Global Strategic Management: External Analysis of Next plc & Topshop

This report provides a comprehensive analysis of Next plc and Topshop within the context of global strategic management. It begins by evaluating the external business environment of both companies using PESTLE analysis, examining political, economic, social, technological, legal, and environmental factors. It then compares their dynamic capabilities, followed by an in-depth look at their Corporate Social Responsibility (CSR) initiatives, including social and environmental innovations in international operations, along with the associated advantages and risks. The report concludes by exploring potential CSR strategies that can enhance the success of both companies in the global market, considering aspects such as competitive rivalry, bargaining power, and threats of new entrants and substitutes.

Global Strategic
Management

Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Evaluation of external business environment and comparing dynamic capabilities ..................1
TASK 2............................................................................................................................................6
CSR Initiatives.............................................................................................................................6
TASK 3............................................................................................................................................9
CSR strategies..............................................................................................................................9
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Global strategic management is a process of developing strategies in order to capitalize
competitive opportunities globally (Bonsu, 2019). Global strategy is a term used to cover
strategies of market in regards of three different areas which are multinational, international and
global. In this report, Next plc and Topshop are the two selected companies which works and
operates in a retail industry. Management of these companies considers global strategic
management in order to grab competitive opportunities worldwide.
This project includes evaluation of external business environment along with comparison
of dynamic capabilities of two organisations. This project also includes CSR initiatives with
social and environmental innovations in aspect of international operation along with its relative
advantages and risks. The project consists of potential CSR strategies that enhances companies
success.
TASK 1
Evaluation of external business environment and comparing dynamic capabilities
Next plc is a multinational retail company operting with footwear, clothing as well as
home products. This company is situated in Enderby, England, UK. Nect plc was founded in
1864 by Joseph Hepworth. Analysing external business environment of Next plc while
considering PESTLE analysis are as below-PESTLE Analysis-
PESTLE analysis is a framework used by business companies to determine its macro
environment which affects its business operations.
Political- UK has a political stable environment which helps businesses to work
efficiently in its market (Rudaya, 2019). Government of UK encourages its domestic businesses
to trade effectively. This support from government helped Next plc to trade and expand its
business operations. But Brexit affect has created stress in businesses of UK. In Brexit affect,
Britain companies has to shut its business operations from EU. This has impacted business of
Next plc as company has to shut its premises and stop its business operations from EU. This
impacted turnover of this company as Next plc has a maximum number of customers from
Europe.
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Economical- UK is a country with high income earners in worlds. This increases GDP of
UK making this country as one of the most developed country in world. Unemployment rate is
low in this developed country (Lessard, 2021). This makes companies to operates their
businesses easily. But emergence of COVID-19 has created stressful environment in UK and
entire world. COVID-19 pandemic has increased unemployment rate in UK as many companies
terminates their staff while facing huge loss because of consequences of this pandemic such as
implementation of Lock Down in country. Post Lock Down Next plc contributed in decreasing
unemployment rate in UK by providing job opportunities to people.
Social- Social culture and structure is changing dramatically in UK. Encouragement in
women empowerment in seen in UK (Allison, 2018). This influenced business activities of Next
plc. Company also contributed its share in empowering women by hiring more female staff in its
operational activities along with contributing in providing knowledge, equal rights to women in
its organisations. Next plc provides community support by providing opportunities of education
and employment. Self awareness and changes in living standards of people in UK has an impact
in business of Next plc. This impacts in change of customers behaviour and insights in market.
Technological- UK is one of top ten countries contributing in innovations of
technologies. Digital marketing techniques are evolving day by day (D’Cruz, 2018). This creates
opportunities for businesses to expand its market beyond geographical boundaries. Next plc
adopts digital marketing techniques to promote, advertise its products to attract more customers
in online platforms. This switch in marketing process from traditional to digital helped Next plc
to attract and trade its business during time of pandemic. Company started providing delivery
services in order to provide safe delivery of its products to its customers in stressful environment
caused of COVID-19.
Legal- Next plc has to follow various different legal frameworks while trading its
operations in various countries. Company operates while following employees protection laws as
per government of country they are operating in. Data protection laws are also at concern in UK
as government of UK does not wants that data of consumers of UK goes out of country.
Company sets its own rules and regulations to provide protection to its employees from
discrimination in office.
Environmental- With rising pollution in environment has increased concern of people
towards environmental protection. Government of UK is taking essential steps towards
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protecting environment from carbon emission, pollution etc. businesses are contributing through
various steps to protect environment (Pessima and Dietz, 2019). Next plc has improved its
production techniques in order to reduce carbon emission in environment. Company has adopted
various latest techniques such as energy saving machines, conserving resources, etc. Major
operations of Next Plc are not of consuming water which makes company to contribute in saving
water resources in country.Porter's Five Forces-
Analysing Porter's five forces in context of Next plc is determined as below- Threats of new entrants- New entrants in retail industry brings innovations, variety of
options for customers as well as increases competition for existing companies operating
in this industry (Oturakci, 2021). New entrants needs high amount of investment to
enter in a retail industry which results in low rate of threats from new entrants for Next
plc. Threats of substitutes- Next plc has a high threat of substitute products in market as this
company operates in clothing, footwear and accessories (
Next plc. 2021). There are
multiple substitutes products available in market which increases threat of substitute
products in market. Apart from this psychological switching cost from industry to other
industry is low under this retail industry. Bargaining power of suppliers- Retail industry has a numerous number of suppliers
which is also in case of Next plc. Next plc has many suppliers which reduces power of
supplier under this company. Bargaining power of suppliers is low in aspect of Next plc
as company has large number of suppliers working with it as well as company can easily
switch between its suppliers depending on their cost and quality provided. Bargaining power of Buyers- Bargaining power can be seen high in hands of buyer as
they can easily switch to other products of other companies and discard a product from
shelves (Aithal and Aithal, 2019). Though Next plc has a strong reputation in market but
still company has to struggle in maintaining its status while providing quality goods as
per customers needs in order to sustain in market by engaging with its existing as well as
potential customers in market. Competitive rivalry- Rivalry from existing firms can be seen high in retail industry of UK
(Akyuz and Gursoy, 2019). This also impacts in high competitive rivalry for Next plc as
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its competitors are adopting various marketing tactics in order to more customers with its
cheap pricing strategies. Though products of Next plc are highly differentiated with its
competitors still this company faces a high pressure from its competitive companies in
market in terms of quality, price, strategies, etc.Topshop Ltd-
Topshop is a multinational company trading in women shoes, cloths, make-up as well as
accessories. This company is headquarters in England, UK and was founded by Peter Robinson
in 1964. Topshop has around 510 shops across globe with 300 outlets in UK. Company provides
quality products in women fashion industry at a reasonable price. Determining external business
environment of Topshop by analysing pestle analysis is as below-
Political- Fashion industry one of most important industries of UK that contributes in
export trade (Nouri and Soltani, 2017). Government of UK encourages this Industry as it helps
in encouraging GDP growth. This helps Topshop to trade its business activities easily in UK.
Due to Brexit implementation in trade business between UK and EU, this can effect business
operations of Topshop. Brexit will impact in operational activities of Topshop such as
outsourcing their fabrics in abroad along with its production processes done in EU. This impacts
Topshop in creating hurdles in expanding their business in across geographical boundaries.
Economical- Customers from low income regions with high unemployment rates affects
businesses in UK. This economic conditions push customers to spend less and save more.
Topshop have seen this impact on its business by decline in sales and profits due to less spending
power of people in some regions of UK. People started purchasing cheap products of its
competitors which affects in reduction in turnover for this company.
Social- Reduction in physical shopping patterns of people in bricks and mortars stores
has been seen in market of UK (Sutton, 2019). Online shopping is mostly accepted by people of
UK as due to their busy daily schedule they don't get time to go for window shopping. This
affects business of Topshop stores as people prefer to shop from online platforms. Reduction in
sales of Topshop is due to its limited list of products which targets a particular age and gender
segment of society. Topshop focuses on providing goods for females specially of age 16-35.
Technological- Advantages in technologies has created opportunities and more options
for customers as well as businesses in UK (Ogbechie, 2018). This enhancements in technologies
has created opportunities to trade and target more audiences for Topshop. Company has started
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utilizing mobile apps and websites in order to reach more customers globally. Company also
implemented scan feature for its products in their outlets along with store locators in digital
maps in order to provide convenience to customers. Adopting digital platforms helped Topshop
to expand its business in overseas with objective to sustain in global market along with
generating more profits.
Legal- Topshop has to adopt various legislatures while trading in different countries.
Company trades while following customer protection laws while trading its business online.
Company safeguards data of its customers from being hacked or leaked
(Topshop. 2021).
Company also looks forward to provide essential benefits to its employees which comes under
employment protection laws.
Environmental- Topshop produces quality goods without effecting negatively to the
environment. Company is involved in producing cotton products without using excessive water
in its processing process. Topshop has switched its packaging process from plastic bags to
biodegradable bags in order to save environment from pollution
(Topshop. 2021).Porter's Five Forces-
Determining Porter's five forces in aspect of Topshop is analysed as below- Threats of New entrants- Threats of new entrants is low in retail industry as this industry
needs huge capital investment to trade (Rascão, 2020). Topshop has a low amount of
threats from new entrants as new entrants needs high amount of investment along with a
long period of time in order to achieve position similar to as Topshop in market. Bargaining power of suppliers- Bargaining power of suppliers is low in aspect of
Topshop as this company is a multinational company which operates with multiple
number of suppliers. This lowers bargaining power in hands of suppliers under this
company. Topshop can easily switch between its suppliers in aspects of quality of
resources offered by suppliers with price. Bargaining power of Customers- Customers have a high bargaining power in retail
industry as they are capable to switch between products offered by different companies in
terms of product quality with their price (Wirtz, Müller and Weyerer, 2021). Customers
have the power to dictate, rules and tastes in market as there are plenty of alternatives
available of products of Topshop in market with a low switching cost.
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 Threats of substitute products- Retail industry has a low threat of substitute products as
this industry has a high level of competitions in market (Hodgkinson and Healey, 2018).
Though Topshop operates in a retail industry threats of substitute products is low for this
company. Products that provides similar benefits to customers and is produced in other
industry is low in case of Topshop.

Competitive rivalry- Extremely fierce competition can be seen in retail industry
(Grewatsch, Kennedy and Bansal, 2021). Topshop operates with a limited list of products
in women clothing and accessories impacts in increasing level of competition from its
competitors in market. Competitors of Topshop produces various products depending on
male and female which provides more options for customers to purchase from a single
place
(Topshop. 2021). Rapid changes in trends and taste of customers in markets
increases competition for Topshop as its competitors uses latest technologies in order to
identify and innovate products as per customers insights in market. Hence, competitive
rivalry is high in market in context of Topshop.
TASK 2
CSR Initiatives
CSR initiatives are initiatives that businesses takes into accounts in order to ensure
positive impacts in aspect of social, economical as well as environmental prospectus (Adizov,
2020). Analysing and comparing CSR initiatives undertaken by Next plc and Topshop along
with there advantages and risks are evaluated as below-Basis
Next plc
Topshop
CSR activities  Next plc provides well being
and health support to its
employees while recognising
importance of mental well-
being of its employees (
Next
plc. 2021). Company takes part
in essential measures in order
to look after safety of health of
its employees like allotting sick
 Topshop is working on
innovating its considered
collection which are
usually vegan made shoe
collections
(Topshop.
2021). Topshop is working
on this process in order to
lower environmental
impacts by utilizing eco-
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leaves, medical insurance etc.
to its employees.
 Next plc works while
providing gender equality in its
operations. Company's 68% of
employees are female as well
as 44% of its board directors
are consists of females.
Company provides equal
opportunities to female.
Through this actions Next plc
encourages as well as takes
effectively part in women
encouragement activities. For
example, Next plc supports
KADAV which is a non
government organisation
situated in Istanbul turkey
which works along with
predominantly Syrian women
in order to provide them with
trainings to childcare,
vocational, social support as
well as Turkish language
lessons.
 Next plc is looking forward
essential measures to reduce
carbon emission by 50% by
2030 (
Next plc. 2021).
company is working in order to
decrease direct carbon
friendly and recycled
materials in its processing
process.
 Topshop is transparent in
providing informations
regarding its labour
conditions. Company
provides informations
regarding its audits, supply
policies etc. along with
being involved in
providing equal
opportunities to male as
well as females in its
operational process
(Topshop. 2021). Topshop
has improved its labour
practises by ensuring that
its employees are being
paid as well as protected
amid Corona virus
disruptions.
 Topshop has received a
high score in animal
welfare activities.
Company has banned use
exotic animal skin, angora,
down etc. in its products in
order to provide safety to
animal as well as gain
sustainability in global
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emission from its business.
Next plc is targeting to divert
at-least 95% of its waste from
landfill by end of 2021.
market.
Advantages  CSR initiatives taken by Next
plc will help company to gain
sustainability in global market
by attracting more ethical
customers, clients, suppliers,
employees, etc. This initiatives
will also help Next plc in
improving its image in global
market.
 This CSR activities will help
Next plc to attract new
financiers. A great reputation
draws more investors in that
company. This investments
helps company to expand its
business operations globally in
international market. Investors
are more attracted towards
companies who sustainable and
works in CSR activities.
 CSR initiatives usually
focuses on energy
efficiency techniques
which impacts positively
in enhancing value and
earnings of that company.
This CSR initiatives helps
Topshop to build its value
as well as increase its
earning by establishing
better relationship with its
customers. Nowadays
people looks forward for
companies who are
involved in CSR activities.
 CSR activities encourages
and motivates employees
of Topshop to work
effectively and efficiently
in order to generate more
profits
(Topshop. 2021).
This implies in giving self
respect and regards to
employees by managers of
Topshop. This practises
attracts employees to work
under Topshop which later
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on will impact in
enhancing business
operations by increasing
proficiency in work
processes.
Risks Insincere CSR can damage Next plc
reputation and goodwill in market. For
example green-washing activities
which includes assuring practices to
provide environment safely and not
using its actually. This can ruin a firms
reputation in domestic as well as
global market.
CSR practices usually cost high
which can affect profits of
Topshop. Topshop needs a high
amount of cost to use medium of
communications to communicate
its CSR policy to its clients as well
as customers.
TASK 3
CSR strategies
CSR strategies are incorporations of CSR perspective in a company's strategic planning
as well as core operations with objective to manage wide set of stakeholders in order to achieve
maximum social and economic value over a period of time (Kumar, Pandey and Mukherjee,
2021). Assessing and comparing potential CSR strategies in aspect of Next plc and Topshop is
determined as below-Basis
Next plc
Topshop
CSR strategies  Promoting health- Next plc
uses CSR strategies such as
promoting health activities
in its work place in order to
fulfil its social
responsibilities. Company
looks after health of its
 Measuring impacts while
designing goals- CSR
responsible companies sets
measurable goals in order
to be accountable to
stakeholders. Topshop
design goals while having
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employees by providing
them medical insurance,
sick leaves.
 Inclusive culture of work
place- Next plc provides
inclusive working culture
for its employees that helps
in building reputation along
with providing opportunities
along with motivating its
employees. Company
effectively provides training
sessions to its employees in
order to provide essential
skills to complete a task or
project they are working on.
multiple priorities in mind.
These priorities consists of
community impact,
marketing reach, internal
business practices as well
as government relations.
 Environmental measures-
Topshop works on
focusing environmental
safety. Company focuses
on producing goods while
reducing animal skin,
angora etc. in its products.
Topshop looks forward for
measures to contribute in
environmental safety in
while reducing water usage
in its operations, adopting
energy saver machines for
production, switching to
biodegradable bags from
plastic bags for packaging
process.
Role of sustainability
offerings
Sustainability has a major role in
activities of Next plc. This offering
to sustainability helps Next plc to
protect its brand and mitigate risks.
For example by adopting
sustainability strategies in business,
Next plc can easily attract more
customers as well as sustain in this
Topshop is adopting sustainability
strategies in its processes in order
to gain sustainable position in
market globally. Company has
banned use of animal products in
its production activities and
started manufacturing rag-zine
shoes and cotton shoes instead of
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competitive global market.
Company manufactures goods that
are environment friendly and
provides its seasonable goods to
persons in need. This helps
company to build its image in
market. Next plc has also focused in
minimizing waste as well as
reducing its footprints. Company is
also looking forward to collaborate
with supply chain with other
companies in order to reduce waste.
This measures will help Next plc to
sustain in long term while
maintaining its reputation in market.
Next plc is also contributing in
government activities to reduce
carbon emission in environment by
adopting ozone-friendly processes,
bags of packaging etc. This
practices will help Next plc to
safeguard environment as well as
attract more target audience to trade
as well as uplift sales of company as
people are more attracted towards
organisations who are working
under environmental measures
which builds trust in their products.
Strategic partnering with
government and society also helps
Next plc in achieving growth in
leader made shoes. Topshop has
also created a greener chain of
supply as well as also targeted
specific issues such as dyeing as
well as eliminating plastic bags
from its packaging process.
Topshop is also contributing in
government activities in
environmental welfares by
declining waste, reducing water
usage, power saving,etc.
Sustainability also helps Topshop
to attract more stakeholders to
invest in its process. This
involvement of stakeholders helps
Topshop to expand its business in
international market. These days,
people are more conscious about
environmental safety, increase of
pollution in air etc. this makes
people to look for companies who
are practising activities in order to
save environment. Topshop this
sustainability measures will help
company to attract more
customers which will also help in
achieving sustainability in long
term. Strategic partnering with
society helps Topshop to
accomplish growth by analysing
and identifying needs and
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business. demands of consumers, change in
behaviour of consumers, etc.
CONCLUSION
As per the above report it is concluded that global strategic management is a system of
managing strategies of business in aspect of internal, social and global market. Corporate social
responsibility is a type of self regulations of international private business which aims towards
contributing in societal goals of charitable nature, philanthropic activist with objective to support
ethical; oriented and volunteering practices. Pestle analysis is a framework used by organisations
to determine its external environment that affects directly or indirectly its business operations.
CSR initiatives are activities taken by an organisation with objective to fulfil its social corporate
responsibilities in order to achieve sustainability in domestic and global market. Social and
environmental innovations consists of activities taken by a business organisations in order to
develop society and develop environment for future use. CSR strategies are plans created and
implemented by a company in order to sustain in market by its processes. This strategies are used
to look after safety measures of environment, economically and social in order to attract more
customers, clients, stakeholders, etc. with objectives to achieve sustainability in long term as
well as gain more profits.
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Online:
Next plc. 2021. [Online]. Available through: <https://www.next.co.uk/>Topshop. 2021. [Online]. Available through: <https://www.asos.com/topshop/>
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