Analysis of Next Plc

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Analysis of NEXT plc and its environment



2.1 The Market 2
2.2 The Company 3


3.1 PEST - Analysis 4
3.2 SWOT - Analysis 7
3.3 Competitive Analysis 9


6.1 Good quality and price 14
6.2 Relationship between Next and its environment 14
6.3 Shopping as en event 15


1 Introduction 
This Report should give the reader an overview of the clothing retail market in general and an in-depth analyse of NEXT Plc in detail. The main emphasis in this essay are the Retail and Directive division of NEXT Plc because they are the cash generators. Furthermore it shows the current situation of NEXT, its environment and the recent development of the company. The report also provides a mission statement and strategies how to be more successful in the near future.

2 Overview 
2.1 The Market 
The UK clothing market is a declining market. The clothing industry is beset by competition from companies which have invested in hi-tech machinery leading to greater efficiency or have moved their production to factories in cheap labour cost countries to produce their products. However, most companies in this sector make only moderate profits. To expand the market share in this arena is not easy, and therefore it needs a great deal of endeavour, knowledge, as well as energy and money.

Clothes retailers fall into two broad categories: firstly, those selling own-brand clothing and, secondly, those selling third-party wear. Major retailers such as Marks & Spencer and the Arcadia Group are good examples of the first group, as are chain operations such as NEXT and Gap. The second group includes the major department stores and the majority of independent retailers in the UK. 
Clothing retailing is a highly diverse industry. The retail sector ranges from low-cost and discounts retailers through to independents, sportswear, formal wear and highly exclusive designer boutiques. However, as in most consumer goods markets, it is at the middle level where the major players are to be found and money can be earned.

2.2 The Company 
The history of NEXT goes back to 1864 when it was founded by J. Hepworth & Son under the name of Gentleman′s Tailors. In 1981 Hepworth bought the chain of Kendalls shops to establish a new Womenswear group of shops. This was the birth of NEXT. 
NEXT Plc is a trendy high street retailer which sells moderately priced clothing for stylish women and men in the age range 20 to 40. The company also provides home shopping and financial services. 
NEXT operates through five divisions: NEXT Retail operates the high street shops through more than 330 stores covering the UK and Ireland; NEXT Directory is the mail order division which also contain the e-commerce platform; NEXT Overseas operates retail outlets in the United States, Asia, Continental Europe, and the Middle East through franchise agreements; Ventura runs the financial services division. Other activities include telecommunications software services and property management. 
NEXT Retail accounted for 69% of the fiscal revenue for the year 2000 ; NEXT Directory, 19%; Ventura, 9%; NEXT Overseas, 1% and other activities, 2%. More than 96% of sales were achieved in the UK market.

Taking an up to date snapshot of the current situation of the Company, it is quite a success story. NEXT nearly tripled their sales during the last six years, Source: see Chapter 7

from GBP 544 m (1994) to GBP 1430 m (2000) and dividends have increased steadily.

3 Analytic Tools 
3.1 PEST - Analysis 
This analysis is a helpful tool to take a closer look at the general environment. Although the PEST analysis rely on past events and experience, it can be used as a forecast of the future (Wilson and Gilligan, 1998).

Political factors 
The political environment is good. The government is stable and reliable, even if Britain fails to...
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