Challenges Faced by H&M in the Retail Sector

Dissertation

Contents
INTRODUCTION..............................................................................................................................
1.Identify and analyze the three strategic issues faced by the overall sector..............................4
2. Identify and analyze three challenges faced by H&M............................................................6
3. Identification and analysis of solution to overcome with challenges...................................10
4. Explanation of how company practically implement one solution.......................................12
CONCLUSION.................................................................................................................................
REFERENCES.................................................................................................................................
Books & Journals...............................................................................................................................

INTRODUCTION
There are lot of changes that are taking place in the internal, external and a competetive
business environment that is affecting various business decisions and functions. Brexit is a
referendum that has affect all the sector and industries that are part of UK overall economy and
has resulted in lot of challenges to be dealt with such organizations. There has been a tremendous
risk that has increased for such organizations especially in case of fashion and the retail sector
there has been lot of changes and rise in the strategic issues (Godhania, Ramanathan, and
Ramanathan, 2019). Present report is based on the discussion of such strategic issues that is
being faced by the retail sector, identification and analysis of the various challenges that are
being faced by H & M as one of the leading fashion n d retail brand. Further here has been
identification and a detailed analysis of solutions to such challenges and one solution that can be
practically implemented by the organsuiation in order to deal with such challenges in the most
appropriate manner.
1.Identify and analyze the three strategic issues faced by the overall sector
There has been lot if challenges that are being faced by the retail organsuiation that are part
of UK ( Retail crisis deepens as 25% of UK’s top retailers are loss-making – study, 2018). So, in
present scenario there is discussion of the three major challenges that are being faced but the
retail brand H & M as given below:
 External challenge: Brexit:
The leaders in UK and most of the leading brands are facing lot of challenges as there has
been 26.5 percent if the organsuiation that are part of the fashion and retail industry who are
facing losses due to lot rising of debt percentage. The number of retailers who are dealing with
high losses has risen by 4 percent and in number 492.
There has been a clear research that has started that the retail crises have been at 25 percent
for all UK top retail brands. In case, of some of the major issues associated with this problems
has been that there is damaged to the sterling value, boosting up of overall production and other
associated cost and the fashion sector is facing cutting down of the whole revenue.

The concern is that the outcomes of Brexit are a major strategic issue for the fashion and
retail sector. Further, another major issue is that there has been the rise on the working cost of
labour. The annual price of labour that is hourly has been rise by 3.8 % in the year 2019 when it
was compared with the same period cost present in the year 2019.
 Competition challenge: Digital up gradation:
Another major issue has been there requirement of up gradation in the use of digital technology.
There are lot of changes that are taking place in the external environmental and are impacting the
overall way business are perform their major functions. Especially in case of the fashion and
retail brands there have been more millennial generations who are being targeted by such brands
and this generation are involved in usage of digital media and is the best way for promoting their
brand. But there has been lot of disruptions that are part of the fashions and retail industry and is
a very common problems faced by H & M as a leading brand of such industry.
For among competitive and relevant for the younger segment of customers it is of immense
importance. In McKinsey state of fashion survey 2019, there have been 79 percent of the total
executives placed in top five trends that are affecting the industry. For staying competitive and
relevant and dealing with the external forces it is very important for fulfillment of the demanding
young consumers. Social media has resulted into dramatic increase in the challenges for
disruption at the external marks. The mergence is explaining that there has been a 50 percent
growth in instagram in advertising spend (Self disruption in fashion industry, 2019). So such
changes in preferences of customers are resulting into shift in the way expenditure is done by
fashion brands.
There are two key aspects such as younger generation preferences for the novelty and up
gradations in the social media and digital technology. In case of brands such as H & M, Dior and
Zara there has been a rise of only 30 percent in comparison with other brands that are have
experienced 300 percent growth. There have been instances of technological disruptions that are
going on and resulting into difficulty for such brands to adopt and be a part of innovation in
terms of use of digital media sources.
 Internal challenge: Exploitation of skilled labour: