STRATEGIC ANALYSIS

OF NEXT PLC
Module Code and Title: BUS9048M Strategy Making
Group Members:
[Member 1 Name]
[Member 2 Name]
[Member 3 Name]
Selected Organization: NEXT PLC
Introduction
Company Overview
• Next Plc is a British multinational clothing, footwear, and home products retailer.
• Founded in 1982, it operates both physical stores and an extensive online platform.
• Known for its fashion-forward clothing lines, Next caters to a wide customer base.
• Today, Next brand is one of the most famous in the world.
• The company employs 54,507 people and has a team of professional designers, whose handwriting
is immutable elegance and consistency of style.
Purpose
• To conduct a comprehensive situational analysis of Next Plc using PESTEL, PORTER and VRIO
Models.
• To evaluate the Internal Capabilities by assessing resources, core competencies, and value chain.
• External Competitive Environment: Analyzing industry dynamics, competitive positioning, and
market trends.
• Strategic issues identification: Based on our analysis, the presentation will identify the strategic
challenges faced by Next in its current business context.
Current Strategy - Diamond Strategy Model
Product Range Expansion Robust Online Platforms

Market Expansion Physical Stores

Online Presence Enhancement Supply Chain Optimization

ARENAS VEHICLES
ECONOMIC
LOGIC

STAGING DIFFERENTIATORS
Incremental Growth Strong Brand Image

Strategic Partnerships Innovation in Fashion Design

Strategic Investments Financial Stability

Cost Efficiency
Revenue Generation
Customer Value
External Environment Analysis -
PESTEL
External Environment Analysis –
Porter Five Forces
Internal Capabilities Analysis:
VRIO
Future Trends Analysis
SWOT Analysis
Strategic Purpose Review: BHAG
Criteria
Strategic Issues - Issue 1
• Identification: High Production Costs
• Explanation: NEXT Plc's cost structure results in higher production costs than
its competitors. This is a significant weakness that needs to be addressed.
• Significance: High production costs can erode profit margins and make the
company less competitive in the market. It can also deter potential investors.
• Impact on Current Performance: The high production costs are currently
affecting the company's profitability and competitive position in the market.
• Impact on Future Performance: If not addressed, these high production
costs could potentially hinder the company's growth and profitability in the
future.
Strategic Issues - Issue 2
• Identification: Dependence on Imports
• Explanation: NEXT Plc's operations heavily rely on imports, making it vulnerable to
fluctuations in international markets and trade policies.
• Significance: This dependence on imports can lead to increased costs and supply chain
disruptions, especially in times of global economic instability or changes in trade policies.
• Impact on Current Performance: The company's current performance could be
affected by increased operational costs and potential disruptions in the supply chain due
to its dependence on imports.
• Impact on Future Performance: If not addressed, this issue could potentially lead to
significant operational challenges and financial risks in the future.
Conclusion and Recommendations
Summary of Key Findings:
• The analysis of NEXT Plc's strategic issues revealed two key areas of concern: high
production costs and dependence on imports. These issues are currently affecting the
company's profitability, competitiveness, and operational stability.
Recommendations
• To address the issue of high production costs, NEXT Plc could consider optimizing its cost
structure through measures such as process improvements, cost-effective sourcing, and
technological integration. The company could also explore opportunities for economies of
scale to reduce per-unit costs.
• To mitigate the risks associated with dependence on imports, NEXT Plc could consider
diversifying its supply chain and exploring local sourcing options. The company could
also invest in risk management strategies to better navigate fluctuations in international
markets and trade policies.
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