Impact of Business Environment on Next Plc

This report analyzes the impact of the business environment on Next Plc, including the economic and non-economic factors. It includes a SWOT analysis and PESTLE analysis to evaluate the internal and external environment of the company.

Business environment

EXECUTIVE SUMMARY
Business environment will affect business on the basis of economical and non
economical factors. Economic factor will includes the economic conditions of country as well
as its system and policies. This affect the decision making of organisation and affects its
overall performance. Non Economical includes social, cultural, legal, environmental and
many other factors. It is essential for organisation to analyse and evaluate different factors
that will affect the performance of organisation and its sales in market areas.

Contents
INTRODUCTION.................................................................................................................................4
MAIN BODY...........................................................................................................................................5
LITERATURE REVIEW..........................................................................................................................5
DISCUSSION AND ANALYSIS...............................................................................................................6
CONCLUSION.......................................................................................................................................10
REFERENCES....................................................................................................................................10

INTRODUCTION
Business environment can be describe as the surrounding of organisation that affect
business and its activities (Boone and et.al., 2019 ). This report will includes different elements
of business environment will have direct or indirect impact on business and its activities. This
report will includes the impact of economical environment of organisation which consist of
economic system, policies and condition. In this report different non economical
environment has been analysed such as demographic, natural and cultural. Apart from this
swot analysis is conducted as well as PESTLE analysis is evaluated properly.
COMPANY BACKGROUND
Company chosen for this report is NEXT Plc. This is one of the well established
British organisation that is conducted its business activities in retail sector. Next Plc company
was developed in 1864 and it founder of this organisation was Josephy Hepworth. This
company is providing its high quality products and services to different market area and Next
Plc headquarter is located in Enderby, Leicestershire, England, U.K. This company is
offering its products and services form many years. Main products ranges of Next Plc
organisation includes clothing wear, fashionable footwear and other accessories. Next Plc
company has more than 546 stores that is located in all around the world (OUR HISTORY,
2020). Michael Roney is appointed as the Chairman of Next Plc company is 2017.
Mission of Next Plc company
Next Plc company is working with the mission of maximizing the results of
employees as well as meeting with the needs and requirements of its clients. This
organisation want to continuously enhance it services in order to satisfy customers and
employees requirements.
Vision of Next Plc business
This company vision statement includes that Next Plc company wants to achieve
excellence by assisting its employees and helping them in enhancing their capabilities and
potential.
Values

Next Plc company values consist of honestly, transparency in work, responsibility,
full filling commitments and conducting business activities with professionalism (Mission,
Vision & Values. 2020). This organisation values includes working by considering ethics of
business as well as developing strong relationships.
Objective of Next Plc organisation
Next Plc company objective includes develop and enhance range of products in order
to meet with the needs of customers (OUR STRATEGIES AND OBJECTIVES, 2020). This
organisation is working with the objective of increasing its sales and retail space in market
area. Increase sales and profits by offering high quality Next Plc products and services to
customers is the main objective of respective organisation.
MAIN BODY
LITERATURE REVIEW
IMPACT OF ECONOMIC ENVIRONMENT ON ORGANISATIONAL BEHAVIOUR
As per the views of Joseph Shinn (2020), it has been determined that there are several
elements of economical environment that have influence over organisational behaviour.
Economical environment can be describe as external business environment which influence
the purchasing power of customers (What Is the Economic Environment in Business? -
Definition, Importance & Factors, 2020).
ECONOMIC SYSTEM – This refer as the system of country according to which goods and
services as well as other resources are allocated in society (Beynon-Davies, 2013). Economic
system consist of market size, foreign currency, distribution, inflation rate, trading of
products and manufacturing of goods. Next Plc company is creating products that can be
distributed to market size of UK as well as other countries.
ECONOMIC POLICIES - This can be describe as the laws and regulation that is created
by UK government. Economic policies consist of consumer rights, monitor of prices, EU
laws, GDP rate etc. Next Plc company is providing products and services by considering the
right of customer and its products does not provide harm to customer
ECONOMIC CONDITIONS – UK has increasing economic condition due to positive
impact on Brexit. This nation has stability of companies that is manufacturing high quality

products and services. It has high education rates and there are many international students.
All of these factors are supportive in enhancing economic condition of UK market area.
NON-ECONOMIC ENVIRONMENT AND IMPACT ON BEHAVIOUR
As per the views of entrepreneurship and career (2020), it has been analyse that
business is surrounded by various non economical factors. All of these factors will lead to
have influence over decision making of Next Plc company and performing of its activities
(11 Non-Economic Environments Affecting Business Environment, 2020).
DEMOGRAPHICS – This factor includes age, religion, beliefs, gender, purchasing power,
income, occupation and other elements of market area (Haider, 2014). Next Plc company is
develop and creating products as per the needs of customers and UK customer has high
income in order to purchase high quality products of respective company.
NATURAL - In this all natural and environmental elements are considered such as natural
resource like trees, water and so on. Food resources, weather and climate conditions are also
includes in this factor. Next Plc company is conducting different corporate social activities
that will support in enhancing nature and environmental factors.
CULTURAL – Cultural element includes beliefs, values , religious norms, dress code, attire
and other factors. Next Plc company is consider attitude and value of customers while
manufacturing its products. This organisation is focusing on body appearance and dress code
of society while developing clothing products.
DISCUSSION AND ANALYSIS
It is important for Next Plc company to analyse and evaluated all of the factors of
economical and non economical environment. This will help respective company to take
correct and accurate decision that will lead to growth of business. Business environment can
be separated into two parts such as internal and external (Grant, 2016). In order to analyse
internal environment of Next Plc company SWOT analysis is used. Where as for determining
external business environment of respective company PESTEL analysis is considered. This
will support in evaluate positive and negative impact on business environment on
organisation as well as taking correct decision for business development.
3.1 SWOT ANALYSIS

SWOT analysis is an business tool that will help in determined internal capabilities
and weakness of organisation. SWOT analysis stand for Strength, weakness, Opportunity
and threat. It is essential for organisation to determine its strengths so that they can perform
organisational activities in more appropriate manner. By identifying weakness and threat
company should take corrective measures that will support organisation. It is important for
company to gain maximum opportunity for business environment. SWOT analysis in context
of Next Plc company is mention below in detail.
Strength – Next Plc is one of the leading company that is offering its products and services
form many years. It is providing high quality and fashionable products and services to
customers which is able to meet with their needs and requirements. Next Plc organisation as
develop strong brand image of company as well as created effective relationship with
employees and customers. diversity of employees is its major strength as this supports in
accomplishing of desired goals and objectives (Rosenbach, 2018). Next Plc company is
offering its products to different location and matrix organisation structure is its strength as
its allow NEXT plc company to perform its business activities in smoothly manner.
Weakness – There are many element of Next Plc company which can be consider as its
weakness. This organisation is not able to provide proper training and development to its
employees. Lack of training is Next Plc weakness as it affect organisation performance and
productivity. Low health and safety rules are followed by company which affect moral of
employees. This is affecting the whole working environment of company and lead to
decrease in performance and potential of employees. Due to this weakness staff turnover rates
will increase. Next Plc company is not using new ad innovative technology in its business
activities . This will have negative impact on efficiency and effectiveness of Next Plc
company.
Opportunity – There are several opportunity for Next Plc company that will support in
effective and efficient performance of employees. It is essential for this company to grab
maximum opportunities in order to gain more benefits. Next Plc company needs to train its
employees as this will help in boasting their moral and capabilities. Trained and developed
worker will b able to conduct business activity in more effective and efficient manner.
Government of UK has good relationship with other company which will support Next Plc to
perform its business activities in different countries. Less international trade restriction is an
opportunity for Next Plc company.

Threat – Next Plc company is providing its products and services in highly competitive
environment. There are many strong companies which is providing its products and services
to this sector. Next Plc company has major threat from highly competitive strategies and tools
that is used by strong company. Major competitors of Next Plc company are H & M, Marks
and Spencer and many other organisation that is offering fashionable products to customers.
Inconsistency from suppliers is also a threat to Next Plc business as this will affect
performance and productivity of business. Next Plc organisation has threat from poor
management of time and ineffective communication will affect business operations.
3.2 PESTLE ANALYSIS
PESTEL analysis can be describe as the framework that is used by company in order to
analyse different external factors of business. This includes political, economical, social,
technological, environmental as well as legal factors. All of these factors will lead to have
impact on performance and decision making of business.
Political factor – This factor includes all government rules and regulation developed to
provide guideline of organisation. UK political party has develop strong policies that will
have influence over the decision of Next Plc company. Political factor include government
regulation, foreign trade policies, impact of Brexit, regulatory bodies and many more. This
organisation is performing business activities considering all rules and regulation set by UK
government. UK political party has developed strong relationships with other government of
other country that lead to increase trade between different countries.
Economical factor – There are various factors that are included in economical factors such
as interest rates, wages, income rates, taxation, exchange rate, GDP and economical condition
of country. UK nation has high economical condition which will lead to have positive impact
on organisation and its operation. GDP rates of UK nation is increasing and this will lead to
increase in exchange rates. Next Plc organisation will be able to conduct business activities in
more effective and efficient manner due to high economic condition of UK company. This
factor will have positive impact on sales and profitability of respective company.
Social factor – This is one of the crucial factor and this will help in analysing influence of
customers on business. Social factor includes all those element of customers and socity which
will impact on purchasing decision as well as sales of Next Plc company. It is crucial for
organisation to consider social factor while developing and creating its products. Social factor

includes culture, religion, attitude, preference of customers, life style and other social factor.
Next Plc company is creating high quality products which is develop by considering the
needs and requirement of customers. This factor will lead to have positive impact on business
as well as support in increase sales of organisation. But it has been analysed that customer
needs and demand is change very fast and this can have negative impact on production
process of Next Plc company.
Technological factor – This factor refers as new and innovative technology that is
introduced in market. UK country has one of the most advance technology system in the
whole world. This factor will support organisation to conduct business activities in more
effective and efficient manner. Technological factor will lead to provide various opportunities
to organisation so that they can perform organisation task in fast manner as well as gain
competitive advantage over other companies. New and updated technology will provide
assistance in manufacturing of products. Through the use of digital technology Next Plc
organisation will be able to enhance its online presence and sale or distribute its products in
more creative and effective manner.
Environmental factor - It is one of the essential external environment that have influence
over business decision making process. Next Plc company needs to consider environmental
factors while performing organisation task. Environmental factor consist of weather
condition, increase in pollution, change in climate condition, recycling, government rules and
regulation regarding protection of environment and many more. Changes in climate condition
will lead to have impact on supply chain management system of Next Plc. Due to this factor
organisation will not be able to perform its activities smoothly and this will have impact on
sales or profitability.
Legal factor – It consist of various laws and legislation that is developed by UK government
for health and safety of individuals. Next Plc company needs to follow all laws that is
developed by government and consider this factor in decision making process. Next Plc
company is develop products and services which does not provide any harm to its customers.
Respective organisation is not testing its products on animal as well as not using plastic
material in manufacturing or sales of products. This is very supportive in enhancing brand
image of company is market area.

CONCLUSION
From the above report it can be concluded that business environment is one of the
crucial part of organisation as it includes different elements. It is essential for organisation to
analyse and evaluate all those factors that affect business and its performance. Economical
environment have influence over organisational behaviour through economic system,
economic policies and condition. Where as non economical environment includes culture,
nature and demographic aspects. All of these factors will lead to have significant impact on
business and its operations. It is essential for organisation to consider economical and non
economical factors while taking business decisions. It has been analysed that business
environment is classified into micro and macro environment. Micro business environment
can be analysed through SWOT analyses. This is effective tool in order to understand and
analysis internal capabilities and threat to organisation. along with this macro environment is
very vast and it includes various external factors that will have influence over decision
making of business. PESTEL analysis is a significant tool that will assist business to
determine all external factors of business. This will support organisation to take correct and
appropriate decision in order to achieve desired goals of organisation.
REFERENCES
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Online
OUR HISTORY. 2020. [Online]. Available
through:<https://www.nextplc.co.uk/about-next/our-history>.
Mission, Vision & Values. 2020. [Online]. Available
through:<https://www.nextemployment.co.uk/mission.php>
OUR STRATEGIES AND OBJECTIVES. 2020. [Online]. Available
through:<https://www.nextplc.co.uk/about-next/our-strategies-and-objectives >.
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[Online]. Available through:<https://study.com/academy/lesson/what-is-the-economic-
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