Comprehensive Business Strategy Report: Next Plc Analysis & Frameworks

This report offers a comprehensive analysis of Next Plc's business strategy, examining both the macro and internal environments. It begins with an introduction to business strategy and its importance, followed by an overview of Next Plc, a British multinational fashion retailer. The main body delves into the macro environment using PESTEL analysis, assessing political, economic, social, technological, environmental, and legal factors. The report then explores the internal environment, utilizing SWOT and VRIO analyses to evaluate Next Plc's strengths, weaknesses, opportunities, threats, and valuable resources. The analysis provides insights into the company's competitive position and strategic challenges, culminating in a conclusion that summarizes key findings and recommendations. The report includes references to support its analysis and findings.

Business Strategy

Table of Contents
IINDRODUCTION..........................................................................................................................1
MAIN BODY...................................................................................................................................1
TASK 1............................................................................................................................................1
P1.................................................................................................................................................1
TASK 2 ...........................................................................................................................................4
P2 ................................................................................................................................................4
TASK 3............................................................................................................................................7
P3 ................................................................................................................................................7
TASK 4............................................................................................................................................9
P4 ................................................................................................................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INDRODUCTION
Business strategy can be describe as a framework of many important decisions which are
taken by an organisation. This is very helpful in achieving desired aims and targets of a firm
(Akter and et.al ., 2016). By developing strong strategies for organisation as well as taken right
decision the firm will be able to carry out tasks and activities in better and effective manners.
Business plans of action are referred to as compilation of many decisions that is specially
developed by company to acquire a fierce edge over its competitors. This guides in the
development of an appropriate plan as well as identifying strengths and weakness of organisation
which will have impact on business objectives. The company chosen for this report is NEXT Plc.
It is a British multi national company dealing the in retail sector. Next Plc is one of the largest
companies as it is develops products of high and durable quality according to the need of
customers. It is a fashion retailer organisation and offers products and services globally. Next Plc
was established in 1864 and was founded by Joseph Hepwoth. Its headquarter is located in
Enderby, Leicestershire, England, UK. This report includes in depth details about the business
strategy as well as different factors which affect organisational strategies. This includes
application of framework which will impact the macro environment and the internal environment
for developing an efficient business strategy. This report explains porters five force model in
order to analyse competitive forces in the industry. Apart from this various theories, concepts
and strategic management plan is developed in respect of organisation.
MAIN BODY
TASK 1
P1
Macro business environment refers to the outside factors of an organisation that have
huge impact on development of business strategies. It is essential for Next Plc company to
examine and assess all the factors (Bell, Bryman and Harley, 2018). This will help in the
formulation of better strategies for organisation which will in turn lead to achievement business
goals. Factors of macro environment different elements such as technology, customers, clients,
suppliers, government and many other factors. All these factors have a crucial impact on the
organisation and help in development of organisational targets. For identifying the impact and
influence of macro environment on Next Plc company as well as its strategies PESTEL analysis
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will be very useful. This is an effective framework that will be very useful for respective
company and its influences on organisation is explained below. Political factors – This factors include the degree of influence of government over
organisation. It is very essential for the firm to identify as well as analyse different rules
and regulation set by political party (Brewster, 2017). This helps in determining the
effect of political factor on Next Plc company. This factor includes taxation policies,
government stability and instability, trade restriction, foreign trade policies and many
other rules and regulation. Government of UK market area are develop strong policies
which will help companies which are dealing in retailing sector. This country has stable
government and political party that will leave a positive impact over organisation. This
will also assist the respective company to grow and develop their business as well as
earning more profits and also create a brand image for their company in the minds of
people so that they are able to recollect the name of the brand quickly. Economical factor – This factor determines all those elements that are related to the
economy of the country. Economic factor includes economic growth rate, exchange rates,
inflation rates, unemployment rate and so on. There has been a study that UK is one of
the fast growing economies of the world. This can be consider as an advantage for
respective company as this will leave a positive impact on the organisation. Economical
factors lead to direct as well as indirect influences on Next Plc company. When
economic rate as well as GDP of organisation are high then it will lead to increased
purchasing power of customers. This will help in increasing in sales and profits of
organisation. Social factor – Social factors comprise of several elements which will have direct on
indirect influence over business as well as its activities. Social factors include customers'
attitudes, behaviour, culture, customs, population, demographic and other social factors
(Cavusgil and et. al., 2014). It is essential for Next Plc company needs to carefully
understand, identify and analyse each and every factor in order to develop product and
services. The company is dealing with a high competitive environment so this makes it
vital to carefully understand and analyse need and wants of customers. Next Plc
company will have to manufacturer those products which is as per the requirement of
customers as well as market trend. This company is dealing in fashion retail industry and
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in this customers needs and market trends are continuously changing. This can have
negative impact on organisation. Technological factor – This factor includes innovation in technology of respective
company as well as its impact on organisation. Technology includes the new and advance
updates that are included by the organisation to carry out business operations in better
and effective way. UK market has the most latest technology worldwide which can be
considered as an advantage of respective company (Chang, 2016). This will assist Next
Plc organisation to carry out organisational tasks in an efficient way. Technology will
help the company in gaining an overall competitive advantage over its competitors.
Through this, the company will be able to create a strong yet positive image in market
and achieve of set targets. Environmental factor – Environmental factor consist of all those elements that are
related to ecological system of organisation. This includes change in climate, weather,
pollution and other environmental offset. This will have direct and an indirect impact
over organisation. When climate changes, Next Plc will need to develop products and
create new requirement of customers which is changing as per the changes of climatic
conditions. Environment factor have potential impact on performance of business as well
as impact over development of strategies. It is necessary for the company to carefully
evaluate and examine these factors in an effective manner in order to take better business
decisions. Changes in climate will also lead to have negative impact over supply chain of
Next Plc company as well as timely distribution of manufactured products to targeted
customers. The firm organizes various corporate social activities in order to full fill their
responsibility towards the society. This will help in development of brand image of Next
Plc company in respective market area.
 Legal factor – There are various laws and regulations which are developed by company
which will by government of UK which is essential to organisation to perform its
business activities (Chen and Jermias, 2014). Legal factors include different pertaining to
consumer protection, discriminations law, anti trust as well as health and safety law,
employability laws and many more. It is spoken to be of importance for company to
follow each and very laws so that Next Plc company they can perform organisational
task in better manner. UK government has increase the wages of employees which will
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have a direct influence on profitability the company. When the firm provides more salary
to its employees this will also influence over reduction of profits. It is necessary for Next
plc to motivate its employees so that they can perform organisational task in better and
effective manner.
TASK 2
P2
It is vital for Next Plc to understand as well as determine internal capabilities and the
business environment as well. This is necessary for the firm in order to make sound decisions
and also help in the development of successful business strategies. Internal factor include all
those factors which can be control by organisation (Davies, 2016). There are various internal
factors that will have impact over the performance of Next Plc company. It is important for Next
plc to identify internal capabilities as well as weakness of company so that they can develop
strategies by considering strength and weaknesses. Next Plc company needs to evaluate various
opportunities that are available for it along with the major threats which can have negative
impact over organisation performance and its overall brand image. It is essential for respective
company to use SWOT analysis to take organisation strategies as well as accomplishment of
desired goals.
SWOT analysis
This stands for strengths, weakness, opportunities and threat in which strengths and
weaknesses are internal part of a firm whereas opportunities and threats are considered to be
external. Analysing all these factors is important for identifying and determining strengths and
opportunities for organisation as well as overcoming weaknesses as well as threats. SWOT
analysis for Next Plc is explained below in detail-
Strengths- Next Plc is one of the chief companies dealing in the retail sector. This
company is providing high quality products which is as per need and want of customers.
Strengths of respective company includes it reach as well as distribution of products in the
market (Evans and et.al., 2017). Next Plc has a large number of outlets which is offering new
and creative products to targeted customers. The firm has employees working with various
backgrounds therefore making it a diversified workforce that is helpful in developing positive
environment with organisation. It is conducting effective market research in order to analyse the
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market trends as well as needs and wants of customers. This will lead to development of
products which is as per consumer requirement and developing strong market image.
Weakness- Next plc is currently facing issues in management of financial resources
which is have huge negative impact over organisation. The company's weaknesses include
management of both finance resources as well as assets. It is affecting its daily activities as well
as operation of Next Plc company. It is necessary for the company to direct financial resources
in better and effective manner in order to conduct daily veracities and production of Next Plc
products in better manner. The company is not able to market or promote its products and
services in an appropriate manner. This is directly affecting the sales and profitability of Next
Plc company.
Opportunities- There are range of opportunities available in market area which will help
respective company to perform its tasks in an efficient and effective manner. The company needs
to make use of new and advanced techniques or technology in its operational activities. This will
lead to increase in productivity as well as performance of Next Plc company (Goffee and Scase,
2015). By using new and innovative technology this company will be able to attain a competitive
edge against its competitors. Next Plc organisation needs to provide training to its employees so
that they can conduct business activities as well as manage financial resources in better way.
Threat - Next Plc company has a major threat from new and strong companies operating
in this industry for strong rival companies as this organisation deals in a very competitive
environment. There are many firms that deal in fashion retail sector as well as providing quality
products to customers. If the company's competitor changes its strategy, it will lead to a major
negative impact over respective company. It is essential for this company to follow all rules and
regulations. There are many strict laws and polices developed by government which can pose a
negative effect over business as well as its activities.
VRIO Analysis
VRIO analysis refers to a framework of effective analytical tools and techniques which
will help Next plc to analyse its competitive resources. It is necessary for the company to
determine all those resources that will assist in conducting organisational tasks in a better way as
well as in gaining a competitive advantage against its competitors (Grayson and Hodges, 2017).
VRIO analysis stands for Value, Rareness, Imitable and organization. It is essential for
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organisation to take better business decision and help company to perform in better manner.
VRIO model in respect of Next Plc company is mention below
Resource valuable Rare Inimitable Organized
Product and
services
Yes - - -
Skilled
Employees
Yes Yes - -
Financial
resources
Yes Yes Yes -
Supply chain
network
Yes Yes Yes Yes
Valuable – This factor comprises of all those components that are of value to the firm as
well as help in gaining a competitive advantage over the firm's competitors. Valuable resources
of Next Plc company include its products and services, skilled employees, financial resources
and supply chain. All of these resources are helpful in performing organisational task as well as
achievement of set goals. Next Plc company provides products and services of high quality to
customers in order to attract them. This company is distributing manufactured products to
targeted audience in order to satisfy their needs. Employees working in Next Plc will help in
earning competitive advantage over other rival companies.
Rare – All those resources that are rare and not available to any other company. The
company deals in highly competitive environment that consist of many companies which is
providing same products and services to customers. Rare resources of Next Plc company
includes skilled employees, supply chain networks and financial resources (Herrmann and Felfe,
2014). This will help Next plc to perform organisational activities in better and effective manner.
Workforce of respective company is rare as this they are not available to any other rival
companies. Its financial resources are considered as rare because it can not be copied by any
other organisation. It is use different methods and techniques for management of supply chain.
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Imitable – This includes all those resources of Next Plc company which can not be copy
or imitate by any organisation. Imitable resource of respective company is financial resources as
well as supply gain networks. This company needs to carefully use these resource as this will
help in earning a first mover advantage over other rival companies (Higgins, Omer and Phillips,
2015). This company has sufficient financial resources which is helpful in performing business
activities in better manner. Supply chain management of respective company is using different
methods of distributing manufactured products to potential customer.
Organized – It comprises of all those resources of company that need to be organized in
proper and effective manner. Supply chain networks of Next Plc company will be able to manage
the resources so that respective company will be bale to distribute products and services to
targeted customers. This will be helpful in full fill needs and requirement of customers as well as
help in achieving goals of organisations.
Through this analysis Next Plc company will be able to identify all those resources that
are valuable, rare, imitable as well as organized. This will help in using of resources in correct
manner as well as achievement of desired goals and objectives without compromising on the
quality of its products.
TASK 3
P3
It is essential for organisation to understand the respective market sector as well as
different factors which have impact on organisation. NEXT Plc company deals in retail sector
which is full of competitors and it is necessary for the firm to evaluate all competitive forces that
will have influences over respective company. In order to carefully analyse each and every
factors or force for performing operations of this company (Jeston, 2014). Porters five force
model will be very helpful for this company. This model was developed in 1979 and it was
created by M. Porters. It includes five different forces such as threat of new entrant, bargaining
power of buyers, bargaining power of suppliers, threat of substitutes, threat from rival
companies. All of these forces are mention below in context of NEXT Plc company.
Threat of new entrants – There are a number of fresh firms that are entering in the
market of retail sectors. NEXT Plc is a well known company and provides high quality products
as per need and wants of customers. This organisation is servicing its products from many years
and it has developed its brand image. New entrant company will not be able to match with the
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quality product and service offered by respective company. This force will have less impact on
organisation as well as its activities.
Bargaining power of suppliers – In retail sector there are many suppliers which are
offering to raw material and other resources to company. It is essential for Next plc to purchase
top quality raw material as its products as majorly dependent on the quality of raw material used
(Jocovic and et. al., 2014). NEXT Plc company can purchase raw products from various
suppliers so that negotiation or bargaining of supplier does not have much impact on
organisation. Bargaining forces will have low impact the forces of organisations.
Bargaining power of buyers – Customers are the most important part of company as they
will help in enhancing sales and revenues of organisations. It is essential for NEXT Plc company
to meet with the expectations of customers. Buyer are very demanding any they are attracted
towards discounts and other offers. This particular force will have impact on company as it will
affects its sales. When large number of buyers are bargaining from respective company then it
will lead to influences the prices of NEXT Plc products. Bargaining power of buyers will have
moderate impact on organisation.
Threat from substitution of products – There are a number of companies that provide
similar products and services to customers. This lead to increase the impact of substitution of
product on organisations. Power of threat from substitution increase when respective company is
not able to meet with the need as well as expectations of customers. It is very important for
company to develop products which has high values and can not be replaced by any other
products.
Threat from rivalry among existing competitors – This is one of the major threat to
NEXT Plc company as this organisation operates in a market that is full of competitors. Rivalry
among existing companies will result in huge impacts over business of NEXT Plc . These forces
have high influences over Next plc as well as its functions (Johnson, 2016). In order to deal with
this force the firm needs to use tools and techniques which will help respective company to gain
competitive advantage.
From porter five force model it can be analysed that threat of rivalry among competitors
and threat from substitution of product will have high impact on NEXT Plc company. Bargaining
power of buyers force will lead to have moderate impact on organisation. Other forces such as
threat of new entrant and this force will have low impact on this company.
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TASK 4
P4
There are several theories and models that can assist the firm to take better decisions in
the business as well as strategic planning. To develop better action plans Next Plc needs to use
Ansoff model. This will help in evaluating different strategies that can be used by company for
its overall growth and development (Jones and Comfort, 2018). This company needs identify the
most accurate strategies and right decision for development of business. Ansoff matrix was
developed by Igor Ansoff with the motive of providing instructions to company. With the help of
this model NEXT Plc company will be able to achieve desired goals. This includes four
different strategies which can be used by company and all of these strategies are explained
below. Market penetration- In this strategy the company need to sale its current product to
existing market area. Market penetration refers to those strategies where the firm plans on
enhancing its business with current products and serves as well as dealing in existing
market area. The aim objective of NEXT Plc company by developing this strategy is to
increase market share in current place. Market development – In this strategy NEXT Plc company will be focusing of enhance
its market area. Market development strategy can be describe as away in which respective
company will be selling is current goods and services to new market area. In this
company needs to understand the demand of new market area and use correct tool and
method to increase sales in new market area. Product development – This strategy refers to the techniques in which respective
company is developing new product to current market area. Product develop is
considered as a very effective strategy in order to offer completely new product which is
different from other rival companies product (Kaul, 2017). For successful implementation
of the product development strategy Next plc should to identify needs and wants of
current customer and satisfy their requirements.
 Diversification – This is considered as the most risky strategy because in this the
company needs to develop a new product in order to full fill the needs of new market
area. In diversification strategy NEXT Plc company will be focusing on attracting
customer of different market area by offering completely new product.
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After analysing different strategies it has been evaluated that market penetration will be
the most suitable business strategy. In order to achieve desired goals, NEXT Plc company needs
to increase its marketing activities. This will help in attracting more and more customers towards
business.
Strategic Management plan
Strategic management plan can be defined as a plan of action that is used by company in
order to achieve desired goals (Klettner, Clarke and Boersma, 2014). This is a well written
document that includes each and every information about company and includes goals,
objectives, mission, strategies and tactics. This will help respective company allocate all details
that are necessary for development of organisation and attaining desired goals.
Aim: The aim of NEXT Plc company is to design beautiful and excellent quality
products in order to meet customer expectations.
Vision: To set high standards to products and services in market area by proving exciting
clothing, footwear and other accessories products.
Mission statement: The mission of respective company is to develop strong brand image
in market area and enhance its profits.
Values: This company is focusing in develop products by considering moral values and
ethics in business process.
Goals and Objectives: This refers to the motive of organisation that should be timely
achieved by company in order to enhance organisational activities. Long term goal of NEXT Plc
is to attract more and more customer in order to grow its overall sales and profits. Short term
goal includes development of effective marketing strategies as well as using new and innovative
tools and techniques.
Strategies: In order to attain desired aims of NEXT Plc company market penetration
strategy will be most appropriate (Lam. and O'Higgins, 2012). Next plc needs to enhance its
sales in current market area by selling existing products. This will help in enhancing sales and
profits of organisations. This company needs to use both traditional s well as Morden methods of
promotional and marketing.
Tactics: For successful development of strategic plan as well as implement it in efficient
manner. This company needs to use right marketing tactics for execution of marketing activities
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