Adaptation and implementation of right and effective business strategies are significant defining the sustainability of strategic position of the company.In order to achieve long term growth, proper due diligence of the strategic risk should be done. Benefits of NEXT’s stakeholders must be considered before implementing any strategic decision. Regular review of the business strategy must be performed to identify the better approach for attaining higher sales and profit budgets. Product differentiation and cost focus were identified as two important competitive strategies of NEXT to achieve competitive advantage over the other companies. Wide range of products, quality of services, highly skilled management team, and supply chain management are few features those provide competitive advantages to NEXT over its competitors. Implementation of such competitive generic strategies has created stronger market of branded goods, increased popularity of NEXT clothing products and footwear and especially among young female customers.
As retail industry is very competitive, several factors were identified according to Michael Porter’s five forces model to analyze an industry. Capital requirements, cost advantages, differentiation, economies of scale etc., are principal sources of entry barriers.Retailers such as Walmart, Tesco, ASDA, etc are very huge in their size and this creates the height of barriers to entry for other companies. Role of mediators is minimized because of increasing trend of online shopping. Healthy relationship with the suppliers and effective mode of transportation has resulted to create a trust among its customers with respect to timely delivery of goods ordered through website. Such valuable services made it possible for NEXT to enjoy long term profit by gaining maximum from the competitive advantage.
This study focused on the strategic position of NEXT plc where product design, management team, and effective supply chain management has been identified as the key competitive advantages where NEXT has an edge against the other competitors. Several factors have been discussed that affects the industry as well as company. Increase in VAT was very influencing factor affecting company’s financial decision making process. Also increasing demand of online purchase was also identified as the significant factor that is affecting retail industry as it eliminates the mediators and provides goods or services at low price to customers. Intense competition in the UK’s retail industry has created very tough for new entrant because of huge capital requirements and wide range of available product at low prices. Online business of NEXT in overseas is a kind of small but potentially prominent growth business. It’s getting expanding itself rapidly and, in spite of the rate of growth, it remains profitable.