46
John Lewis Partnership plc Annual Report and Accounts 2015 Our principal risks and mitigations (continued)
These are our top ten principal risks; the ones that cause us the most concern in delivering our strategy and business plan. We have mitigations in place and have identified further actions where we feel we need them to protect the Partnership.
Possible causes Strategic risks 1 Competition
S Potential consequences How we manage and mitigate these risks
Increased risk profile o
Aggressive price competition puts pressure on our margin and profitability as the current environment in the retail grocery sector means that Waitrose customers focus more on value for money and less on loyalty.
5 Economic environment
A worsening external economic environment, for instance due to government spending restrictions, a static economy and lack of pay increases, reduces our customers’ spending power and harms our suppliers’ financial resilience.
6 Operating model strain
Changing customer requirements, a shift to online and the need to increase investment in supply chain and IT put strain on our operating model and threaten our ability to meet customer needs and grow profitably.
7 IT infrastructure capability
As our customer needs change and our ambitions grow, our IT infrastructure becomes less ‘fit for purpose’ for our current operational needs and is not able to adapt to meet our future aspirations.
Change may require significant investment, through capital, expertise and Partner input. In addition, change could strain our operating model, both from an efficiency and a continuity perspective.
Partnership Aims affected a Realise Market Potential a Grow Efficiently a Increase Advantage of Partners
8 Change delivery
Due to the size, nature and complexity of our change agenda, we may experience issues with planning and governance, resourcing and investment, and engaging our Partners.
Failure to develop, implement and embed change effectively could result in increased costs, disruption to our trading activities, missing our growth ambitions and losing the engagement of our Partners.
Partnership Aims affected a Realise Market Potential a Grow Efficiently a Increase Advantage of Partners
a Heads of Portfolio Management develop and manage our change capability. Significant investment has been made in specialist project management support.
a Working Groups, Steering Groups, Group and Divisional Change Boards are in place to provide pan-Partnership programme governance. This enables early identification and remediation of issues and considers the impact on Partners.
a Project and programme assurance is provided by Internal Audit.
a Our IT vision and strategy align with our business strategy and enable the sustainable change required.
a IT restructure programmes are in progress, which will provide resilience and protect the Partnership.
a System backups are in place to provide business continuity, and SLAs are in place with IT third parties.
Stresses on our operating model may result in strain on our Partners, systems and operational potential. Ultimately these could impair our ability to meet customer needs and grow profitably.
Partnership Aims affected a Realise Market Potential a Grow Efficiently
a Significant investment in our IT infrastructure and supply chain to support efficiency and continue development of a market-leading omnichannel proposition.
a All change initiatives consider Partner impact.
a Implementing sales initiatives and continually introducing new products and services to ensure we meet changing customer requirements.
Our customers may move away from our core product offers or buy less. Key suppliers may demand higher prices or fail us. This could impair our ability to grow profitably.
Partnership Aims affected a Realise Market Potential a Grow Efficiently
a Pursuing our strategy to deliver the highest levels of customer service, product quality and product innovation.
a Securing value for all our customers through our range selections and price matching commitments, while continually introducing new products and services to anticipate changing customer requirements.
a Developing long term relationships with our suppliers and having contingency plans for key vulnerabilities.
We may lose customers, impairing our ability to grow profitably.
Partnership Aims affected a Realise Market Potential a Grow Efficiently
a Tracking competitor impact and customer perceptions to inform our decisions.
a Focussing on the customer experience we offer to differentiate us from other retailers, including myWaitrose benefits to offer additional value to customers.
a Implementing efficiency projects to protect our operating margin.
In a nutshell...
These ten risks are the ones that could damage the Partnership the most if we do not manage them effectively.
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103 |
Page 104 |
Page 105 |
Page 106 |
Page 107 |
Page 108 |
Page 109 |
Page 110 |
Page 111 |
Page 112 |
Page 113 |
Page 114 |
Page 115 |
Page 116 |
Page 117 |
Page 118 |
Page 119 |
Page 120 |
Page 121 |
Page 122 |
Page 123 |
Page 124 |
Page 125 |
Page 126 |
Page 127 |
Page 128 |
Page 129 |
Page 130 |
Page 131 |
Page 132 |
Page 133 |
Page 134 |
Page 135 |
Page 136 |
Page 137 |
Page 138 |
Page 139 |
Page 140 |
Page 141 |
Page 142 |
Page 143 |
Page 144 |
Page 145 |
Page 146 |
Page 147 |
Page 148 |
Page 149 |
Page 150 |
Page 151 |
Page 152 |
Page 153 |
Page 154 |
Page 155 |
Page 156 |
Page 157 |
Page 158 |
Page 159 |
Page 160 |
Page 161 |
Page 162 |
Page 163 |
Page 164 |
Page 165 |
Page 166 |
Page 167 |
Page 168 |
Page 169 |
Page 170 |
Page 171 |
Page 172 |
Page 173 |
Page 174 |
Page 175 |
Page 176 |
Page 177 |
Page 178 |
Page 179 |
Page 180 |
Page 181 |
Page 182 |
Page 183 |
Page 184