LUBM304: Strategic Management Report on NEXT Plc's Global Strategy

This report provides a comprehensive strategic analysis of NEXT Plc, a British multinational retailer, focusing on its global strategy and potential for international expansion. It begins with an introduction to strategic management and its application to NEXT Plc, followed by an internal and external analysis using SWOT and PESTEL frameworks. The report then critically assesses three modes of market entry, exploring options such as exporting, licensing, and joint ventures, and recommends a suitable market entry strategy for NEXT Plc in an African market. Furthermore, the report examines the extent to which the selected business unit should be standardized for the chosen nation. It also delves into Porter’s generic strategies and outlines a strategic business plan for NEXT Plc. The report uses the provided information to analyze the company's strengths, weaknesses, opportunities, and threats, and provides recommendations for future strategic decisions.

Strategic Management in
Global Context

INTRODUCTION
Strategic control is the management of a business enterprise’s resources to acquire its
dreams and targets. Strategic management involves setting targets, reading the competitive
environment, analyzing the inner employer, evaluating techniques, and ensuring that
management rolls out the techniques across the company. Strategic management is the manner
that entails an administration in the shaping of its scheme or way and doing the determinations
on how its assets need to be allocated so as to accomplish this scheme. In order to complete this
project Next Plc is taken in to consideration (Drumaux, 2018). It is a British multinational garb,
footwear and domestic products retailer, which has its headquarters in Enderby, England. It has
round seven-hundred stores, of which circa 500 are in the UK and circa 2 hundred throughout
Europe, Asia and the Middle East. The assessment will consider information about internal and
external analysis of business, three modes of market entry and the extent should the selected
business unit be standardised for selected nation. Moreover, the report will explain about Porter’s
generic strategy and strategic business plan.
MAIN BODY
Recommend a business and a country and provide an internal and external analysis
Company/business overview- NEXT Plc is a United Kingdom-based shop offering clothing,
footwear, add-ons, beauty and domestic products. The Company’s segments include NEXT
Online, NEXT Retail, NEXT Finance, NEXT International Retail, NEXT Sourcing and
exceptional. NEXT Online is its online commercial enterprise for selling clothing and domestic
ware inside the United Kingdom and Eire. NEXT Retail is a chain of over 500 shops inside the
United Kingdom and Eire. NEXT Finance provides client credit score rating for NEXT clients to
buy products online and in its stores thru nextpay and next3step. Next3step is a credit account,
which permits clients to spread the fee of orders over 3 months in three identical bills, with out
incurring a interest price (Okumus and et. Al., 2019). NEXT Sourcing designs and sources
NEXT branded merchandise. The NEXT International Retail section incorporates franchise and
absolutely owned stores distant places. The Company's franchise companions characteristic
approximately 199 shops in over 32 worldwide locations. For example, in order to make growth
and development in the business, the management of respective company decided to operate in
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African market. In order to analyse the internal and external business environment, the
management can consider SWOT and PESTEL analysis respectively.
PESTEL analysis of Next Plc
A PESTLE analysis is a framework to examine the critical aspect elements (Political,
Economic, Sociological, Technological, Legal and Environmental) influencing an enterprise
from the outside (Nathan, 2019). It offers human’s professional’s perception into the outside
elements impacting their business agency.
Political factor- A robust political surrounding is the idea for extended-time period choices. The
United Kingdom, as a Member State of the European Union, fulfils this prerequisite. The
authorities has to behave inside a specific political framework to attain the conditions of the
European Union and this ensures NEXT PLC a higher scope of economic moves. Another
advantage of the European Union is the open transfer of merchandise. This makes it simpler for
NEXT to promote their products in the one in each of a type European international locations.
There aren't any change boundaries that get worse income.
Economic factor- Investments in Europe for NEXT PLC are very exciting. The British forex
nowadays is noticeably strong (www.Comdirect.De, 2000). This is due to the independence of
the British pound to the Euro and has numerous results. First, distant places investments for
NEXT are pretty a lot much less highly-priced, and 2nd, it's miles highly-priced for outdoor
businesses to establish within the United Kingdom. However, many nations are reluctant to have
interaction in exchange due to those motives.
Social factor- At the winning time, 59.2 million human beings are residing inside the United
Kingdom. It estimates that within the three hundred and sixty five days 2036 greater than sixty
four.Nine million humans can be residing there. These technique masses of new clients for
NEXT PLC but the age of the populace is increasing. On the alternative hand, the social form
has modified dramatically. The development in medical employer and the self-interest of living
ends in developing existence expectancy. Following improvement of intercourse education and
developing numbers of profession women, the begin price has dropped (Meyer and Xin, 2018).
These reasons are accountable for declining figures within the NEXT 20 to 40 three hundred and
sixty five days vintage purpose organization.
Technological factor- The age of Internet and the reception of recent media display screen a
number of capacity possibilities for NEXT to boost profits. Some companies in the United States
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already provide on line-orders in which the purchaser can precisely outline his goals and
measurements, and deliver it to the place of manufacturing. Forty eight hours later he receives
his package deal. This is just an example of the endless possibilities. Using this technique the
companies can react proper away to adjustments in behaviours.
Environmental factor- The physical environment is also a key hassle for organizations jogging
in any given countrywide market and attention ought to be considered how groups address the
physical surroundings and the effect this has at the business enterprise, but also the impact the
physical environment typically has upon a corporation (Akyuz and Gursoy, 2019). In favored
terms, the physical environment which Next operates internal in the UK can be seen as
surprisingly benign in assessment to distinct additives of the arena which be by means of way of
way of high depth herbal screw ups collectively with earthquakes, hurricanes and wooded
vicinity fires. Despite the sort of environment there had been some of environmental troubles
nowadays in the UK which have affected the retail quarter. These have included growing greater
common floods and awful income because of snow storms and the failure of community
government to prepare for durations of inclement weather.
Legal factor- The case of Next’s UK operations felony elements may be seen as more complex
given that the organisation need to have a look at every UK regulation and EU regulation. Some
of the vital problem jail guidelines which have an impact on Next within the UK are taken into
consideration beneath: Minimum earnings regulation – A key piece of guidelines in the UK
which influences agencies which encompass Next with a big type of low paid people is that of
numerous minimal salary pointers. In this example, the law calls for UK employers to pay their
personnel as a minimum £6.19 in line with hour for those elderly over 21. Given the big form of
employees of companies which encompass Next which might be tormented by the National
Minimum Wage, brief shifts in legislative coverage could have a immoderate effect upon the
arena.
SWOT analysis of Next Plc
SWOT Analysis is a simple however beneficial framework for studying your company's
strengths, weaknesses, possibilities, and threats (Baltabayeva and et. al., 2020). It lets you build
on what you do nicely, to deal with what you're missing, to limit risks, and to take the greatest
viable advantage of possibilities for achievement.
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Strengths- NEXT Brand is targeted on the pinnacle surrender of the mass marketplace. Its
well-set up strengths are man or woman STYLE, pinnacle QUALITY and VALUE for coins
(NEXT Annual Report, 2000). The key for this success is that NEXT designs its private
merchandise and sells them below its very very own label. As certainly one of the largest shops,
they use their giant marketplace evaluation to understand adjustments in purchaser desires and
behaviours. Creating products under its non-public label allows NEXT to comply fast to
changing marketplace situations. This procures NEXT PLC a beneficial benefit - saving time.
The style industry is one of the quickest-moving markets. Adaptability, and therefore time-
saving, is critical in a market in which period makes a variety between success and defeat.
Weaknesses- Unfortunately, regular customers are now and again obliged to shop for in
the stores of NEXT PLC's competition. The root of this inclined factor may be found inside the
incomplete product variety (Tereshchenko and et. Al., 2019). For example, NEXT PLC does no
longer realise the hazard of now not promoting sports activities activities located on. In reality, if
normal customers of NEXT PLC are interested by sports activities placed on, they must visit the
competition. This offers the opposition a chance to influence NEXT customers in their blessings.
Secondly, purchaser footfall is a outstanding way to boom sales due to the fact browsers
searching out a specific article will frequently purchase extra than clearly that item. For instance,
a person who's best inquisitive about sports activities sports sports positioned on additionally can
buy a gift as nicely.
Opportunities- Times of social rethinking need to be discovered with attentiveness with
the beneficial useful resource of NEXT PLC at the way to make earnings. Nowadays,
increasingly humans have emerge as aware of the significance of nature. Manufacturing with
herbal fibres and environmentally fantastic uncooked substances is a excellent opportunity to
promote the socially conscious recognition of NEXT, thereby developing lengthy-term
fulfilment. Individuality is a key word for profit. Latest research display that the commonplace
frame has changed. People have end up taller and heavier. The biggest ever observe of the girl
parent confirmed that over the last 50 years the common British girl's bust has grown with the
useful aid of 4 inches, her hips through six inches, and her waist through manner of 8. To adapt
to those adjustments leads customers to comprehend that NEXT PLC pays interest to them.
Threats- The largest threats that NEXT PLC faces is companies that use a "Guerrilla
Attack." This method that discounters, especially massive supermarkets that aren't based totally
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on the equal market as NEXT PLC, promote similar products. They provide those merchandise
for first-class a brief time frame (Drobyazko and et. Al., 2019). For example, they sell for
remarkable one week at a completely cheap charge and then they skip on. The Tesco grocery
store is promoting the aforementioned Levi's pinnacle-selling 501 jeans at £ 30, a few £20 plenty
less than the High Street rate. Consumers consciously decide to buy those inexpensive devices in
lieu of better exceptional, excessive-rate charge price tag merchandise. This hit and run approach
leads to a huge a part of the call for being happy.
Critically assess three modes of market entry
There are a number of ways in which an employer can enter a foreign marketplace. No one
market access approach works for all global markets (Ioannis and Belias, 2020). There are
different modes of entry which can be considered by Next Plc in order to get entry in to new
market. The description of the as:
Exporting- It is the advertising and advertising and advertising and direct sale of
regionally produced items remote places. Exporting is a conventional and nicely-set up method
of accomplishing foreign places markets. Since it does no longer require that the products be
produced in the purpose united states, no funding in foreign places manufacturing facilities is
wanted. Most of the charges related to exporting take the form of advertising and advertising and
marketing and advertising costs. While rather low risk, exporting consists of massive costs and
restricted manipulate. Exporters commonly have little manage over the advertising and
marketing and distribution in their products, face high transportation prices and viable charge
lists, and have to pay companies for a variety of offerings. What is extra, exporting does not offer
a corporation firsthand revel in in staking out a competitive characteristic overseas, and it makes
it hard to customize products and services to neighbourhood tastes and alternatives.
Licensing- It is largely allows a corporation inside the aim nation to use the property of the
licensor. Such belongings are usually intangible, together with emblems, patents, and
manufacturing techniques. The licensee pays a rate in change for the rights to apply the
intangible belongings and probable for technical assist as well. Because little funding on the a
part of the licensor is wanted, licensing has the capability to provide a completely large go lower
returned on investment. However, due to the reality the licensee produces and markets the
product, ability returns from manufacturing and advertising and marketing and advertising sports
can be out of region. Thus, licensing reduces price and entails restricted risk (Crane, Matten and
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Spence, 2019). However, it does now not mitigate the giant risks related to walking from a
distance. As a rule, licensing strategies inhibit control and bring satisfactory moderate returns.
Joint vnture- The joint mission is a shape of strategic alliance where a neighbourhood
employer corporation and an distant places entrant conform to percent fairness in taking walks a
partnership together. The fairness participation of both companies varies regarding their
settlement. Major office work encompass majority stake, same stake, minority stake or a
controlling stake. A joint challenge has some of blessings it affords an remote places entrant. It
gets rid of the need to start over from scratch in a modern day territory which might be an risky
and a capital huge organisation. The close by enterprise's distribution, manufacturing, and
retailing centres also are leveraged to offer carrier to the remote places entrant.
In order to get entry in to new market like African market, the management of Next Plc can
consider Joint venture as a mode of market entry. Starting a joint undertaking offers the
opportunity to gain new insights and know-how (Schilling and Shankar, 2019). Think about it;
the market is now manner easier for respective firm to apprehend given the quick-time period
partnership which they have cast. Forming a joint mission will provide the company with get
right of entry to better resources, including specialised team of workers and era. All the system
and capital which they needed for their venture can now be used.
To what extent should the business unit be standardised or adapted for selected nation
Joint project is a enterprise or business affiliation made mutually by using manner of the
usage of or extra occasions to carry out business corporation operations via contributing assets,
fairness ownership, return of investment, costs, governance, income for wearing out a specific
challenge of a newly made jail entity where each birthday party is having joint control over
employer operations and rights in internet property of the venture. Joint ventures have restrained
jail obligation and determination. The lifestyles span of any joint challenge may be molded in
keeping with the want of the occasions. If the agency does no longer see earnings within the
enterprise business enterprise or due to outdoor or inner elements, if the enterprise employer
suffers, the activities can withhold determination and exposure of the company in addition. At
anything in time, the owner may be taken lower returned. This makes joint project attractive and
fruitful desire within the location of employer. Joint undertaking is a popular entry strategy thru
which foreign companies advantage marketplace access into Africa (Rabetino, Kohtamäki and
Federico, 2021). It is an access method where or more legally separate our bodies shape a
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separate jointly-owned entity wherein they make investments and engage in various choice-
making sports.
Applying Porter’s generic strategy to define how client could gain rivalry benefits
This strategy applied by the Next PLC to sell the products and services in the market.
These strategies are divided into four parts:
Cost leadership: This is one of the main strategies that could help to reap competitive
benefit inside the marketplace. In this method a company attempts to turn out to be a market
leader by imparting services and products at the lower price as examine to other commercial
enterprise unit. In the context of NEXT PLC are required to triumph over its operational price to
such level so that no other firm suits to product their items at this stage (Dimitrios and et. Al.,
2020). It can help to increase market sales and profitability within the marketplace that's the
common desires and goals for each commercial enterprise units. For this, they required to use
numerous equipment and techniques that can assist to decreasing their fee of operation. For this
they're the usage of price control method without compromising with the product nice. Apart
from that they also import their garb and other products from diverse countries along with India,
Indonesia, Chain and many others. Because the labor costs are lower in these countries.
Differentiation: This is any other a part of Porter's Generic strategies which can also assist
to provide competitive gain within the UK market. In this approach a enterprise agency attempts
to create area of expertise in their products, services, infrastructure, studies and improvement and
so on. In this context of NEXT PLC, the company can provide unique merchandise in phrases of
product excellent. They can also launch new clothing range on a regular basis which can help to
attract their customer which cans leads to increase market share and revenue. The cited business
entity, also conducting customer research which can help to identify their changing needs so that
they can design and produce their products accordingly. Apart from that NEXT PLC is having a
brand image in the UK market which can give edge over its competitors.
Cost focus: In this strategy the firm is focused on the particular area. The idea behind the
focus strategy is developing marketing and selling products in to a nice market or a particular
type’s of customers. The main aim of such strategy is become market leader in order to provide
goods and services to the niche market. In the context of NEXT PLC, the firm can select various
target markets and provide products accordingly. For example, they can focused on the young
generation and provide sport clothing and sports footwear to them (Simandan, 2019). They can
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also open a separate store for sports segment which can help to attract market share and market
share in the target market. Apart from that the firm also can select premium target market in
provide highly qualitative and unique products to its target customers.
Differentiation focus- An technique to competitive advantage wherein an organization
tries to outperform its rivals with the aid of imparting a product this is perceived via customers to
be superior to that of competitors even though its rate is better; in adopting a differentiation
cognizance strategy, the employer focuses on narrow marketplace coverage, in search of most
effective to attract a small, specialized phase. For example, with the support of this strategy the
management of the company can make focus on the differentiation of the goods and services as
per the requirement of target market consumers.
In order to gaining competitive benefits, the management of Next Plc can consider
differentiation focus in order to gain competitive benefits in to target market. With the support of
this strategy, the organization will have to first identify that a patron company has a selected set
of needs than does the broader market populace (Dias, 2018). If there can be no version in want,
then there can be no legitimate basis for differentiation. Alongside this, the company also needs
to make sure that any other competitor isn't already attractive to the unique and particular needs
that they have recognized.
Produce a strategic business plan
Strategic Business Planning is a high-degree management method undertaken to perceive
and approve the framework, imaginative and prescient, lengthy-time period desires, instructions,
and goals of a commercial enterprise business enterprise if they want to ensure that this
organisation is appropriately positioned considering its advertising abilities, technological
benefits and available resources. It serves as a basis for the development of tactical plans and
solutions to obtain preferred entrepreneurial intentions and industrial benefits. The explanation of
business plan of Next plc is as under:
Company overview- Next PLC is a retailer that sells garb, shoes, accessories, and home
merchandise. Most of the organisation's services encompass its personal Next-branded
merchandise. Almost all of Next's revenue comes from its hundreds of shops within the United
Kingdom and thru its on-line and catalogue commercial enterprise that reaches dozens of
different international locations (Drumaux, 2018). Most of the organization's final income is
through retail shops outdoor of the United Kingdom that it franchises.
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Mission- Next's mission is to be the natural choice retailer in the UK for fashion aware
men & women who expect style, distinction & quality from their clothing.
Vision- The vision is to meet our customers' expectations via offering thrilling,
fantastically designed, fantastic first-class garb, shoes, add-ons and home ware.
Objectives- The SMART objective of Oak Cash & Cash Ltd is described under:
 For doing increment into commercial enterprise income with the aid of around eight%
into destiny 9 months.
 To enhance the share in addition to sales of entity with the aid of five% in similarly 7
months.
Source of investment: This is taken into consideration as that areas wherein company can
also borrow budget from economic institutions for jogging the company collectively with angel
purchasers, financial institution loans, crowd investment and masses of others (Okumus and et.
Al., 2019). Additionally, few deliver of funding wherein agency which embody Next Plc can
also additionally decorate fund for appearing their corporation. Along with this, it might aids
entity to boom business company boom similarly to doing development into their income in
addition to profitability margins.
Action Plan: This is undertaken because the document that includes complete steps which
aids them to carry out the precise reason similarly to goals. Moreover, the crucial issue cause of
motion plan is to specify popular property which can be required for achieving the goals,
growing time periods for unique mission similarly to challenge to be finished and verify required
belongings. In addition to this, Next Plc ought to formulate motion plan for introducing their
corporation inside new market simply so this may perform it in appropriate way. During growth
of enterprise, the executive have to accumulate records related to customers’ necessities further
to desires simply so it is able to facilitate products primarily based genuinely upon them. In
appreciate of advertising and advertising and marketing and advertising and marketing and
advertising similarly to promoting their commodities so they may hire social media gadget for
publishing its merchandise which may be useful in growing interest amongst audiences. Also,
this could useful resource to attract them for getting merchandise similarly to undertakes
blessings of offerings.
Budget making plans: This is considered due to the fact the monetary plan which
undertakes satisfied gross income quantity similarly to profitability, resources abstraction,
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liabilities and many others (Nathan, 2019). In understand of Next Plc, the executive may also
moreover furthermore formulate a price range file for his or her practices of enterprise business
enterprise in order that they may has data related to finance which is implemented for allocating
to supply enterprise company costs of business enterprise boom in addition to increase.
CONCLUSION
This has been concluded from the defined records that Strategic control is not anything
however making plans for every predictable in addition to unfeasible contingencies. It is
applicable to every small in addition to massive company as even the smallest company face
competition and, with the useful resource of formulating and enforcing suitable techniques; they
might achieve sustainable competitive benefit. With the support of PESTEL and SWOT analysis,
external and internal analysis of business can be analysed. Different modes of entry support, the
firm in getting entry in to new market. Along with this, Porter’s generic strategy support the firm
in gaining competitive benefits.
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REFERENCES
Books & Journals
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Online
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