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Essay: Managing your career

23 July 202414 June 2012 by Essay Sauce

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MANAGING YOUR CAREER

� Applying for a part-time job (evenings, weekends, vacation)

2) Based on the organisation you have chosen (ie the one where you work currently, have worked in the past, or are applying for a job) write an overview describing the appropriate industry, or sector, or market and the organisation’s place in it. In addition, any issue(s) it faces currently or recently eg a takeover bid, boardroom scandal, external pressures, declining market share, natural or man-made disaster. Describe and comment on these. Next, do a PESTLE analysis (considering the impact on the company of Political, Economic, Social, Technological, Legal, and Environmental influences) OR a SWOT analysis (considering the organisation’s Strengths, Weaknesses, Opportunities and Threats) describing and commenting on these. This will be based on research in the library, on websites or the media, and from the organisation’s own materials or publications. The sources you use must be cited in the text for this task, using Harvard conventions, and listed in a Bibliography.

INTRODUCTION

This is a reflective learning journal based on my personal experience when dealing with the process of applying for a part time job. In this journal I will explore….

The position I will apply for is the position of sales assistant with Next plc. Next is a UK based retailer who offer ‘stylish, good quality products in clothing, footwear, accessories, and home products’ (www.nextplc.co.uk).

BUSINESS OVERVIEW

The Next plc headquarters are based in Leicester, UK and presently employs 36,973 people. Next has three main channels of distribution which is by means of the Next Retail chain which currently operates 480 stores in the UK and Ireland; as well as the Next Directory which is a direct mailing catalogue and website that has more than 2 million active customers; there is also Next International which are retail stores overseas, and there are currently more than 170 stores in the Middle East, Asia and other European countries. Next also has additional businesses namely Next Sourcing and Ventura; another division of next sales comes from third party distribution activities and Lipsy a young woman fashion retailer that sells and designs their own branded products, which was bought by Next in 2008.

CURRENT AFFAIRS

The ongoing disruption caused by the slump in the financial services sector has affected all sectors but had an unsettled effect on the performance of Next plc. In the months June- December 2008 shares reached it’s lowest since 2005 reaching between 800-850 points.
By the end of the financial year ending January 2009 Next recorded revenues of �3,271.5 million and operating profits of �3,271.5 million during 2009 and shares are standing at 2021.00 points as of 14:41 20/12/09. Next plc market share is at a capacity of �3.94m.

At the end of November 2009, Next plc was able to buy a further �18.96m of its 5.25% bonds which are due September 2013, which may have been assisted in company sales doing better than expected.

SWOT Analysis

Organisational Strength

The strengths posed by NEXT plc are seen through being able to maintain satisfying their target group of people aged between 20-40yrs which is a great advantage as this is where some of their competitors have failed and as they are an own branded business they can react to consumer wishes and key trends very quickly and have total control over the quality. In addition to this, NEXT has a respectable presence internationally and is doing well as reflected in sales and profits being up by 27% and plans to expand overseas are in motion as they entered Czech Republic, Slovakia and Hungary in the first half of 2009 along with stores being opened in Sweden in September 2009. The quality of customer service continues to improved to uphold it market share through changes such as making next day delivery as standard on for Next Directory users, in addition to this a new in-house delivery service has
been set up to deliver large home items this allows for deliver at weekends making NEXT more consumer-friendly attracting a larger customer base.

(NEXT plc Page 15 data monitor)

Organisational Weakness

NEXT’s weaknesses lie in how they view their e-commerce sector although improvements have been made to their NEXT Directory website, NEXT simply sees the site as extension to telephone orders despite the fact that they spent �125,000 on this division. Whereas their competitors view this division very differently as reflected in the amount spent on these activities for example M&S �50m in e-commerce and digital TV.

Further gains can be made by the e-commerce division. NEXT, who spent GBP 125,000 sees the internet as an extension of the telephone to order their products online. It is nothing more than a vehicle to get the orders to the retailer. Their competitors interpret the internet phenomenon differently. Debenhams for example invest more than GBP 5m on internet technology and Mark and Spencer even spend GBP 50m in e-commerce and digital TV.
Right now, nobody can tell if e-commerce will be the future of shopping and customers are satisfied sitting on the computer to chose their clothes. But if the trend of internet shopping goes further NEXT is in a bad situation compared to its competitors because its platform is not sufficient enough.

Another weakness is the concentration of similar type of clothing retail companies on the UK market. This can damage NEXT if competitors gain market share or if consumers change their habits and NEXT cannot adapt to these changing trends quickly. To diversify into foreign markets could balance any possible risk of decreasing sales. Furthermore such a policy would strengthen NEXT’s position if the pound become weaker or if the government decides to join the Monetary Union.

Lowered credit ratings
NEXT’s credit ratings were recently downgraded by rating agencies. In the first quarter of calendar
year 2009, Fitch Ratings and Standard&Poor’s revised NEXT’s outlook to negative from stable. Fitch
also downgraded its ShortTerm Issuer Default Rating (IDR) and affirmed its Long Term IDR at “BBB”.
These ratings reflect the increased probability of a drop in the company’s debt protection measures
below the levels compatible with the “BBB” rating category.

At the same time, Standard&Poor’s lowered its short-term corporate credit rating to “A-3” from “A-2”
and affirmed its “BBB” long-term corporate credit and senior unsecured debt ratings on the company.
The rating actions reflect the deterioration in Next’s trading performance and profitability against the
backdrop of the ongoing general economic downturn. Inability to regain favorable credit ratings could
increase the company’s cost of borrowing funds.

Environmental opportunities

Nevertheless mail order is an important plank in the retail trading stakes. Employees aged 20-40 have little time to do their shopping. So it is good that NEXT has gained a foothold in this market. They are ranked number one among the High Street names which are offering mail order clothing. This could be a great opportunity for NEXT to increase market share -speaking of the domestic market as of the foreign markets – to use their knowledge and experience over the years they can make it even harder for its competitors to step in. More opportunities are mentioned at chapter 6. Opportunities

Acquisition of Lipsy
NEXT acquired Lipsy, a brand for young women, in September 2008. Lipsy designs and sells its
own branded younger women’s fashion products through wholesale, retail and internet channels.
NEXT has so far made good progress in preparing Lipsy for its future growth. Lipsy opened its first
retail store in 2008 and commenced direct sales through the internet; Next further plans to open 9
Lipsy stores in major city centers and malls in 2009. The company also plans to broaden its product
offering and enhance its internet and home delivery capabilities. In the form of Lipsy, Next has a
potential second brand that is set to become one of the leading brands in the younger women’s
fashion market.

Growing popularity of online shopping in the UK
NEXT has a strong online presence with its business division, Next Directory. The Next Directory,
with more than 2 million active customers, currently accounts for over 60% of the company’s orders.
Sales were up 2.1% in FY2009, achieved largely through a 1.9% increase in the average number
of active customers and an 8.4% increase in pages showing new and developing product areas.

NEXT also provides credit on Next Directory accounts; this offers an added advantage for consumers
in the current tight credit environment.

Continued growth at the Next Directory despite the economic environment was mainly due to
increased use of Internet as a shopping channel. Online retail sales in the UK grew 14% in April
2009 from a year earlier. Although this is a low growth rate compared to that in the previous years,
a double-digit growth rate under the current economic circumstances is a good sign. Internet shopping

NEXT plc Page 16
� Datamonitor

Environmental threats
A threat is the low market growth and the strong competition. Some companies are very aggressive in their attempts to gain market share or to maintain it. To reach their aim they are offering high street products manufactured in third world low labour cost areas at dumping prices. Tesco for example offered Lewis 501 denims twenty pound cheaper than the high street shops. Threats

Recessionary climate
Like most advanced economies, the UK is currently in the grip of recession and is forecast to remain
so throughout 2009. The UK’s economy contracted 2.4% in the first quarter of 2009, the biggest
year-on-year decline in 51 years. Based on the falling GDP rates during late 2008 and early 2009,
the International Monetary Fund (IMF) estimated that the UK economy will contract 4.2% in 2009.
Amidst the recession, declining income and increasing unemployment, consumers have lesser
disposable income and have become more vigilant of spending. As a result, the demand for the
company’s branded apparel products will be under immense pressure during such difficult economic
times.

Rising labor costs in the UK*
Labor costs in the UK are on the rise. The National Minimum Wage Regulations came into force in
April 1999 and since then the NMW rates have been increased annually. As per the National Minimum

Wage (NMW) Regulations 2009, the adult minimum wage rate has increased from �5.73 ($9.3) in
October 2008 to �5.80 ($9.4) which will come into effect in October 2009. The rate for those aged
16-17 years has also increased from �3.53 ($5.7) in October 2008 to �3.57 ($5.8) (to come into
force in October 2009). A rise in labor costs will increase NEXT’s operating costs and impact its
margins adversely.

*Currency exchange rate as on 14th July 2009: 1�=1.62027 USD

Intense competition
The retail industry is characterized by a large number of players, many of whom have a worldwide
presence. Next competes with national and local departmental stores, specialty, off price, discount,
supermarket, independent retail stores and internet businesses, which sell similar product lines.The
company faces competition from companies like New Look, Selfridges, Debenhams, Esprit Holdings,
H & M Hennes & Mauritz and Zara. In addition to these companies, the company also competes
with retailers such as Marks& Spencer, which offers private labels at affordable prices. Increasing
competition could affect Next’s margins and market share.