Next Analysis

SWOT ANALYSIS

SWOT stands for the internal strengths, weakness and the external opportunities and threats. A swot analysis summarises the key issues from the industry and the strategic capability of an organisation that are most likely to impact on strategy development.

Strengths

* Strong brand awareness. (Next has a strong heritage and roots in its brand perception relating to good design and quality)

* Truly integrated multi-channel clothing retailer. (Its Internet operations are seamless with the directory and the company also uses this channel to drive customers into stores.)

* The Next womenswear blouse collection is a combination of design, quality and comfort.

* Good value for money.

* Costs of production are falling as manufacturing is increasingly being relocated to cheaper locations around the world. This may lead to reduction in price of the product range.

* MFA expired January 05' - leading to major impact on value growth. (International developments will also have a major impact on value growth. An international pact -- the Multi Fibre Arrangement (MFA) -- has imposed strict limits on imports of textiles from the developing world into industrialized countries since the 1960s. However, the MFA expired in January2005 and imports are now no longer subject to quotas. Consequently, the global textile industry is expected to consolidate, with production shifting to the most efficient, cheapest and most reliable suppliers -- India and China are expected to emerge as the behemoths of the industry. Indeed, the World Bank estimates that China will control nearly half the world's clothing exports by 2010, up from around 20% in 2004. As a result, consumers are likely to see prices of clothing fall by between 5% and 10% in 2005, further capping growth in the value of the market).

* The UK industry is strong in fashion and design, leading to a reputable international brand.

* They cater to all segment markets like maternity wear, petite and the sizes for the blouses go up to size 22 from size 6.

Weakness

* May need to consider having a faster response fashion range.

* Store interiors can be somewhat bland and uninspiring.

* Fierce competition is leading to heavy discounting that is eroding profit margins.

* Under-potentialised in the fashionable group of young women between 18 to 23yrs.

* Lack of consumer awareness of the Next blouse collection. (survey, see appendix)

* They have not used all the channels for promoting their products e.g. TV, magazines, radios and newspapers.

* Customer

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