Business Project: Next plc's Social Impact and Trading Strategies

This business project analyzes Next plc, a British multinational retailer, focusing on its social impact and international trading strategies. The project examines the considerations Next plc should undertake to create social impact, including ethical considerations, government regulations, stakeholder responsibilities, and environmental protection. It also explores factors the company needs to consider when trading across borders, such as cultural differences and market entry strategies. The project provides a critical evaluation of these aspects, highlighting areas for business enhancement, and offers insights into how Next plc can navigate the complexities of global business to achieve sustainable growth and maximize profitability. The analysis covers various aspects, including ethical consumerism, government norms, stakeholder engagement, environmental protection, cultural factors, and market entry strategies, providing a comprehensive overview of Next plc's operations in the international marketplace.

Business Project
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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
Considerations that Next plc should undertake when trying to create social impact.............4
What does the company need to consider when trading across borders................................7
Critical evaluation of all the above mentioned aspects which organization needs to consider
enhancing their business.......................................................................................................12
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................16
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INTRODUCTION
Global business involves different commercial transactions i.e. private and government
that undertakes among two or more national boundaries. However, international business refers
to all those activities that involves cross border transactions of products and services in order to
gain profits. Likewise, worldwide business transactions also involve capital, human resources
and technical skills with the aim to carry out finance, banking and insurance services (Polonsky
and Waller, 2014). In the current era of globalization, cross border transactions involves high
level of growth and assists economy to develop with the help of exchanging the resources and
products and services in order to perform the business operations effectively. However, it
involves different ways such as joint venture, franchising, licensing and strategic alliance etc. for
businesses to carry out transaction at international level. Hence, these are some crucial ways
through which organization can easily enter into global marketplace (Kerzner, 2013).
Furthermore, through operating the business at global level it assists firm to develop
distinct brand image in market and give tough competitive to rivals. It also helps in providing
best offer and enable enterprise to develop awareness among consumers. Thus, international
business creates effectual medium through which products and services can be marketed at
global level and satisfy the needs of varied market segment. With the help of this, organization is
able to develop their global presence and thus maximizes the productivity and profitability. In
such competitive era, it is crucial for firm to enlarge its operations and move beyond national
boundaries to serve more regions (Wilson, 2014).
In the present business project, Next plc has been undertaken which is a British
multinational brand and operates in clothing, footwear and home appliances. Business sells their
products at affordable prices in order to gain high market share. Company owns around 700
stores out of which 502 are in UK and Ireland while 200 are in continental Europe and thus
offers products and services to wide range of customers (Jeston and Nelis, 2014). In regard to
this, as per the sales figures of 2012 and 2014, Next plc has overcome Marks and Spencer and
become the highest clothing retailer. Thus, it helps firm to build competitive edge over rivals and
attain desired goals. Main aim of business to spread its operations in international market so that
they can determine the needs and wants of consumers and fulfill them accordingly. Similarly,
organization also provide varied employment opportunity to the individual by setting up the
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stores at different locations in regard to attain sustainable growth and development in the
economy (Becker, Kugeler and Rosemann, 2013).
Moreover, in the present study, two different areas has been selected in respect of Next
plc and thus determine the operations of firm in international marketplace. Here, analysis has
been done by considering different factors that Next plc should undertake while trying to create
social impact upon society. Therefore, it is essential for business to delivery ethical products and
services and enhance consumer base. Another aspect consists of developing the understanding of
Next plc that what should firm consider at the time of trading across boundaries. Thus, it assists
business to enlarge its operations in different markets and attain high profits (Bryman and Bell,
2015),
Considerations that Next plc should undertake when trying to create social impact
It can be stated that social environment possess high level of influence upon the business
enterprise at the time of entering into international market. However, social environment states
that it involves beliefs, customs, practices and behavior of society (Grunig, 2013). Thus, it is
essential for Next plc to undertake different aspects such as ethical consideration, following
government norms and regulations, fulfilling responsibilities towards stakeholders and
developing environmental protection and safety measures etc. so that best results can be attained.
All these factors assists business to create social impact upon the society and help them to enter
into international marketplace. It is significant for Next plc to undertake different methods at the
time of creating social impact so that better quality products can be delivered to consumers and
satisfy their needs (Eriksson and Kovalainen, 2015). Following are the considerations that Next
plc should undertake in order to create social impact-
 Ethical consideration- It is essential for each and every business to undertake ethical
consideration which means that firm needs to deliver ethical information to consumers
regarding the products and services so that they are not misguided by the benefits
derived from the products. Further, if misleading information is provided by
organization that it impacts upon the society and thus affects the brand image of firm in
marketplace (Collis and Hussey, 2013). Next plc operates in clothing, footwear and
home products therefore, it is essential for business to undertake ethical consumerism
policy and provides relative information to consumers otherwise it losses faith of people
from enterprise and thus it results into decrease in customer base. However, in order to
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follow ethical consideration within firm it is essential for them to provide best
information about the products and services that involves features, ingredients, quality
etc. so that true and fair information can be rendered to consumers. Also, in order to
remain ethically sound it is crucial for enterprise to provide detailed information to
consumers regarding the ISO standards of products and its merits as well as demerits so
that consumers can use it accordingly (Bhagwati, 2014). Through, providing such
information it assists customers to select the Next plc for purchasing goods and thus
gain competitive advantage in marketplace. Thus, by adopting ethical consideration it
helps business to create socially responsible and attain desired targets.
 Government norms and regulations- It is another significant factors that assists
business to enter into international market. Thus, it is essential for Next to follow proper
government rules and regulations and maintain quality standards as per the set levels
such as ISO or other set regulations in order to follow corporate social responsibility
within business (Andreas, 2012). It is crucial for businesses to follow proper
government rules and regulations at the time of promotion or advertisement so that
customer can choose best quality products and services. Hence, it creates social impact
upon the society and firm is required to deliver products at competitive prices. Also,
Next plc is required to follow Fair Trade policy so that products can be delivered to
customers across national boundaries. It is essential for firm to follow all the rules and
regulations provided by government so that it influences the society to purchase the
products and services from Next plc and enhance productivity and profitability
(Ghemawat, 2013).
 Following responsibilities towards stakeholders- Further, it is essential for firm to
follow the responsibilities towards the stakeholders such as employees, customers and
shareholders so that their needs and wants can be satisfied. However, if any organization
does not harm the environment that it is considered as good. Therefore, it is essential for
Next plc to maintain proper standards in relation to satisfy its stakeholders and attain
desired goals. For instance, company should determine the needs of employees and
fulfill it accordingly so that it assists individual to remain in the business for long term
(Kaplinsky, 2013). Also, Next is required to determine the needs of consumers
regarding the clothing and footwear products as they expect better business practices to
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be followed by the management of firm as now-a-days consumers are shifting towards
socially responsible companies. For instance, there are more than 88% consumers
assume that organization should try to attain their business goals through enhancing the
society and environment and does not impact it in a negative way. Also, Next plc is
required to consider the social impact and make donations and charity in order to fulfill
its corporate social responsibility (Abrego, 2014). At the end, shareholders are one of
the crucial stakeholder of business and thus firm is required to provide them fair return
on investment so that it does not impact upon the society and creates bad public image
in the minds of consumers.
 Environmental protection and safety- In addition to this, it is another consideration
that influences Next plc at the time of creating social impact. Thus, it is essential for
enterprise to undertake best environment protection practices and safeguard it in order to
protect and assists companies to differentiate themselves from other competitors.
However, social responsibility also inspires innovation within the business and thus
attain long term growth and sustainability within firm. It is crucial for each and every
business to protect its environment by adopting different safety measures so that market
supports the enterprise to achieve desired goals (Dobusch, Mader and Quack, 2013).
Next plc should not use any unethical means of production and pollute the environment
so that it affects the society adversely. Individual aims to purchase the products from
those companies who are socially responsible and thus do not affect the environment by
producing unethical products and services. Hence, at the time of creating social impact
it is essential for Next plc to undertake best environment protection measures so that
health and safety of both employees and consumers can be safeguarded. Furthermore,
such factors also helps organization to create competitive immunity and thus makes feel
the business more sustainable in the long term (Mezzadra and Neilson, 2013). Thus,
corporate social responsibility is effective and assists business to overcome the rivals
delivering similar products and services. Moreover, business aims to possess greatest
potential to improve the health of society and citizens in order to become prosperous
and have moral obligation to enhance the condition of society and helps Next plc to
attain success.
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What does the company need to consider when trading across borders
International trade increases the sales and profits of the organization, enhances its
prestige, appoint jobs and offers valuable strategy for company persons balance the level
seasonal fluctuations (Perkins and Neumayer, 2012). But things to be consider or develop by the
companies before planning for overseas marketing and business are crucial factors which
includes everything from culture and language barriers to shipping costs. Next PLC is a retailer
dealing with the clothing, footwear and home products based in its parent country, i.e. UK,
should develop its market entry strategy as per the factors explained below: Get a company commitment and defines its planning to access the global market –
company should involve every employee's participation, from executive suite to customer
service through engineering, purchasing, production and shipping, as a vital member in
international team. Further, the company should develop its business plan/strategy to
access the international market. It is important to specify the company's present status and
internal goals and commitment for creating a business plan. The company should
determine the location for expanding its business, its criteria of investment in its
international expansion efforts and lead time for world market penetration (Hernandez,
Ibarra and Trupkin, 2014).
 Choosing the location – companies like Next plc, does not normally have to deal with
major issues when marketing in its own parent country, but has to face a whole host of
issues when expanding its market internationally. In order to avoid such issues, Next plc
should consider some factors while making any international marketing decision, which
are as follows:
◦ Cultural factors – it could be difficult for some companies like, Next plc to enter the
international markets due the taste and preferences habits of the country's national.
Next plc dealing in the clothing and footwear section, should attain a good market
research to define the choice and preference of the locals in the country where the
company is planning to establish. The market researches should also account the
regional differences in its values and beliefs from their cultural learning (Behrens,
Corcos and Mion, 2013). The marketers are very well known about the importance of
combination of culture and personality for shaping the consumer behavior in every
particular region. Similar to this, the marketers of Next plc should also determine the
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products habits and tradition which could influence the buying decisions of the buyers
in that country. Being a retail company of clothing and footwear sections, Next plc
should understand and specify its set age and demographic conditions as per the
buying decisions of the country.
◦ Political and Legal factors – The legal framework according to the laws in the
country affects the company's ability to do business. The marketers of Next plc must
be aware about the laws and political policies to develop the marketing strategy
which includes manufacturing or distributing its merchandise in a foreign target
market country(McCubbrey, 2015). Although, company has an option of licensing or
permitting an expensive license/permit of another business in that country to
distribute and sell the products of Next plc. Taxes and fees are another way that
governments impact the company's ability to make a profit selling products in a
foreign countries and this impact is the reason which forces the company's
international strategy to re-shape. Tariffs have a long been used to balance trade
between countries and to protect national companies from losing business to foreign
competitors, it can be a big issue when it comes to international trade and marketing
company's products for sale (Turner, 2013). Due to the impacts of Political unrest and
wars, it affects the stability of the party in the country which influence the market of
the company. Some risks affect the business when the company is marketing its
products in foreign country, they are like
▪ Currency risks – When the company's money is tied with the foreign currency and
economic condition of the country falls, the company could suffer losing millions
(Helm, 2014).
▪ Investment restrictions – Many countries have restrictions on the forign
investments made by the foreign companies, like Next plc, this could influence
the expanding operations of the business.
▪ Operational restrictions – Government's restrictions over the company's
operations in its market (Government's). These regulation affects the business
operational control of the Next Inc.'s business (Portugal-Perez and Wilson, 2012).
▪ Discriminatory restrictions – The discrimination practices in a foreign country
acts as a restriction to the business of Next plc which inhibit or prohibit marketing
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the company's products. It restrictions could be in the form of color
discrimination, price discrimination or gender discrimination.
◦ Economic factors – When determining the potential target market countries, its
wealth and its economic conditions are the main factors to be consider by the Next
plc marketer's. They should determine the structure of the potential buyers in that
country to avoid the need of an overwhelming number of people in a certain income
bracket in a foreign market (Portugal-Perez and Wilson, 2012). To break through this
point, the marketers of Next plc should develop a class structure (an upper, middle
and lower class) according to the country. The numbers of the people in these classes
may differ from country to country. The supply and demand of the company's
products play a vital role in expanding the market of the business. For this the
company has to take deeper look at potential markets to target the buyers because the
products will get sell only when market in right way, at right time and on a right
place.
◦ Environmental factors – These factors plays a vital role in international marketing
as they can have both a positive and negative effect on the company's international
marketing strategy. Suppose one of the product of Next plc that does not hold up well
when constantly subjected to periods of high heat, for which the marketer might want
to consider that carefully before marketing the company's heat sensitive product
internationally to such places as Saudi Arabia. The impacts of disasters and natural
calamities can halt the purchasing power of the customers for certain duration that
influences the business of the company (Hausman, Lee and Subramanian, 2013).
◦ Other factors – there are many other factors other than these main factors which
may, sometimes, influence the company in conducting its business in overseas
market, and they are:
▪ Regional partnerships – For foreign companies like Next plc, it becomes difficult
to set into a foreign market without the assistance of other companies that knows
the tactics of marketing a product to the targeted customers. To overcome this
situation, many companies engage themselves in partnerships with the other
countries that are based out of the country and those who are having the same
market they are trying to get into (Böhringer, Balistreri and Rutherford, 2012).
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▪ After-sales service plans – the relationship between the company and its
international buyer should also be maintained after the sales. Next plc having a
specific home products range for its customers should have an extraordinary after-
sales service plan to ensure the care and feeding of its customers which will
determine if they keep coming back for more. Building and implementing an international plan sensibly – While considering the above
factors the marketers of Next Inc. should build up a plan to expand its business in the
international market. The plan should have an efficient and effective impact over the
foreign market. The company should decide the list of products, which it wants to take in
overseas market. The products so decided must compete and suit all the factors affecting
the business. While implementing the plan the company should check the appropriate
alternative to set it as a back up plan which could be use if the implemented plan could
not perform/execute well. The company need to search out the data, through researching
the foreign market, that it needs to predict how much the product will sell in a specific
market location (Busse, Hoekstra and Königer, 2012). Market Attractiveness – It could be assessed by measuring the market potential in terms
of incomes that could be generated, access to the market in terms of the host country
being warm to investments by multinational companies, and potential competition and
dynamics of the company in the foreign market. The level of revenue and profit potential
of the foreign market could be judged by the initial investment required in setting up the
business activities, structure of the plan, the construction period, the degree of influences
that the company (i.e. Next plc) could face during expansion process. This information
could be obtained by studying the cases of similar companies engaged in expanding itself
in foreign market. However, a big market with a rapid rate of growth could be attractive
and a big direct investment could be justified in such a market. Lack of established
competitors and stability in the type and number of competitors add to the attractiveness
of the market (Novy, 2013). There could be other factors such as the terrain of a country
and the level of infrastructure development that could considerably affect the profit
potential of the market. Next Inc. needs to invest less in countries having developed
distribution structure at the time of entering the new foreign market (Trading across
borders 2015).
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 Competitions – These are the factors which affects the company's entry and its existence
in the foreign market. This factor affects the business of the company either in positive
way or in negative way. Although, Next plc has a wide number of competitors in the
foreign market like Zara, Marks & Spencer, etc. but still, the company is entering in the
new markets of the overseas countries (Blonigen, Piger and Sly, 2014). Capability of the company and the market – The company should conduct an audit of its
resources and capabilities before accessing the new market. Next Inc. should have clear
competitive advantages in terms of market cognition, technology, list of products, certain
partners and other applicable constants. The company should appoint and recruit persons
in its staff having experience in foreign markets. Next plc should specify its objectives
and goals to be achieved from the foreign markets by assigning the task to the star
performers and experienced persons of the home market heading the initiative. The
company have to attain the capabilities and the position of the market, in order to
evaluate the potential target customers present in the overseas market (Gomez-Herrera,
Martens and Turlea, 2014).
 Shipping/logistics - It is well known that international business means more costs,
including travel, customs, phone calls and office space if the company plans to expand
through an overseas office. For companies like, Next plc, the biggest difference in costs
between having an international or domestic business is shipping. It includes the cost of
hiring a 40 feet-er container for transporting products, appointing a freight forwarder,
purchasing overseas shipping insurance, custom charges for clearing the container and
the products, etc. Further, the cost of the products rises when the overseas buyer request
for extending the credit limit which generates cash flow issues for the company (Ryan
and Mulholland, 2014).
Critical evaluation of all the above mentioned aspects which organization needs to consider
enhancing their business
It can be stated that as per the view of Yu (2014), through considering different factors
such as ethical consideration, government norms and regulations, environment protection and
safety etc. helps firm to enlarge its business and achieve desired goals. However, Next plc is
required to consider all these aspects as it helps firm to improve their business situation and
overcome competitors. As firm is operating into clothing, footwear and home products it is
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essential for them to undertake best factors such as deliver ethical products to consumers that
contains best features, quality standards etc, so that health and safety of consumers can be
enhanced (Yu, 2014). Also, it is essential for Next to follow proper government rules and
regulations so that standard of business can be raised. Further, at the time of business operations
it is crucial for enterprise to undertake ethical measures so that better quality products and
services can be delivered to consumers. On the contrary as per the opinion of Held (2013), it is
crucial for enterprise to formulate effective strategy so that business can expand its operates in
international market. However, through following proper ethical consideration it assists
management of Next plc to develop best quality products that attracts consumers as compared to
competitors and thus it enhances the business into worldwide marketplace. Moreover, by
undertaking environment protection and safety measures such as Health and Safety Standards
Act so that it assists Next plc to protect the health and safety at workplace and thus enhances thee
business operations in global market (Held, 2013).
According to McKeown (2013), it can be evaluated that businesses are required to fulfill
the responsibility towards its stakeholders i.e. employees, customers and share owners. However,
it is significant for Next plc to determine the needs of employees by providing them safe working
environment and achieve results. For instance, if consumers of any firm is happy and satisfied
than it helps organization to improve its products and services in society and expand the business
operations in international market (McKeown, 2013). By implementing all these factors it helps
firm to attain competitive edge over rivals and thus enter into diverse marketplace. On the
contrary Smith (2013), it can be assessed that one of the most significant factor that Next plc
needs to consider is environmental safety and protection so that organization should consider the
safety of environment while producing the products. Therefore, it is crucial for enterprise to
maintain sustainability which helps in enlarging the business operations in international market.
At last it can be stated that implying all the identified factors within Next plc creates
social impact and thus it is significant for enterprise to attain high growth and development.
Therefore, by following all the norms and regulation designed by the government helps business
to create distinct image in market as compared to rivals. Thus, it assists business to expand its
operations in worldwide marketplace. Through entering into international region business aims
to fulfill its corporate social responsibility so that set targets can be attained in an effective
manner (Tran and Atkinson, 2002).
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