Global Strategic Business Plan: Next plc's Expansion into the US

This report provides a comprehensive analysis of Next plc's strategic management approach to global expansion, focusing on entering the US market. It includes internal and external analyses using SWOT and PESTEL frameworks to identify potential opportunities and threats. The report evaluates three market entry modes—licensing/franchising, exporting, and foreign direct investment—recommending FDI as the most suitable strategy. It also discusses the extent of standardization required for the chosen country and applies Porter’s generic strategies to achieve a competitive advantage. Finally, the report develops a strategic business plan, outlining key performance indicators to measure success and identify areas for future improvement. Desklib offers a variety of resources including past papers and solved assignments to aid students in understanding similar strategic management scenarios.

Management in Global
Context
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Table of Contents
Executive summary........................................................................................................................3
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
Suggest a business and a country which provide internal and external analysis and identify the
possible opportunities as well as the threats which can be faced by the company................4
Evaluate three modes of market entry which will be suitable for the company and with this
make recommendation with the justification.........................................................................6
Upto what extent should the company be standardised for the chosen country. Provide full
justification of the idea...........................................................................................................8
Use Porter’s generic strategy for the company as how it can gain competitive advantage with
the adoption of generic strategy.............................................................................................9
Develop a strategic business plan and evaluate how the company can measure its success in
the market and how it can improve for the future................................................................11
CONCLUSION..............................................................................................................................12
References:.....................................................................................................................................13
Books and Journals...............................................................................................................13
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Executive summary
This report covers the information regarding the strategic management which the company has to
follow when they have to expand their business globally. Company has to use the different
strategies which will be useful for the growth and success when they will enter in new market of
different country. This report covers the internal and external analysis which will help in
identifying the threats and opportunities for the business and will also provide the information
regarding the modes of entry of the business in different country. Adopting different standards
and applying the Porter’s generic the company would be able to gain competitive advantage in
the market.
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INTRODUCTION
Strategic management means the strategies which can be used by the top management or
the leaders to manage the organisation for achieving better performance(Sidunova and
Shokhnekh, 2018). The managers of the company have to identify that which strategies will
work for the company, then they are required to implement it, and at later stage they have to
manage the strategies as this will help the company as well as the employees for achieving the
objectives in a better way and gaining competitive advantage. The competitive advantage means
when the company is having higher profits then other companies in the market which can be
achieved only by strategically managing the work. Strategic management in global context
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means that what strategies will work out when the company has to expand the business globally.
Next plc is a multinational clothing brand which not only deals in clothes but also provides
footwear and home products. the headquarter of the company is in Enderby, England, UK and
the founder of this big retail company is Joseph Hepworth. This report will cover internal and
external analysis with the possible opportunities as well as threats for the company. Three modes
of market entry and to justify as to which extent business unit will be standardised with the
application of Porter’s generic strategies with a strategic business plan.
MAIN BODY
Suggest a business and a country which provide internal and external analysis and identify the
possible opportunities as well as the threats which can be faced by the company
For expanding the business globally Next plc have to adopt different strategies which can work
in a greater form to the company. Next plc has opened its stores in UK and not just these stores
they are also expanded in Europe, Asia and Middle East(De Filippi, Coscia and Guido, 2019).
Now the company is thinking to operate and expand the business in US as the country is big and
the revenue will also be large of proper strategy will be used for conducting the activities. But
the company has to face the competition in the market of US because there are already big retail
companies who are already doing well in their business. There will be threats and opportunities
for the business which they have to identify before entering in the country. Because
identification of such issue will be helpful for the company and they will work according to it.
Internal and external analysis can be done with the help of PESTEL and SWOT analysis-
SWOT analysis- SWOT analysis is done for identifying the internal and external factors in
which strengths and weakness are the internal and opportunities and threats are for the external.
 Strengths- Next plc is strong in their product innovation which is liked by the consumers
who are using their products(Yakin, 2019). The company has well established channels
by which they can distribute the products with greater frequency. The performance of
Next plc is great in market in which it has set up its stores because of the great revenue
which they are earning.
 Weakness- The company is not proper as to forecast the demand of the products which is
needed in the market. The work culture of Next plc is not good and the environment in
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which the employees are working is not positive. Because of which the employees does
not feel motivated enough to work for the company. The company wants to expand its
business in other country and for which they have to make some changes.
 Opportunities- The major opportunity for Next plc is the changing demands of the
consumer through which the company can enter into the market. They are good in doing
innovation in the products which will be liked by the consumers. The online website
though which the Next plc can work and conducts its all its operations will not only
increase the revenue but consumers will also find it great when the products will be made
available to them.
 Threats- The major threat for Next plc will be the competition in the market of US which
are already existing in the market from longer term and the customers are already
distributed and buying their products. Also the changing in demands if not met by Next
plc then the customers could turn to other companies who are delivering the products to
them.
PESTEL analysis- This analysis is helpful in identifying the external factors which can impact
the performance of the company.
 Political factors- There are many political factors which can impact the performance of
Next plc if certain solutions are not made(Tlili and Mouneyrac, 2021). The taxation
policies which are made by the government of different country and specially of US is
higher which the company has to pay. Stability in political factors is also important
because of this the company has to face serious problems. The government of the country
ha formulated the wage policies and the safety in the factorise which has to be goverened
by the company.
 Economic factors- This factor includes the inflation, employment opportunities which
are helpful for the company and for the government also(Lu, Tan and Li, 2019).
Economic system of the country must be stable in which they are expanding their
business and also the availability of labour must be present by which the company can
operate the activities. Next plc will be providing the employment opportunities to the
unemployed people and if the company earns good amount of profit the n it will be good
for them as well as for the county.
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 Social factors- The main social factor which is important is the changing needs of
customers because of which the company has to develop those products which are
required by the people. Next plc is good in making innovation but they have to forecast
the demand properly so that consumers do not go to other stores.
 Technological factors- The technology which can be used by Next plc is the innovations
which can be done with the help of technology and doing marketing of products and
services which the company is providing. Next plc can use the technology in the website
and online shopping also.
 Environmental factors- Next plc have always focused on the sustainability factors and
because of which they do not conduct any activities which will be harmful for the
environment. They are using nay thing which is made in plastic which includes the
packaging as this can harm the environment.
 Legal factors- The company will be operating in different country and their they have to
follow the policies which are made by the government which include the employment
law, safety law, wages law and many more(Rodrigues and et. al., 2018). These laws have
to be undertaken by Next plc for the success and growth.
Evaluate three modes of market entry which will be suitable for the company and with this make
recommendation with the justification
The modes of market entry means the way by which the companies can enter into new
country and can expand their business. Next plc have also adopted some methods by which they
can enter in US market and can establish their business which are explained below-
 Licensing and franchising- Companies which have to establish their business in the
other market of different country then this method is the best at it reduces the risk of
operating the business(Du Gay and Salaman, 2019). In the licensing and franchising the
company has to take the name of the other business which is already established in the
overseas market for some period of time. The person which provides the intellectual
property rights is the Licensor and the person who is getting the license in the Licensee.
Next plc if uses this strategy then it will be the best thing for them as the licensing and
franchising is the best strategy to enter in the market and that too with less investment. It
allows to have the knowledge of the market in which the company wants to expand the
business.
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 Exporting- This method means to export or sell the products and services to the different
country. This term is similar to that of the direct sales which also involves direct selling
with no intermediaries. Next plc can also chose this mode of entry into the country as in
this there will be no intermediary or any mediator who will take the entry into the
business. In this case there is a guarantee that the sale is increased and reduces the
inventory of the company. Next plc can select the representative of the selling by their
own and in this way they will not be restricted to any other person or company. But if the
company has to operate the business in an offline mode then it can cost very high because
Next plc have to start the business from the beginning.
 Foreign direct investment- In this case the company has to make some investment in the
country which can be either purchasing the company from the market or it can include
increasing or expanding the business in the particular country. This is done to take the
control of the activities and other aspects of the business and can take the benefit of
subsidies and taxation(Srai and Lorentz, 2019). But with the benefits, Next plc have to
face some challenges which includes some high level political risks and the investment
has to be made in good numbers.
Recommendation- The best strategy which will work out for Next plc will be the Foreign
Direct Investment as this can help the company in reducing the restriction which they have to
face and also reduce the limits on importing of products and services. The company when
expand its business to US can avoid the import duties when they will do manufacturing in the
country in which they are making expansion and can take the benefit of cheap and low cost
material with the labour.
Upto what extent should the company be standardised for the chosen country. Provide full
justification of the idea
The company has to adopt particular standards for operating the activities of the business in
different country. Standards determine how the company has to work and what should be the
activities which will help the business to make success(Vazquez and et. al., 2020). Next plc have
to identify such factors which are important for them and which will be helpful in succeeding the
operations of the business. There are some factors which have to adopted by Next plc to become
standardised in its operations and expand the business in UK which have been mentioned below-
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 Culture- Culture of the company means the environment in which the employees are
working and to make it in accordance with the culture of that country in which the
company is expanding its business(Akkucuk and Seckin-Celik, 2019). Next plc company
culture has not been good which needs to be made better because they have to grow their
business in different country. Next plc can involve different activities which can indulge
other people and the employees to work actively and their focus will also remain in the
business and in achieving the objectives.
 Products- As the company deals in clothing, footwear and home decor products which
now needs to made in according with the requirements of the people who are staying in
US. The company has to forecast the demands and have to identify the requirements and
the needs of the people. Next plc is good in making the innovation which has helped the
company to develop their brand image and achieve in the markets in which their stores
are already established.
 Marketing techniques- It is a well known fact that the marketing techniques of the
companies ahs to be different in different countries in which they are operating their
business(Kupriyanova and Medvedev, 2018). The companies have to make the strategy
have to conduct the research which will be helpful in giving them the idea regarding how
they have to do their marketing and promotional activities in the particular country. Next
plc is thinking to make the expansion of the business in US because of which they have
to make the marketing tactics in accordance with the culture or environment of the
country. Next plc is also operating the business online mode and for this they have to
make their website accordingly.
 Tax and employment regulations- The company when expand or grow its business in
different country then for this they have to follow the standards which are set by the
government and by that only then can start their business activities(Izquierdo and et. al.,
2020). Next plc when start the business in the markets of US then they have to follow the
regulations of government in tax and employment. US has strict law for the employee
safety and standards in the work place which has to be adopted by the company. The
earlier the adoption of such standards the better would be for the company to choose their
mode of entry.
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These steps need to be followed by the company if they are planning to expand their business in
different country. Next plc is also growing and enlarging the business in US and for this they
need to follow some standards which is the only way to make growth and success in the country.
The above points which are mentioned are for the growth and how the company has to start its
business in the country and what steps they need to follow including conducting research in the
market as these are the most important consideration which needs to be followed.
Use Porter’s generic strategy for the company as how it can gain competitive advantage with the
adoption of generic strategy
The Porter’s generic strategies model is helpful in identifying the niche market for the companies
which will be helpful in gaining the competitive advantage in the market. The Porter’s generic
strategies have been explained below in context with Next plc-
 Cost leadership- In this strategy, the company wants to become the leader in the cost
with which they are delivering the products and services to the customers. They conduct
large production and that in low cost and reduces the costs which is helpful in the
production(Wiese and Akareem, 2020). Next plc if uses this strategy in the beginning of
their setup then it will start gaining the market share as the consumers will like to
purchase the products from that company which are providing them at the low cost. This
strategy will help the company to gain competitive advantage in the market as they will
be the one who are providing the products at low cost.
 Differentiation- This strategy is made to differentiate the products from other brands and
develop the brand image which produces attractive and unique products. The companies
have to target the larger market and their main aim is to differentiate the products from
other big competitors. Next plc have developed its brand image in producing the products
which are unique and have great style whether it is home decor, clothes or other thing.
This strategy will be the best and amazing strategy for Next plc as they would target the
large market and will provide the products in different way.
 Cost focus- In this strategy the company focus on particular segment in the market and
offers the products at lowest possible price(Dassieu and et. al., 2019). This helps them to
know what the consumer likes and whether they are liking this strategy of the company.
Next plc if has to expand and grow the business in US market then they have to follow
this strategy to know the customers. The company has to target the niche market and
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provide the delivery of products and this is the most difficult step for the company as well
as they have to identify whether they can provide the product at lowest prices.
 Differentiation focus- In this strategy similar with cost focus the company have to
identify the niche market in which they can sell the products in unique style and attractive
design (Cardoso and et. al., 2020). But before this they have to conduct the research and
have to check that no other competitor is providing the differentiated product which is
similar to them. Next plc have to identify such market and have to know what consumer
can like if they provide them the differentiated product and whether it would be
successful for them.
For Next plc it would be the best if they adopt the strategy of differentiated product in the
market. As this will make them unique in their approach and they can build the image of the
business. For this the company has to conduct and study the requirements of the consumers and
then they have to identify as to which product and idea will work best for them.
Develop a strategic business plan and evaluate how the company can measure its success in the
market and how it can improve for the future
Company overview- Next plc is a big company which deals in clothing, home products and
footwear. The main headquarter is in England, UK and the company provides the products with
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different design and style which the consumer will like and it according to the trends(King and
Schramme, 2019. When the company was established it deals in the clothing section and only in
this year the company has earned the revenue of $82 million. Operations of the company is
divided in two areas which includes the retail sales and catalog sales.
Vision- The main vision is to offer the products to the consumers which have different and
unique designs including the quality of the clothes and the products which they are selling. They
want that the home products which are produced for the people must be made with great and
functional designs. Their main priority is to satisfy the needs of the consumers to meet their
value and providing the products according to their requirement.
Mission- Their mission is to provide the product to men and women who have the expectation of
different quality product when it comes to clothing or home products and to become the natural
retailer across the country.
Strategic objective- Their main objective is to add value in the products and focus on customer
satisfaction. They want that the products which they are developing must provide different range
and in which they have to use the skills for developing good quality products. To achieve good
margins in the products which they are selling which will help the business to grow(Thinh, Pham
and Strickler, 2019).
Monitoring and evaluation- Monitoring of the products which they are selling needs to be done
as this will help them to measure their success in the future and what changes they have to
undertake. Monitoring and evaluation will help the company to see that in which things they are
doing their best and this can be identified by gaining competitive advantage and earning good
revenue. Improvements in the future have to be made in the products which require effective
planning and development of strategy.
CONCLUSION
From the above report it can be concluded that without strategic management planning could
not be done which means that the direction in which the company has to operate its business
cannot be carried out. Expanding the business globally is not simple as the management has to
work on different areas to make the business successful. There are different policies which are
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working in different countries and the companies has to work in that manner only. Resource
allocation and the threats which the companies have to face while expanding their business can
be solved only with the help of strategic management.
References:
Books and Journals
Akkucuk, U. and Seckin-Celik, T., 2019. Governance as a Bridge to Sustainability. In Ethical
and Sustainable Supply Chain Management in a Global Context (pp. 86-98). IGI Global.
Cardoso, P. and et. al., 2020. Outcomes management in a real-world evidence context: the case
of abiraterone and enzalutamide in the treatment of metastatic castration-resistant prostate
cancer. Global Journal on Quality and Safety in Healthcare. 3(2). pp.65-68.
Dassieu, L. and et. al., 2019. Chronic pain management among people who use drugs: A health
policy challenge in the context of the opioid crisis. International Journal of Drug
Policy. 71. pp.150-156.
De Filippi, F., Coscia, C. and Guido, R., 2019. From smart-cities to smart-communities: How
can we evaluate the impacts of innovation and inclusive processes in urban
context?. International Journal of E-Planning Research (IJEPR). 8(2).pp.24-44.
Du Gay, P. and Salaman, G., 2019. The cult [ure] of the customer. In Postmodern Management
Theory (pp. 195-213). Routledge.
Izquierdo, J. and et. al., 2020. On the importance of assessing the operational context impact on
maintenance management for life cycle cost of wind energy projects. Renewable
Energy. 153. pp.1100-1110.
King, I.W. and Schramme, A., 2019. Introduction to the Project. In Cultural Governance in a
Global Context (pp. 1-19). Palgrave Macmillan, Cham.
Kupriyanova, S.V. and Medvedev, A.V., 2018. RUSSIA IN THE CONTEXT OF TRENDS IN
WORLD FOOD MARKET: FORECAST MODEL AND MOVEMENT
DYNAMICS. Modern economy success (2500-3747).
Lu, Z., Tan, H. and Li, W., 2019. An evolutionary context-aware sequential model for topic
evolution of text stream. Information Sciences. 473. pp.166-177.
Rodrigues, A.P. and et. al., 2018. Developing criteria for performance assessment in municipal
solid waste management. Journal of Cleaner Production. 186. pp.748-757.
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Sidunova, G.I. and Shokhnekh, A.V., 2018, April. Balance-cognitive approach to foresight-
development of management audit efficiency digital economic systems in the context of
strategic drift. In International Conference Project “The future of the Global Financial
System: Downfall of Harmony” (pp. 657-665). Springer, Cham.
Srai, J.S. and Lorentz, H., 2019. Developing design principles for the digitalisation of purchasing
and supply management. Journal of Purchasing and Supply Management. 25(1). pp.78-
98.
Thinh, N.H.T., Pham, L. and Strickler, C., 2019. Customer Trust and Purchase Intention: How
Do Primary Website Service Quality Dimensions Matter in the Context of Luxury Hotels
in Vietnam. International Journal of E-Services and Mobile Applications
(IJESMA). 11(1). pp.1-23.
Tlili, S. and Mouneyrac, C., 2021. New challenges of marine ecotoxicology in a global change
context. Marine Pollution Bulletin. 166. p.112242.
Vazquez, D. and et. al., 2020. Investigating narrative involvement, parasocial interactions, and
impulse buying behaviours within a second screen social commerce
context. International Journal of Information Management. 53. p.102135.
Wiese, M. and Akareem, H.S., 2020. Determining perceptions, attitudes and behaviour towards
social network site advertising in a three-country context. Journal of Marketing
Management. 36(5-6). pp.420-455.
Yakin, I., 2019. Evaluation of IT Projects in the Context of Human Performance Technology:
Principles, Processes, and Models. In Human Performance Technology: Concepts,
Methodologies, Tools, and Applications (pp. 326-343). IGI Global.
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