Compression is useful because it helps us to reduce the resources usage, such as data storage space or transmission capacity. Compression methods have a long list. In this paper, we shall discuss only the lossless compression techniques and not the lossy techniques as related to our work. In this, reviews of different basic lossless data compression methods are considered. The methods such as Shannon-Fano Coding, Huffman coding, Run Length Encoding and Arithmetic coding are considered. LZW is dictionary based algorithm, which is lossless in nature and incorporated as the standard of the consultative committee on International telegraphy and telephony, which is implemented in this paper. Furthermore, the code for each character is available in the dictionary which utilizes its ASCII code. In this paper, LZW data compression algorithm is implemented, thus the text data can be effectively compressed. Obtained compressed results show an improvement in lossless data compression scheme by reducing storage space about 40% to 50% depending upon the redundancy appeared.