Strategic Solution for Next
Task G (A1)
Strategic Solution for Next
Interest for Expansion
Next retailers of clothes, home and lifestyle products will be interested in expansion due to the huge success they are in the UK. Therefore they believe that they have the ability to cater for a larger market and will be able to establish themselves a recognised business which is successful and profitable, interesting shareholders to invest in their business which will help eliminate their competitors.
Due to Next being a successful business in the UK, they have the ability financially and unity to successfully expand in the UK and worldwide in to European countries.
Expansion will aid their business in becoming competitive, creating a better corporate image and increasing sales which will lead to higher profits. After all Next is an organisation which belongs to the private sector.
Importance of Change
Although Next is a great success due to the way it is trading here in the UK it will not have the same beneficial success in other countries in the European Union. In order for Next to be as successful in France and Germany like it is in the UK it is vital that the business undergoes adequate changes. This is because the consumers at which they are targeting their products and services are different in these countries than the consumers in the UK. This is due to cultural differences and the grouping of countries which I have explained in E7+C3. Therefore it is vital that Next make adequate adaption to their products and services as well as other areas such as staffing in order for the expansion in Germany and France to be successful. This will be achieved by creating a strategic solution which takes in to account operational changes.
Business Culture, Management Styles & Motivational Theories
Although Next employ democratic management style, which makes it logical for them to incorporate a task culture, adaption must be made in order to suit employees so that they are satisfies this will lead to motivated employees which are beneficial for Next. This is because employees in the UK have different needs and wants compared to employees in Germany and France. This is because they live in a different type of country where their interests are different due to their culture and the different behaviour. Due to the cultural differences, employees will live different lifestyles and therefore, will work in a different way to employees in the UK.
Currently, employees in the UK's Next are satisfied with the democratic management style that enables them to delegate authority to other employees and are happy to take advice from other employees who specialise in a certain area and therefore are experts. This may not be the case in Germany and France because they feel they are being lectured and feel that Next is undermining and makes them feel like they are unable to complete their work properly. Therefore it is likely that employees in Germany and France will be satisfied with Laissez Faire management style because it enables them to make decisions by themselves as Management give employees full responsibility because they feel they are capable of completing their work correctly and efficiently. Employees are therefore motivated by this management style because they are trusted and do not feel they are being watched over constantly.
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Due to Next incorporating a Laissez Faire Management style it is logical they utilise a role culture. This is because employees are given a defined job and are given power. Therefore this business's culture is suitable.
Next utilise motivational theories such as Abraham Maslow and Douglas McGregor in the UK. This is because these theories apply and are suitable for employees in the UK, which therefore motivates them. This is because of the cultural differences between Germany, France and the UK is likely that employees are motivated by different motivational theories compared to the UK as they are applicable. So it is vital that Next investigates the different motivational theories incorporated by businesses situated in Germany and France as well as observing employees behaviour and identifying their wants and needs so that they are aware of what factors motivates employees. They could then make these applicable changes to the way Next operates so that they suit the employees of Germany and France.
In Germany, shops close midday due to high temperatures and the sun being unbearable at this point of the day. The people of Germany spend this time of the day indoors away from the sun and tend to go to sleep for a couple of hours until they are able to face the sun. However this is not the case in France. In order to adapt to the cultural change, Next must close the stores at midday for a couple of hours. This is because consumers will be resting in their homes like the population of Germany Therefore employees will refuse to work at these hours.
Due to the expansion of Next in France and Germany, large workforce will be requires to work for the organisation in these European Countries. Next provides employees the opportunity to expand and achieve a career through working with Next. Therefore productive employees in the UK will be given promotion that will enable them to work in Next in Germany and France. These employees need and wants will alter once they are in Germany and France because they have to adapt their lifestyles do that it meets those of employees in Germany and France. It will be different to their lifestyle led whilst they inhabited in the UK due to cultural differences between the countries.
As well as internal staffing, Next must recruit people outside of the organisation for Next in Germany and France. Therefore it will be the job of the Human Resources function to draw up and create advertisements that suit the citizens of Germany and France. These advertisements will differ to those that they create for the population of the UK due to a cultural difference. These advertisements must not only be in English but also and French and German so that they can be comprehended and are suitable for the people of France and Germany. These advertisements must also meet the laws and regulations that France and Germany establish. This is so that Next abides by the law and successfully appeals to the people of France and Germany.
Consumers, Communication, Disabilities & Staffing
In order to satisfy the consumers of France and Germany relevant changes must be implemented for success. One of these changes will be that employees must comprehend and have the ability to speak the language of the country they are working in, French or German. Due to English being a European language employees must be able to speak and understand English as well. This is so that employees can communicate amongst themselves as well as internally and externally with the consumers and suppliers.
Good communication is vital for Next so that they are able to communicate with the suppliers in order to access goods as well as provide employees and consumers with the facilities that meet their wants and needs as well as meeting the legal requirements e.g. Facilities and services for employees and consumers with impairments and disabilities.
Next must change the way they respond and cater for consumers and employees who have disabilities when trading in Germany and France. This is because they must follow the European laws as well as the laws established in the country they have expanded in which in this case is Germany and France.
It is vital that Next set up a distribution network so that they are distributing their products to the different Next warehouses and stores. These products will be imported and exported so that they successfully reach the Next stores and warehouse in France and Germany.
Although Next benefit from free trade because the UK is part of the European Union. They have chosen to expand in to France and Germany which are European countries. There are still costs for importing and exporting products internationally. These costs must be kept to a minimum in order for success and profitability. Therefore Next must research the possibility of suppliers for Next in France and Germany so that they utilise suppliers who provide the best quality products for the cheapest prices.
They must also consider ways of receiving these products so that they utilise the method that is convenient and cheap.
It is advisable and vital that Next research the distribution network in order to avoid any problems. This is because they identify the best distribution network and also consider the costs of this network. By researching the distribution network they will be able to identify whether it is too costly for Next to utilise and distribute products form their suppliers from the UK. Therefore they must research and find an alternative as the costs of importing and exporting will be eliminated as well as the longer travelling costs compared to a local supplier in the country they have expanded in. By doing this possible threats are minimised ensuring success for Next.
Adaption of the Products
The weather in Germany is hot like the southern areas of France. Therefore Next must adapt their products by utilising thin fabrics such as cotton for the products in the clothing range. This is because it is logical that clothes utilising thick fabrics will not be sold due to hot weather. Therefore there is no demand for thick fabric clothes. Instead there is a demand for products that utilise thin fabrics because consumers want to keep cool due to the high climate.
Another adaption Next must make to the products in their product range is that electrical haters must be removed from the product range as there is no need and demand as the weather is hot there. Heaters should be replaced with products such as fans and air conditioners as consumers will want to keep cool. Therefore there is a need and demand for these products.
Financial issues such as exchange rates must be taken into account in order to incorporate a strategic system that considers the operational changes that are statutory. To invest capital from the UK's Next stores to the Next stores situated in France and Germany. The currency must be exchanged form Pounds to Euro. This is because France and Germany utilise the Euro as their currency unlike the UK which has not adopted the Euro even though they are a Member State of the European Union. Due to the fluctuating exchange rates, Next must form a synthesized plan on when they will transfer the company's capital from the UK to the Next businesses situated in France and Germany.
It is vital that Next minimise threats visible in order to become competitive and maintain success and profitability. The major threat present in expanding Next in to France and Germany is the inability of satisfying the needs and demands of the consumers situated in France. This threat is major because consumers are vital for a successful business because the organisation is established to meet their needs and wants, resulting in sales and profits. Unsatisfied consumers lead to poor sales, causing a lack of profits resulting in an unsuccessful business that is forced to cease trading which can cause bankruptcy. So in order for Next to prevent these problems arising it is vital that they satisfy their consumers and develop their clientèle base. This can be achieved by observing and researching the market in France and Germany in order to comprehend the consumers with the countries. Next will be expanding therefore they could provide consumers with goods and services adapted to suit their wants and needs. Therefore sales will increase resulting in high profits and a successful and competitive business which will maintain a good corporate image.
In order to reduce the threat for failure and a lack of capital to finance the expansion in France and Germany. Next must strive to sustain sales in the UK in order to generate profits to remain competitive, maintain a good corporate image and finance the expansion in the European Union leading to a success and eliminating the threat for failure.
Next should take advantage of maximising opportunities which they have been identifying in the business's SWOT Analysis. This is so that they can improve the company and maintain competitiveness resulting in success.
One of Next's main opportunities is the size of the market in France and Germany due to the large population. Therefore Next can target their goods and services at a larger market and therefore have more potential customers. This will lead to an expansion in the clientèle base.
Another opportunity of expanding in to France and Germany is their high Gross Domestic Product measure. This conveys that the consumers in these two countries will be financially able to shop regularly at Next. Due to their good financial welfare consumers in France and Germany will demand products and services of a high quality as they can afford to pay for the increased costs. By producing high quality products they will be satisfying consumers and abiding with the quality and standard laws designed by the EU and imposed in France and Germany. Therefore Next will maintain and enhance competitiveness which will eliminate competitors leading to high sales, increased profits and a successful business that has successfully managed to adapt and utilise a synthesized strategical solution to operational change improving Next's Corporate image.
BY ALKESH PATEL