PESTEL Analysis of Next Plc: A Case Study in Business Strategy

This essay examines the application of PESTEL analysis to Next Plc, a British multinational clothing, home products, and footwear company. It explores how political, economic, social, technological, environmental, and legal factors influence the company's operations and decision-making. The essay analyzes the impact of each factor on Next Plc's strategic planning and competitive advantage, highlighting the importance of understanding the macro-environment for business success.

Business Management
Essay
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PESTEL analysis is utilised for business development assessment, marketing and decision-
making process. PESTEL model is used to recognise how the future trends on the business
environment could impose on the organisations. It stands for political, economic, social,
technological, environmental and logical aspects of the business. This essay will analyse how
the concerned theory works in Next Plc, a British, multinational clothing, home products and
Footwear Company. The Pestel framework provides analysis of six different macro-level
factors which affect a business and decisions which it takes. It could be used for seeking out
the external marketing situation of an organisation. This administration tool recognises the
macro-environmental factor.
Political factors play a very crucial role in the business function. This is due to the
fact that there is a balance between the systems of free market and control. As globalisation is
in its peak, organisations have to consider the threats and possibilities before growing into
new marketplaces (Ilevbare et al., 2016). Political factors help an organisation to understand
the location of business head office. Some of the political aspects organisations have to look
after are the tax guidelines, steadiness of the government, social approaches and trade system.
Next Plc. is impacted by the rate of tax implemented by the government. The foreign
exchange rate, policies and guidelines impacts the business.
Economic factors are the metrics which help an organisation to analyse the
economical situation in the region. The economic condition of an organisation changes a lot
during its life time (Ilevbare et al., 2016). Analysing the economic factors helps Next Plc. to
contrast the present level of the joblessness, inflation, international trade and economic
growth. This helps the firm to carry out its tactical plan in an improved way.
Social factors assess the state of mind of the customers in a specific marketplace. It is
also known as the demographic factor. Exchange rates, inflation rate and GDP are the social
indicators are critical to the administration. These measures could assist to recognise how a
financial system could react to convinced change (Jurevicius, 2013). Some of the social
factors which Next Plc has to identify are the distribution of wealth, educational levels, and
changes in lifestyle and trends and population demographics.
Technological factors indulge the potential technologies which are available. The
advancement in technology helps in optimising the internal efficiency of a product or service
(Jurevicius, 2013). Next Plc. could benefit by identifying the evolving technologies to
optimise its product internal efficiency.
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Environmental factors help an organisation to understand their negative impact on
the environment. Next Plc has to understand that that government levy huge fines on the
companies for polluting the environment (Gillespie, 2007). The organisation has to
understand several laws such as environmental laws and energy utilization laws.
Legal factors are the last factor in PESTEL framework and this stride include the laws
and policies under am area (Jurevicius, 2013). Some of the common legal factors which an
organisation has to recognise are business regulations, workers health and safety policies and
product laws.
In conclusion, it can be said that PESTEL analysis could help an organisation before
any large projects are undertaken. It is important that each organisation conducts their
PESTEL analysis themselves and identify the factors which could provide it strategic and
competitive advantage.
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References
Gillespie, A., 2007. PESTEL analysis of the macro-environment. Foundations of Economics,
Oxford University Press, USA.
Ilevbare, I., Dusch, B. and Templeton, P., 2016. A framework and methodology for creating
business tools and processes. IfM, University of Cambrige, Cambridge.
Jurevicius, O., 2013. Pest & pestel analysis. Strategic Management Insight, 13, p.2013.
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