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Next Plc Company’s Innovation Management Report



Nowadays, innovation can be discovered as a critical attribute that defines company’s success in the market while having not only a positive impact on its financial performance but also leading to continuous development and growth (Bessant & Tidd 2015; Dubina & Carayannis 2016; Tohidi & Jabbari 2012). It assists the companies in surviving in the intense market competition and offering unique products to cater constantly rising needs of the customers. Its beneficial characteristics underline the need to include its features in the strategy of the company, and it could be said that Next Plc can be viewed as one of the firms that attempt to redesign its strategy to regain its market shares.

Next Plc specialises in the apparel industry, and its first store was established in 1982 in the UK (Next Plc: at a glance 2017). Pursuing a path of continuous innovation and providing customers with stylish and exclusive clothing and accessories helped the firm become one of the recognisable brands worldwide. Today, Next Plc has 400 stores in the UK solely while 200 locations are also open globally with its total sales of £4.1 billion (Next Plc: at a glance 2017).

Consequently, the primary goal of the paper is to evaluate Next Plc innovation initiatives and market potential. In the first place, innovation theory will be discussed by relying on the BVS model. After that, the acquired knowledge will be implemented into practice by assessing internal and external environment of Next Plc. Based on this analysis, the recommendations will be presented, and conclusions will summarise the main findings of the paper while offering new insights concerning the approaches to enhance Next Plc’s innovation processes.

Innovation Theory

To establish a foundation for discussion, it is crucial to refer to the ideas of innovation models in detail. One of the most commonly used ones is the BvS innovation framework, and its concepts are presented in Figure 1. The image clearly displays that the core of company’s innovation pertains to vision, strategy, leadership, and organisation of processes. In this instance, to support innovation and aim at effective integration, the firm has to have a concise and shared vision and a well-established leadership style that complies with corporate needs and fosters innovation while it is essential to cover a diverse range of processes including Human Resource Management (HRM), market research, and information technology (IT) (Stamm 2008).

The second layer refers to corporate culture and working environment, as they show whether the company is able to implement its principle values in practice. A combination of these factors shapes the understanding of the firm’s internal image and its capability and desire to take advantage of its strengths to become more innovation-orientated.

The BvS innovation framework.
Figure 1. The BvS innovation framework (Stamm 2008).

At the same time, one cannot underestimate the significance of externalities that may include collaboration with customers and suppliers and industry trends (Stamm 2008). When evaluating industry, it is vital to assess rivalry, industry’s innovation potential, and regulations, as they will offer a clear basis for recommendations and define ways to enhance current situation (Stamm 2008). This chapter provides only a brief review of the BvS innovation framework and its components, and each of its elements will be discussed in the subsequent sections accompanied by Next Plc’s analysis.

Internal Factors

Strategy and Leadership Style

As it was mentioned earlier, corporate strategy and vision play a crucial role in aiming at becoming an innovation-driven organisation. In this instance, the strategy has to be distinct, concise, future-focused, exceptional, and clear while vision statement has to have similar features and form a general image of the company in the market for its customers and competitors (Papulova 2014; Stamm 2008). One cannot underestimate the significance of these elements since they are a part of strategic management and help define company’s distinct competitive advantage (Papulova 2014).

When referring to Next Plc, its mission statement implies designing unique and stylish products, having global recognition and efficient supply chain, satisfying constantly changing customer needs, and generating a high return on investment for shareholders (Next Plc 2017). It could be said that the presented mission statement entirely complies with the main features of innovative vision, but its intention to cover as many directions as possible makes it confusing and less motivational.

Another internal aspect to consider is leadership, and its roots are highly linked to the mission statement. For example, Steve Jobs and Henry Ford were the bright examples of leaders, who were able to support growth and revolutionise the ways of doing business in their industries (Papulova 2014). They underlined the significance of innovation by becoming inspiring and encouraging role models, supporting changes, and considering failure as one of the opportunities to learn. As for Next Plc, it has a well-developed framework of decision-making and supports the alignment with risk management strategy (Next Plc 2017).

Following this approach helps minimise risks and become less responsive to the fluctuations of the business environment. Nonetheless, lacking a charismatic leader has a direct impact on revenues and motivation of the employees since the established organisational structure is often associated with the lack of effective internal interactions between different levels of subordination.


When referring to processes, it is apparent that innovative organisation has to support creativity from dissimilar angles. For example, the workforce can be considered as a defining element of the company’s success since it “guarantees the continuity of the organisation” and ensures its competitiveness in the dynamic international environment (Cania 2014, p. 373). In the context of Next Plc, its HRM strategy entirely complies with the mission statement by highlighting a paramount importance of customers and employees. Nonetheless, paying higher attention to employee training and motivation and ensuring the integrity of leader’s vision and HRM strategy can help reach expected Key Performance Indicators (KPIs) and build a stronger bond and understanding in the company.

Another important matter that is directly connected to innovation is Research and Development (R&D) since the companies are required to modernise their products and manufacturing processes to remain financially viable (Babkin, Lipatnikov & Muraveva 2015). Focusing on this matter can help the firm overcome the challenges of the market such as uneven distribution of resources and fill the gaps in knowledge (Hossain 2015).

To support this aspect, the company pays critical attention to know-how while emphasising it one of the defining forces of corporate performance. Along with HRM and R&D, the organisation underlines the importance of supplier network, infrastructure, and financial performance by reflecting them both as a part of the strategy and mission statement (Next Plc 2017). Being able to focus on these elements simultaneously supports integrity, complies with the corporate strategy, and takes into account a diverse portfolio range. Nonetheless, increasing the focus on innovation and flexibility can have a positive impact on the overall organisational stability.

Corporate Culture

Due to the interdependence between innovation and creativity, it is vital to support and reflect these features in the organisational culture (Anderson, Potocnik & Zhou 2014). According to Taha, Sirkova, and Ferencova (2016), these is a vehement connection between the atmosphere in the firm and the desire of the employees to generate and share new ideas while stimulating corporate growth and outstanding financial performance.

In this case, to encourage and cultivate innovative initiatives, organisational culture has to have characteristics such as trusting, respectful, experimental, different, diverse, customer-centred, and innovative. Simultaneously, apart from these features, it has to focus on market orientation and entrepreneurship practices that will help develop an exceptional competitive advantage and value proposition (Barbosa 2014).

As for Next Plc, the main features of its corporate culture are reflected in the mission statement and annual report of the company. For instance, in the mission statement, the management clearly declares a pivotal role of the employees in the company’s success. The actions of the workforce are believed to comply with customers’ expectations by being trained to provide high-quality services (Next Plc 2017).

This goal is accomplished by having designated monitoring and control procedures and KPIs that measure the effectiveness of the workforce such as sales performance (Next Plc 2017). Along with that, as a part of corporate responsibility, the company prioritises the values of trust, tolerance, motivation, and learning by providing safe working conditions, training, and support, and listening to the employees’ opinions when making important decisions (Next Plc: our people 2017). It is implemented by selecting the representatives that will attend managerial meetings and present the viewpoints of the group. Based on this evaluation, it could be said that company’s corporate culture is not only aligned with strategy but also creates a friendly atmosphere for innovation orientation.

Work Environment

Lastly, it is vital to evaluate the working environment, but due to the technological process, it not only includes physical space but also up-to-date equipment that helps share information and facilitate innovation (Stamm 2008). As it was stated previously, the company paid critical attention to providing safe and healthy conditions for the employees while emphasising their well-being (Next Plc: our people 2017).

It helped the management of the firm focus on the development of the workforce while decreasing the accident rate at work. Nonetheless, the work environment that supports innovation has to include a diversity of working locations and continuous collaboration, as these concepts will help retain the employees (Stamm 2008). Next Plc has these features, and they are partly reflected in corporate culture. For example, they include training and idea exchange, and these aspects imply working together as a team to reach organisational goals. Nonetheless, the management mostly focuses on satisfying basic needs of the employees including safety. Apart from maintaining high profit margins, this approach will not be fully effective to release innovation potential of the workforce, and including additional spaces and locations has to be discovered as an essential aspect of improvement.

External Factors

External Communication

Apart from internal company’s strategy, it is vital to understand the approaches used to build external communication framework. In this instance, both interactions with customers and suppliers have to be regarded as equally important since they play an essential role in product delivery. It is widely known that customer orientation could trigger innovation and development of new offerings to satisfy their constantly changing needs (Racela 2014).

Next Plc’s strategy entirely complies with this trend by highlighting a paramount importance of designing products with exceptional features and training personnel to meet perceived quality expectations of customers (Next Plc 2017). Nonetheless, a defining feature of the innovation-driven organisation is the need to engage customers in innovative processes such as product development and optimisation and consider them as mediators (Ngo & O’Cass 2013).

This matter is not reflected in Next Plc’s annual report and can be viewed as a critical aspect required for improvement. A similar framework applies to suppliers such as textile providers, as their contribution can optimise company’s manufacturing activities and enhance financial performance. In this instance, Next Plc is able to take this advantage, and it collaborates with them and uses means of innovation to decrease costs, assure the sufficient flow of information, and maximise revenues.

Industry Context

Next Plc’s operates in the fast-fashion market with leading and innovative brands such as Mango, Zara, H&M, and Forever21 that understand the principles of this industry and quickly deliver their products from the designer to the final consumers for the affordable price (Loeb 2015).

In this case, this industry can be characterised by high innovation rates, as it is essential to satisfy customers’ desire for new looks and overcome competitors. Simultaneously, along with industry regulations, consumers become highly concerned about working conditions and environment, and it requires companies operating in the fast-fashion segment to focus on corporate social responsibility and pay attention to safety and health of their workers (Joy et al. 2012). The ability to adapt to market changes rapidly leads to high rivalry while causing market cannibalisation, as low adaptation rate will result in the loss of the market share. This matter incurs, as the older product or brand is not able to satisfy the existent market potential (Yoffie & Cusumano 2015).

Zara and Mango took advantage of these trends a long time ago, and this feature explains their success in the fast-fashion market. Meanwhile, companies such as Next Plc have to evaluate the operating schemes of market frontrunners and redesign their strategies for their sustainability continuously.


Based on the analysis conducted above, it is possible to propose recommendations to make Next Plc more innovation-driven. In the first place, it has to restructure the original mission statement and make it short and concise. For example, a revised version may refer to “We seek to provide high-quality products with exceptional design at affordable price to cater the needs of our consumers and recognise financial goals of shareholders and employees”.

As it was indicated previously, delivery of the vision was highly linked to the leader’s skills and capabilities. In the context of Next Plc, the company should continue using existent decision-making mechanism, as it guaranteed the involvement of employees in the development of new solutions. Nevertheless, to increase employees’ motivation, considering skills of a charismatic leader and complying with the definition of “exceptionally expressive people, who employ rhetoric to persuade, influence, and mobilise others” are important (Khuong & Hoang 2015, p. 212). Working on the development of these skills will help create the most appropriate blend of capabilities to comply with Next Plc’s corporate culture.

As for processes, it is apparent that the existent Next Plc’s strategy ensures a high level of integrity of leader’s vision and HRM strategy, but developing charismatic skills of the leader can foster motivation and innovation. Relying on this model helps the company stay competitive in the market. Nonetheless, it has to change its focus and pay vehement attention not only to training but also to R&D (Cania 2014).

Increasing investment in this activity by at least 2% will help support innovation and ensure the required level of flexibility. As for corporate culture and work environment, organising different idea-sharing activities such as product innovation programs, having a positive impact of innovation on compensation, and developing creative training programs along with innovative rooms and workshops can help innovation become an irreplaceable component of the organisational structure and corporate strategy (Hoyle 2015).

For example, the employees can voluntary participate in product development projects for awards while rooms can be established on a regular basis with the required equipment such as laptops and whiteboards to cultivate idea-sharing initiatives. A combination of these activities along with a new understanding of leadership will make Next Plc innovation-driven and support integrity.

It remains apparent that the company actively takes advantage of external communication to enhance innovative potential with the help of customers and suppliers. Nonetheless, the intensified rivalry requires the firm to build a strong bond with its clients. In this instance, the company can revolutionise its business model and employ one of the concepts of open innovation such as crowdsourcing (Agrawal & Smith 2014).

For example, integrating this idea with social media can help evaluate potential demand for new products and redesign them according to customer comments in social media groups of Next Plc. Lastly, the firm can consider using some elements of strategies of the market leaders, as it is one of the ways to retain customers and avoid being cannibalised by other brands (Hitt, Ireland & Hoskisson 2014; Walker 2015).

For instance, Zara can be discovered as a front-runner of the fast-fashion industry and implementer of value or blue ocean innovation, and adopting its ideas concerning process innovation can boost the current position of Next Plc (Goffin & Mitchell 2016; Thompson 2012). Overall, utilising these methods will enhance company’s position in the market and help it evaluate risks continuously.


In the end, it could be said that Next Plc successfully operates in the market and attempts to take advantage of innovation by reflecting it in corporate culture, leadership, processes, and work environment. Viewing innovation as a cost-reduction tool is rational, as it is one of the most common trends of the fast-fashion industry. Along with that, intensified rivalry requires the companies to redesign their strategies continuously to avoid cannibalisation of their product lines by more advanced ones. Overall, it could be said that Next Plc can be characterised by a high potential for innovation due to the ability to consider all critical components of the BvS framework.

Nonetheless, there are certain activities and processes that have to be improved to enhance company’s innovative initiatives. The first step is related to making mission statement more concise while using some features of charismatic leadership to distribute vision across the company. Along with that, paying attention to training and R&D, organising various innovative activities, and taking advantage of open innovation can boost company’s position in the market. Lastly, adapting elements of Zara’s strategy can help Next Plc increase market shares and client retention while pursuing value or blue ocean innovation.

Reference List

Agrawal, N & Smith, S 2014, Retail supply chain management: quantitative models and empirical studies, Springer, New York.

Anderson, N, Potocnik, K & Zhou, J 2014, ‘Innovation and creativity in the organisations: a state-of-the-science review, prospective commentary, and guiding framework’, Journal of Management, vol. 40, no. 5, pp. 1297-1333.

Babkin, A, Lipatnikov, V & Muraveva, S 2015, ‘Assessing the impact of innovation strategies and R&D costs on the performance of IT companies’, Procedia – Social and Behavioural Sciences, vol. 207, no. 20, pp. 749-758.

Barbosa, E 2014, ‘Organisational culture oriented for innovation: influencing variables’, The Malopolska School of Economics in Tarnow Research Paper Collection, vol. 25, no. 2, pp. 37-45.

Bessant, J & Tidd, J 2015, Innovation and entrepreneurship, John Wiley & Sons, Hoboken.

Cania, L 2014, ‘The impact of strategic human resource management on organisational performance’, Economia: Seria Management, vol. 17, no. 2, pp. 373-383.

Dubina, I & Carayannis, E 2016, Creativity, innovation and entrepreneurship across cultures: theory and practices, Springer, New York.

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Hoyle, R 2015, Informal learning in organisations: how to create a continuous learning culture, Kogan Publishing, London.

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