and short term distraction. This will enable the
organisation to pay attention to key activities required to implement the strategy.
Compatibility- This element explains that all activities undertaken by an organisation to
achieve its objectives much work together in order to ensure successful execution of
strategy. The supplier manager and the franchisee must work together to be compatible
Continuity- Once again, the appointment of a project manager will ensure that strategies and
plans do not become confused or derailed when passing down through hierarchies; a
common problem with successful strategy execution. There must be coordination between
the project manager and heads of various subunits such as finance, marketing, supply,
logistics and production to ensure successful execution of strategy
Clarity- Once the organisation achieves criticality, compatibility and continuity, it has
achieved clarity. The final element of strategic executions explains that it is vital that every
member of the organisation is aware of how individual roles in the team impact the big
picture; the overall strategic objective in the organisation.

Issues with implementation

There are various commercial, economic and political risks that can ask as a barrier to the
implantation of a strategy. (Hollensen, 2007). These can be seen in the aforementioned risk
analysis. Other potential issues with implementation are as follows.
- Although overall strategy is control and managed by the John Lewis, a franchise can
choose to implement its own strategy, meaning be difficult to achieve clarity; common
issue with the implementation of franchises. The franchisee can choose to ignore
strategic decisions by the head office leading to a lack of continuity through the
organisation.
- The geographic proximity of Kuwait can mean it will be difficult and costly for effective
evaluation and monitoring of the franchisees operations. This means might be
difficult to achieve compatibility between the franchise and the organisation.
- Language barrier and glaring cultural differences between the UK and Kuwait can
create an issue in implementation due to miscommunication, meaning it can be
difficult to achieve continuity.
Evaluation: SAFe criteria
The strategy will be considered effective when its objectives are in line with John Lewis
mission, vision and stakeholder expectations. (Boundless, 2016).
Suitability, Acceptability and Feasibility need to be addressed before a strategy is considered
effective. This is known as the SAFe criteria, an acronym used to evaluate strategic
objectives. (Johnson et al, 2008).
The table below illustrates the SAFe criteria in reference to John Lewis. Aspects of this
evaluation however are outlined in different sections throughout the report.

SUITABILITY ACCEPTABILITY FEASIBILITY

Whether the Whether the expected Whether the

organisations strategies
addresses the
opportunities and
threats the organisation
faces
outcomes meet organisation is capable
shareholder expectations. of delivering the
3 Rs Risk, Returns, strategy
Reaction Focuses on: Finance,
People, Resources

John Lewis recently
expressed an interest to
operate internationally. In
reference to the
opportunities and threats
within the SWOT analysis,
organisation has the
Because John Lewis has no
international marketing
experience, the core benefit of
franchising as an entry strategy
is an international expansion
with minimal investment and
minimal risk.
John Lewis is likely to be
able to finance the strategies
as Trans-nationalisation and
franchising is relatively low
cost.
The proposed strategies are
likely to work in practice
 financial stability and
objective to implement a
franchise strategy within
Kuwait.
The return on investment is
likely to be positive thus the
reaction of stakeholders.
because the organisation
has the means, people
resources as seen in the
resource and competence
analysis.

Balanced scorecard
The balanced scorecard as pictured below is another tool that can be used to evaluate the
success of the strategy. Originated by Robert Kaplan of the Harvard business school, it can
be bused to align business activities to the vision and strategy of the organisation.
TOWS evaluation
The TOWS matrix as pictured below allows organisations to consider various strategic
options by analysing the strengths and weaknesses in the internal environment with the
threats and opportunities in the external environment. (Johnson et al, 2014).

Strengths (S) Weaknesses (W)

1. John Lewis is a strong British
brand.
2. John Lewis is diversifying its
target market to cater to men
and a younger demographic
3. Innovation and dedication to
responding to shopping
habits. (John Lewis, 2017).
1. No experience operating in the
complicated Middle Eastern
market.
2. Risk of failure due to vast
cultural differences between
the UK and Kuwait

4. Strong relationship with its

Opportunities (O)
1. Domestic rivalry in the Kuwaiti
retail sector has created a
demand for international brands
2. 60% of Kuwait population is
under the age of 25, with a rise
of 3% annually driving the
demand for high end
international brands
3. Up market retail will cater to
suppliers. ()
S1, O1: John Lewis should W1,O1: With no experience
highlight the Britishness of the operating in Kuwait or anywhere
organisation to appeal to the new else in the middle east, John Lewis
customers and differentiate will be positioned as a brand new
themselves from the competition. and exciting shopping experience
in the minds of the Kuwaiti
S2, O2: Increased focus on shoppers.
targeting the younger population
would be a great strategy to
target the majority youth
population of Kuwait.
S3, O3: The organisation should
be open to amend the generally
 Kuwaiti shopping habits
Investments in infrastructure and
retail space pipeline by the Kuwaiti
government
standardised product range to
appeal to Kuwaiti trends and
needs.
S4, O4: Distribution and logistics
will be effective.

Threats (T)
1. Competitors from the home
market such as Marks and
Spencer, Harvey Nichols and
Debenhams are well established
in Kuwait
2. Kuwaiti Commercial Law 68 of
1980 prevents business
operations from international
brands without an agent.
S1, T1 The organisation should
focus on differentiating
themselves from the competition
by highlighting the codes,
conduct and principles that make
the John Lewis brand; such as
customer service.
S3, T2: John Lewis will be able to
appropriately cater to the needs
of the Kuwaiti market with the
help of a seasoned player in the
regions retail industry.
W1, T1 John Lewis has an
opportunity to differentiate
themselves from the competition
during its entry into the market as
the organisation has no middle
eastern presence.
W1, T2 This legislation forces the
organisation to form an agreement
with a season player in the Kuwaiti
retail industry who will be well
versed in with the cultures and
customs in the region.

Development Approach
The basis of a transnational strategy as defined by Stonehouse is a global vision but with
customised implementations for local markets and regions. (2010)
This goes hand in hand with the chosen entry strategy of franchising because the franchisee
will have the local knowledge and expertise for said implementations in response to glaring
cultural differences between Kuwait and the United Kingdom. Despite a standardised
approach to the product range overall, amendments can be made to cater to local needs
and trends by building a relationship with local suppliers. John Lewis has also worked hard
to secure long term sustainable supply chains based on fair and transparent trade
conditions; by building strong relationships with their local and international suppliers. (John
Lewis)
Providing the franchisee with links to John Lewis suppliers will ensure that the organisations
ethical standards are met, maintaining john Lewis brand image.

Mission Critical Success Factors

Create successful relationship with local suppliers

To open a franchise store Franchisee to maintain on-going relationship with existing

in Kuwait suppliers
Attract and satisfy new customers
Product
The overall approach of a standardised product range will be accepted in the new market as
Kuwaitis and expatriates alike are constantly looking for a quality international retail
experience. John Lewis is a strong British brand offering a wide range of stylish and
innovative products in exceptional quality and at great prices, and will appeal to the region.
(Arabian Business, 2015).
These products can be attained by the franchisee by developing and maintain a relationship
with John Lewis current suppliers. This also means that the choice of stock can be adapted
to better suit the region. Once relationships are formed with local suppliers, amendments
can be made to cater to local trends and needs.

Price
An invention strategy would be the recommended approach to pricing in the new market as it
integrates local pricing strategies into the organisations wide strategy. (Doole and Lowe,
2012).
John Lewis is positioned with the middle market with a USP of high quality products and high
level of services amounting to its value proposition. Local factors such as a lack of value
added tax will impact the base costs set up by the organisation. () A market oriented
approach to pricing is recommended. The prices in the new market can be set to reflect the
high level of perceived quality of the organisation, the consumers ability to pay and the
competition.

Place
Entry strategy mode: Franchising

Source strategy map

Distribution channels
John Lewis acquires its raw materials and stock from both local and international suppliers.
The organisation ensures that all its suppliers use raw materials that are soured responsibly
and meets all labour standards issues. (John Lewis.)
The franchisee will be able to acquire stock directly from John Lewis suppliers and therefore
will not require capital from the organisation. This will be less costly and the organisation will
have less responsibility however there comes a caveat of even less control.
Investments in the infrastructure of Kuwait including roads and ports will make distribution
and logistics more efficient. This can then be sold on to consumers in store. With an internet
penetration rate of 80% in Kuwait, it will also be recommended that the franchisee to
capitalise on the success of John Lewis Online. The convenience of this will also appeal to
the youth segment; the prime target market in the region.

Promotion
The target region for promotion is Kuwait City; Kuwait. Due to a high expatriate population,
Arabic, as well as English are the main languages represented in promotional messages.
John Lewis should maintain the same message strategy in order to ensure a uniform
corporate identity across all the brands operations; whilst adapted to suit the region.
The summer advert for example; as opposed to Christmas in John Lewis home market is
the most significant time on the retail calendar in the Gulf States.

Message Strategy
John Lewis is positioned with a USP of high quality products and high level of customer
service amounting to its value proposition, and must be reflected as such within the
communications. It is vital that the missions, visions and values that amount to John Lewis
corporate identity, permeate through all communications. There must therefore be uniformity
between both internal and external communications to ensure that John Lewis brand image
is upheld.
The way in which they communicate this information will determine whether consumers
develop an interest or go to a competitor (Hollensen, 2011). The company has various
options within the promotional mix, which have been illustrated below in the form of above or
below the line techniques.

Mixed media communication strategy

ATL techniques stands for Above the line Marketing, and BTL stands for Below the line
Marketing. ATL techniques tend to be more of a broad target approach to target a larger
audience whereas BTL techniques tends to be a more target focused approach
(MacDougall, 2016).

ATL Techniques BTL Techniques

Television adverts Social media

Magazines Blogs/ forums
Billboards
John Lewis online

Implementation: 5 Cs
Feedback: Market research qualitative/quantitative
Analysis: Market research made from above feedback
Strategic review and alteration: Identified through market research results
New improved and effective strategy: Based on alterations if required
Identified: Potential for future improvement/expansion
Tactical Plan for Communication Strategy

Activity Resources KPI Planned Target % Timeline

required

Television Marketing, Brand recognition Increased awareness 6 months

adverts Finance by 40%

Magazines Marketing, Brand recognition Increased awareness 6 months

Finance by 10%

Billboards Marketing, Brand recognition Increased awareness 6 months

Finance by 15%

Social Marketing, High activity levels- Increased awareness 6 months

Media Technology followers, likes, by 20%
hashtags

Blogs/ Marketing, Increased Increased awareness 1 year

Forums Technology awareness by 10%
 John Lewis Marketing, Website traffic Increased awareness 6 months
Online Technology by 30%

Conclusion
In conclusion, this report considers a transnational internationalisation strategy for John
Lewis through the implementation of a franchise in Kuwait City, Kuwait. Kuwait is an
attractive marketplace for retailers being ranked the highest of amongst all Middle Eastern
countries on the Global retail development index in 2016. (A.T. Kearney).
The benefits of operating in Kuwait are illustrated within the PESTEL analysis and Porters
Diamond model.
A transnational strategy was selected for John Lewis so the organisation can offer a
standardised product range as detailed customisation will not be necessary; due to the
liberal mind set of Kuwaiti consumers; allowing the benefits from economies of scale. The
selected entry mode was franchising, which all thigs considered; is a suitable, acceptable
and feasible strategy for the organisation.
This report also discusses the implementation of the strategy including SMART objectives,
personnel involved, key actions and the 5Cs of strategy execution. It also discusses the
evaluation of the strategy using the SAFe criteria, TOWS matrix and a balance scorecard.
The report finally discusses the development approach through consideration of the four
elements of the marketing mix.

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Appendix
Appendix 1- Hofstedes Cultural dimensions. The United Kingdom vs Kuwait