Global Strategy Management of Next Plc

Introduction

Global Strategy Management of Next Plc: It is necessary for today’s firms to engage in globalisation and worldwide marketing. In order to obtain new clients and grow the volume of their products and services, corporations may conclude that entering international markets is the best strategy due to the intense competition and saturation of home markets. Businesses incur the risk of entering international markets and broadening their customer base for a variety of reasons, including to diversify risk and establish a worldwide brand.

Other advantages of internationalisation include the development of core capabilities such as technology for a more strategically oriented organisation, as well as the transfer of knowledge and collaboration as a result of interactions between firms. Internationalisation has a number of other advantages.

The purpose of this paper is to assist the NEXT management team (a clothing, footwear, and home products retailer in the United Kingdom) by recommending an internationalisation strategy for the company over a five-year time span. This report is divided into two parts: part 1 will look at NEXT PLC’s external and internal environments, new nation market selection, and NEXT’s entry-mode plans for NEXT, and part 2 will look at NEXT’s business strategy for the selected market, which will contain numerous recommendations.

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Part 1: The analysis and evaluation of the relevant external and internal environments

Internal environment analysis

SWOT Analysis

Strengths

Product innovation capabilities is vital for NEXT PLC’s success in the international market, and it is also critical for the company’s internationalisation plan. The presence of a strong brand portfolio will increase the likelihood that customers will purchase things and services from NEXT plc. In addition to a well-developed distribution system, NEXT Plc.

Weaknesses

A kinked demand curve is present in this case, and the company’s investment in a new market may fail as a result of its reliance on the prices of its competitors. The bulk of NEXT’s clients are middle- and upper-class individuals, and as a result, the company’s high prices deter them from doing business with them.

Opportunities

NEXT needs to target new emerging markets such as Germany, Russia, and others in order to take advantage of the growing social media and online user base throughout the world.

Threats

The competition is putting pressure on NEXT’s profit margins. Because it is so reliant on the pricing strategies of its competitors, it has limited capacity to modify its prices.

PESTEL Analysis

Political factors

With operations on four continents, NEXT is exposed to a variety of political risks, which are imposed by Germany’s Constitution on companies operating in the country.

Other resources, such as natural gas and oil, are primarily obtained through importation from other countries. More than two-thirds of the country’s energy requirements are satisfied through importation from other countries. In truth, it is the world’s third-largest importer of energy behind the United States and China.

Because NEXT has more than 500 sites in the United Kingdom and the GDP per capita has declined, this shows that consumers’ spending power is falling.

The impact of social elements on a situation.

Germany is home to approximately 82 million people. As a result, it is the most populous country in the European Union. As a contemporary, multi-ethnic nation, I would describe it as follows. The increasing number of elderly people presents both challenges and opportunities.

Factors associated with technological advancement

A variety of mechanisms exist through which Germany contributes to the advancement of national research and technology. It is a location where a large number of independent research facilities are located. There are research institutions that are both public and private in nature.

Environmental factors that influence human behaviour

The tourist business in Germany contributes approximately 4.5 percent to the country’s gross domestic product (GDP). It has the potential to be a terrific opportunity for NEXT Plc.

Legal

NEXT must comply with a slew of new laws and regulations, including those concerning employee rights, consumer protection, and environmental protection standards.

Selection of an appropriate new country market for NEXT PLC

Analysis of Germany, Russia and Poland

Selection Criteria	Germany	Russia	Poland
Market Size	Germany will overtake South Korea and the United Kingdom as the world’s fifth-largest eCommerce market in 2020, with a revenue of US$96 billion.	In 2019, the rise in oil prices, combined with tight fiscal and monetary policies, contributed to Russia’s GDP growing by 1.3 percent. In response to the worldwide health pandemic, both the Russian Ministry of Economic Development and the International Monetary Fund had anticipated that Russia’s economy would contract by 3.1 percent in 2020, according to the IMF.	Polish eCommerce revenues are estimated to reach US$13 billion by 2020, making Poland the world’s 18th-largest market for online shopping in terms of value. In terms of revenue, Poland ranks first, ahead of Sweden, and second, behind Mexico. In 2020, the eCommerce market in Poland is predicted to increase by 33 percent, contributing to a global growth rate of 29 percent, according to industry forecasts.
Consumer Buying Power	The purchasing power of Germans per person reached € 23,766 by 2020. Germans have an average purchasing power of € 23,766 by 2020 according to the latest GfK purchasing power survey. Based on the revised figure since last year, this is accompanied by an increase of 2.9 per cent per person.	Russians were even more optimistic about their purchasing power when they grew up, as more than 40 percent of middle-aged people revealed that their purchasing power had diminished. About 14 percent of respondents aged 18 to 34 indicated improvement in their purchasing power by 2020.	Poland’s average purchasing power per capita was 8,294 euros, an average of 45 percent lower than the European average in 2021. That year, the highest purchasing power per person was in Warsaw, with over 13.6 thousand euros.
Economic Stability(Risk)	Germany’s economic independence rate is 72.5, making its economy 29th free in the 2021 Index. Its overall rating has dropped by 1.0 points, largely due to declining legal performance.	Russia’s economic management is currently commended for its achievement of greater economic stability. Inflation is reduced; the budget is a residual; national debt is low; and the storehouses are sufficient	Poland’s well-mixed economy proved to be the strongest in the European Union (EU), with a 2.7 percent decline in GDP by 2020, the first shortfall in production since 1991.
Political Stability(Risk)	Germany Indicator of political stability (-2.5 weak; 2.5 strong), 1996 – 2020: The average German mid-term average was 0.87 points and a minimum of 0.57 points in 2019 and a peak of 1.41 points in. 2000. The latest figure in 2020 has changed to 0.67%.	Russia’s economic management is currently commended for its achievement of greater economic stability. Inflation is reduced; the budget is a residual; national debt is low; and the storehouses are sufficient.	Politically stable, and a member of the European Union and NATO, Poland is rapidly gaining ground with the West. Its GDP per capita increased from 49% of the EU average in 2004 to 73% in 2019 while standing at USD 15,693.

From the table above it is clear that NEXT Plc should invest and expand in Germany.

Introduction of Entry-mode strategies

Joint Venture

The development of a third-party independent entity emerges from a joint venture between NEXT PLC and a German corporation. In comparison to Hong Kong distributor or exporter, this is a common mode of entrance in Germany.

Sharing with other companies is a company’s best opportunity of entering the German market, even if it is time-consuming and difficult. It is more profitable than other Entry-Mode techniques, such as franchising, turnkey, licensing, completely owned firm, and direct export, because the holding company will allow NEXT PLC to enter Germany’s domestic market through a joint venture.

PDCA cycle

To expand its business in Germany, the NEXT Plc should follow the PDCA cycle that is as follows:

P- Plan: In this step, the company will do planning of its expansion by analyzing the data that is available to them. They can base their planning on secondary data as well as they can also gather primary data. They will analyze the data make planning according to its results.

D- Do: In this step, the company will convert its planning into the actions. And will provide instruction on how they are going to achieve the goal that they planned in step 1. This segment can be broken down into smaller segments so that each segment is given enough attention to get better results.

C- Check: In this step, the NEXT Plc will make formal and informal assessments of to identify whether their actions are going according to the plan or not. And is there any need to make changes. A more comprehensive review of the project is done in this stage.

A- Act: This step involves standardization to meet the goals. It involves identifying the mistakes that were made and resolve them to get better results.

Part 2: Business strategies

Plans for entering the new worldwide market have been laid out in detail

NEXT PLC will need an international market strategy if it wishes to reach Germany. As a result of this, there are a number of tactics that a corporation might employ in order to gain a foothold in the new market. NEXT PLC’s worldwide expansion strategy is defined in the following business strategies, which address the various questions that must be answered before NEXT PLC can enter the new foreign market.

Knowing the target audience

The growth of NEXT PLC into Germany will demand a thorough grasp of the company’s target demographic in the United Kingdom. Following the completion of a specialised Google Trends search to understand more about German tastes for garments, footwear, and household items, the following will be better prepared to promote to these consumers.

Learning from competition and distinguishing yourself

Competitive advantage in the market and industry can only be gained by learning about the strategies of your competitors. The following can do a SWOT analysis of the German market before entering the market to describe its strategy.

Setting objectives

The success of NEXT’s international marketing strategy is primarily reliant on the company’s ability to define its goals for the new market. However, there are various opportunities for both quality and value, but the key goals of entering a new market are to increase sales volume and get a larger share of the overall market.

Functional strategies

Effective strategies are tasks and objectives assigned to various departments that support business strategies and business standards. These strategies are specific to the workplace / unit or department and NEXT PLC strategies for international operations include:

Products decisions

For NEXT, this means making product decisions about whether to introduce new items to the German market, improve upon existing ones, or stick with the company’s current young offerings. This is one of the four Ps of marketing mix. Market. NEXT PLC won’t make product decisions on its own; instead, it will follow the company’s overarching strategy.

Product differentiation

The following should be committed to introducing unique elements into items that will be advertised and sold in Germany in order to stand out from the competition.

Product positioning

NEXT will need to use demand-oriented differentiation to make its products more targeted to the target audience and to meet the basic needs in order to extract distinctive features and benefit industry or market position.

Marketing decisions

Marketing tactics and price development, as well as the selection of distributors and public relations, are the emphasis of this chapter. A number of factors, including the size of NEXT’s sales force, advertising budget, and product quality, must be taken into consideration in order for NEXT to succeed in the new market.

Efficiency: This is will entail maximizing the cost-effective targeting of marketing .

Quality: Offering an accurate assessment of customers’ product preference.

Delivery: This will involve detecting and reacting to evolving marketing trends.

Operations decisions

However, this raises questions about how NEXT plans to better link the corporate strategy with the German government’s considerable operational resources. A few of the most successful next initiatives on the German market in this regard include:

Efficiency: Which will be aimed at minimizing scrap.

Quality: To increase high-quality production.

Delivery: Which will ensure NEXT adapts the latest production demands with minimal delays.

Future perspective with a strategic plan to sustain business in global markets

These issues can only be addressed by developing a strategic plan for NEXT PLC’s future, as well as building a strong financial basis and preparing for the difficulties of the global market. With this plan in place, the future of NEXT will be more secure, as will the company’s operations on the worldwide market NEXT PLC will have to accomplish this as well as strategize. To maintain business in Germany and around the world.

Strategize

NEXT will need to outline short-term and long-term growth goals after fully understanding global markets. This will enable the company to avoid global market mistakes such as aggression and attacking the right opportunities early rather than taking action in the event of a crisis. In addition, strategic planning will help NEXT remember that strategy and evaluation do not stand still and need to be revised according to global markets in order to continue global competition.

Learning the risks

 These issues can only be addressed by developing a strategic plan for NEXT PLC’s future, as well as building a strong financial basis and preparing for the difficulties of the global marke. If the company is to succeed in stabilising its business in global markets, it needs to use a consensus-building method that assures key stakeholders believe in and commit to that vision. NEXT PLC will have to accomplish this as well as strategize. To maintain business in Germany and around the world,

Staying consistent

New markets and global markets will be impacted by NEXT’s future performance and compliance, thus it’s critical that NEXT upholds its ideals throughout all markets, no matter how global they are. Consistency and product protection for measurement purposes are reasons why customers associate products with prices. In order for a company to remain current, operational, and sustainable in global marketplaces, it must be consistent.

Conclusion

In this study, the researchers went into considerable detail regarding their tactics for competing in international marketplaces, according to the findings. When considering whether or not to expand into new areas, executives should weigh the benefits and drawbacks of doing so carefully and thoroughly.

It is beneficial for executives to examine current (domestic) demand conditions, factor conditions, related and supporting industries and other relevant aspects when making strategic decisions on organisational structure and competitive positioning. It is possible that any or all of these concerns will have an impact on international success, but it is difficult to predict.

The first stage in expanding abroad for a company is determining if its worldwide strategy will be multinational, global, or transnational. In the event that the firm decides to enter a new market, it is up to the company’s management to determine how the operation will be handled. For example, the product may be exported or licenced, or the company may enter into a joint venture or strategic partnership to manage its operations, among other options.

A plethora of prospects for management and investment in emerging countries presents managers and investors with the opportunity to increase manufacturing and product distribution while also earning a profit.

Throughout the chapters on emerging markets in this book, you’ll learn about the numerous disparities in business practises that exist throughout a wide spectrum of emerging markets, from Asia to Africa, from Eastern Europe to South America, and everything in between. These chapters highlight the distinctive qualities of each market, as well as the prospects for expansion into new areas, difficulties to overcome, and growth options accessible in each market.