An organisational analysis of M&S & Next

Written by diana wicks
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An organisational analysis of M&S & Next
Both these companies utilise a face-to face method of distributing their products, through high street retail stores. (Getty Thinkstock)

Organisational analysis entails evaluating the functions, process and development of an organisation over a period of time. Marks and Spencer, and Next Plc are mass-market retail chain stores with a significant presence in the clothing market. One of the major strengths of both these companies is that they have established a clothing line market niche, and are well known by their customers due to the high quality of their products and the reasonable prices.

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Location

Both M&S and Next have their origins in the UK, but have constantly expanded to establish stores all over the world. M&S has stores in more than 40 countries with more than 700 stores just in the UK. Next Plc also has a worldwide presence with more than 180 stores in Asia, Europe and the Middle East. Both companies locate their retail stores in high-end streets. This has earned them a reputation with customers looking for trendy products at pocket-friendly prices.

Product

NEXT Plc and M&S are primarily retail clothing outlets, but also sell products as diverse as homewares and footwear for Next and healthy foods for M&S. Next's clothing line targets men and women between the ages of 20 and 40. M&S has a more generic clothing line, such that it is not exclusive to a bracketed customer group. M&S provides a wider range of options while Next Plc narrows the options but makes choosing a piece of clothing easier through the targeted approach

Business model

Both these companies utilise a face-to face method of distributing their products, through high street retail stores. Developing contact with the customers is a similar attribute of both companies' business strategy. M&S developed the "You and M&S" slogan, which seeks to integrate customers with the business. M&S does this through developing products needed by the customer and providing excellent customer services. Next is focused on generating revenues by providing its primary product to a niche market (20- to 40-year-old customers). Next also extensively utilises mail order to offer clothing options for its targeted niche market. Consequently, according to Business Wire, Next recorded company revenues £3,406.5m at the end of January 2010 (FY2010), an increase of 4.1 per cent from 2009. BBC Business notes that M&S enjoyed a 4.6 per cent increase in pre-tax profits to £632.5m in the financial year of 2010.

The Future

NEXT Plc is yet to fully tap into e-commerce to reach its target customers while M&S effectively uses e-commerce to reach customers, suppliers and retailers. As more people choose to do their shopping online, e-commerce represents a lucrative opportunity to both companies. Competition between the two companies and other upcoming high-street retailers significantly narrows the clothing market for M&S and Next Plc, which could pose a considerable threat to both companies, according to Michael Giffels of University of Bedfordshire and author of "Analysis of NEXT plc And its Environment."

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