Business Strategy Report: Macro-Environment Analysis of Next plc

This report provides a comprehensive analysis of Next plc's business strategy. It begins with an introduction to business strategy and its importance for achieving competitive advantage, followed by an in-depth analysis of the macro-environment using the PESTLE model, examining political, economic, social, technological, environmental, and legal factors. The report then assesses Next plc's internal environment and capabilities through a SWOT analysis, identifying strengths, weaknesses, opportunities, and threats. Furthermore, it applies Porter's Five Forces model to evaluate the competitive forces within the organization. Finally, the report synthesizes these analyses to interpret and devise strategic planning recommendations for Next plc, concluding with a summary of key findings and recommendations. The report emphasizes how macro-environmental factors and internal capabilities influence the company's strategic decisions and market position.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Analyse of macro-environment to understand their impact and influence on organisation
and their strategies.......................................................................................................................3
TASK 2............................................................................................................................................7
P2 Analyse internal environment and capabilities of organisation.............................................7
TASK 3............................................................................................................................................9
P3 Implement of Porter five force model to evaluate competitive-force in organisation...........9
TASK 4 .......................................................................................................................................11
P4 Apply range of theories, concepts and models interpret and devise strategies planning for
given organisation.....................................................................................................................11
CONCLUSION .............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
The term business strategy is explicated as a combination of overall decision, action and
methods which are enforced by organisation to accomplish their goals and objectives with
development of competitive-edge in market. The main aim of business strategy is to ensure
competitive position in market. Strategy work as a roadmap that aids an organisation for
accomplish of their desired goals by overwhelming from competitors. The business considered
for this report is Next plc and it is a British multinational organisation that operate their business
by overwhelming from competitors (Amran and et. al., 2016). Moreover, this report highlights
on analysis of macro environment and it influence on organisation and it's strategy. Internal
environment and capabilities of organisation with use of appropriate frameworks will also be
included in this report. In the last, Porter's five force model to evaluate competitive force is also
focus in upcoming report.
TASK 1
P1 Analyse of macro-environment to understand their impact and influence on organisation and
their strategies
Business objective with a strategy perform an important role and this aids management to
enter in market with a competitive-edge in market. The increase in competition generate
challenges so strategy perform an important role and it aids management to enhance their
position in market. From the perspective of Next plc, planning, strength & weakness,
competitive-edge and control of activities is achieved through formulate of appropriate strategy
in organisation. In simple terms, business strategy is considered as a business plan and it work as
a part of conceptual structure that is known as business model. Organisation strategy is impacted
due to change in macro-environment factors because they are uncertain to predict. So the
strategy of business is impacted (Balaji and Roy, 2017). Therefore, PESTLE model is enforced
by management of Next plc for accomplish of organisational goals in minimum time-period
through understand of macro-environment. It also results strategy is developed with understand
of macro-environment factors.
 Political factors- The term political factor play an important role and this is used for
determining different factors that impact on long term profitability of Next plc. The
certain market or country government, rules, regulations etc. complexity for management

to perform their role in an appropriate manner. Next plc perform their work in an
international market and this define about understand of different political system to
analyse risk factors. Retail industry is dynamic in nature and it generate complexity for
Next plc to understand systematic risk factors. This impact on sale of organisation
products because of challenges that exists among government of company. For influence
and develop appropriate strategy it is important for management of respective
organisation to establish and manage their store in a political stable country (Bentley-
Goode, Omer and Twedt, 2019). This influence individuals for performing all roles in an
appropriate manner. Corporate level strategy is impacted because of political factors and
this is because government set guidelines that stated aspects which define how work is
managed in a particular country.
 Economic factor- Macro environment factors engage about development of inflation
rate, saving and interest rate etc. for determine and understand about aggregate demand
and investment factors among economy of business. Within context of UK economy,
there are different challenges faced by Next plc because of Brexit decisions. On the other
side, pandemic conditions formulate long term challenges that impacts on organisation
operations such as sale of products is reduced. So economic factor directly impacts on the
profits of business. Similarly, to influence decision-making of consumer Next plc
develop different factors such as discount, big days sale etc. for increase sale and profits
of business (Chen and et. al., 2018). Moreover, to enter in international market Next plc
focus that government intervention must be low in market. Along with this economic
factor impact on Next plc action so management maintain and develop relationship
among all departments of respective organisation to accomplish business goals in proper
manner.
 Social factor- The society culture as well as way of performing work impact on the
culture of an organisation. Belief, value and attitude etc. of a population perform a crucial
role for marketers to understand customer requirements. From the perspective of Next plc
social factor impact on marketing strategy because management design and promote
message of Next plc as per consumer needs. Along with this operation method to perform
work in market is impacted because of demographics and skill level of population. Like,
Next plc face challenges to manage store with individuals who are not well in education.

This is because it is a multinational retail organisation that deal in various products so it
is important to identify products from a large list that stay in market. Further, to ensure
better position in market Next plc formulate strategy according to interest level of
society.
 Technology factor- It is a fast disrupting aspects that perform their role among different
industries across the world. Retail industry also identify different aspect that demonstrate
importance of technology in an organisation. Next plc purchase their product stock in
bulk so it is important for management to identify number of them in order to reduce
number of product wastage. With help of technology this is easy for management to
perform and manage product item by engaging product in a profitable manner (Diddi and
Niehm, 2016). The technology aspect impact on strategy of business because if
management not update their work with technology than it is complex to complete task
within minimum time-period. To influence individual or personnel of Next plc for adopt
technology management organise training session. It helps individual to work with
application with a user-friendly manner.
 Environment factor- Different market generate norms and environmental standards that
impact on profitability of organisation. Even within UK, Next plc face challenges
because of different environment laws and liability. The impact of environment factor is
understand that European countries government charge healthy tax from companies who
break environment policies. Next plc analyse and understand weather, climate change
and laws of regulating environment pollution to manage and develop their store
according to surroundings and rules of a country. Further, to influence and analyse all
environment factors Next plc management implement green policies to generate company
goodwill in environment standards (Ertürk, 2016). It impacts on business unit level
strategy. So all work is completed with specific strategy that aids to develop and manage
work according to corporate level aspects.
 Legal factor- Within a number of different countries, it is understand that legal
framework and institution are not robust properly that aids to protect intellectual property
rights. Next plc carefully analyse and understand about all factors that aids management
to enter in market with a clear approach. This also state there are different threat faced by
management and this impact on position of Next plc. So to overcome from this anti-trust

law within retail industry of a country is understand by management of respective
organisation for minimising challenges related with legal barrier of a country (Frei, Jack
and Krzyzaniak, 2020). Moreover, to influence better position in market employment law
and consumer safety law is developed for performing all work according to legal aspects
of a country. It also results that management of respective organisation also ensure that
all task are performed in an ethical manner that develop company goodwill in
organisation. Further, to influence all organisation in proper manner legal factor generate
aspect to secure position in market through use of company core-values which also helps
to operate similar store in different geographical market.
Critically analyse the macro-environment to develop strategic management decisions
With understand of different factors it is identified that strategy of an organisation is
impacted due to change in macro-environment. From the analyses of all above aspect this is
understand Next plc face challenges for development of corporate level strategy and the reason
of change in political environment. Along with this strategic analysis is also understand by Next
plc for performing positive results from company. An organisation ignore macro-environment
and it own about peril that make link between organisation strategic decision and environment.
This also generate about all aspects that include outcome of legislation to perform work with
decided aspects. It generate negative results and it define about develop of goals and objectives
that aids towards focus on company roles. On the other side, functional level strategy is also
impacted and it define management face problems due to change in country economy. Along
with this business unit level strategy is also impacted because of change in macro-environment
factors of organisation (Garcia-Swartz and Campbell-Kelly, 2019). The most important action to
analyse company aspect define about analyse of all roles, legislation and market analysis for
performing organisation task in proper manner. Regulation also generate a basic system for
government and this aids to develop laws that formulate systems for managing all work with
analysis of political environment. Next plc understand environment to make appropriate
decisions by analyse of government policy that might include develop of appropriate strategy or
policy for performing all work in proper manner. With this government action design about all
task with potential organisation aspect that define about all present aspects to make revolutionary
changes in company.

TASK 2
P2 Analyse internal environment and capabilities of organisation
SWOT Analysis
Swot analysis is helpful to identify the internal situation of the company. This is helpful
in taking suitable decisions after analysis and take prominent steps to recover from the threats
and weakness. Next plc the leading company in market had its Swot analysis for knowing the
Strength, Weakness, Opportunities and Threat that are mention as follow:
Strength- The main measurement of an organisation can use successfully to get its
objectives. Accumulation of all assets at a specific point, price and good quality these are the
major strengths of Next plc. The brand creates its own products and sells it in market, so the
company is not much affected by the switch in the demands of the market. Product innovation is
identified as a major strength of organisation that helps to complete all task with understand of
proper record of activities (Ji, Sun and Liu, 2014). It define about all task through which person
increase it company performance.
Weakness- The synonym for this in terms of business is a barrier in achieving your
profit in market. Lacking in performance or coordination is not well balanced and it lies under
weaknesses aspect. Next plc analysis history is its weakness as related to debates over factory
workers and staff's treatment. In case of Next plc lack of place in between leadership, 90%of
revenues created from the United kingdom and it define management face challenges to perform
work similar as compare to competitors. Days inventory perform work and it is used for
performing work with aids of enhancing company results through minimising organisation
barrier. Like, less investment in technology generate challenges for organisation to perform their
work in proper manner.
Opportunities- An advantage related to factors that affect an organisation from outside
that might create opportunity for them. A base for third party brands. A hype in demand of
complete clothing and footwear going with the demand in market. New trends is an opportunity
for Next plc. and International increase in the market with the focus on rising economies are
some beneficial future potential aspect for respective organisation. Liberal or flexible policy
perform an important role and it aids probability to enhance number of opportunities in market
through performing business with more efficiency. Technology provide opportunities that enable
management to maintain and develop it customer base.

Threat- Threats affects the business in market as New competitor, Increase in cost by the
wholesaler, Quality of work by staff is decreased, Clients are not satisfied, Sudden change in
taste of customers, Substitute products and many more. Various Troubles arise because of
mention threat that generate problem for Next plc and it Decline in quality by the the national
economy in United Kingdom (Khaled and et. al., 2020).
The VRIO analysis of Next plc identify and understand all internal resources one by one
to assess about all factors that aids company to gain sustainability in market. Next plc VRIO
model mention organisation factors at different stages and it results resources are improved by
management to gain competitive advantage in market. VRIO model of organisation is mention as
below:
Valuable
 Next plc VRIO analysis demonstrate financial resources as they are highly valuable.
Along with this it aids an organisation to invest in external opportunities for achieving
first mover advantage in competitive market. Similarly, threats are also reduced with
proper utilisation of financial resources.
 According to VRIO analysis of Next plc, local food products provide a valuable resource
and also they are highly differentiated. It make perceived value for customers and it result
this is easy for organisation to gain competitive position in market.
 The Next plc VRIO analysis define that employee's or workforce is most important
valuable resources of firm. With significant portion of trained and capable employee's it
is easy for management to generate productive results through transferring hight value in
company operations.
Rare
 Financial resources of Next plc are found to be rare and according to VRIO analysis of
Next plc, strong financial resources are only possessed by minimum or few companies in
world.
 On other side, local food products are found to be rare and it is easy for management to
provide them in market (Kitsios and Kamariotou, 2019). This define competitors face
challenges to utilise resources that define all work is completed with engage of local food
products. It results Next plc use them to gain better position in market.

 Employee's of Next plc are also identified as a rare resource and this define management
generate effective outcomes by offering training to all workforce in proper manner.
Imitable
 Financial resource of Next plc are not possible to imitate and it is identified by Next plc
that all resources which is acquired by management is generated from prolonged profits
of company (Lueg, Pedersen and Clemmensen, 2015). New entrants and competitors
require similar profits to accumulate same or equal position of Next plc.
 Local food products are not costly but they are complex to imitate because this is
complex for competitors to manage and invest same time period and value in research
and development department.
 Employee's of Next plc are also costly to imitate and this is because Next plc invest huge
amount for training of it's individuals. All competitive companies face problems to
perform work in similar manner because Next plc offer high package to it's individuals.
Organisation
 Financial resources of Next plc are organised to capture better value and it is identified
by VRIO model that company manage all resources in a strategic manner. This results
resource perform an important role to gain sustainable advantage in market.
 Patent of Next plc are not organised in proper manner and it demonstrate management
not utilise patents with it's full potential. So with use of patents in proper manner
sustainable advantage is convert into competitive-edge in market that aids to secure better
position in market.
TASK 3
P3 Implement of Porter five force model to evaluate competitive-force in organisation
Porter five force analysis is explained as a strategic management tool that is used for
analysing industry and understand about company profitability (Madhushree, Kumar and Aithal,
2018). Next plc manager utilise Porter five force model to analyse and influence about strategy
for business that aids to improve company profitability of Next plc in an organised manner.
Further, Porter five force is explained as a holistic strategy framework that aids to generate
strategic decisions with develop of different opportunities in market.

 Threat of new entrants- The term new entrants in retail industry perform their work
through analyse of all perspective that aids organisation to complete their task with new
methods. It is because new organisation perform work with new methods and low price
strategy. So the power of new entrants is high and this impact on operations and
functions of Next plc that create problems for organisation to deal with new competitors.
Innovation perform an important role to overcome from challenges related with new
competition.
 Bargaining power of supplier- All most each organisation perform their work in retail
industry and it aids to purchase raw materials for manufacture finished products
(Maniora, 2018). This also define Next plc perform work by understand of supplier
power. The power of supplier power is moderate and this is because persons face all
aspects through which task are done according to profitability aspect of retail.
 Bargaining power of buyer- Consumer demand a lot of offers and this is because a
large variety of products is exists among market. Therefore, consumer wants to purchase
best product at minimum price. It put pressure on Next plc to maintain constant profits
because force or power of buyer is high in market. Moreover, to deal with bargaining
power of buyer management consider to develop a large customer base that aids for
reducing buyer power. So actual profits are earned by management in proper manner.
 Threat of substitute product- When the new product match with customer needs of
buyer in a different manner than profitability of organisation is suffered. The market of
UK retail industry is too competitive and it refers that number of substituted products is
easily identified in market. This also define management make longer sustainability in
market through establishing them as a product oriented organisation. The threat of
substitute product is high and it is because competitors offer better value in products.
 Rivalry among existing competitors- If rival organisation among the existing players in
an industry refer to intense competition in market. This define about down prices and
decrease in overall profitability of industry (Peker, Kocyigit and Eren, 2017). Next plc
operate their business in retail industry and it is very competitive. The competition
aspect and force of overall area define about long term profitability factors that aids
towards identify of sustainable differentiation. It also aids individuals to build better
scale of customers in organisation.

TASK 4
P4 Apply range of theories, concepts and models interpret and devise strategies planning for
given organisation
Porter's Generic model
The term Porter generic model aids to examine all methods through which an
organisation is aids to attain long term business objectives. This is used for obtaining
competitive-edge in market. Next plc focus on Porter generic strategy and it is mention as
follow:
 Cost leadership- The strategy reflects that an organisation easily target all customers
with develop of offerings that is related with sales of product through minimising the cost
of products. Next plc offer discount on their products to enhance number of customer in
their store (Peng, 2020).
 Differentiation- Next plc deliver different products to the user specifically those product
that are not identified by rivals. Innovation plays an important role for differentiating
products and it aids to increase profits of organisation by offering quality products to
customers.
 Focus- This include cost focus as well as differentiation and according to this Next plc
focus on the number of customers. It aids to fulfil demand of individuals in an organised
manner. Along with this focus stage also helps for offer high quality products in order to
enhance market share of business.
Strategic management plan
Vision- The vision of Next plc is to offer designer clothes that aids customers to
demonstrate their better status in organisation. It also define about better position in market.
Mission- The mission statement of organisation is to ensure and sustain secure position
in cloth and retail market by offering good quality of products.
Strategies- Product development strategy is more appropriate for Next plc as it aids to
offer innovative products to customers.
Objectives- The main objective of organisation is to ensure better position in market
through enhancing sales of company products with 30% within a period of three months.
Tactics- It reflect to efforts which is executed by organisation for attracting a large
number of individuals (Sánchez-Herrera and Donate, 2019). With this management is also

focused towards those perspective that support to analyse market. Marketing mix for better
position in market is mention as follow:
Product Organisation offer several product in retail industry and according to
this management consider to analyse and understand about all aspect
that are in demand. Next plc management is focused towards develop
of designer clothes that aids management to secure better position in
market.
Price Management of Next plc is focused towards implement of competitive
pricing strategy. This aids management to enter in market with
effective approach and along with this product development strategy
for increase in number of customers related with price factor.
Place Next plc operate their store at different locations and it define
management consider and add a clothes section. This results designer
clothes are introduced in market through already established section.
Promotion For advertising and promoting new offerings Next plc utilise both print
and digital media. This results a large section of individuals is attracted
by management among all over the world through using all
advertisement techniques.
Implementation- The implement section aids Next plc to develop and execute a user-
friendly method that is required by authorities to introduce their new product in market. Key
performance indicator work as an effective tool and this is used by management to remove
challenges related with financial resources. It also helps to gain high profits that enhance sales of
organisation within future.