Next PLC Cultural and Social Environment - Case Study Example

LEARNING LOG RECORD SHEET: YOUR NAME SOURCE/FULL REFERENCE Next PLC. Next PLC Web site. 2015. http://www.nextplc.co.uk/corporate-responsibility/environment.aspx and http://www.nextplc.co.uk/about-next/business-overview.aspx (accessed March 26, 2015).  DESCRIPTION The website describes the next brand for the company Next PLC. It offers insights into the concepts under discussion. ANALYSIS (CONCEPTS, EXAMPLES, STATUS OF SOURCE, CRITIQUE etc) The Environment Next PLC is a multinational clothing company and thus its business environment is set and suited according to the location. Therefore, various forces from various countries in which its operations are based affect Next PLC operations. Such factors include the culture of a particular country, the general tax laws and other operational rules and regulations set by the government of those countries, the economic depressions and booms, the natural weather and the general climate in those countries, and so forth. Next PLC is aware that it is its responsibility to ensure a clean via reduction of both the direct and indirect effects which results from its operations. The company prioritizes improvement of energy efficiency, minimising the waste that it produces and increasing its delivery fleet efficiency (Next PLC 2015). Next PLC is thus a company that is keen on improving the environment in which it operates given that its operations results in the emissions of carbon directly. The company aims at achieving this through the prioritization as stated above. Strategic Capabilities Next PLC aims at delivering stable long term returns to the investors and other stakeholders via a sustained growth in its earnings. The company aims at achieving this through developing new products which are in line with the current fashion trends, ensuring that the new stores it opens meets the profitability appraisal, participating in international sales, ensuring an efficient and a secure financial structure and looking for an efficient products sourcing. The company also intends to manage stock flow and general costs incurred to achieve its set objectives (Next PLC web site 2015). For instance, these strategies enabled the company to improve its revenues from 3.5 US dollars in the year 2013 to 3.7 US dollars in the year 2014. Additionally, the company has in place good and implementable strategies to ensure that it able to counter any competition it faces in operations. It is can therefore be seen that the company has put in place the mechanisms to ensure that it remains to be a market leader in the foreseeable future (Next PLC web site 2015). Cultural and social environment Next PLC being a company that operates in different countries, it is likely that the different cultures and beliefs of the residents of these countries can influence the and greatly impact on the company. Therefore, Next PLC has to keep an updated course of events and stay in line with those changes. This can be done via observing the religious views and beliefs of the residents and other cultural beliefs. For example, in some countries putting on some clothes is taboo and thus restricted while in others due to their religious beliefs they cannot allow some categories of people to wear some types of clothes. Other characteristics to be considered while analysing this type of environment are the demographic changes. Demographic changes will enable the company to produce clothing and other of its products, which can just meet the needs of the people as at that time. The company will thus not incur losses due to unsold stock, which could go out the current fashion. For example, a cloth, which is good for youngsters may not be appealing to an old man. An analysis of lifestyles is also required to know each categories needs according to the lifestyle they lead. Next PLC has therefore the duty of researching and knowing which group of culture require what type of clothing and when they require it. It is with such considerations that Next PLC was able to take a note that the young population was increasing rapidly and therefore it was able to take advantage of it by producing goods tailored for the young. USEFULNESS/FUTURE RESEARCH/ACTIVITY PLANNED In future, the concepts can be described in general without attention to a particular company as is the case in the above discussion. Log Three SOURCE/FULL REFERENCE Kachru, U. (2009). Strategic management: Concepts and cases. Excel Books India. DESCRIPTION The author attempts to highlight that each manage is supposed to perceive him/herself as a strategist since as firms become progressively flat in structure, leaders engage more in formulation of strategy. A comprehension of the fundamentals of strategic management will be favorable in all their areas of undertaking. The text examines the strategic nuances in management. The book is original as well as unique in the manner of organization and the presented material. Among the deeply analyzed concepts is environmental analysis tools such as PESTEL and hence it was chosen for this context. ANALYSIS (CONCEPTS, EXAMPLES, STATUS OF SOURCE, CRITIQUE etc) The Political Environment An increase or a decrease in government spending habits can positively or negatively affect the operations of the business (Team FME 2013). This is because when the government is spending people have more income and therefore they can purchase the products. If the government cuts its spending then money in the pockets of citizens of these countries is limited and therefore they have to live in a budget of only purchasing the necessary (Kachru 2009). Other things that affect the operations of the business in this category include political stability or instability. In case of political stability the business is most likely to thrive well while under political instability the business would incur losses and shrink. The Legal Environment This category includes all the laws, rules and regulations that are put in place by the legislative authorities of a country to govern a given business industry operations. Such laws could include various tax legislations and business operating permits (Kachru 2009).. A review of such either upwards or downwards will greatly affect the company’s profit after tax. Additionally, a legislation endorsed to govern the price of fuel is likely to impact on the business. For instance a review of fuel prices downward by the country’s energy regulation committee would imply a lower cost of production. Thus, the company should review its prices downwards to take care and reflect such a change. Technology and innovation Changes in the level of technology which could be through new inventions or improvements in the existing technology can also influence business operations (Allen n.d). Internet, mobile phone inventions and the rise of the social media use across the world are some of the areas which can be tapped by a business to reach more customers (Kachru 2009).. An example of this is where the Next PLC launched an online market and selling platform, e-commerce website where its customers could purchase their products wherever they are without incurring travelling costs. Ecology and climate change Ecology and climate changes greatly influence the fashion industry. In view of this Next PLC should consider producing its products tailored for a given location after carefully considering the climatic conditions of those areas. Seasons such as summer and winter require people to have different types of clothes to suit those seasons. A cloth that is worn during a rainy season may be unnecessary during the sunny period. Considering such factors would help the company to match its production a capability with the market needs to avoid surplus and thereby increase its profit (Kachru 2009).. USEFULNESS/FUTURE RESEARCH/ACTIVITY PLANNED The textbook is important since it has offered insight into the pestel environment and understanding of the business environment where all companies operate. Future research could e its application on a given company in order to enhance understanding. Log four based on the given case: BMW automobile group Business strategy After the economic crisis and recession, automobile companies were struggling to make a balance between the quality and reliability of the vehicles that they produced. Toyota was able to succeed via striking a balance between the two while taking care of different classes of people. At this particular time, BMW was also able to convey the image to its customers. Some of the business strategies that the BMW Group used to ensure its success include: Changing management and ownership: this is a point where they got a new shareholder who was able to focus on the future despite the problems that the company was facing. Diversification of Product Initially, BMW group had been established to manufacture engines only but with time it diversified its operations. The company began producing automobiles and motorcycles and this has since helped it to gain a market share in the automobile industry. Utilizing high skilled man force to ensure quality products worked to the advantage of the company. In return this helped the BMW Group gain customer’s confidence in the automobiles it produced as they regarded them as those of high quality. Controlling distribution channel and pricing its automobiles differently in different markets ensured that the company was able to get customers all over the world. Distributions channel control ensured that the company had a direct link between them and their customers and therefore sales and after sales services were easily accessible. Product structuring: with this people were able to easily remember and identify with the BMW as the “Ultimate driving machine” and therefore they perceived them as high performance vehicles. Use of the above strategies enabled BMW group to be one of the leading automobile companies in Europe by the year 2003. Strategic Capabilities Moving production into growth markets: this strategic behaviour helped the group to reduce production costs through utilization of cheap but quality labour force. In return, this ensured the BMW group was able to offer competitive prices to its customers and at the same time assure them quality products. Market research and product development was one of the ways through which BMW group can pursue market lead e.g. Helmut Panke who was the CEO of the group in the year 2002 had plans of launching a new model every three months. Another strategic capability that can lead to success of the group internationally is tailoring a product for each market according to their lifestyle. This could be achieved through increased production of other small models which can be purchased by people who can’t afford the large models. Using PESTEL analysis, I conclude that BMW group still has some untapped opportunities in some markets such as Africa and Middle East and therefore the group should develop models which suit those markets. References Allen, M N.d, Analysing the organizational environment, Select Knowledge Limited Kachru, U 2009, Strategic management: Concepts and cases, Excel Books India. Next PLC 2015, Next PLC Web site, viewed 26 March 2015 http://www.nextplc.co.uk/corporate-responsibility/environment.aspx. Next PLC web site 2015, Business Overview, viewed 26 March 2015 http://www.nextplc.co.uk/about-next/business-overview.aspx Team FME 2013, "PESTLE Analysis - Strategy Skills," Free Management E-Books, viewed 26 March 2015 http://www.free-management-ebooks.com/dldebk-pdf/fme-pestle-analysis.pdf Read More