Global Business and Strategy

This report explores the concepts of global business and strategy using Next PLC as a case study. It discusses the background of the company, theories of international trade and investment, determination of sustainable competitive advantage, and strategic decision making. The report also evaluates Porter's generic strategies for Next PLC.

Global Business and
Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
Main Body.......................................................................................................................................3
Background of the case study of the company.......................................................................3
Strategic decision making....................................................................................................6
Integration of theories of international trade and investment in global business...................7
Determination of the sustainable competitive advantage for an organisation........................8
Critical evaluation of Porters generics strategies for next PLC:............................................9
CONCLUSION..............................................................................................................................10
REFERENCES................................................................................................................................1

INTRODUCTION
The overall business which is having its presence across globe and is operating at
international level is regarded as global business. This expansion of a business is helping
companies in increasing their share in market. This is also helping in building up of their brand
image which can lead to attracting of more customers. Such type of strategies are very helpful in
formulation of functional strategy for building up of a competitive advantage in the external
market. There are various corporate strategy which can be formed with the help of such
businesses which are operating at global level (Meindl, 2016). This report Next PLC is
considered as the base company which is brutish multinational brand dealing in footwear,
clothing, accessories and home related products. Their headquarters are present in Enderby,
Leicestershire. They are having approx 700 stores 500 are in UK and 200 are having presence
across Europe, Asia a& Middle east. This report is dealing with various factors which are present
internally & in the external environment and this is having a impose on overall strategies of a
organisation. Various other issues which are having a impact on implementation of strategies are
also identified in this report.
Main Body
Background of the case study of the company
Next PLC is a British company which is offering various products such as ready to wear
clothes, accessories, sunglasses etc. these are famous for their quality which they are offering to
their customers. They are having operation in approx 700 countries and they are willing to
expand their business functions further in other countries for this they are willing to have a
competitive advantage. This can be achieved if they are able to analyse their external market in a
more effective manner. This is a way of analysing the market which is being done in this report.
Theory of international trade
International trade is very important as it gives rise to a world economy and at same time
this is also very helpful in increasing GDP Of countries at individual level. There are many
Companies which are willing to explore various parts of world and establish themselves in other
parts where they can earn higher profits by increasing their sales. Many economists have formed
theories which are helping Companies in expanding themselves to new parts of world. Some of

such theories are discussed with reference to Next PLC which they cab adopt in their operations
and this can help them in successfully entering and establishing in such new countries.
Theory of absolute advantage: This is a theory which was developed by Smith in which
it focussed on a view that ability of a country to make production of goods in a more effective
manner is based on the competence of and overall availability of resources with a nation. Next
PLC can use this theory as they can use more techniques of specialization and further increase
the efficiency in their production methods and this can lead to high specialisation by them.
Theory of comparative advantage: This theory states that if a country is not able to
produce more efficiently than another country. In this there is a focus which is made on by a
country that they can produce a good more effectively as compared to another good produced by
them (Rugman. and Verbeke, 2017). This will give them advantage in terms of their own
products. This theory can also be used by Next PLC so that they are able to use them in
achievement of specialisation in their products in which they are having better capability.
FDI
This is also a tool in which there is investment in form of a ownership which is controlled
ownership in business in one country. This is a different form of investment which helps in
investment being done by a nation which is having a direct control. This is a tool which can be
used by Next PLC so that they are able to make investment in those countries where they are not
having any stores in the present situation.
Trade liberalisation
Trade liberalization is the removal of any defects or restrictions which occur in case of
free exchange of goods across nations. Such type of barriers can be in form of tariffs like
surcharges & duties and other non tariff barriers include licensing rules & quotas (Spender,
2014). Economists across world have a view that this eradication is very necessary for
promotion of free trade. So, it is been recommended for Next PLC that they must start building
up trade relations with such countries which are having very negligible rules and regulations this
will lead to smooth building up of trading relations.
Arguments on national projectionist trade policies
Trade protectionism refers to the policies and actions of a government which is restricting
the international trade and this is done for the benefit to a single domestic economy protections
policies are implemented with a objective to improve the economic activity and this can be

implemented with quality concerns and also with safety (Rachapila and Jansirisak, 2013) . These
are related with various types if restrictions which are because of international trade and is also a
big subject for debate amongst various policy makers and economists. This is very helpful in
expansion of a business across various countries. Attempts are made by Companies that they are
expansing themselves to those countries only where they can easily start their operations without
any barriers.
Importance of regional integration of super national organisation such as WTO
World Trade Organisation is large corporation body which mainly focus on providing
help to business who are running their activities and operations at marketplace (Chang, 2016).
This is regarded as regional integration of super national organisation that assist in achievement
of business goal and objectives in best possible manner. Some of the importance of WTO are as
follows:
 It deals in regulating as well as maintaining trade among all participating countries in
order to provide help to business for dealing trade.
 This also focus on providing forum to do negotiations in order to settle disputes occurred
between business in terms of doing trade with each others.
 This is regarded as centre of analysis and doing economic research for achievement of
positive outcomes in an appropriate manner.
 This is regarded as organisation that liberalise as well as supervise international trade in
an effective and efficient manner.
 WTO oversees administration, implementation and operations of covered agreements.
Role of FDI and evaluation of strategies available for internationalisation of business
Foreign Direct Investment plays vital role in success and growth of business at
marketplace (Madsen and Walker, 2015) . It is essential for business to consider FDI while
operating their firm in order to gain high profit margins in an effective and efficient manner. The
roles of FDI in growth of economic are as follows:
FDI Provides Capital- This helps in bringing capital to developing countries in proper
manner. As developing countries requires high investment in order to achieve targets of growth
at national income. In context of respective organisation, it does not requires more capital as it is
earning high profit margin from marketplace in better manner. This is regarded as source of
capital and comes with risk.

FDI provides Increased Employment- This provide employment opportunities at
marketplace that helps business to hire skilled and capable employees for work performance. It
create both direct as well as indirect employment chances for business.
In order to internationalised business, different types of strategies are available at
marketplace such as multi-domestic, global, transnational and international. They are described
below:
Multi-domestic Strategy- This is defined as strategy through which company achieve
maximum local responsiveness through customization of product offered and marketing strategy
in order to match various national conditions (Grayson and Hodges, 2017). It has low integration
and high responsiveness.
Global Strategy- It is defined as planned made by organisation in order to develop target
growths beyond its borders. This has an aim in rising sales of products as well as services
abroad. This carry high integration and low responsiveness.
Transnational Strategy- It carry both characteristics such as multi domestic as well as
global firm (Pucciarelli and Kaplan, 2016). This has aim for maximising local responsiveness in
order to gain benefits from international integration. It has high integration and high
responsiveness.
International Strategy- It is operated at global level that has low integration and low
responsiveness. This has to adopt local adaption as well as integration in best possible manner.
Therefore, after analysis of all above strategies for internationalisation of business,
respective organisation has adopted transnational as it has both high integration and
responsiveness in appropriate manner. These strategies are very helpful in developing a basic
understanding of how various business functions are taking place in a economy and these can
help to a great extent in developing strategies of how to enter a particular country.
Strategic decision making
It is process of making good decision about the organisation which provide profits in long
run. This include decision which improve the performance of the organisation in the environment
likewise Next plc uses such strategies to make better use of avail the resources present in the
organisation (Pucciarelli and Kaplan, 2016). Below discussed are some of the strategies which

this company can use while they are willing to make some important decision and implement
them in course of achievement of some specific objectives.
Functional system: this part is where product is placed in the market to attract the
customer in the marketing. This is used to place its product in the market in the business
environment
Operational strategies: under such strategies, company provide a good quality of
product and services in the market place, in the long run all employees are provide with new idea
for the development in the organisation (Peng, 2016). Company provide better use of resource
present in the organisation and all another factors that effect the probability in the company.
Capital system : under such condition, various capital structure are made to use
resources in best available and reduces the cost of capital in the long run. It is used to make
better best use of human resources available in the organisation in the long run.
Above discussed are some types of strategies which can be adopted by Next Plc in
getting a strategic positioning in a new country in which they are willing to enter (Quirke,
2017). Every country has their own culture and external market which differs from one country
to another. For every company which is willing to enter or start their operation's in a new country
has to make sure that they are researching the market of such country in a very appropriate
manner. Hence, this becomes very essential to understand the market and external environment
of such country so that appropriate strategies can be formed and then such information can be
utilised in achievement of laid objectives.
Integration of theories of international trade and investment in global business
The basic framework for theory of the economic integration was laid by Jacob viner in the
year 1950, who is defining the creation of trade and trade diversification as reason for
introduction of changes that are necessary for inter regional flowing of goods & services that are
because of the tariffs that are because of various economic unions that have been carted across
different parts of the world.
This theory basically is related with the term of economic integration that is sued for
describing of interdependence between different economies that are part of international trade.
Theory of comparative advantage can be used by next PLC s they can focus on production on
those goods which they can use as they will have to focus on products in which they are having

high amount of specialisation. It will lead to achievement of high cost advantage and at same
time there will be complete effectiveness in the production activities of the organisation.
Regionalism is a big threat for Next PLC as there is a complete difference in the culture,
trends, and preferences of people in different countries. For employees there can be difficulty in
coping with these challenges that are present for Next PLC as they have to make lot of changes
according to the culture, trends and preferences of other countries. If such changes will be easily
adopted by Next PLC and if they are also adopting changes in their products then it will help
them in creation of a loyal customer base just like in those countries where they are presnelty
located.
Determination of the sustainable competitive advantage for an organisation
Porter's generic model refers to the different types of formulation in order to gain
competitive advantages within an organisation so that they can achieve their business goals and
able to sustain at marketplace for long period of time. This is a model which is used by many
companies while they have to decided on to the appropriate strategies which can be formed by
them and used to establish themselves while they are launching a new product or are willing to
expands their market share by usage of existing products. Therefore, this is always considered as
a helpful model for Next plc as they are following different types of strategies in order to make
this industry much attractive within UK. Along with this generic strategy aid performance
improvement within in the firm, there are four strategies of this model, those are going to be
discussed below:
Cost Leadership: According to this strategy respective firm is able to have effective
purpose in order to maximise their customers through adopting affordable cost strategy. In
reference with Next plc this can be said that if they are able to adopt low cost strategy than they
can easily produce several goods and services as per the customer's base. It will increase firm's
profit and they can achieve competitive scenario.
Differentiation: This type of strategy mainly concentrates on offering goods and services
with the help of differentiation by which firms are able to formulate customer's loyalty towards
brand. So that there are few advantages which is gained by firm like strong recognition from

consumers, good quality of products, effective channels of distribution and so on. It will arrange
huge facilities for Next plc and make them attractive.
Cost focus: With the help of this strategy firms are able to focus on their entire goods
segment by which they can have advantages to produce their goods accordingly and able to
achieve marketing goals. In reference with Next plc they generally deals with external
competition so they apply affordable cost to achieve business target.
Differentiation focus: According to this strategy the main of firm is to develop unique
segment of their product in order to target marketing goals. Therefore, it is necessary for
respective firm to serve unique goods and services to their customers so that they can lead in a
market as premium brand within the UK.
On the basis of above specified model it can be said that with the help of porter's generic
strategy model Next plc has different types of levels by which they can operate their overall
functions and operations in a proper manner. On the other side it is the process of developing to
gain international business to measure their overall resources and capabilities in a perfect way.
By having these sorts of tools so that it is easy for firm to utilisation of optimum resources.
Critical evaluation of Porters generics strategies for next PLC:
From above discussion it can be said that Next PLC must adopt a cost leadership strategy in
which price penetration as a strategy should be used by this company so that they can establish
themselves in such countries. There is already presence of big brands in every country that
belong to similar industry to which Next PLC belongs. It will lead to creation of a different
position in the industry because of prices will be a competitive advantage for Next PLC.

CONCLUSION
It can be concluded from above report that all organisations have to update themselves
with the strategies which can help them in gaining of competitive advantage in the external
environment. There are various theories which have been formed and this can be used while
deciding of strategies to expand the functions across borders. There are many challenges which
are faced by a company while they are establishing themselves in a completely new country.
There are many sustainability measures which have to be taken care of while formation and
planning is being done. Apart from this various strategies such as porter's generic model can be
used which can help in determining the most appropriate strategy by a company.

REFERENCES
Books and Journals
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& Francis.
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competitive environment of Thailand’s sweet corn industry. International Journal of
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Spender, J.C., 2014. Business strategy: Managing uncertainty, opportunity, and enterprise.
Oxford University Press.
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Meindl, S.C.P., 2016. Supply Chain Management--Strategy, Planning and Operation. Tsinghua
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Chang, J.F., 2016. Business process management systems: strategy and implementation.
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Madsen, T.L. and Walker, G., 2015. Modern competitive strategy. McGraw Hill.
Grayson, D. and Hodges, A., 2017. Corporate social opportunity!: Seven steps to make corporate
social responsibility work for your business. Routledge.
Peng, M.W., 2016. Global business. Cengage Learning.
Pucciarelli, F. and Kaplan, A., 2016. Competition and strategy in higher education: Managing
complexity and uncertainty. Business Horizons, 59(3), pp.311-320.
Quirke, B., 2017. Making the connections: using internal communication to turn strategy into
action. Routledge
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