Global Positioning of H&M in Fashion

Q1. Critical evaluation of current global positioning of H&M

a) Trends related to fast fashion and disruptive external events

In simple terms, fast fashion can be described as a clothing design that moves quickly from catwalk stores to take advantage of the trends. The low-priced stylish clothing range moves quickly from designs into reality to fill up space in-store fashion. Continuous new collections are introduced as a part of managing fast fashion (Varley et al. 2018). Key drivers for change in the fashion industry include instability, problematic events, and the ever-changing fashion sense of common people. Hoodies under blazers including bohemian floral, color clashing, chunky loafers, and tractor trek-sole boots are important aspects of fashion that are ruling over the market. Disruptions are coming from geopolitical and macroeconomic events. "When Zara landed in New York at the beginning of the 1990s, people first heard the term 'fast fashion'”. Fast fashion includes an immense amount of water usage while textile factories are leaving a mass of untreated toxic wastewater. The textile waste contains substances like lead, mercury, and arsenic which might become harmful to human lives including aquatic ecosystems. Fast fashion is becoming a trend because of cheaper, speedier manufacturing and shipping methods (Andersson, and Forslund, 2018.). Consumers' appetite for up-to-the-minute styles. Consumer increase in purchase power specifically within young people indulges in gratification desires. One of the world's second-largest fast fashion businesses, H & M, sells up to thousands of items each day which ultimately leads up to the landfill. The rotation of fashion trends and new garments in this organization attracts more people towards them. Disruptive fashion events surround the organization through cheaper and no-cost returns for faster delivery days. The disruptions include better assortment and gaining feedback from customers. More sense of fashion is bought via commerce vs. fast fashion brands (Arrigo, 2018). Understanding data analytics to release a better assortment over time is important for offering free delivery within 2 days and creating better customer service. Digital disruptions in fast fashion are living up the expectations and generating valuable profit chains. There is considerable battle started between big shot organizations like Zara and H&M. The trade 2.0 and cross border trading systems sources strategies in the upcoming year ahead. End of ownership components is shifting to new ownership models driven by consumer desire associated with variety, sustainability, and affordability. Brands are coming up with ideas for rental, resale, and refurbishments business (Bocken, 2021). The traditional fashion industry is also moving towards a now or never achievement of components. Trust deficits are there for high-profile data breaches while online fashion grows to its core. Consumer demands are given greater transparency through the value chain while consumer trust is being improved. According to "McKinsey State of Fashion Survey, self-disruption was top of mind for 2019, with 79 percent of executives placing it in the top five trends affecting the industry (Giertz-Mårtenson, 2020)". Adopting the agile style of working and departing from traditional operational models becomes a greater aspect of self-disruption. The digital land grabbing race is accelerating the emergence of an ecosystem that relates to overlapping business. Friction is observed in valuations and profit margins for the e-commerce platform managers.

b) Construction of some plausible 5-year scenarios for H&M

This organization has a motto of giving fashion freedom to its consumers. There are living values and guidelines observed for everyday fashion aspects. According to the CEO, "We are judged on how we act and how we treat each other, our customers, our suppliers and other stakeholders as we do business and interact with the world around us every day (Güemes-Castorena, and Ruiz-Monroy, 2020)". The organization works in teams and leads by example. The leadership on inspiration, delegation and feedback are associated with a fun and creative work environment development. Pleasant and sustainable work environments are encouraging employees to report unsafe working conditions to managers. H&M group’s net sales have increased by 5 percent within the last few years. As a challenge to the sustainability index of the world, a fashion revolution is occurring and sustainable components are working in collaboration with the environmental research index. For a 5 year plausible scenario the new CEO is trying to fix fast fashion. The current system involves the production of 100 billion garments every year, however, H&M is working on the sustainability credentials to take part in eco-friendly uses of materials and become climate positive by 2040 (Hansen, and Schaltegger, 2013). Scaling up the fibers that can be used over and over again is observed as a part of sustainability. "This month, the retailer also launched a new in-store recycling system called Looop, which allows customers to bring in their old garments and see them transformed into something new, right in front of their eyes.”

c) Consideration of the potential impact on H&M’s business in terms of both threats and opportunities

The digital disruptions have left a potential impact on H&M's business in terms of opportunities aligned with the brand. A heavy line of discounts is being offered in the North American operations that insisted on the development criteria of H&M. New, faster players are trying to gain the market with service on demand and clothing rental systems. “Another annoyance for the trade giant is the emergence of a whole new breed of online-centric players beginning to beat H&M at their own game (Huaranga, 2020)”. There are brands like Boohoo which are coming across this week as a part of cutting down the supply chain and bringing about the major utility components in social strategy and up scaling. This organization consists of more than 14 million social media followers while in 2017, the competition is identified to be increasing while the awareness increases within the evidence of pushing Gen Z in a new level of transparency (Hultberg, and Pal, 2021). 73% of millennial have admitted the fact of paying more for sustainable products. Investment done to more of the personal style is influencing the internet itself. Social media influencers and fashion periodicals need more content from the organization to ensure that several customers are being attracted to the stuff sold online. Higher quality basic clothing which is mixed and matched with re-worn items is identified to be stylish and trending. Maintenance of a good employee and employer relationship to ensure that less employee retention is occurring.

Q2. Sources of competitive advantage and its relevance to management

Review on theories of competitive advantage and evaluation of relevance to management

There are indeed reasons to believe that companies need to fuel growth upon digital transparency and hang upon the business sizes. Reimagining the business models and creating intelligent technologies to target new markets have been observed. Business is done in the H & M way and ethical engagement is organized within business components (Javed et al. 2020). Competitive advantages are gained for an evaluation of components through using supply chain and technology together. H&M's business model consists of creating values for customers by offering quality fashion at the best prices. H&M is not limited to the offering of products for women, it comes in a variety of ranges for teenagers, and children. Business models consist of creating value for customers and offering fashion at the best prices. "In the case of H&M in the global market can be characterized as a combination of cost leadership and the elements of differentiation". The fast-fashion business model is built upon outsourcing of new designs to multiple independent suppliers. Next comes their pricing strategy which can be lowered according to the needs. The outsourcing of products to countries where cheap labor is available helps in keeping it simple and concise for business management and differentiation. The gradual lowering of costs and direct dealing with consumers keeps the middleman at bay and improves the pricing components. Creating unique style and quality of their products are associated with the best fitting of available styles to consumers (Jirawongsy, 2020). Making fashion and design accessible to consumers is identified to be the most sustainable development aspect. Organizations are identifying company resources that are coming up with competitive advancements and certain traits are outlined to the people associated with a range of fashion networking. Some of the core competencies include initiatives that improvise on leadership skills and organizational development. Problem-solving aspects indulge in core values that include a team and beliefs in people, entrepreneurial spirit. According to Jocevski, (2020), constant improvement, cost-conscious attitudes, and commitment towards the responsibility and accountability of people encourage stewardship and perspectives of personal development. Open-minded and simplified activities guide operations and activities around H&M. The cost leadership strategy has to keep the production cost low to achieve profitability. As commented by Lahti, Wincent, and Parida, (2018), lowering production costs, H&M has identified a way out to get the best possible customer base. This Swedish multinational clothing company encourages technical components. Shrinking and managing the purchasing capacity reflects gigantic marketing potential for fast fashion companies. Primary dimensions indulge in global recognition of competency and infrastructural differentiation. Currently, the management is finding theories of relativity so that in countries like India as well the company can spread its name. Fashion products capitalize textile components and all locally and globally sourced components are supposed to be imported within as a part of the tactical theory (Lanzolla, and Markides, 2021). Higher corruption is indulged within foreign markets that need to be overcome. As a part of managerial relativity, it can be explained that a SWOT analysis conducts marketing competency development.

Theories informing H&M managers for the quest of competitive advantage

Theories that can be applied for H&M managers for the quest of competitive advantage are explained as porter's five forces

The bargaining power of suppliers are found to be high

In the case of H&M, the diversified supply chain is having a major impact on global sales, and disruptions are managed through global sales positioning development concepts. The degree of providing the best possible market strength is associated with supply chain management (Paton et al. 2021).

The threat of new entrants is found to be medium

Different wholesale markets are populated in different countries. Now, for to H&M get involved in market share, international fast fashion should be highly encouraged. Collaborating with local brands can be an effective idea to revitalize ethnic and western looks (Rana, and Tajuddin, 2021). Making a full-scale entrance into an already established market will require high potential advertisement and costly investment with the management of regulatory barriers.

The bargaining power of customers are identified to be high

The growing average income means that customers are free to choose from a variety of offerings in this sphere. Local mall chains are promoting multiple fashion brands. Now, H&M can precisely choose to sell via this organization online to kick start its fashion growth.

Threats of substitution are medium

H&M has been identified as a unique and recognizable fashion component that provides long industry expertise and cooperation with famous experts (Sandberg, and Abrahamsson, 2021.). Personal preferences in apparel products and accessories are changing at a fast pace and every upcoming day provides industry expertise and cooperation.

Competitive rivalry is found to be higher

The overall level of rivalry is appraised to be higher since multiple local and international organizations focus on the same market segment. Sufficient resources are there in other brands of the new market while H&M required a skilled labor force to meet the demand and easily penetrate the market. International rivalry is getting deeper and some of the marketing people are Marks and Spencers, Zara, and GAP. These two companies have been present in the market since the 1990s and no regulatory pressure from the protectionist import upon investment policies of these two organizations. If H & M is trying to spread the market share in India then regulatory pressure will come upon it as a new brand (Xuejie, Chang, and GuangHao, 2019,). The competitive strategy of H&M in the global market is characterized as a combination of cost leadership and element differentiation. “There exist multiple market entry modes offering different degrees of control over the local operations and the overall financial engagement in them”. It is highly suggested that companies should not indulge in direct and indirect exporting as the organization operates the lifestyle items to local manufacturers. The fast-fashion model minimizes investment requirements and political risks while distributing the business plans in Europe and the Middle East. Representatives of local environments pay loyalties and invest in a medium degree of control over local operations (Zhang, 2021.). The possessed experience of operating in the country relates to supply chain management rather than marketing.

Q3. Firm’s strategy and strategic position

The firm is currently in the position of analyzing H&M through looking at internal resources and provides sustained competitive advantage. It mentions VRIO frameworks that can define the firm's strategy and strategic positioning.

Valuable:

H&M VRIO analysis shows that the financial resources are highly important as the investment components are into external opportunities which arises opportunities for the organization Combatting external threats can be indulged within local selling operations and making it affordable (Cao, 2018) The distribution network is identified to be another valuable resource that helps in reaching out to more customers. Honest and open-minded attitude to manage customers and build upon teams performance is found to be the most amazing idea Believing in its available resources gives a development idea of enterprise spirit

Rarity:

“These employees are highly trained and skilled, which is not the case with employees in other firms. The better compensation and work environment ensure that these employees do not leave for other firms” The patents are not easily available and are not possessed by competitors

Imitable:

Investment of a significant amount of money is done within the organizational market so that financial resources are accumulated together for a better growth Training the employees on customer handling and allowing them to improve market positioning is acquiring the future of the fashion market H&M has developed an amazing distribution network that can be imitated for becoming a potential distribution manager (Buzzo, and Abreu, 2019) A centralized headquarter location to handle all operations is an imitable factor of this particular organization

Organization

Financial resources are used to invest in the right places and departments such as product, employee development, delivery and refund services, and most importantly marketing Reaching out to a large customer base is observed since the products are patented and it is sold before it is expired “Long-term advertising campaigns with high-light celebrities to enhance the value of H&M's brand name” “H&M's focus on employee involvement and significant designs are ruling over the market (Fujioka, 2017)”

Review on firm's strategy about firm resources and capabilities and performance

The firm is highly reliant on the partners to consider the limited corporate budgets and use their expertise to develop the presence in the market in a new country. Wholly owned subsidiaries and management of traditional schemes are associated with the development of a worldwide presence. H & M establishes a foothold inside the market with the encouragement of franchises. National motives, materials, and traditional concepts allow H&M to co-develop a line of products aimed at Indian consumers while expertise is developed to minimize the entry risks.

Operational components encourage the medium degree of control observed within a large-scale market chain and encourage full ownership to be undertaken. Increasing the "sunk costs" is a great threat across the firm. An elementary level of analysis associated with H&M would divide the cash expenditures and post-entry management within an existing market. In this case, selling and offering the best or quality clothing range is associated with advanced technology and excellent services. Low-cost production and unique selling proposition operate through systematic alignment of business processes. “H&M is the oldest, has the largest number of physical stores, and has expanded from its budget roots to include seven other brands (Fujioka, 2017)". Seven capabilities that help in ethical business management of this organization are literacy, numeracy, information, and communication adaptability. Critical and creative thinking encourages ethical and intercultural understanding. "H&M focuses a vast amount of time on Promotion and advertising. Direct marketing is also used as part of H&Ms campaigns. H&M uses Celebrities, press, and Bloggers to carry out the advertising message". Social Media, Video, and print make its products and services known to its customers, and therefore the online and offline media is identified to be resources that indulge in the organization's development. According to Ren, Hui, and Choi, (2018), the company does not own a single factory and organizational assets are utilized in different sectors to allow H&M to co-develop a line of products aimed to minimize the entry risks. Using the expertise and insights of local partners are identified to be minimizing the entry risks while being rated with a good score by the consumers.

Q4.Role of innovation and internationalization in a firm’s Competitive Advantage

The role of innovation and internationalization in a firm's competitive advantages can be described in terms of increasing the innovative capacity of small and medium-sized companies. The access to resources such as skilled labor ship provides an opportunity to increase the resource components by reaching new markets. Innovation capability is the key product that creates a competitive advantage of discovering new ways of competing in the industry and launching them into the market (Härtsiä, 2018). The innovations provide relative advancements in competitive dynamics within an organization. The firms are developing competitive advancements that ensure international markets are captured. As a part of innovation, the firm has to explore relationships with stakeholders and allow companies towards internationalization. Product innovation is identified to be giving a competitive advantage on challenging the other available competitors. It emerges from the multinational growth of economics. The ability to mobilize and create an interaction between resource-based firms operates as mainline research on innovation. Acquisition and assistance of competitive advantage have to be focused upon to encourage internal competency and maintain sustainable commercialization of this product line. Resources and innovative actions are required to be popularized since in big shot countries like the U.K and the U.S the competition in clothing is much higher than the desired amount. Years after the release of the judgment, market dominance is improvised and the internalization process is impacted (Härtsiä, 2018). Competitive advantage confirms adopting apprehended implementation of components such as examining the relationship integration with consumers. Firms are achieving growth through enormous development index and strategic resource alignments. High and low-income factors are associated with resource utilization aspects of the U.S market.

Evaluation of innovation and internationalization in designing and implementing H&M competitive position

The ultra-competitive fashion industry utilizes different trends where styling components and materials are executed to regenerate their revenue. "H&M competitor Zara branched into the China market with opening 120 stores trying to capitalize on the growing China market". Hence, the organization needs to focus on getting the market share by offering fast fashion at an affordable price range. H&M stocks to the reestablishments of their mission and showing promising growth. Organizational and cultural activities are highly associated with creative thinkers while the retail business entities are focusing on more growth of the organization. Transformational leadership is identified to be associated with the completion of activities under the progression of business activities and following infrastructural developments. A fair and consistent leadership for employees is estimated to be the primary step towards organizational management and optimal leadership generalization. H&M is getting a competitive advantage while gathering a high number of consumer traffic in their retail stores. Shopping habits and trends are managed to ensure that high-end fashion never stops. H&M styles are also focused on opening stores that possess collections of the same category as offline ones in the virtual world. The CEO has collected a good amount of information that will keep the managers and leaders on the right pathways and enable them to take the right ownership of work. A reliable and effective leadership maintains a good marketing strategy to organize and process business model changes. A core set of values and beliefs has resulted in entrepreneurial-driven market components. H&M has been sliding into a strategic drift while resulting in losing brand recognition both globally and locally. Higher returns on profitability through an entrepreneurial shifting of the H&M brand is maintaining its diligence. The most useful assets of this brand are culture and brand awareness (Nayak, Akbari, and Far, 2019). Businesses are remaining profitable and competitive as a hierarchy of fashion components is maintained. Multi-level strategies and researching other brands' pricing components are important. H&M has also created an organizational culture and empowerment of employees. The leadership generalizes on empirical activities to create innovation management. "Relation of the theories of internationalization of firms with the approach of the RBV to verify the possibility of integration of such theoretical perspectives”.

The circular economy works for hand in hand with such organizations, while the online competency is improvised there is market positioning generated for becoming one of a kind in the e-commerce business sector. A differentiated look creating and pricing implementation is taking place inside H&M. "The company only wants to create an image of a responsible company and if it is implementing these strategically smart decisions". The majority of the company people are associated with a flexible approach with the rivals (Nayak, Akbari, and Far, S.M., 2019). H&M is residing inside a market area while there are ample amounts of e-marketing moves observed. The effective range of environmental screening and contributing to their CSR activities is potentially observed. The strategy implementation slips into actions of monitoring performance. H&M focuses on the objectification of environmental and social components such as driving long-lasting positive change and innovating fair and equal opportunities. Gaining stakeholders at its maximum can be another important aspect of managing organizational vision, mission, and objectives (Buzzo, and Abreu, 2019). Sustainable growth can be achieved through achieving milestones at minimal capital investment. A sustainable and reusable fashion that should be undertaken by the organization in order to achieve long-terms benefits in the fashion industry. The PESTEL analysis of this organization that can improvise on innovation is as follows:

The customers are given a time where unbeatable fashion is offered with improved quality at the best prices. Hyper competitive market-driven capabilities are associated with the development of companies' best possible workforce delivery (Zhang2021). The current markets are flooded with several retailers having great information systems and managing the effective actions of financial competency development. The manufacturing process is progressed by spreading the company objectives in a social media release, annual reports, and websites. For different companies, the stores are managed directly. The commercial aspect of company operations is associated with the management of direct sales of single-brand stores. Distributing transport, delivery, and advertisement costs on a broader basis help in managing the world's major market development. The global rise of retail markets is increasing the purchase and ensuring that consumers get the exact product that they want. Numerous people gather together on the occasion of purchasing clothing on New Year’s Eve. Now the company can create an innovative strategy of selling beauty accessories and producing its line of beauty products. End-of-year sales with lightning discounts and gift hampers are age-old techniques of retail marketers to gather customer attention (Hultberg, and Pal, 2021). Distinctive capabilities of customer linking qualify for maximum relational alignment with consumers and standardized mass-market management. Virtual business is getting done within development criteria of marketing essential. The limited budget buyers should also not feel left out since the quality and price ratio is impacting the overall sales. Innovation management capability is becoming stressful while several global trends are perceiving the concept of faster delivery. Faster delivery and return or refund systems are popular among people. IT processes and improvised sales and marketing components are associated within a company to ensure constant development. Looking after employee well-being, growth, and sanitization of stores at the current period contributes to the innovation (Hultberg, and Pal, 2021). Digital design, self-checkout portal, queue-free services, automatic sorters, and RFID systems are the most important technical components associated with the company H&M. A differentiated assortment of trends at the current moment helps in the management of global markets and transforming elements for continuous improvement and evacuating demands. The success of the family firms is not detached from the economic conditions that the county is currently residing in. The research experts are contributing to the management of awareness-raising and organizations are needed to be following those records for necessary business dimension management. H&M follows the aspects of a person's cultural values and beliefs that is continuing to provide cultural benefits. "They believe in a wholehearted team that has to be the most cost-conscious, entrepreneurial driven, and people with a positive attitude that consistently strives for excellence in leading and developing a change in the fashion industry (Jocevski, 2020)”. Internal, external compatibility is associated with a generalization of creative thinking and empowering employees. Roles and responsibilities within an organizational culture are associated to ensure that competitiveness is encouraged. People are having creative ideas where the cultural expansion of internal and external paradigms is consistently following up to observe the work types of managers.

H&M store managers are expected to handle aggressive customers and get some extra savings throughout for high-end fashion development and sales. GAP, UNIQLO ZARA are major competitors which are also coming up with multi-channel shopping experiences, and the entire supply chain and sourcing are associated with the fast-paced design of product innovation and innovative promotional ideas. The sustainability of the supply chain fasts forwards unique shopping components and outsourcing of labor. Potential growth strategies and objectives of H&M store slide into a strategic drift and logical analysis of the brand's competency (Varley et al. 2018). Technology is leaving a potentially bad impact on the environment since the packaging wastage and constant emissions of carbon monoxide in the air are considered to be harmful. Constant use of the internet and related devices cause harmful emissions to be released within the environment. Incremental changes evaluate the constant refining strategies of advancements in the U.S markets. Radical innovations to obtain significant advantages in internalization over their competitors. Innovative resource components are required for the centralized management and commercialization of retail chains. Contributions are made for the business model that is filled with adaptability and fast-changing fashion requirements. As mentioned by Andersson, and Forslund /92018), the advancements and progressive technological capacity of the organization focus on innovation development and marketing strategy. Some consequences are determining the innovative features of internationalization and gradually taking part in the decisive alignment of work. Inimitable and organized products are mostly loved, while H&M's offshoring strategy is optimizing efficiency and flexibility. As a part of outsourcing basic items from Asiatic partners, the costs are kept down and business is increased.

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