Next PLC: Evaluating Strategic Management and Business Models

This report provides a comprehensive analysis of Next PLC's strategic management, focusing on its business model, financial strategies, and market positioning. It begins with an introduction to the enterprise, followed by an examination of strategic management practices, including SWOT and Canvas models. The report evaluates the relationship between finance, investment, and the business model, highlighting the use of budget and forecasting models. It also delves into entrepreneurial leadership, analyzing planning tools like the Ansoff model and communication skills. The impact of the market, assessed through Porter's Five Forces, is considered, alongside an evaluation of the VRIO model for resource analysis. The report concludes with an overview of the key findings and implications for Next PLC's future development.

Developing Enterprise
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Determining value and practices of strategic management of enterprise as well as new project
of entrepreneur........................................................................................................................3
Evaluate relationship between finance, investment and business model. .............................6
Analysis of leadership planning of planning as well as finance of enterprise.......................6
Investigation of different ability in communication entrepreneur preparation and process of
making making......................................................................................................................7
Impact of market on business objectives................................................................................9
Evaluation of theories and tools that analyse business environment...................................10
Analyse of different important factors and elements in context of business........................11
CONCLUSIONS............................................................................................................................12
REFERENCES..............................................................................................................................13
APPENDIX....................................................................................................................................14
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INTRODUCTION
Enterprise refers to a business plan that is developed with new and innovative idea. It
includes all of those factors that is helpful in creating and introducing creative product and
services to customers (Clarke, 2013). There are various factors that affect organisation and
activities. It is important of company to identify these factors for taking effective decision. In this
report chosen organisation is Next Plc company. It is well established company which is
conducting its organisational activities in various parts of the world. This company is performing
task in retail sector and providing advanced attribute stylish products to consumer. Next Plc
business was formed in 1864 and it is developed by Joseph Hepworth. Headquarter of respective
company is situated in Enderby, England, United Kingdom. This business is offering men and
women clothing, footwear and other fashionable accessories. This report includes comprehensive
understanding of principle and strategic enterprise management. It consist of finance and
investment model in order to analyse relation between business model, finance and investment.
In this entrepreneurial leadership, enterprise planning has been analysed as well as skills in
communicating entrepreneurial planning is investigated. Apart from this different theories has
been analysed in order to determine business environment.
MAIN BODY
Determining value and practices of strategic management of enterprise as well as new project of
entrepreneur.
Next plc is British multinational footwear, clothing as well as home product relaters.
Respective organisation was founded in 1864 and its founder was Joseph Hepworth. Next plc
have approx. 500 stores and around 43,970 staff members in 2018. SWOT analysis is the tool
which utilise for analysing competitive position of company within business environment. Here,
SWOT stands for Strength, weakness, opportunity and threat (Schaper, 2016). SWOT analysis
of Next Plc are as follows:-
Strength Weakness
 Major strength of Next Plc is their
distribution and reach as they have
several outlets in mostly every state
 Next plc has not conducted market
research from last 2 years within the
market they are dealing. As respective
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which is supported by strong
distribution network. As they make
sure that their products will available to
every customer in easy manner.
 Along with this, Next Plc invest huge
amount in providing training session to
their employees which result in
employing numerous skilled as well as
motivated staff members.
company is working on 2 years old data
while need of customer get change over
time. This is their biggest weakness as
they have to conduct market research
on timely basis.
 Respective company have high
employees turnover ratio in comparison
of their competitors. As they are
spending high on training and
development session which result in
loss for company because people are
joining and then leaving.
Opportunity Threats
 For Next Plc internet is opportunity as
there are increasing number of user
which simply means company can
expand their presence at online level.
 Social media is also opportunity for
Next Plc as they can promote their
products and services by using
Facebook, Twitter, Instagram etc..
 Next Plc have threat of new entrance
because through this respective
company may loose their customers to
new entrants.
 Along with this, in retail sector there
are numerous organisation which create
competition for Next Plc and also
become threat for them.
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Canvas model
This model is used to develop strategies of organisation as well as analysed important
elements of the company. Business model canvas includes different aspects that will help in
performing business task in effective and efficient manner. Canvas model is mention below in
respect to Next Plc company.
Key partners
 Transporta
tion
provider
 Retailers
distributor
s
Key activities
 Marketing
 Sales
 Logistics
 Finance
Value
proposition
 High
quality
products
 Creative
design of
products
 Online
services
Customer
Relationship
 Effective
services
 Easy
transactio
n facilities
 Post sales
services
Customer
segments
World wide
customers
Mass market
segment
Shopping centric
customers
Key Resources
 Human
resources
 Products
 Authoritie
s
Channels
 Directing
or
traditional
selling
 Online
channel
 Retail
channels
Cost structure
 Inventory cost
 Production cost
 Raw material cost
Revenues streams
 Sales of product
 Online sales
 Accessories sales
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Evaluate relationship between finance, investment and business model.
It is very important for Next Plc company to analyse as well as evaluate different finance
and business model (Daclin, Chen and Vallespir, 2016). This will help in taken better decision
for organisation as well as achievement of objectives. Finance and investment model that is
applied in Next Plc company is budget model and forecasting model. Both of these model is
mention below in detail.
Budget Model – This model is helpful in maintaining appropriate budgets as well as
finance for conducting business activities. Budget model is considered as a finance model that
will help in analysing as well as planning finance of respective company in professional manner.
This model aid in providing appropriate budgets to different department of respective company.
Forecasting Model – It has been analysed that it is important for Next Plc company to
forecast financial resources. This company is collecting financial resources and investigate from
various sources. Forecasting model will help planning of accurate finance for the future use.
Relationship between finance, investment and business model
There is direct as well as indirect relationship between financial resources, investments as
well as business model (Zhao, Hwang and Low, 2013). Next Plc company is operating its
business operations on the bases on multiple channel retailer. This business model in helpful in
providing its advanced choice goods and services to potential customers and meeting with
market needs. Finance and investment of Next Plc business will have affect on its business
model. Lack of financial resources and investment have negative effect on company and its
services. Due to this respective organisation will not be capable to offer its manufactured good or
services to consumer. So it is important to have right amount of finance and investment in Next
Plc company for performing activities in effective manner.
Analysis of leadership planning of planning as well as finance of enterprise.
Entrepreneurial leadership refers to the way leader in influencing as well as motiving its
employees to execute enterprise task in effective way. There are various ways through which
leaders can influence its employees as well as enhance business performance. Next Plc
organization is performing activities in competitive business situation so it essential for
conducting an effective business plan (Ng, Hayes and Seah, 2015). This will help in determining
and analysing entrepreneurial activities in correct manner. In order to develop an effective
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business plan Next Plc organisation needs to analyse Ansoff model. This model in mention
below in context of planning business activities.
Ansoff model
It is considered as an impactful tool that will assist organisation to examine different
strategies. Through this framework respective business needs to use in order to analyse different
strategies as well as select most appropriate strategy for organisation growth and development.
Different strategies that will help respective organization in its enterprise planning is given
below. Market penetration – Through market penetration strategies respective organization will
be focusing on offering existing products of company in existing market area. Through
this strategy Next Plc company will be able to gain sales and profits by offering products
to current customers. Product Development – This refers to those strategy in which company developing new
product and offering it to current market area. Product development strategy will be
helpful in raising gross revenue or profits of the organisation. In this strategies Next Plc
organisation should evaluate and identify different requirements of consumers for
developing new commodity. Market development – This strategies consist of offering existing good and services to
fresh and different market place. In this strategy respective company needs to identify
various structure by which respective organization is enhance its customer bases or
profits.
 Diversification – This is considered as the highest degree risk plan of action as in this
Next Plc organisation have to offer completely brand new products and services to new
market place. This strategies will be helpful for company to enhance performance as well
as profitability of business.
Thus, leaders of this organization needs to determine and analyse different strategies with
the motive of achieve desired goals and objectives.
Investigation of different ability in communication entrepreneur preparation and process of
making making.
It is important for respective organisation to communicate planning of business as well as
decision making. There are different skills and resources that will lead to have impact over
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entrepreneurial planning as well as communicate it with employees (Almeida and Ronconi,
2016). Enterprise planning will be very helpful in conducting organisational activities in better
way and accomplishment of in demand or set targets. For investigating skills in business
planning communication as well as decision taking Next Plc company needs to analyse various
resources of organisation. VRIO model can be considered as effective tool for business planning
and decision making.
VRIO Model
This model includes different resources of organisation that is classified into different
sector. It includes all those sources or elements which are considered as valuable, rare, imitable
and organization. This model in respect to Next Plc company is mention below in detail.
Resources Valuable Rare Imitable Organization
Technology ✓ - - -
Employees ✓ ✓ ✓ -
Network of
Supply chain
✓ ✓ ✓ ✓
 Valuable – This includes all those resources that is valuable to business and helps in
performing organisational activities in effective manner. Valuable resources of this
organisation includes technology, employees and supply chain network. This will support
Next Plc company to conduct task business task in effective and efficient way that set
targets could be timely achieved. Rare – Rare consist of all those resources of company that is rare to company as well as
not available to any other organisation (Rouhani and et.al., 2015). It includes staff
member and supply chain network that is developing and delivering products to potential
customers. It will aid in attracting large number of consumer towards organization and
creating powerful brand value. Imitable – This element include different resources of organisation that is helpful for
respective organisation. Imitable resources of this organisation includes effective supply
chain network. This factor will lead to conducting tasks in effectual way. Employees are
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considered as imitable resources of organisation as each and every employees have
different skills and capabilities.
 Organisation – This includes different resources such as supply chain and Next Plc
company is using different tools and techniques in order to correctly manage its supply
chain networks.
By analysing all of these elements manager of respective organisation will be capable to
take better and efficient communicate important decisions to employees. This will help in
implementing planned activities of company in accurate manner.
Impact of market on business objectives.
Market refers to place where Next Plc organization in conducting different type of task
and offering products and services. It has been identified that market place will have major affect
on organisation activities and accomplishment of objectives (Prasad, 2014). In order to analyse
the impact of market on objective of Next Plc company, five force needs to be analysed in
effective manner. This will help in evaluating market area as well as its impact on business.
Analysis of Porters five force model
It includes five major forces that will have effect on enterprise and its operational task .
Porters five force model is considered as essential of respective business as it will aid to analyse
all five forces as this will help in taking better decision for organisation. Difference forces are
mention below in detail. Threat of new entrants – Respective organisation is well established company in UK
market areas and its is providing high attributes commodity and services to many years. It
is supply advanced and prime good to its targeted consumers and this will be very
difficult for new entrant company to compete with Next Plc company (Ansen, 2014).
This forces will lead to have low affect on Next Plc enterprise. Threat of substitute product – It has been analysed that there are different organisation
that is conducting its business task in same market place and that is providing smiler
types of product and to consumers. This forces will have moderate affect the business of
Next Plc enterprise as this business is providing more creative products to customers. Bargaining power of suppliers – Respective company is dealing with number of
suppliers and they are helpful in managing different activities of business in accurate
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way. So bargaining power of buyers will not lead to have impact on objective of this
company. Bargaining power of buyers – This organisation is providing its goods to large number
of consumer. Individual bargaining power will not have major effect on organisation. So
negotiation power of buyers will lead to have moderate affect on organisation and its
objectives.
 Threat from rival companies – There are various strong rival companies that is operating
its activities activities in same market area. Rival companies will have high impact on
accomplishment of goals.
Evaluation of theories and tools that analyse business environment.
Business environment refers to the surrounding of organisation and its activities that
affect business performance. There are different factors that will have impact over business and
its organisational activities (Svejvig, 2013). It is essential for Next Plc company to analyse as
well as evaluate all factors in order to take better decision for organisation growth and
development. PESTEL analysis is considered as an effective model that will help organisation to
identify and evaluate various factors of business environment. This tool is given below in context
of Next Plc company with its impact on organisation. Political factor – It consist of different policies and rule which is formed by UK
authorities and political party with the motive of performing different task of business in
effective manner. This factor will lead to have major impact on business as well as its
activities. Political factor consist of rules and regulations, taxation policies, trade
restriction, stability and insatiability of political party. UK government has developed
very strict rules and regulation that have impact on sales of its products. High trade
restriction lead to reduce in sales and profitability of Next Plc company. Economical factor – This factor consist of economical condition of the UK market area.
Economical factor consist of GDP rates, inflation rates, exchange and interest rates and
so on. It has been analysed that UK government has one of the strongest and largest
economic rates. This will be very supportive for Next Plc company to perform its
business operations. Social factor – It consist of various elements that are related to attitude, behaviour,
values, culture and so on. Social factor will lead to have major impact on business as well
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as its activities (Dietz and et.al., 2013). It is essential for respective company to develop
and create products and services as per need and want of customers. This will help in
attracting more and more customers towards business and increase sales. By analyse this
factor respective company will be able to take better decision for enhancing business
performance. Technological factor - This factor consist of new and advance technology that will help
in performing business activities in effective manner. UK market area has one of the
advance and innovative technology that will help in conducting business activities in
creative and effective way. Next Plc company needs to take advantage of updated and
modified technology as this will help in gaining competitive edge over other rival
companies. Environmental factor – It includes climatic conditions, whether, ecological system,
pollution and many other environmental factors. Next Plc company needs to identify and
analyse these factors in order to perform business activities in effective manner. UK
country has appropriate climate that is supportive is timely distribution of products
manufactured by Next Plc company.
 Legal factor – Legal factor includes several laws and legislation that is develop for
maintaining health and safety of individuals. This factors is helpful in smooth conducting
of business activities. It consist of health and safety laws, employment legislation,
copyright, patents and so on. This company is full filling all laws and policies set by UK
government in order to provide safety to its employees.
Analyse of different important factors and elements in context of business.
It has been determined that there are different factors that will lead to have impact over
business and accomplishment of goals. Next Plc company needs to analyse various factors that
will affect organisation as well as its performance. It is important for this company to analyse
various business opportunity as this will help in overcoming weakness and threats. This company
needs to use new and updated technology in its business process. This will aid in conducting task
and activities in effective and efficient manner (Garside and et.al., 2015). Next Plc company
needs to use product development strategies as in this respective company will be able to
offering high quality new and creative products to potential customers. This will support in
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enhancing customer base as well as improve profits of organisation. Business environment
includes various factors that will affect organisational performance and external business factors
can not be control by organisation. Next Plc company have major threat from its rival companies
that is offering different and innovative products. Product development strategies will help in
creating products that will lead to meeting with customers needs and requirements.
CONCLUSIONS
From the above report it can be concluded that it is essential for company to analyse
various factors that have impact on business. By evaluating various elements of business
environment organisation will be able to grow and develop its activities. There are various tools
and models that will help organisation to develop strong business strategies as well as planning
business activities. It is significant for company to communicate its decisions and business plan
for accomplishment of desired goals.
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REFERENCES
Books and Journals
Clarke, W.M., 2013. Private enterprise in developing countries. Elsevier.
Schaper, M. ed., 2016. Making ecopreneurs: Developing sustainable entrepreneurship. CRC
Press.
Daclin, N., Chen, D. and Vallespir, B., 2016. Developing enterprise collaboration: a
methodology to implement and improve interoperability. Enterprise Information
Systems, 10(5), pp.467-504.
Zhao, X., Hwang, B.G. and Low, S.P., 2013. Developing fuzzy enterprise risk management
maturity model for construction firms. Journal of Construction Engineering and
Management, 139(9), pp.1179-1189.
Ng, B., Hayes, M. and Seah, W.K., 2015, May. Developing a traffic classification platform for
enterprise networks with SDN: Experiences & lessons learned. In 2015 IFIP
Networking Conference (IFIP Networking) (pp. 1-9). IEEE.
Almeida, R. and Ronconi, L., 2016. Labor inspections in the developing world: Stylized facts
from the enterprise survey. Industrial Relations: A Journal of Economy and
Society, 55(3), pp.468-489.
Rouhani, B.D. and et.al., 2015. A systematic literature review on Enterprise Architecture
Implementation Methodologies. information and Software Technology, 62, pp.1-20.
Prasad, T., 2014, January. Developing enterprise culture among the students through
intercollegiate competitions: A case of student enterprise competition (SEC) 2007.
In Developments in Business Simulation and Experiential Learning: Proceedings of the
Annual ABSEL conference (Vol. 35).
Ansen, J.B., 2014. Sustainably developing e-skills in Africa-a case with enterprise resource
planning (ERP) system. Journal of Emerging Trends in Educational Research and
Policy Studies, 5(8), pp.148-152.
Svejvig, P., 2013. Using institutional theory in enterprise systems research: Developing a
conceptual model from a literature review. International Journal of Enterprise
Information Systems (IJEIS), 9(1), pp.1-30.
Dietz, J.L. and et.al., 2013. The discipline of enterprise engineering. International Journal of
Organisational Design and Engineering, 3(1), pp.86-114.
Garside, J., and et.al., 2015. Developing a culture of publication: a joint enterprise writing
retreat. Journal of Applied Research in Higher Education.
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APPENDIX
NEXT PLC (NXG) Statement of CASH FLOW
Fiscal year ends in January. GBP in millions except per share data. 2017-01 2018-01 2019-01
Cash Flows From Operating Activities
Net income 828 760 762
Depreciation & amortization 117 123 123
Investments losses (gains)
Stock based compensation 13 14 14
Change in working capital -88 -182 -95
Inventory 35 -39 -36
Other working capital -123 -143 -59
Other non-cash items -170 -100 -149
Net cash provided by operating activities 700 615 654
Cash Flows From Investing Activities
Investments in property, plant, and equipment -157 -113 -123
Property, plant, and equipment reductions 3 1 0
Acquisitions, net 0 -3
Net cash used for investing activities -154 -112 -126
Cash Flows From Financing Activities
Debt issued 297 135 120
Debt repayment -328
Common stock issued -21 -26 -46
Common stock repurchased -188 -105 -325
Dividend paid -314 -480 -216
Other financing activities -31 -32 -37
Net cash provided by (used for) financing activities -584 -508 -504
Effect of exchange rate changes 1 -1 1
Net change in cash -38 -6 26
Cash at beginning of period 53 14 8
Cash at end of period 14 8 34
Free Cash Flow
Operating cash flow 700 615 654
Capital expenditure -157 -113 -123
Free cash flow 542 502 531
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