Strategy, Enterprise, and Innovation Report: A Case Study of Next PLC

This report provides a comprehensive strategic analysis of Next PLC, a leading British multinational clothing retailer. It examines the company's internal resources and capabilities through a SWOT and VRIO analysis, evaluating its strengths, weaknesses, opportunities, and threats, as well as the value, rareness, imitability, and organization of its resources. The report also assesses the impact of external environmental factors on Next PLC's entrepreneurial activities using a PESTLE analysis, considering political, economic, social, technological, legal, and environmental factors. Furthermore, it evaluates the competitive forces within the retail industry and their impact on Next PLC's entrepreneurial activities and profitability, employing Porter's Five Forces framework. The report concludes by summarizing the key findings and implications for Next PLC's future strategic direction.

Strategy, Enterprise and
Innovation

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Analysis of the firm's internal resources and capabilities...........................................................3
Evaluate the impact of external environment factors on the entrepreneurial activities of the
firm..............................................................................................................................................6
Evaluate the impact of the competitive forces on entrepreneurial activities and profitability
within the industry.......................................................................................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Innovation, in which an organisation apply new approaches, processes, services or
products to changes their business in positive manner. Innovation is important for all industries
or business. It can improving the existing strategies, processes or method. Innovation is change
the methods or processes that can recreate the brand value and enhance the growth rate.
Innovation drives the revenue for company. It is enhancing the productivity of company or
organisation. Innovation is always introduces new things. It helps to improve the profitability of
company. Innovation is important to an organisation it helps to introduce new things in industry
that affects their business in positive manner. This report is done in relation of Next PLC. Next
PLC is a British multinational clothing, footwear, home products retailer. Its headquarter in
Enderby, Leicestershire. Next PLC has around 700 stores in world. Most of the stores of Next
PLC is in United Kingdom. It is a largest clothing retailer by sales in UK. Next PLC was
founded in 1864. it was founded by Joseph Hepworth. In this report analyse the internal
resources or capabilities of an organisation, evaluate the external factor or impact of main
competitive forces by using the swot analysis, vrio, pestle analysis and porters five forces
(Soltanizadeh, S. et. al. 2016).
MAIN BODY
Analysis of the firm's internal resources and capabilities.
SWOT Analysis
It is a analysis method by which analyse the internal factors of an organisation. In this
analysis evaluate the strength, weakness, opportunities or threats that affects to an organisation.
This is helps in strategy making to an organisation or company that is promote the growth or
brand value of company. Swot analysis is done in the relation of
Next PLC (Dapeng, Y. et. al. 2016).
Strength
 Next PLC has reliable supplier and
Weakness
 its day inventory is high in compare to

strong base of supplier of raw material.
 It has strong brand portfolio. The Next
Plc is invested in developing the brand
portfolio.
 It has built a distribution network. That
distribution network is reach to
potential in their market.
competitors. Due to this company raise
more capital for investment that can
affect the long term growth of
company.
 Company's net contribution % or
profitability are below the industry
average.
 There is not present the clear strategy to
achieve the long term growth.
Opportunities
 there is new opportunity for switch to
online market, it helps to connect new
customer's.
 Technological innovation provide new
opportunities to company. It helps to
improve their processes or productivity.
 Opportunity of formation the strategic
alliances with other brands.
Threats
 in market increase the competition from
discount or basis of the price of
clothing brands.
 In the company shortage of skilled
workforce, that has affects the growth
or profit of company.
 Next PLC is fail to formulate or
implement long term growth strategy
for their business.
VRIO Analysis
Vrio analysis is a process in which four components are there such as valuable, rare,
imitate and organised. It is an analytical process for evaluation of organisations resources. In this
analyse the all internal resources which is important for an organisation. This analysis
summarised the sustained competitive advantages (Jin, X. et. al. 2018).
Resources V
Valuable
R
Rare
I
Inimitable
O
Organized
Financial
resources
Yes Yes Yes Yes

Clothing products Yes Yes Yes No
Skilled workforce Yes Yes No No
Patent Yes No No No
 Valuable: The financial resources are most valuable for Next plc. The financial resources
provide valuable opportunity to firm for expansion and modernisation. That is provide
growth or boost the profit margin and sales within an organisation. Next plc is a
multinational clothing, footwear retailer in UK. Skilled employees are considered as asset
in respective firm. They provide training to employee for enhance their efficiency. That
helps in accomplish their goals in limited time period.
 Rare: the financial resources are unique and rare for next plc. Next plc has a good cash
flow and strong financial position in market. That is not possessed by new entrants or
competitors. There is one of the strongest strength of next plc is quality that ensure the
product differentiation. The next plc is always modify their products by quality. For
maintain their customer loyalty and enhance their brand value. The manager of next plc is
also provide training for employees.
 Imitable: In this the financial resources are difficult to imitate as these are earned by
organisation in term of profit in a time period. That promotes more difficulty for new
entry. The Next plc keep experimenting in their clothing products and make them unique.
Which assist the organisation to determine the preferences of customers across the world.
 Organisation: Funds of Next plc are strongly organised due to proper planning. Because
of this they make investment at proper place in a time period. The company make proper
financial decision so that it could promote profitability and productivity. This facilitates
the coordination or cooperation in an organisation. That ensure the proper systematic
procedure of of working.
Evaluate the impact of external environment factors on the entrepreneurial activities of the
firm.
PESTLE in context of Next Plc.
Changes in the macro environment factors can have positive affect not only to Next Plc
but also they make their impact on other retail industry players. PESTLE help the company to
take competitive advantage and the whole levels of profitability levels in the industry of

consumer industry. PESTLE analysis give deep details regarding operating challenges Next Plc
will face in the macro environment (Zou, H. et. al. 2020).
Political: It include various factors like Political stability, corruption level, Trade
regulations & Tariffs, Incentives and tax rates, Retail related anti trust laws, legislation of wage,
Regulations of work week in the retail industry, Regulations of pricing, product labelling and
other retail requirements. The factors like interest rate, foreign exchange rate, economic cycle,
saving rate, inflation rate, economic cycle, tariffs determine the aggregate demand and
investment in the whole economy, various factors like competitive norms make positive and
negative impact on the competitive advantage of the company. Next Plc use various economic
factors related to growth rate, inflation and economic indicator of industry like growth of retail
industry.
Economic: Money is the important element that makes impact on economic growth.
GDP also makes impact on business environment. Examples of various economic factors are,
saving, expenditure, population, Income etc. GDP of UK is rising because it collect income from
all over the world as Next plc operate business across the domestic country so it affects the
business operations of Next plc. Due to rapid variation in the inflation rate it makes negative
impact on Next plc sales that makes the items or goods costly that affects the business negatively
.
Social: It covers various factors like class, demographic, attitudes cultures, education
industry and power structure in the society, in the industry, leisure interest etc. Social culture and
the manner of performing the things as it makes impact on the culture of the company in an
environment. Attitudes and beliefs of the population play a crucial role in understanding how the
smart marketers in Next plc will understand different types of people in the market. How to
design the message for marketing for consumers of retail industry is also to understand.
Technology: It includes Innovation, R&D, creativity etc. due to increasing change in
technology in short duration of time it makes affect on Next plc business. To survive in
competitive world (Mao, Y. et. al. 2019).
Legal:It involves various factors that are depends on provisions which was set by
government. As per application law all the work is done and according to regulations of
government, Next Plc employer perform their task to eliminate defaults and discrimination all

the activity is performed as per applicable law that helps to protect the interest of work force. It
attract heavy penal provisions if any default is found in Next Plc in respect of failure of
following regulation made by government.
Environmental: climate change, natural disaster,weather, size of population make
impact on sales so to overcome with the difficulties various strategies should be prepare to
handle unpredictable situation. By using eco friendly things it can reduce pollutions by Next plc
in this way in impacts positively. due to natural disaster that affects sale of organisation
negatively. It also affects sales of the company.
Evaluate the impact of the competitive forces on entrepreneurial activities and profitability
within the industry.
Porter's Five Forces
Porters five forces are used for the evaluation or analysis of market. The porters five forces are
used by management for analyse or evaluation the competition of market. Next plc is a British
multinational retailer. It sales clothing, footwear or home products. The analysis is done in the
relation of Next plc (DAI, S.R. et. al. 2017).
 Threat of new entrant: Next plc is a multinational retailer. In the retail market new
entrants brings innovation. Innovation is like new way of doing things. New entrants put
pressure on next plc through the reducing cost, lower pricing strategy. Next plc is tackle
with new entrants by innovating new products or services.
 Bargaining Power of Supplier: in this the all most companies of retail industry purchase
their raw material from numerous suppliers. The supplier can decrease the margin. Next
plc can earn margin in the market. The powerful supplier use their negotiating power to
extract higher prices from the company in the retail field. The higher supplier bargaining
power is lowers the overall profitability of retail company. Next plc is tackle with this by
building efficient supply chain.
 Bargaining Power of Buyers: the buyers want to buy the best offering product by
paying the minimum price as possible. Long term growth strategy put the pressure on
Next plc. Next plc has a powerful customer base. Higher the bargaining power of
customer or their ability to seek increasing offers or discounts (Zhang, et. al. 2017).
 Threats of Substitute Products or Services: when a new product or service is in market
which is fulfil the needs or requirement of similar customer in different way. Substitute

goods has high influence on Next plc. These type of industries is diversifying with new
products. Next plc treat with this by increasing the switching cost for the customers.
 Existing Rivals: when the rivalry among the existing competitors in an industry is
intense that will drive down prices and decrease the profitability of the organisation. Next
plc is a very competitive company in retail industry. Make better strategy or scale for
compete better (Chen, W. et. al. 2019).
CONCLUSION
From the above report it can be concluded that strategy, innovation or enterprise.
Innovation is a new way to do things. In this organisation apply new approaches or process for
developing productivity. Innovation is like to do things in new or unique way, it helps to improve
the productivity, existing strategies, process or method of work. This is important for
organisation by improving the methods. It helps to recreate the brand value of company. Further
in this report swot, pestle, vrio analysis or porters five forces has been done in the context of
Next plc. In the end porter five forces is done in the relation of an organisation that evaluate or
analyse the competitive environment of market (LIU. L. et. al. 2017).

REFERENCES
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