Strategies for Next Fashion Company in the Retail Industry

Summative
Assessment

Table of Contents
INTRODUCTION TO RETAIL......................................................................................................1
INTRODUCTION OF COMPANY................................................................................................2
KEY RELEVANT CHANGES IN THE MACRO ENVIRONMENT...........................................2
PESTLE analysis.........................................................................................................................2
KEY RELEVANT CHANGES IN THE MICRO ENVIRONMENT.............................................4
Porter's five forces analysis..........................................................................................................4
SUGGESTED STRATEGIES AND TACTICS..............................................................................5
RECOMMENDATIONS.................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8
APPENDIX......................................................................................................................................9
PESTEL analysis.........................................................................................................................9

INTRODUCTION TO RETAIL
Retail is the process of selling different products and services to the consumers with the
help of various distribution channel for the purpose of generating higher profits. The retail
market of United Kingdom is very big and there are various business entities such as Next,
Burberry, Marks and Spencer, ASOS etc. which are operating under it. It is providing
employment to more than 555000 individuals. Consumer expenditures of the industry is 56048
million pounds.
Illustration 1: UK fashion industry statistics, 2019
(Source: UK fashion industry statistics, 2019)
The above chart is showing that the contribution of clothing in the consumer expenditure
is 56048 which means a higher amount of the income is spent by customers on clothing (UK
fashion industry statistics, 2019). The clothing industry employs around 75% of people who are
working in the retail industry.
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INTRODUCTION OF COMPANY
Next Fashion company is one of the largest British Multinational organisations which are
established in UK. It was founded in year 1864 by Joseph Hepworth. It is headquartered in
Enderby, Leicestershire, England, UK. The company is having around 44000 staff members who
are contributing in the execution of business in systematic manner. It is having more that 500
stores in UK and more than 700 around the world which means it has captured a large market
share. There are various locations where it is having its stores (History of Next Fashion, 2019).
Some of them are Saudi Arabia, UAE, Japan, Indonesia, Ireland, Russia, UK, Kuwait etc. It is
the second largest fashion retailer of UK after Burberry and the market position of it is very high
because of brand loyal customers and good quality of all its products and services. Market value
of it is around 7.16 billion pounds. The estimated annual sales of it is more than 4 billion pounds.
2% of the revenues of the company is generated from the international sales rest of it is acquired
from domestic sales. For year 2018 net income of it was more than 590 million pounds and the
operating income was 759.9 million pounds. By analysing the profits of the entity it has been
determined that higher profitability is resulting in great market position and performance of the
company.
KEY RELEVANT CHANGES IN THE MACRO ENVIRONMENT
PESTLE analysis
For all the business entities it is very important to make sure that macro environment is
analysed so that the changes which are taking place in it could be taken in to consideration for
the formulation of effective business strategies (Carmignani, Francesco and Massimo, 2016). For
Next Fashion it is also very important to analyse it in order to determine the future steps which
are required to be taken for betterment of business. PESTLE analysis is a technique which best
suits to this purpose. All the elements of it are discussed below in context of Next:
Political: It covers different political policies which are related to taxation, trade and
others. One of the major factor which is affecting the fashion retail industry and the companies
such as Next operating business under it is Brexit. Exit of Britain from European Union is
affecting the whole sector because it has resulted in increased taxation and tariffs for the
importer and exporters. Due to this most of the entities like Next which are selling their products
in other countries are facing issues as they have to pay higher amount for exporting their items.
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