Fashion Retail From The Eye of NEXT PLC

The retail transaction deals with less quantity of products but wholesale handles with buying services on a large scale. The fashion retailing enterprise focuses on manufacturing and creating designer clothes and other associated fashion accessories in order to produce profit and increase the productivity of the organisation as well. This report will discuss the fashion retail of Next plc including the PESTLE analysis of the business, microenvironmental changes, strategies and future recommendations for enhancing the efficiency and smooth functioning of the enterprise.

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Introduction to the Company

Next Private Limited Company is a multinational British company of fashion dealing in fashion clothing manufacturing, which has a headquarters in Enderby, Leicestershire. The company has around 700 stores, out of which approximately 500 are in the United Kingdom and others in Europe, the Middle East and Asia. Such an organisation was originally founded by Joseph Hepworth in 1864 with the partnership of James Rhodes, which later dissolved. This has been considered one of the largest retailers in clothing as per sales in the UK, and it also got listed on the London Stock Exchange. The portfolio of such a company has a long list covering goods and products like home décor systems, footwear, beauty products, lingerie, sports accessories, and clothes for men, women and children.

Mission - The mission of Next plc is to meet the demands as well as expectations of the customers by rendering them attractively designed and exciting clothing with the assurance of the best quality of accessories, footwear, clothes and homeware (Choi and Shen, 2017). They focus on building such an environment that has the capacity to attract and retain people at each and every level.

Vision - The future vision of the company is to deliver supreme quality of all products and services. It wants to be a natural choice retailer in the market of UK, especially for those people who are aware of recent trends and expect different styles in clothing from time to time.     

Key Relevant Changes in the Macro Environment Within the NEXT PLC

It has been observed that there are many variables and factors that affect the operations and decision-making strategies of any enterprise. Fashion retailer companies also face changes in the macro environment, so it is essential to identify and monitor the key issues and the external factors affecting the mission and the objective of the business (Crewe, 2016). So as to conduct such an evaluation, a PESTLE analysis is being conducted which covers political, economic, social, technological, environmental and legal variables. Such analysis has been discussed below.

Political factors - Major political factors that have an impact on the future of the company are the rules and set of regulations which are designed by the government. The rate of tax imposed on Next plc by the government is another political factor that affects the stability of the corporation and has an imbalance in the spending ability of customers in the Next brand. Another factor has been considered as interest rates which have a positive impact on the company because of the low rate in the UK, thus allowing such enterprises to acquire large amounts of money so as to capitalise the business at much lower interest rates.

Economical factors - This factor deals with the economy of the United Kingdom, which indirectly influences the economic status of the provided company. Such factors have major consequences on the financial status either locally or globally. The factors like recession, taxes, amount of supply over demand, rate of interest and exchange rates (Vecchi, 2016). These variables have an immense amount of influence over the profitability and productivity of Next plc. By maintaining the economic factors, the fashion industry can attract a large number of customer which eventually enhance the revenue of the business.

Social factor - The social factor has a direct outcome on the society in which the given company have been operating. Factors consisting of beliefs, values, social classes, attitudes towards saving and funding, population growth, age, lifestyle, and thoughts on imported services are some of the factors that affect the macro environment of Next plc as well as set the preference and decides the way customer problems are dealt with. These factors assist in prioritising the customers and aid in targeting quality customers. The choices and lifestyles of customers are constantly changing that directly have consequences over the business growth and deliverance.

Technological factors - The competitiveness and structure of price can be disturbed by the emergence or lack of technology in a short period of time. Thereby, it is very necessary to create innovation and uniqueness in the products and services, which not only raise the economy of the business but it also aid in preventing degeneration in the upcoming future. The emergence of technology should give tough competition to the competitors in the same domain industry to enhance the level of popularity of the brand among the customers (Cutcher and Achtel, 2017). The profits earned by the company should be invested in the research and development sector in order to ensure the improvement in the profits sustainably.

Legal factors - All the factors that are related to the law of the country come under this category. There are set of standards and guidelines which have to be followed by Next plc in order to maintain the functioning and manufacturing of the enterprise smoothly. The intellectual property laws help in safeguarding the policies and patents of the organisation. Discrimination law made by the government to ensure protection to Next plc employees.

Environmental factors - Various types of environmental standards are provided depending upon the kind of industry. Ecological factors like the weather, and constantly changing climate have an adverse effect on the pattern and quality of clothing. The demands of the customers tend to bend depending upon the current weather, and Next plc should keep a check on the demands and should make amendments to their clothes.

Relevant Changes Within the Microenvironment

The microenvironment of an organisation consists of factors in the area of operation which affect its performance and freedom of decision-making. Some of the factors that constitute a microenvironment in an organisation include customers, competitors, suppliers, distribution channels and the general population (Petermans and Kent, 2016). Some of the relevant changes within the microenvironment of Next plc are discussed here.

Competitors - Being a fashion retailer, the respective company faces a large number of competitors. However, the ratio of competitors is increasing day be day as many new entrances are entering into market. A number of changes have been made in the microenvironment of Next plc due to the increasing number of competitors. It will affect operations of the respective organisations and will make the overall business to lower their manufacturing price. Some of the examples of competitors of Next Plc are Topshop Ltd., The J. Jill Group and New Look Limited.

Customers -  In comparison to the earlier days, customers are now brand freaks and they are more interested in running with current trends. Thus, such changes in the clothing styles of customers will affect the internal operations of  Next Plc. In order to deal with such changes receptive organisations need to introduce current trends in their organisation. Utilization of technology and some more creativity will help the organisation to tackle such changes. However, customers mostly have a microeconomic impact directly on business operations (Fernie and Grant, 2019).

Suppliers - An increasing number of new entrants will gradually lead to a smaller number of suppliers. There may be chances that suppliers may switch to other organisations. Thus, Next plc being a fashion retailer has to select their suppliers carefully. If a supplier provides low-quality or poor-quality resources to the organisation then it will affect the overall reputation of the firm and can lead to a negative brand image.

Employees - The availability of skilled and qualified employees is the main reason for the overall success of the organisation. Employees of the respective organisation produce, service or sell the products of the organisation. However, employee turnover can impact the overall productivity of the organisation as it will lead to a disturbing microenvironment.

General population - Media along with the general population also affect the ongoing operations of the business. People generally support organisations that provide employment, pay taxes and function with environmental and social responsibility. However, the respective organisation must cope up with all such things otherwise it will lead to a negative image among the public.

Strategies and Tactics That Could Be Used by the Company

The micro, as well as macro factors, have been observed to have positive as well as negative impacts on the development and growth of the business and also assist in making crucial decisions regarding the working of the company (Henninger, Alevizou and Oates2016). There are several strategies and tactics which influence the efficacy and productivity of the enterprise. Both the factors that is micro and macro factors help in establishing efficient tactics and strategies for the betterment and advancement of the organisation. Some micro as well as macro factors and their impact on the business are elaborated below.

Technology - The advancement of technology has been considered to shape the future of the world. The emergence of new techniques in sorting the work as well as in marketing is huge. The use of technology may also have demerits and merits for the enterprise. The companies hire high-paying executives to keep a check on security and prevent attacks from cyber. The online presence of Next plc has been seen to be subjected to security risk due to such platforms more frequently. Thus, companies depend on technology and innovative machines to make the task simple and easy. Such macro factor helps in growing the business to a large extent. Moreover, technology makes the advertisement and new products of the company more public and authentic which results in boosting the revenue and sales in the market (Giraldi and et.al., 2016). It is because of technology that social media platforms have emerged and have been considered as a very essential business target channels which are sorted according to the nature of the company.

The necessary tools which assist in identifying the correct time of posting the post, applying and tagging the preferred content, location-restricted targeting and many more have been established more accurately in the social world and have been observed to engage the correct audience and demanding customers for the upliftment of the business. It has been seen in some cases, that a break in the secure software and technology may lead to mishaps and can be dangerous for the reputation of the company and negatively portray the picture of enterprise in the outer world.

Economy - The economy has been observed to have the biggest effect on the growth and development of the business. The growth leads to increasing the account of profitability at a high rate, where the employment is low and the confidence among the staff members is high. The business can be expanded and the opportunities are huge (Okonkwo, 2016). Using the economic turn, high-level authorities have the capacity to acquire new employees, thereby, they can hire new minds and talents to serve the customer demand in the most creative manner. Attaining another business can help in expanding the base of customers and new products.

Competitors - Competition is often considered good, and the rivalry is thought to make the company workers work more on their own resources to outcompete one another. If an industry is the sole supplier of any product, then they soon avoid making any innovation and the customer gets bound to the single product, the competition makes such organisation challenging. Self-awareness is often found to develop which helps in determining the weaknesses and strengths of the company for coping with the shortcomings.

Kurt Lewin theory

It is a change theory or change model which provides an approach for improvement in the organisation. It gives the framework to the organisation for implementing a change effort, which must be as seamless as possible. It is a three-step model and gives an idea of the effects of implementing change in an organisation (Landmark and Sjøbakk, 2017). It is mostly done by managers and other change agents. Next Plc should also implement this particular model in their organisation as it will help them to deal with changes which occur due to macro and micro environmental factors. The first step of  Kurt Lewin's model is unfrozen which determines that employees of the organisation are ready for change. The next step is change implementation which means the change process has been started in the organisation. The last step is freeze which states that change should be made permanent and all the employees must accept the changes done in operations.

Recommendations

On the basis of the above report, there are a few domains in which Next plc should work and improve so as to earn more profit and reputation in the market (Parker, 2016). However, it has been observed that the fashion company already has a huge brand name and creates new and innovative products to achieve the objectives and visions of the organisation. Various recommendations have been given below which should be followed by Next plc.

• The emergence of new technology and software should be utilised efficiently in order to create new products and to determine the needs of the customer at that particular time.
• All the guidelines and rules set by the government have to be followed by the company for ethical issues.
• Internal communication should be managed effectively with multiple divisions so as to lower disruption levels in processes.
•  The techniques of marketing and advertisement should be more creative and unique so that a large number of customers get attracted towards the brand name.
• Proper funding must be provided to the research and development sector in order to make the brand selective and more desirable.
• The feedback and suggestions of loyal customers should be attended to first, this aids in retaining the customers for life lifetime (Perry and Wood, 2018).     

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Conclusion

From the above study, it can be concluded that the Fashion Retail industry is one of the fastest-growing retailing industries in the overall market area. It is a business of manufacturing and selling clothes to customers and offering them fashion goods and services. However, micro and macro environmental factors of business affect the overall productivity and success of the organisation. They largely affect the operations and decision-making process of business. Macro environmental factors such as political, legal, social conditions and technological changes are the major factors for bringing relevant changes in the operations of a business organisation.  Competitors, customers, suppliers and even the general population which consist of microenvironmental factors also lead to a number of major changes in business operations.  The micro as well as macro factors have been observed to have positive as well as negative impacts on the development and growth of the business. several strategies and tactics which influence the efficacy and productivity of the enterprise have been discussed in order to overcome the negative effects of such factors. 

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