Strategic Analysis and Evaluation of Next plc's Operations

This report provides a comprehensive strategic analysis of Next plc, a British multinational retail organization. It begins with an introduction to strategy evaluation and its importance, followed by an examination of Next plc's mission, vision, purpose, and objectives. The main body of the report critically evaluates the value of clear purpose, vision, mission, and objectives in setting the strategic direction of organizations, using Next plc as a case study. The report then assesses Next plc's competitive advantage using the VRIO framework and analyzes the external environment using the PESTLE framework. Porter's Five Forces Model is also applied to understand the organization's competitive landscape. Finally, the report reviews Next plc's overall strategy, drawing conclusions about its effectiveness and offering recommendations. The report highlights the importance of strategy evaluation in achieving organizational goals and maintaining a competitive edge in the market.

Strategy Evaluation

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY ..................................................................................................................................3
A critical evaluation of the value of clear purpose, vision, mission and objectives in setting the
strategic direction of organizations using examples from selected organisation........................3
Assess the competitive advantage of the selected company, using the VRIO framework.........5
Using PESTLE framework analysing the external environment of the selected business.........7
Application of the Porter’s Five Forces Model within organisation...........................................9
A review of the selected organisation’s strategy.......................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
The term strategy is explicated as a process and set of actions that are designed for
formulating a competitive-edge in market. Strategy choice is developed and implemented to
match with organisation objectives of enterprise by understanding internal and external
environment of country. Strategy evaluation is defined as a process through which strategist
know about extent of strategy to achieve company objectives by determining strategic choice
which is implemented to match with objectives of business. This report is written from
perspective of Next plc and it is a British multinational retail organisation that perform
operations at global level (Sanzida and Nagy, 2019). The headquarter of Next plc is situated in
Enderby, England. UK from where organisation operate and manage more than 500 stores at
global level. Moreover, this report highlights on vision, mission and objectives of organisation
and also on competitive advantage of selected of business. PESTLE framework and Porter's five
force model will also included in this report to analyse and understand organisation strategy.
MAIN BODY
A critical evaluation of the value of clear purpose, vision, mission and objectives in setting the
strategic direction of organizations using examples from selected organisation
The term strategy evaluation is defined as a significant strategy that formulate and focus
on efficiency and effectiveness of plans that is used to achieve desired results. The manager
assess about appropriate factors of current strategy through which challenges and issue from
dynamic world is evaluated to achieve organisation goals. With understand of strategy evaluation
of Next Plc this is analysed that strategy evaluation consists and undertake different factors that
include development of inputs for new strategic planning, appraisal and reward, development of
strategic management process (Grissom and Bartanen, 2019). They are used to achieve
organisational mission and vision in an appropriate manner.
Mission of Next plc
The mission statement of Next plc is to offer exciting, creatively designed and excellent
quality clothing that are made for comfortable clothing.
Vision of Next plc
According to vision of Next plc management focus to offer outstanding value that meet
with customer expectations.

Purpose of Next plc
The purpose of Next plc is to become natural choice retailer among UK that provide
fashionable cloths to men and women who expect style, quality and distinction from their
clothes.
Objectives of organisation
 To formulate a team of specialist that generate responsible aspects to ensure all products
that are sold by Next plc are safe and comply with relevant customer legislation.
 To develop better relation with customers and it aids to generate expert guidance for
selecting and choosing high quality materials for clothes.
 To perform all work with responsible sourcing and building transparency for trace raw-
materials that not impact on environment.
Strategy evaluation perform an important role for business strategy and it arise out facts
that aids to develop actions that are correct and accurate (Meschke and et. al., 2018). This also
aids management to perform work with detail evaluation and it aids decision-maker to generate
right and appropriate factors for development of appropriate strategic plans. From perspective of
Next plc some steps related with strategy evaluation are mention as follow: Fixing benchmark of performance- To fix with benchmark, management of respective
organisation encounter and generate strategy that set criterion for expressing and
completing organisational work in an appropriate manner. This is also important for
organisation to set and develop essential requirement of business. With understand of
performance indicator this is identified and understand that special requirements are
developed for performing work in an appropriate manner. Quantitative and qualitative
data is implemented and this include net profit, earning per share, cost of production and
many more. In context of NEXT plc management decided benchmark that focus on
selection of strategy that is implemented on all operations and functions of respective
organisation. Measurement of performance- The standard performance is defined as a benchmark and
it match with actual performance to compare (Mungi, 2020). Reporting and
communication system helps to measure standard and performance for completing
organisational work with more efficiency. The term performance standards are
established in right manner and it make strategy evaluation easier. Next plc also develop

and implement different factors through which management indicate better financial
statements for organisation. It refers management measure performance through
calculating their profits. Similarly, divisional performance provide individual aspect and
it create variable objectives to complete all task in an organised manner. Moreover,
performance measurement also help to decide strategy which is more accurate to
accomplish organisation vision and mission. Analysing variance- This is important to measure actual performance and then compare
it with performance standard (Dogu and Albayrak, 2018). There are different variances
is analysed which is used by strategists to understand performance of organisation.
While monitoring all perspective this is analysed that NEXT plc perform operations and
functions at a large level. So it is difficult for management to analyse and manage work
which focus on deviation of aspect that indicate for developing issue through which
shortfall in performance is managed by organisation. This shortfall states about
understand of corrective action for overcome from different variance that create
complexity for organisation because of managing work at a large place.
 Taking corrective action- Once deviation performance is understand and identified than
it is mandatory for organisation to generate plan that support management to perform
work with corrective action. If performance is consistent less than it is complex for
management to gain desired results. Along with this management also focus on all those
aspects that improve responsible factors to manage all work in an appropriate manner.
Strategist also analyse and make longer results by which persons understand aspects and
it is used for managing work with decided roles and for Next plc strategist evaluate about
roles that focus on completing work by dividing it in an appropriate manner.
Assess the competitive advantage of the selected company, using the VRIO framework
The VRIO analysis of Next plc generate fortune of fashion chain and this is used to
manage work with internal resources (Thongsookularn, 2019). Their are different task performed
by management and it provide sustainable competitive advantage. VRIO analyses of Next plc is
mention as follow:
Valuable

 The Next plc face fortune of fashion chain and it is because financial resources of Next
plc are valuable and it aids to generate investment in external opportunities that arise to
perform all work in an organised manner.
 Local fashion chain and suppliers of Next plc provide products in each market segment
and it generate valuable resource that is used to differentiate clothes of Next plc different
from another competitive organisation (Cvetković and et. al., 2019).
 Employee's or workforce perform an important role and this aids management to
complete their task in an appropriate manner. It refers employee's are valuable resource
for organisation.
Rare
 Financial resources of Next plc that is obtained by fashion chain of Next plc generate and
possess by only few number of organisation. So it work as a rare resource for
organisation.
 Designer and research team of Next plc fashion chain perform an important role to gain
competitive-edge by providing new and comfortable clothes to management.
 Employee's who are engaged in operations of Next plc are highly trained and skilled so it
it aids to complete all work with more efficiency by focusing on company goals and
objectives.
Imitable
 Financial resources of Next plc imitate and identified perspective that generate goodwill
for organisation and it aids to earn high profits. So this is difficult for new organisation to
earn same profits because it is difficult to match with value and goodwill of Next plc.
 Clothes that are provided by Next plc are good in design and effective to use as they are
made from good fabrics (Błaszczyk, 2018). So it work as an effective aspects for
management to gain competitive-edge as it is difficult to imitate same products.
 The employees of Next plc create difficulty for other organisation by obtaining patent of
it's products. So with legal aspects this is complex for competitors to simulate same
products.
Organisation

 Financial resources of Next plc generate fashion chain and for this aspect management
strategically invest in right place. It results better opportunities are obtained to perform
work that aids to obtain sustainable advantage in market.
 The patent of Next plc generate fashion chain and this is used by organisation to
distribute all aspect by which management generate long networks to reach out with
customers. It also aids to gain competitive-edge in market.
Using PESTLE framework analysing the external environment of the selected business
Pestle analysis is defined as a theory to analyse its key factors which involve political,
economic, social, technological, legal and environmental factors. This analysis defines as a
organised evaluation in context with businesses risks as well as opportunities. The pestle
analysis of Next plc is explained as below:- Political factors:- These factors are defined as as how government steps in the economy.
There are different political factors like political stability or instability, tax policies,
labour law, different trade restrictions and so on. In case of Next plc all different kind of
political factors affected their profitability in context with specific country or market.
They faced an impact of Brexit transition period (Widodo, 2018). Next plc analysed
external environment while analysing political factors through different trade regulations,
compulsory employee benefits, safety regulations in customer service sector. In context
with the external environment there are certain external factors also which are outside the
environment and affect the organisation. So, company make certain strategies to deal
with specific political factors as there may be issue of corruption in political parties
which lead to certain consequences in organisation. So, while entering into any industry
they choose to enhance their business they look at all regulatory policies as well as risks
associated with business. Economic factors:- These type of factors lead to impact on demand for consumer goods
like wages, prices of goods, confidence of consumers and so on. In case of Next plc, they
also faced the impact of epidemic in their retail sector in context with customer spending
power. To deal with all economic factors that affects external environment company
make certain strategies like to focus on education level in the economy, economic growth
rate, interest rates as well as inflation rates. The company got affected by certain

economic factors as it was difficult for UK to be a strong competition in outside world
due to high pound exchange rates (Gregory, 2020). So, Next plc also made strategies to
build a stronger economy so that customers are able to purchase those products which
they want to buy. The economy can be strong also and at some time it can be poor also.
The company also made a strategy while employing skilled workforce because it will
lead to build a strong economy and proper analysis of external environment would be
done. Social factors:- These factors affects people's lifestyle. Social factors includes religion,
education level, family size as well as structure and population density. In case of Next
plc, they also had an impact of society culture on their business. So, to deal with external
environment and social factors company made various strategies like they did promotion
of diversity, use of Internet through which customers had many choices and there was
support from community in context with all employment and education opportunities. By
analysing external environment and by making strategy of doing online business, they
get all information regarding choices of consumers, their likes as well as dislikes. As due
to different religion everyone has different choice so Next plc also made strategy
according to that. Technological factors:- These factors influence all decisions when any company enters a
new market or do any type of innovation in their products. There are various type of
technological factors like use of social media, know about customer, launch or innovation
in market, investment in technology and benefits of new technology (Bailey and et. al.,
2018). In case of Next plc, they also made certain strategies for doing advancement in
technology as new technologies attract all consumers. The company was affected by
technological factors as their competitors are using latest technology so to deal with them
they started doing online business to reach consumers across the world. Due to growing
internet business and analysing external environment company launched new products. Legal factors:- These are defined as all external factors and how different all different
laws puts impact on businesses in context with how they operate and how customers
behave. There are different legal factors like health and safety law, consumer law,
employment law and so on. In case of Next plc, they had to deal with certain legal

conditions which companies especially face while doing online business. The company
made certain strategies while analysing external environment through regulatory
compliance in terms of consumer credit business. There are certain issues due to impact
of legal factors like bankruptcy so before establishing their business company made
strategies to deal with all legal laws.
 Environmental factors:- They are also known as ecological factors which affects the
physical environment. There are different environmental factors like air pollution or
water pollution, environmental laws, effect of climate change and son on. In case of Next
plc, they made strategies to deal with environmental factors by implementing proper
water management to solve with shortage problem and also did decreased carbon
emissions.
Application of the Porter’s Five Forces Model within organisation
The term Porter five force analysis work as a strategic management tool and it is used to
analyse industry and also to understand levers related with profitability. Next plc manager use
Porter five force for formulating competitive-edge in market. Next plc five force framework is
mention as below:
 Threats of new entrants- New entrants in retail generate innovation and it also offer
new ways to do things that generate pressure on Next plc by minimising pricing strategy.
Along with this by reducing cost and offering new value propositions to customer's this is
easy to build effective barrier that generate challenges for Next plc. So the threat of new
entrants is high in market (He, Whited and Guo, R., 2018). Next plc implement
innovative strategy to safeguard it's position among market.
 Bargaining power of supplier- All major organisation in retail industry purchase raw-
material from different suppliers. So the position of supplier is dominant and it decrease
earning of Next plc. Powerful supplier in consumer service sector utilise their negotiating
power to extract high price from retail field. Overall the bargaining power of supplier is
high in market.
 Bargaining power of buyer- Buyer often demand a lot and they are focused towards
best offering that is available in return of minimum price. It also generate pressure on
Next plc to earn profits for long run. So high bargaining power of buyer create difficulty

because individual require discount to manage their work. To overcome from this
management generate aspects that create and build large base for customer's.
 Threat of Substitute products- When product and service match with similar needs of
customers in different ways, profitability and retail industry than it generate challenges
for Next plc to perform work in proper manner. The power of substitute products is high
in market so it create problems for organisation to perform work in unique manner.
 Rivalry among existing competitors- If rival organisation consider and reduce prices
than overall profitability of industry is reduced. From perspective of Next plc
management operate business in retail organisation and this is a competitive place. It
results that long term profitability generate long term challenges for rival organisation
which create complexity to analyse and understand market to compete with rivals in
small market. So with understand of all factors manager also perform their role in proper
manner.
A review of the selected organisation’s strategy
Next plc perform their work with innovation and business strategy and it is used to
perform work with understand and analyse of factors that create business outlines to attain
organisation goals. This also explain methods to deal with competitors that generate needs and
expectations for customer's. Long term growth and sustainability create sense for management to
improve their position in market. This also explain management aids time to perform their work
in straight manner though generating capabilities that support business operations and functions
to perform all task with use of new action and activities. Business strategy is also beneficial for
Next plc as it is a retail organisation and this aids persons to perform their work with future
areas. Strategies look towards future risk and it generate trends for persons to complete all task
according to related strategy. This also results management examine and implement changes
which is used for generating political and technological changes in company.
CONCLUSION
From the above analysis it is concluded that while establishing any organization there
must be a proper vision as well as proper mission so that all employees work according to that
specific mission. The aim and objectives which an organization have, there should be purpose
behind it and all employees should have a clear purpose in their mind regarding the aim they

have to achieve. Every organization want to generate sustainable competitive advantage so that
they perform better than their competitors. There are many competitors in the market and
organizations have to make proper strategies to deal with other businesses. The business is also
affected by the external environment which involve many factors like social, competitive and it
can affect business in a negative way also. The organization makes strategies according to those
different factors because organization can be affected by different cultures of society, different
demands, competitors already present in the market. It is also analysed that to remain at the top
position and to maintain attractiveness in market, it is important to evaluate all external
environment factors as well as analysing about strategies of competitors also.

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