Business Environment Assignment | H&M

ASSIGNMENT

Introduction
In present scenario people are concentrating on fashion and new living standard that
make feel very confident in front of all. Business concern are focusing on people demand and
taste, therefore produce that kind of material the in the organization. The main aim of this
report is to understand the value of customer and changing the environment (Shen and Li,
2015). The business concern adopts different model that helps to achieve the organization
objectives. H&M is a multinational UK based company that deals in different types of
product and fills the client’s demand in order to obtain profits and expand the business. In
this report various topics has been discussed such as porter forces model which influence
industry, value chain model to analysis the internal business environment.
Analysis of internal environment by using five forces model
Rivalry among existing competitors: As there are number of competitors against H&M
industry that serve lot of products and services. The opportunity for growth is not so high
because of maturity sector. H&M company develop new and products. In other words it
provides quick changes in customers. It also provides price variables products r considering
alternatives.
Purchasing power of buyer: One negative element is the most nonexistent loyalty in the
cheap that helps to attract the customer. Pricing strategy is the most variable factor that
influences customers to purchase the products. H&M is a multinational market that has
number of buyer so it can sell its products and services according to his pricing policy. The
manager of H&M sales designing dresses as per their pricing policy.
Purchasing power of supplier: This is not high in H&M industry because there are number of
suppliers is available in UK’s market with lower labor cost. That’s why retailer can demand high
more because they have more than supplier (Pedersen Gwozdz and Hvass, 2018).
Threat of substitutes: It may competitive for H&M if another company is also dealing in
fashion industry. If another company manufacture same kind of products or substitute
products. For solving this issue it need to get copyright and patent of product. The product
should be different from others.
Threat of new entrants: In UK, there are not barrier to entry at market place. Anyone can
get entry to run a business effectively. So it may challenge for H&M company to crack the
competitions by developing new products.
Value chain Model for H&M industry
This model is connected with number of people, communities, ecosystem of H&M
business. It is a part of global economy that helps to run a business after accepting the changes.

The manager of H&M follow a value chain that is used to expand the business (Yang, Song and
Tong, 2017).
I observed that H&M is creating positive changes along with value chain that supplies number of
products and services. The business concern is doing operations that are used to control over the
excess activities in order to earn profits. It provides number of influencing with the help of
employees in the organization. Designing is the natural part of fashion industry that choose
material, look, style and quality of products that makes different from others (Pedersen and
Netter, 2015).
Raw material is another part of value chain under this the manager of H&M decides from
where they should purchase raw material and finished goods and at what prices it should
provide raw material for increasing the production at lower cost. H&M does not have any
industry that can increase the profitability. The member of the organization is used to expand
the business and create a value chain for customers. It does not have own factories in which it
can manufacture different types of products. The manager of H&M industry purchase from
directly distributer that provides number of products and services. Moreover, it chose right
mode of transport that helps to reduce the impact of economy and maintain the profitability.
The main value of increase the chain that is used to increase the number of customer and
maintain the productivity This manager of the organization used to different type
organization products that helps to sustain the product (Maloney, 2015.).
Explanation of appropriate
It has been analyzed that H&M is concentrate on fashion style and people taste that helps to
know their demand and tries to provide that kind of material at high prices. It also involes
external factor that can reduce the profits in order to achieve objectives. It contains political,
economic, environmental and technology which may impact the business activities. The
manager of H&M plans to expand the business function by maintains the quality.
CONCLUSION
From the above report it has been concluded that business is first need of every person.
For doing business a person should have enough knowledge and experience that helps to run
a business properly. The report has e covered different topics such as porter five forces model
that helps to deal with competition and increase profit margin. This model shows that in
which situation our business stand and what need to do for further business activities. A part
from this, value chain is the process that defines an article by including, manufacturing,
production, sales and marketing that helps o improve productivity.

REFERENCE
Books and Journal
Shen, B. and Li, Q., 2015. Impacts of returning unsold products in retail outsourcing fashion
supply chain: A sustaina
Pedersen, E. R. G., Gwozdz, W. and Hvass, K.K., 2018. Exploring the relationship between
business model innovation, corporate sustainability, and organisational values within the
fashion industry. Journal of Business Ethics, 149(2), pp.267-284.
Yang, S., Song, Y. and Tong, S., 2017. Sustainable retailing in the fashion industry: A
systematic literature review. Sustainability, 9(7), p.1266.
Pedersen, E. R. G. and Netter, S., 2015. Collaborative consumption: business model
opportunities and barriers for fashion libraries. Journal of Fashion Marketing and
Management, 19(3), pp.258-273.
Maloney, B. C., 2015. The economic impact of the fashion industry. In Joint Economic
Committee, United States Congress.