Business Environment Analysis of Next Company: PESTLE Analysis, Leadership Styles, and CSR Practices

This report analyzes the business environment of Next Company, including PESTLE analysis, recommended leadership styles, and contribution to corporate social responsibility. It also discusses the impact of Brexit and Covid-19 on the company's business.

Context of Business

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
PESTLE analysis.........................................................................................................................1
Recommended leadership styles.................................................................................................3
Contribution of Next in Corporate social responsibility.............................................................5
Impact of Brexit and Covid 19 on Next company's business. ....................................................5
CONCLUSION................................................................................................................................5
References:.......................................................................................................................................5

INTRODUCTION
Business environment consists of different elements that affects the functioning of a business
organization in various forms. It poses direct impact on the decision making power of the
company which is undertaken by the managers or the directors of the business organization. The
business organization must monitor the activities of the enterprise that are being performed in the
organization so as to attain the desired aim of the company. To understand the concept of
business environment, Next company is being selected. It is a multinational brand situated in
Enderby, England which was founded in the year 1864(Grail, et.al, 2020). The founding father of
the company is Joseph Hepworth. It is associated with clothing and footwear industry. This retail
brands contains 700 stores in total out of which 500 are located in different regions of United
Kingdom. And other 200 are located in the various cities of Europe, Asia and the Middle East. It
is a well known recognized brand of UK. The report will analyse all the external elements that
affects the business by conducting PESTLE analysis. It will also suggest certain
recommendations in relation with opting an appropriate leadership style which will further helps
in achieving the goals of the business organization. Further, the report will explain the concept of
CSR in relation with Next company. It will also discuss about the impact of Covid 19 and Brexit
on the business of Next company.
MAIN BODY
PESTLE analysis.
The Pestle analysis basically assist the organization to determine and evaluate different external
components that influence the business operations of the enterprise in one or the other manner.
The business organizations cannot exercise any control over these factors but they can try to
reduce the risk to an extent by conducting Pestle analysis. These elements mainly affects the
managerial functions of the business. It can be used as a tool that can monitor all the elements
that lays a negative effect on the company (Górnicka, 2018). In terms of Next company, the
management of the organization can use this technique in identifying the affect of the external
factors on the business activities of the enterprise. The evaluation done in context with Next is as
follows-
 Political factors- the political factors also affects the company in different ways. Like,
government rules and policies, taxation policies, trade rules, change in the government
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structure, political decisions, etc. Sometimes these elements instead of providing benefits
to the business organization, lays adverse effects on the company. In context to Next, the
effect of Brexit impacts the business of the particular organization to a great extent. The
government of the country introduced certain amendments in the trading as well as the
taxation policies. The company do not hold any sort of business connection with the
organizations that are located in the member countries of the European union.
 Economical factors- the changes in the economic conditions of the country also affects
the operations of business organizations. Like, change in the interest rates, GDP growth
ratio, rate of employment, inflation, per capita income, monetary flow, etc. In relation
with Next, the activities of the company are affected by the pandemic that is Covid 19
and the separation of Britain from the European union. The financial structure of the
country is highly affected by Corona. This leads to increase in the prices of the products,
where the company is not able to fulfil the requirements of the customers. The currency
also faced a downfall at the global level(Hamilton and Webster, 2018).
 Social factor- the societal factors like preferences of the customers, recent market trends,
likes and dislikes of the consumers,etc. affects the activities of the business organization.
The efficiency of performance is highly influenced by these factors when the company is
unable to meet the demands of the consumers. In relation to Next, the company is facing
the issue of lack of proper supply of the goods in the market. The organization is failed to
make out the needs and preferences of the consumers. They are not focusing on the
manufacturing of the products according to the latest market trends.
 Technological factor- the business organization must perform their respective functions
according to the recent trends of the technology. This is the time where the companies
should adopt the changes and run its business according to the new technological
advancements. Using obsolete techniques or methods will not able to make a new
consumer base or will fail to attract the customers to buy the particular product. This is
the era, where every one is making use of the digitalization. Every body has an access
over the different digitalised platforms. Nowadays, window shopping or online shopping
is quite in fashion. The consumers are highly involved in shopping through online sites.
In terms of Next, the company needs to list their products on such online platforms in
order to attract the customers.
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 Legal factor- there are various legal factors that poses negative impact on the business
organization, such as, laws related to the rights and duties of employee and employer,
providing healthy and safe environment, etc. The business organization is expected to
adhere to the legislations and statutes that regulates the business and employment sector
of the state. In relation to Next, if the company wants to avoid any sort of legal
repercussions, it is required to follow all the important rules and regulations laid down in
the statutes(Gromenko, 2018).
 Environmental factor- there are number of environmental factors that affects the
business operations of the companies. Such as, pollution(air, water, noise), change in the
climatic conditions, global warming, disasters like, earthquake, storm, floods, etc. The
transportation of goods and the manufacturing process of the company are majorly
affected by these factors (Maazouz, 2022). This affects the supply of the products which
results in failing to meet the demands of the consumers in the market. In context of Next,
the company has initiated a policy, named as green policy which protects the
environment from any kind of harm. The company is also taking part in eco friendly
activities and programs in which the main concern is to prevent environment in one or the
other manner like, by planting number of trees.
Recommended leadership styles.
A good leader is a person who posses the ability and potential to improve the performance of the
individuals who are working in the capacity of employees in the organization. The main job of a
team leader is to increase the capacity of work among the individuals so that they can handle
complex tasks. They have the accountability to achieve the set goals of the company by
motivating the employees to perform their tasks accordingly. There are different styles of
leadership which is being used by the team leaders in order to encourage the employees of the
organization. This ensures a positive environment in the organization. In relation of the Next
company, Coleman's leadership style is being selected (Adamyk, 2019). With the help of this
specific style of leadership, a sense of leadership will be maintained by the team leaders in order
to manage the members of their respective teams in terms of achieving the desired goals of the
company. It will also assist in performing with full potency and efficiency.
 Affiliative leadership- this particular style of leadership is being used in order to
create a peaceful and harmonized environment in the company. As, a healthy and positive
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working environment is necessary in every business organization in order to perform the
tasks effectively. It also helps in building a spirit of unity and cooperation in the team. All
sort of disputes or conflicts are being avoided in the organization and if in case any
differences arise among any of the team members, the team leaders will try to solve that
in a proper way.
 Democratic leadership- it promotes the sense of freedom and democracy in the
organization. The team leaders while taking any decisions related to the tasks, must also
include the employees in the same. The team members have the right to take part in the
decision making process of the company or of their respective teams. In terms of
achieving any target, the collaboration with the other team or members of the team is
allowed. The team leader is concerned with the enhancement of the necessary skills and
expertise among the employees(Capobianco, et.al, 2021).
 Commanding leadership- according to this, the leader gives proper direction to
the team to perform the assigned tasks in a particular period of time. This leadership style
is used when the task is required to be completed before the deadline. Generally, the
leader use to command the team members to fulfil the requirement of specified work
provided by the organization.
 Pace setting leadership- in this type of leadership the team leader tries to set out
a pace to perform a specific task. They mainly focus on the quality of the work. The team
leaders ensures that the employees should use their speed in terms of producing quality of
work. The team members are required to work with full concentration and determination
in order to achieve the best and desirable results for the organization. The team leader use
the potential of the employees at its best.
 Authoritative leadership- the team leaders use to set various targets for the
employees to make certain improvisation in the skills. In this style of leadership, the
leaders concentrates on creating an optimistic environment for the employees. This
further helps in building a healthy relation between the team leaders and the employees.
 Coaching leadership- the team leader use to evaluate the strength and weakness of the
employees to figure out the weak areas in which the employee needs to work hard. The
team members are required to rebuild those areas where they lack expertise(Gupta, Gupta
and Gupta, 2019).
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From the above observations, Next company must go with the authoritative leadership style. The
reason behind choosing this particular style of leadership is that the company is highly affected
by the Brexit and they need some sort of encouragement and energy in order to restart the work
from the very beginning. The team will be able to perform the tasks with more efficiency after
getting motivated from the team leaders. This will also helps in achieving the high sales ratio and
better productivity for the company.
Contribution of Next in Corporate social responsibility.
Corporate social responsibility means that the company should undertake its business activities
without creating any hindrance to the environment and the society. Basically, the company must
carry out its functions without posing any harm to the environment. Every retail business unit is
concerned with the manufacturing of the various goods(Shahid, 2022). While performing the
manufacturing practices, the production units of that organization produce a lot of harmful gases
and chemicals which causes a heavy loss to the environment as well as to the society. Such as,
air pollution, water pollution, etc. The society in which these industries are located is a place
where each of us are living. The society along with the environment, is facing major
consequences of such harmful operations. In order to diminish the hazardous effects, the
company should undertake the CSR activities in order to protect the environment and the society.
Adopting CSR strategy, will help in establishing the brand name of the company by building a
positive image of the organization in the domestic as well as in the global market. It also helps in
managing a healthy and positive relationship with the suppliers, buyers, employees, workers, etc.
The companies that contributes in the CSR practices ensures their responsibility towards the
protection of environment. There are mainly five types of corporate social responsibilities,
namely, economical responsibility, social responsibility, environmental responsibility, ethical
responsibility and philanthropic responsibility (Achinas, et.al, 2019).
The company must undertake the CSR activities so as to build their brand imager in the market.
In order to prevent the risk of pollution and other hazardous activities, the company must adopt
the CSR strategy. This will make them socially accountable and helps to achieve the objective of
social well being. The companies should accomplish their responsibility which they posses
towards the environment and the society. There are various types of CSR practices that are
discussed in the context of Next company-
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 Economical responsibility- it means that how a business organization will contribute to
the economic growth of the country. It states that the company must involve the CSR
practices in the financial structure. The main aim of a business organization should be
maximisation of profit without affecting the environment in a negative way. In relation to
the Next company, the organization must focus on involving the CSR practices and
adopting the same without laying adverse impact on the society and the environment.
 Environmental responsibility- the company must follow the rules and regulations that
are made in order to prevent the environment from the harmful activities. The company
should undertake the necessary methods or techniques to decrease the level of pollution
in the environment. In relation to Next, the company must concern with the social welfare
and environmental well being. The organization should take part in the eco friendly
practices and also provide assistance to the non-governmental organisations who are
engaged in such activities (Brooks, et.al, 2021).
 Ethical responsibility- the company should follow the ethical standards to carry the
functions of the business organization. The company should not encourage any kind of
irregular activities in the organization. Such as, discrimination of the employees in terms
of race, sex, gender, religion, etc. In relation to Next, the management of the organization
is focused towards maintaining positive relationship with the employees, shareholders,
suppliers, etc. of the company. This would ultimately helps in maximising the
profitability and the sales of the company.
 Philanthropic responsibility- the company must engage in various activities related to
social welfare and charity. These activities includes providing support to the
underprivileged section of the society in terms of food, shelter, education, employment in
the manufacturing units of the company. The organization should provide financial
assistance to the NGO's or any other social welfare organizations who are working in the
field of charity and welfare of the society. In context with Next, the organization must
motivate such practices related to social well being (De Lyon and Dhingra, 2021). The
company can also become a volunteer in such events that are concerned with charity
programs.
 Social responsibility- the organizations are also a part of the society and by that reason it
holds the responsibility towards the society as well. The company must reduce the
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obnoxious effects of the harmful substances which it releases during the manufacturing of
the various goods. In context of Next, the company has established its factories where it
runs their production unit in the city outskirts where there are no residential area. It is a
industrial area in which many industries have formed their manufacturing units (Mircheva,
2020).
Impact of Brexit and Covid 19 on Next company's business.
The business units in the United Kingdom are majorly affected by Brexit. This situation
influenced the trading, buying and selling, import and exports, supply of different products, etc.
The European union is a group of several states, and UK was one of them. The separation of
Britain from the EU has affected the economy and the business organizations to a great level.
The trade deals that were entered by UK with the other member states of the union also got
affected by this separation. The union has also provided an open market in which the member
states are free to perform their business deals or agreements freely without any kind of formality.
And because of that, UK has succeed in attracting a large base of consumers in the various
countries. Now, after exiting the union, the companies are required to build new brand image in
the eyes of the customers in order to attract them. In context of Next, the company has
experienced many challenges after the separation (Cooper, Spowage and Connolly, 2020). Like,
increase in the prices of goods, weak supply range, etc. the economic stability of the country got
lose during this period. With this the company has failed to provide the required products to the
consumers because they are unable to meet their demands. The company has to increase the
prices of the products because they also have to pay the taxes according to the new taxation
policies and rules.
The situation of pandemic also laid an adverse effect on almost all businesses around the globe.
Next is a well known brand name in the clothing and footwear industry. During the period of
Covid 19, the government has prohibited the movement of goods and services from one place to
another. It severely affected the retail outlets of the company(Lin, Lloyd and McCorriston, 2020). The
products are not being able to listed on the retail outlets of the company because the stores are
located in different areas of the country. The company cannot list the products on the online
platform as the delivery of the goods is not possible in case of so much restrictions. This has
affected the supply chain of the company due to which the sales of the particular brand
automatically went down.
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The company, Next has used its already established brand image in order to re establish itself in
the domestic as well as international market. The company is enjoying the trust of the customers
over the product which are made available to them. Now, the company is focusing only on the
various market trends and the preferences of the customers(Nanda, Xu and Zhang, 2021).
CONCLUSION
From the above report, it is concluded that the business environment consists of different
elements that affects the functioning of the business organizations. Appropriate marketing plan is
required to be adopted by the companies to enhance the sales and performance of the company.
PESTLE analysis is one of the best methods through which the business organizations can
anticipate the risk involved in the external elements on the operations of the business enterprise.
This report also talks about certain suggestions regarding choosing one of the most benefited
leadership style in order to attain the desired aims and objectives of the company. It also
explains the concept of CSR in context with the Next company. In furtherance, it also discuss
about the effects of Brexit and Covid 19 on the business activities of Next.
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