Next Retailer: An Entrepreneurial Strategy Analysis Report (2024)

This report provides a comprehensive analysis of Next, a major UK retailer, focusing on its entrepreneurial strategy. It begins with an introduction to entrepreneurial strategies and their importance in establishing and maintaining an organization's relationship with its environment. The main body of the report examines Next through PESTEL and SWOT analyses, assessing political, economic, social, technological, environmental, and legal factors, as well as the company's strengths, weaknesses, opportunities, and threats. The report also identifies potential problems Next may face in sustaining its market position and proposes solutions, including the application of the ANSOFF matrix for product development and market penetration. The analysis highlights the importance of adapting to market changes and developing innovative strategies to ensure continued growth and profitability. The conclusion summarizes the key findings, emphasizing the critical role of strategic planning in Next's success.

ENTREPREEURIA
STRATEGY

INTRODUCTION...........................................................................................................................4
MAIN BODY..................................................................................................................................4
NEXT...........................................................................................................................................4
PESTEL analysis of Next............................................................................................................4
SWOT analysis of NEXT............................................................................................................8
Problem that can be faced by Next to sustain itself in the market...............................................9
CONCLUSION..............................................................................................................................10
REFRENCES.................................................................................................................................11

INTRODUCTION
Entrepreneurial strategy is that kind of strategy through which an organization establishes
and re-establishes its fundamental set of relationships with it environment. In other words these
are those strategies that are responsible for establishing of decision making process within an
organization and affecting the process involved in it. These strategies are related to various
aspects of business. Scope of this strategy is wider because it covers those things that is
important for an organization to grow itself. The following file is going to be based over Next
that is larger retailer in UK and has variety of products to sell. In these file things that is going to
cover is based upon PESTEL analysis, SWOT analysis and ANSOF matrix. Further in this file
problem that can be faced by an organization is going to be explained. Also appropriate solutions
going to be provided for problem face by an organization.
MAIN BODY
NEXT
Next is an British multinational clothing, footwear and home products retailer. It has its
headquarter in Ender by, Leicestershire. It has around 700 stores which circa 500 are in United
Kingdom and rest 200 is across Europe, Asia and Middle East. Next being a popular retailer it
has various wide ranges of products that are of various types. Next consists of two types of
factors within an organization. These factors can have very adverse affect over an organization
because of their tendency to affect overall working procedure of an organization. These factors
are responsible for growth of company. External factors are those type of factors that is
responsible for creating an impact upon a company through external forces. External factors are
those factors which affect an organization from inside. In order to mark these factors two
analysis are done that is SWOT and PESTEL.
PESTEL analysis of Next
PESTEL analysis is a strategic tool to analyze the macro environment of the organization.
PESTEL stands for - Political, Economic, Social, Technological, Environmental & Legal factors
that impact the macro environment of Next (Alayo and et. al., 2019). Changes in the macro-

environment factors can have a direct impact on not only the Next but also can impact other
players in the Retail. PESTEL analysis provides great detail about operating challenges Next will
face in prevalent macro environment other than competitive forces. For example an Industry may
be highly profitable with a strong growth trajectory but it won't be any good for Next if it is
situated in unstable political environment. The factors involved in this analysis has been
explained as follows:
Political factor: Political factors play a significant role in determining the factors that can
impact Next's long term profitability in a certain country or market. Next is operating in Retail in
more than dozen countries and exposes itself to different types of political environment and
political system risks. It has achieved success in such a dynamic Retail industry across various
countries and is also able to diversify the systematic risks of political environment. These are
some of the important factors that have to be kept in mind which can create drastic impact over
Next in relation to policies that are being formed by the government.
 Political stability and importance of Retail sector in the country's economy.
 Risk of military invasion
 Level of corruption - especially levels of regulation in Consumer Services sector.
 Bureaucracy and interference in Retail industry by government.
 Legal framework for contract enforcement
 Intellectual property protection
Economic factor: The Macro environment factors like inflation rate, savings rate, interest rate,
foreign exchange rate and economic cycle determine the aggregate demand and aggregate
investment in an economy. While micro environment factors such as competition norms impact
the competitive advantage of the firm. Next can use country’s economic factor such as growth
rate, inflation & industry’s economic indicators such as Retail industry growth rate, consumer
spending etc to maintain the growth of itself within growing competition of market within the
country. Such factor has an very important role to play for an organization and such factor can
impact a company in both positive and negative manner (Acs and et. al. 2017). If policies for is
going to increase the

 Type of economic system in countries of operation – what type of economic system there
is and how stable it is.
 Government intervention in the free market and related Consumer Services
 Exchange rates & stability of host country currency.
 Efficiency of financial markets – Does Next needs to raise capital in local market?
 Infrastructure quality in Retail industry
 Comparative advantages of host country and Consumer Services sector in the particular
country.
Social factor: Society’s culture and way of doing things impact the culture of an organization in
an environment. Shared beliefs and attitudes of the population play a great role in how marketers
at Next will understand the customers of a given market and how they design the marketing
message for Retail industry consumers. Some of the important thing which are to be taken in to
consideration while dealing with this factor has been given as follows:
 Demographics and skill level of the population.
 Class structure, hierarchy and power structure in the society.
 Education level as well as education standard in the Next’s industry
 Culture includes gender roles, social conventions.
 Entrepreneurial spirit and broader nature of the society. Some societies encourage
entrepreneurship while some don’t.
 Attitudes involves services like health, environmental consciousness.
 Leisure interests
Technological factor: Technology is fast disrupting various industries across the board. Variuss
new methods of having faster and better production are being developed. Over the last few years
the industry has been transforming really fast, not even giving chance to the established players
to cope with the changes. Next should not only do technological analysis of the industry but also
the speed at which technology disrupts that industry is required to be kept in mind. Slow speed
will give more time while fast speed of technological disruption may give a firm very less time
to observe all change and gain high profitable (Gans, Stern and Wu, 2019). Technology analysis

involves understanding the following impacts because it plays an very important role in making
it effective upon an organization and these are being explained as follows:
 Recent technological developments by Next competitors
 Technology's impact on product offering
 Impact on cost structure in Retail industry
 Impact on value chain structure in Consumer Services sector
 Rate of technological diffusion
Environmental factor: Different markets have different norms or environmental standards
which can impact the profitability of an organization in those markets. Even within a country
often states can have different environmental laws and liability laws (Gao and et. al. , 2018).
Before entering new markets or starting a new business in existing market the firm should
carefully evaluate the environmental standards that are required to operate in those markets.
Some of the environmental factors that a firm should consider because they affect growth and
establishment of the company and some of these important factors are being give as follows:
 Weather
 Climate change
 Laws regulating environment pollution
 Air and water pollution regulations in Retail industry
 Recycling
 Waste management in Consumer Services sector
 Attitudes toward “green” or ecological products
 Endangered species
 Attitudes toward and support for renewable energy
Legal factor: In number of countries, the legal framework and institutions are not robust
enough to protect the intellectual property rights of an organization. A firm should carefully
evaluate before entering such markets as it can lead to theft of organization’s secret sauce thus
the overall competitive edge. This is one of the most important factor of the analysis because it is

responsible to protect an organization with all kinds of legal issues which can stop its progress
and growth (Garg and Eisenhardt, 2017). Factors required to be kept in mind while dealing with
this factor has been explained as follows:
 Anti-trust law in Retail industry and overall in the country.
 Discrimination law
 Copyright, patents / Intellectual property law
 Consumer protection and e-commerce
 Employment law
 Health and safety law
 Data Protection
SWOT analysis of NEXT
SWOT analysis is that kind of analysis which is responsible for analyzing of strength,
weaknesses, opportunity and threat within an organization these are one of the most effective
analysis that helps and organization to work over its and these analysis has been very useful
within an organization. SWOT analysis of Next has been done as follows:
STRENGTH WEAKNESSES
1. Successful track record of developing new
products – product innovation.
2. Strong Brand Portfolio – Over the years
Next has invested in building a strong
brand portfolio. The SWOT analysis of
Next just underlines this fact. This
brand portfolio can be extremely useful
if the organization wants to expand into
new product categories.
3. Strong Free Cash Flow – Next has
strong free cash flows that provide
resources in the hand of the company to
expand into new projects.
1. Days inventory is high compare to the
competitors – making the company
raise more capital to invest in the
channel. This can impact the long term
growth of Next
2. The profitability ratio and Net
Contribution % of Next are below the
industry average.
3. Financial planning is not done properly
and efficiently. The current asset ratio
and liquid asset ratios suggest that the
company can use the cash more
efficiently than what it is doing at
present.

OPPURTUNITIES THREATS
1. Organization’s core competencies can
be a success in similar other products
field. A comparative example could be
- GE healthcare research helped it in
developing better Oil drilling machines.
2. The new taxation policy can
significantly impact the way of doing
business and can open new opportunity
for established players such as Next to
increase its profitability.
3. Lower inflation rate – The low inflation
rate bring more stability in the market,
enable credit at lower interest rate to
the customers of Next.
1. New technologies developed by the
competitor or market disruptor could be
a serious threat to the industry in
medium to long term future.
2. Liability laws in different countries are
different and Next may be exposed to
various liability claims given change in
policies in those markets.
3. Shortage of skilled workforce in certain
global market represents a threat to steady
growth of profits for Next in those
markets
Problem that can be faced by Next to sustain itself in the market
Next is among the largest retailer in UK and has al lot of variety of product including household
product. Still Next might have to face lot of competition regarding is sustainability within the
market. So, in order to help in gaining of balance and run itself according to market it has to
focus upon product development. This can be better understood through an ANSO matrix. In this
matrix. The Ansoff Matrix is a strategic planning tool that provides a framework to help
executives, senior managers, and marketers devise strategies for future growth. In this there is
market development, product development, diversification and market penetration. Out of this
product development can be used by Next as it is required to develop its product and bring it into
current market with innovation which is going to boost its production. Also increases
profitability at very faster rate of an Next (Hartsfield, Johansen and Knight, 2017).

CONCLUSION
From the above file it can be understood that entrepreneurial strategy are that kind of strategy
that has been used by an organization to boost its finances and maintain decision making. Also in
this file PESTEL has been conducted upon Next in order to show the impact of external forces
upon it. After this SWOT has been done to show affect of internal forces upon the organization.
Further in this file problem has been told that is related to sustainability in market and solution
regarding it is ANSO matrix which is going to help through product development.

REFRENCES
Books and journal
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entrepreneurial performance: An empirical research. Technological Forecasting and
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making happens in entrepreneurial firms. Academy of Management Journal. 60(5).
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