Global Strategy Case Study

Introduction - Strategic Management and Market Entry for Next plc

The global strategy is referred to as the plan and is assistive to the company in ensuring growth within the international market. This is particularly very necessary for the reason that when the business operates in an international market then it is very necessary for the companies that they work effectively. This is because of the reason that the competition is very intense and in case the working efficiency will not be effective then it will affect the efficiency of the business to a great extent. The present study is based on Next plc which was founded in 1864. The current study will outline the application of different types of strategic management frameworks for evaluating the current position of the company. In addition to this, the different global strategies of the company will be evaluated which they use to manage the business. Along with this, the market entry strategies will be outlined which can be used by the company to expand in other countries. In the end, some of the recommendations will be provided for improving the efficiency of the business and will assist the company to grow and develop.

Overview of business

Next plc is the company founded by Joseph Hepworth in the year 1864 and is headquartered in the UK. The company particularly deals with clothing, footwear, retail, home products and many other related products. The focus of the company is to offer beautifully designed products with premium quality to the consumers so that their needs can be satisfied easily. The major target of the company is the youth who are more conscious of relating to their lifestyle and the way they look within the society. This is essential for the company that they continuously focus on the quality of the goods and services. This is about the fact that when quality services are not provided consumers will not be happy with the company. The total sales of the company included an 11 % increase as compared to the past year. The profit before tax also increased by 5.7 % which is good for the working of the company (Investors, 2023).

Main Body

Strategic management process models and framework

Strategic management is defined as the plan which is created by the company to grow and develop the business. There are many different types of options which are present for the company and it is very necessary to select from them. This is about the fact that when these changes are not implemented then it will be impacting the working to a great extent. Strategic management can also be stated as the process through which goals are set and objectives are prepared to ensure the working of the company is taking place in that direction only (Peng, M.W 2022). Thus, effective compliance with strategic management is very necessary for the company and will improve the success of the company.

Goal, vision and mission of the company

The goal of the business is to impart the services in such a manner that the consumers are happy and satisfied with the different products and services of the company. The mission of the company is to design the products in such a manner that the consumers are much happier with the working of the company. Furthermore, the vision of the company is to focus on the use of quality products and services so that consumer satisfaction is enhanced. The major focus is emphasised over consumer satisfaction because it is the major reason for which the companies are working.

Environmental analysis

For the successful working of the company, environmental analysis must be undertaken. This is necessary for the reason that the business operates in an external environment and there are many different changes taking place within it. Thus for business to be successful it is necessary that these changes are being implemented within the company. For this Next plc implements the internal and external analysis so that all these changes can be evaluated and analysed effectively.

External analysis

The business exists in external environment and it is very necessary for the company to evaluate the external environment most of this is necessary because there are many differences with need to be applied within the working (Singh and et.al, 2019). The strategic management tool of photos competitive model for industries structure is necessary in order to evaluate the external environment. The Porter five forces for Next PLC is as follows-

Blue/red ocean strategy

Another strategic management tool helpful to Next plc for evaluating the external environment is the Red and Blue Ocean Strategy. This is a concept which includes red Ocean Strategy with his treated as an existing market with many competitors. On the other and the Blue Ocean is a type of market which needs to be discovered and where the competitors are less. Thus, in the present case of Next plc company must focus on Blue Ocean Strategy (Ren and et.al, 2019). This is particularly necessary because Blue Ocean Strategy help the business to redefine the objectives and try to improve the working of the business.

Internal analysis

Along with the external analysis it is also necessary for the company to evaluate the internal environment as well. The internal analysis tool useful for next PLC for evaluation is as follows-

Porter’s value chain

Porter value chain is a model which helps the company evaluating their activities of the business. In the present case of Next plc it under takes the use of portal value chain for evaluating the primary and support activities. This model helps the company in deciding the strategies relating to all the primary activities and the support activities which are essential for success of the business (Gupta and et.al, 2019). The successful completion of all the activities helps the business in attaining the overall objective of earning profit and working sustainably. The different kind of activities included within these is human resource, Technology, inbound logistics, operation, production and much other different kind of activities which are crucial for success of the business. For the successful working, it is necessary for Next plc that they try to manage all these resources and activities of the business effectively.

VRIO

Along with the Porter’s value chain the effective compliance with the VRIO analysis is also necessary for managing internal working. This is particularly essential because without the use of resources the company cannot operate. Hence, it is very necessary for the business to effectively manage all the resources so that the objectives of the study can be attained well.

With the evaluation of the VRIO table it is evident that the resources which are of importance to the company include the technical and the employees. This is particularly necessary because all these resources are very important for the success of the company (Reddel and et.al, 2022). In case resources will not be balanced effectively then it will create a negative impact over the working of the company. Hence, it is the responsibility of Next PLC that they must ensure all the resources are optimally utilised so that effective benefits can be attained.

Evaluating global strategies for the company

Business strategy

For the successful working of the business it is very necessary that effective strategies are been formulated by the company. This is particularly necessary because when the strategy will not be clear then the products of the company will not be good. Thus, for Next PLC it is very necessary that they formulate effective business strategies so that the appropriate working can be done (Revill and et.al, 2019). These business strategies will help the employees and will guide them that how effectively they can implement the different strategies for getting the business successful. In the current case Next PLC applies the Porter generic strategy model which helps them to evaluate the different strategies available to enter within the international business.

According to the model there are three different kinds of strategies which can be used by the company. These different strategies include cost leadership, differentiation, cost focus and differentiation focus strategy. All these strategies are helpful for the business to grow and develop effectively. Out of four the recommended strategy to Next PLC is the differentiation strategy. This strategy is particularly recommended to the company because it will help them to enter within the new market. Differentiation is a strategy which majorly focuses on entering into a new product line and completely new market. Thus, with help of this strategy the company will be in position to enter within the international market with new range of product.

Corporate strategy

Corporate strategies are defined as these strategies which assistance establishing the overall value of the business. This includes setting up of strategic goals and objectives and motivates the employees for attaining those objectives. The most common corporate strategy which is used by Next plc while operating with the international market includes the use of integration. This integration includes expanding the business by combining with other firms. In general this integration can be vertical or horizontal. The vertical integration includes combining the business with the elements of the supply chain. On the other hand the horizontal integration includes integrating with the companies working at the same level. This integration will help the Next PLC in improving their business within the international market (Fuertes and et.al, 2020). Along with this another corporate strategy used by Next PLC is the strategic alliance with other companies. This is particularly a good method because the strategic alliance will combine the business with other companies for a specific strategy or purpose. Hence, it will provide a pattern within which two companies carry out a single project as both the companies have a common benefit which is attained by the strategic alliance created.

Global strategy

Working within the external environment that is very necessary had a company makes effective Global strategies. This is particularly necessary because when the business needs to operate in the international environment then they have to comply with different Global strategies. Thus, it is very necessary for Next plc to effectively compare with different kind of global Strategies for successful working of the business (Ketchen Jr, and Craighead, 2020). For this the compliance with Bartlett and Ghoshal Matrix of global strategies will be complied. This model indicates that there are different strategic options which the business is need to manage for their International operations and these are based on to pressure that is local responsible and the Global integration. Both these element are very necessary for the effective working of the business with the international market.

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According to this model there are four different kinds of strategies which next PLC can comply. The strategy includes Global, transnational, International and multi domestic strategy. These strategies are based on the pressure of local responsiveness and the cost of the product. This is very necessary theory because it provides better ways to the companies for operating in the international market. Out of all the four strategies the best suited for next PLC is the International strategy (Wang and et.al, 2019). The international strategy is the one which occurs when the similarity between all the markets is similar and there is benefit of integration at the global level. Thus, it is the strategy which focuses on operating at the global level that is going out from the home country that is operating in abroad. For Next plc as well this is the strategy with which they need to expand the business within the international market. Thus, this strategy will help the company in increasing their market share and the try to improve the property of the business.

Entry strategies for the international market

For the successful working of the business within the international market it is very necessary that it enter the international market effectively (Bogers and et.al, 2019). This is particularly because of the reason that when the entry mode is not effective than it will be affecting the overall working of the business to a great extent. The different market entry modes which next PLC can comply includes the following-

Exporting- Exporting is a strategy within which the company directly sell the goods or services into another country. This is the simple and best method of entering with the foreign market. In addition to this exporting is very cost effective and includes very low risk. Within the case of exporting there is involvement of four different parties which includes the business, importer, transport provider and government of another country through which the export will be done. It is very necessary that cordial relations are being maintained with all these people so that the export process can be made easier.

Joint venture- Joint venture is another strategy through which the company can enter into another country for international business (Kumar, 2022). Joint venture is a scheme within which the company join hands with another local company dealing in the same product line. Both the companies work together and when the objective of the venture is completed then the joint venture comes to an end. The major benefit of this type of venture is that the local company has the proper knowledge of the foreign market and this assist in managing the cost.

Licensing- Licensing is another technique which can be used in order to enter with the international market. This is a good technique within which the company provide some Trademark or right to operate on the name of others company. This requires very less investment and is providing high return of investment.

Out of all the different market entry methods the most favourable for Next plc is the joint venture. This is particularly because of the reason that within joint venture the business joint hands with another local business for a particular purpose. As the purpose will be accomplished the joint venture will come to an end. This ultimately it will result in attainment of the objectives and the Profit ability of the company will increase. Moreover the company will get much better market share within the new country and this will help the business in increasing their goodwill and attract the consumers.

Recommendations for increasing the competitiveness of the company

In addition to this another recommendation to the company for improving the international business is to focus on ethics. It is very necessary for the company to have ethical working. This is particularly necessary because in the current competitive environment ethical and effective working is promoted (Teece, 2019). In case the ethical working is not promoted than it will be impacting the overall working of the company. Thus, while entering within the international market it is very necessary that ethical working is promoted so that they can gain competitive position within the market.

The first and form most recommendation to the company is to have a focus on social responsibility. This is particularly necessary because when the business is entering in new country than the CSR practices need to be followed (Ferlie and Ongaro, 2022). The reason underlying the fact is that if the current competitive environment sustainable working is focused. Thus, when the next PLC will be focusing on the environment and its protection that it will be liked by the consumers.

With the help of the above discussion it is evident that working within the international market is very necessary. This is particularly necessary because when the country will be operating in the international market than the size of business will be large. Thus, some of the recommendation for improving the international market is as follows-

Conclusion

In the end it is concluded that focusing on global strategies is very important for success of the company. This is particularly necessary because with the international market competition is very high and it impacts the working of the country to a great extent. The above study highlighted that internal and external analysis is very necessary for the success of the company. This is particularly necessary because the internal and external environment guide the working of the companies and its strategy. With the help of Porter 5 forces it was evaluated that competition is very intense and the capable resources of company includes technical and employees. Further the strategies of the business include complying with differentiation strategy along with international strategy. In the end it was analysed that complying with the joint venture is the market entry strategy which is very necessary for the effective working of the company. the reason underlying the fact is that with help of joint venture the company will be benefitting with less investment and more returns.

References

Books and Journals

• Bogers, M., Chesbrough, H., Heaton, S. and Teece, D.J., 2019. Strategic management of open innovation: A dynamic capabilities perspective. California Management Review, 62(1), pp.77-94.
• Ferlie, E. and Ongaro, E., 2022. Strategic management in public services organizations: Concepts, schools and contemporary issues. Routledge.
• Fuertes, G., Alfaro, M., Vargas, M., Gutierrez, S., Ternero, R. and Sabattin, J., 2020. Conceptual framework for the strategic management: a literature review—descriptive. Journal of Engineering, 2020, pp.1-21.
• Gupta, A., Suri, S., Dadhich, J.P., Trejos, M. and Nalubanga, B., 2019. The world breastfeeding trends initiative: implementation of the global strategy for infant and young child feeding in 84 countries. Journal of public health policy, 40(1), pp.35-65.
• Ketchen Jr, D.J. and Craighead, C.W., 2020. Research at the intersection of entrepreneurship, supply chain management, and strategic management: Opportunities highlighted by COVID-19. Journal of Management, 46(8), pp.1330-1341.
• Kumar, S., 2022. Strategic management of carbon footprint using carbon collectible nonfungible tokens (NFTS) on blockchain. Academy of Strategic Management Journal, 21, pp.1-9.
• Peng, M.W., 2022. Global strategy. Cengage learning.
• Reddel, H.K., Bacharier, L.B., Bateman, E.D., Brightling, C.E., Brusselle, G.G., Buhl, R., Cruz, A.A., Duijts, L., Drazen, J.M., FitzGerald, J.M. and Fleming, L.J., 2022. Global Initiative for Asthma Strategy 2021: executive summary and rationale for key changes. American journal of respiratory and critical care medicine, 205(1), pp.17-35.
• Ren, H., Qin, H., Ouyang, Z., Wen, X., Jin, X., Liu, H., Lu, H., Liu, H., Zhou, J., Zeng, Y. and Smith, P., 2019. Progress of implementation on the Global Strategy for Plant Conservation in (2011–2020) China. Biological Conservation, 230, pp.169-178.
• Revill, P.A., Chisari, F.V., Block, J.M., Dandri, M., Gehring, A.J., Guo, H., Hu, J., Kramvis, A., Lampertico, P., Janssen, H.L. and Levrero, M., 2019. A global scientific strategy to cure hepatitis B. The lancet Gastroenterology & hepatology, 4(7), pp.545-558.
• Singh, D., Agusti, A., Anzueto, A., Barnes, P.J., Bourbeau, J., Celli, B.R., Criner, G.J., Frith, P., Halpin, D.M., Han, M. and Varela, M.V.L., 2019. Global strategy for the diagnosis, management, and prevention of chronic obstructive lung disease: the GOLD science committee report 2019. European Respiratory Journal, 53(5).
• Teece, D.J., 2019. A capability theory of the firm: an economics and (strategic) management perspective. New Zealand Economic Papers, 53(1), pp.1-43.
• Wang, W., Hoang, D.T., Hu, P., Xiong, Z., Niyato, D., Wang, P., Wen, Y. and Kim, D.I., 2019. A survey on consensus mechanisms and mining strategy management in blockchain networks. Ieee Access, 7, pp.22328-22370.

Online

• Investors. 2023. Online. Available through: <https://www.nextplc.co.uk/investors>