Next Plc of UK - Case Study Example

"A competitive advantage is an advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices." (Strategy - Competitive Advantage: Competitive Advantage - Definition. 2008). This has high relevance in the context of the increased competition the company is facing from newly industrialized nations like India, China, Taiwan and Vietnam. The report is also intended to provide required recommendations for Next to solve the issues faced by it in the present market.

Next Plc is a retail cloth major that is headquartered in England. The company belongs to the clothing market of UK, which is the second biggest textile and clothing market in European Union. The major share of clothing market in UK accounts for the apparels for women, girls and children. "Womenswear is the largest sector within the market in general, clothing for women and children is worth double the market for men and boyswear." (Clothing Retailers Market Assessment: Largest Sector. 2000).

Considering the higher boom in the industry the clothing retailers are at a higher growth pace in the market. The clothing market of UK can be split into everyday wear, high street fashion and top end ready to wear. The market players include right mix of departmental stores and fashion retailers. The major player in the industry is Marks and Spencer whose market share is 15% of the overall market. The most influencing governmental regulation for the industry has been the minimum wage. Due to this regulation that added more on the costing structure, many companies had moved out of UK.

The company that is been mentioned in the assignment is Next Plc which is one of the leading cloth retailer in UK. The company was formed in the year 1982 as a new meaning for the fashion industry. "Next plc designs, manufactures, and distributes clothing and home furnishing and accessory items to nearly 330 Next retail stores and through the company's Next Directory mail order sales catalog." (Next Plc: Company Perspectives: Company History. 2008). The company was able to capture a good share of market in a short period of time with their good branding and marketing strategies.

The products of Next are characterized by style, quality and value for money. Currently Next has 460 stores in UK and over 100 franchisees outside the country. The company gives higher priority for customer service as a strategy to capture more and more market. Based on the analysis of Next on the basis of Porter's Five Force model, three areas of concern can be identified for the company. The three areas of concern for the company are market penetration, consolidation and product and market development.

Market penetration is a cause of concern for the company especially in the present situation of increased competition. The threat of new entrants is higher in the case of cloth industry. And also the increased bargaining power of buyers will contribute to the competition. The strategy to be adopted by the company is increased product promotion. The product range of the company can also be improved on the