Fashion Operations Report

This report provides a detailed analysis of fashion operations, including industry and market analysis, business strategy, operational plan, and technology used by H&M. It also covers the competitive advantage of H&M, the role of the CEO and design director, and more.

Fashion Operations
Report

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Industry and Market Analysis.....................................................................................................1
Business Strategy........................................................................................................................4
Operational Plan..........................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Supply Chain Management is defined as designing, planning, implementing, control and
monitoring of activities which are under supply chain activities with aim of creating net value,
build a competitive infrastructure which are required by end consumers.
Operation Strategies is defined as part of business that involves production and
distribution of goods and services. It underlines overall strategy of business which is critical for
company to compete with ever changing market analysis (Chow, 2018). By using effective
operation strategies it leads to proper utilisation of people, resources, technology and processes.
H&M is a multinational clothing retail company which is known for fast fashion clothing
for teenagers, men, women and children. It is located in Stockholm, Sweden and have its
operations in 74 countries covers 5000 stores under various brands.
In this report, it covers industry & market analysis, brand strategy which includes
business objectives along with competitive advantage and about design director, CEO of H&M
with their background (Brooks, 2019). Furthermore, this report also covers operation plan which
covers manufacturing, designing, storage, distribution, retail to end customers and which
technologies company is using for planning process.
MAIN BODY
Industry and Market Analysis
PESTEL Analysis is a framework which defines macro environmental factors which are
used in scanning environment. By this analysis it influence an organisation from outside. Below
is discussion of macro analysis of H&M: Political Factors: In this, it includes how government interfere in economy. These factor
include environmental law, tax policy, labour law and so on. In context of H&M, political
risk is increasingly in company as it is a global brand which is operating in many number
across all over world (Pedersen, Gwozdz and Hvass, 2018). There is political instability
is increasing as many countries are closely linked with this brand like Turkey, Egypt and
so on. So this leads unstable political plans. Economic Factors: In this, it greatly affect as how business operates and make decisions.
It includes factors like inflation rates, exchange rates, economic growth and so on. In
terms of respective company, there is negative impact due to Brexit, this results in
1

weakened in US Dollars. So by this UK government decide to increase import tax so this
leads to increase in price of products of company. Social Factor: This includes health consciousness and culture aspects, age distribution
and so on. When there is high trends in social factor this leads to affect in demand for
product of company and in what manner company operates. In context of H&M, as
consumers are becoming more concerned about manufacturing of products and quality of
product they are getting. This company is slowly conforming to demand of consumer by
involvement in corporate social activities. Technological Factors: These includes aspects which are related to technology like
automation, R&D activity, rate of technological change and so on. These factors
determines minimum production level, barriers to entry and influencing decisions which
are related to outsourcing. In terms of company, it established online shopping by e-
commerce (Cole and Yakushiji, 2020). This results in modern turns in field of sales and
marketing. So this leads to serve customers in appropriately manner as by not visiting
stores they can shop purchase from their home. Environmental Factors: In this element, it includes environmental and ecological
aspects like, climate, weather and so on, which directly affect farming, tourism and
insurance factors of industry. In context of respective company, there are many unwanted
materials which are contributing largely by environmental pollution. In addition, now
company has started recycling process of old materials and unused products from their
company. So for company who wants to entering into new country as they have to make
sure about their actions and operations which do not harm environment.
 Legal Factors: It includes factors which affect company has how it operates, costs,
demand for their products. It includes laws such as consumer, discrimination, antitrust
and health and safety law. In context of H&M, as company is being victim in many legal
disputes so it is follow all national laws. In addition, firm does not allow employees of
underage. Furthermore, working conditions of company highlights the working safety
requirements (Crewe, 2017). Moreover, company also provides equal employment policy
by treating their staff members equally. It also acknowledges importance of transparency
so by this it undertakes financial audit of business.
3S of micro environment:
2

 Safety is the state or condition of safe from unprotected harm or from other non-desirable
results. It refers to manage the recognized hazards in sequence to achieve an acceptable
level of danger. In context of H&M, it takes measurable actions to avoid unprotected
harm in the premises. It maintains pleasant working surroundings through the operations.
Company takes preventive measures to ensure the long-term safety of the employees and
good health of the team to enhance the working proficiency of the business. It encourages
the workers to report the accidents and unsafe working environment to their supervisors.
It's a shared responsibility of all employees to take care of each other to avoid the
uncertainties at the workplace (Dillon, 2018). It ensures to implement all legal
requirements to guarantee that the actions are sustainable and is ethical. Company
provides products with keeping in mind human rights and to the lowest degree possible
negative effect on the environment. Security refers to the effective measures taken to be safe or unharmed and freedom from,
or resiliency against, potential harm done buy others. In view of H&M it is committed to
ensure safety of all the employees thus it is dedicated to provide respect to human rights.
It avoids negative impact of human rights and promotes to encourage and influence
proper security to its workers (Varley and et. al., 2018). It has implemented
discrimination and equality policy, diversity policy, Harassment and complaint
procedures mentioned into codes and policies document of the company.
 Safeguarding is used to explain measures to protect the well-being, and human rights of
employees, health which allow others to live free from abuse and harm. H&M has zero
tolerance for all forms of abuse and corruption. It has also introduced and implement
anti-corruption programme which is mentioned in Code Of Ethics. Employees must
safeguard its personal information regarding all the factors and strategies from its
competitors . Company believes in safeguarding its client and employee data in regard of
respecting everyone's secrecy (Fernie and Grant, 2019). It ensures to protect the human
rights of every employee into the organization which will build trust between the
company and its workers. One of the important core value of H& M is of being
straightforward. It has introduced Open Door Policy to ensure proper communication
amongst all employees and must discuss any issue which related to work directly with
3

their administrators. Company believes in fair play and transparency towards its co-
workers to avoid any kind of bribery or corruption.
Business Strategy
Business Strategy is defined as set of decisions and course of actions which helps
entrepreneur in attainment of specific objectives of company. It is a master plan that is used by
management of firm for securing competitive position in market segments by carrying its
operations, satisfy customers and achieve aim of company (Kozlowski, Searcy and Bardecki,
2018).
The business objectives of H&M is to implement motivation by sustainable change all
over fashion industry which leads to set targets for themselves in Swedish Fashion company.
There are many marketing objective which can leads to success of company. Moreover, overall
aim of firm is to increase customer equity by decreasing dissatisfaction of plus size customers.
The Psycho graphic Target of company is mainly concerned customers which are interested in
fashion trends, having good environment for shopping. Mission and vision of company is to
make every people look and feel good and leads change towards by renewing fashion outlets by
being fair and equality in company. Business operation of H&M are aimed to run in sustainable
condition which includes economically, socially and environment criteria. It leads to satisfy
needs of both present and future generation that must be fulfilled. The main objective of business
is to offering their customers by quality and fashion at their best price. In terms of company, it
believes that by providing good quality of products to customers is more important than meeting
expectations of customers (Forster and Knowles, 2018). Company is continuously working on
better their products by manufacturing goods in proper working conditions that have limited
impact of environment.
Competitive Advantage is defines as factors that allow business to produce services and
goods cheap or better than its rivals. By these factors it allows goods in productive way for
generating more sales or increase in margins by comparing to their competitors. In terms of
H&M, competitive advantages are assign to various factors which are discussed below: Cost Structure: Company leads to cost advantage when it produce a product and offer
services at lower cost other than their competitors. When company with this advantage
produce in greater quantities and allow access many elements like efficient technologies
& processes. By lowering price of products other than their competitors to attract
4

customers and gain shares in market segment. In context of H&M, prices of products is
cheaper compare to other rivalries. By this customers are attracted due to product's
quality and affordability. Quality of product offering: If company's services or product are unique, valuable for
their customers. So this leads to loyalty in consumers for brand this leads to increase in
productivity and profitability of company. In context of respective company, retailer can
achieve their objective by having higher turnover by offering their products or services
in cheapest and good quality. Distribution Network: It can be defined as type of linkage and intermediary between
customers and producers. There is direct distribution network in H&M stores as they sell
their products to end users (Gardetti and Torres, 2017). By this it ensures company is
receiving new shipments daily, providing company fully control over demand and
supply shifts. It effectively incorporated its retail distribution and supply chain within
business strategy.
 Branding: Having strong brand it offers credible, clear and memorable message. It
motivates buyers and strengthen their loyalty. In terms of company,goal is to exceed
customer expectation of consumers. It strives that they should always be attentive and
provide best combination of quality, fashion and price.
CEO of H&M Group is Helena Helmersson, born in 1973, as an economist at company
buying department and in addition play various roles in production and buying sector. She is first
female CEO of fast fashion pioneer, undertaking from family Karl Johan Persson who is
struggling to contain competition from various rivalries and also covers online platform that
impact in revolutionising shopping area. She is appointed by board of directors and she has
responsibility for manage daily working which are directed by board (Kawamura, 2020). So by
this it means as CEO must have to focus in particular for recruiting of senior executives, pricing
strategy, logistics matters, marketing, expansion, development and many sectors which are
controlling all operations in company. The role of CEO contains having contacts with media,
financial markets and all other authorities.
Design director of H&M group is Oscar Olsson who design new brand named as
Nyden. He mixes limited edition drops, co creation, higher prices that is unexpected from
Swedish retail giant and influencer guided by data. It will take design from studio of Los
5

Angeles. By this launch it reflects belief of him in future of fashion that targets people who make
their mind that what have to be wear rather than shift to big brand. He has influencing capacity
of mix creativity with data driven insights and by using social media stars as well as celebrities
to appeal more esoteric.
Operational Plan
Operational Plan is defined as highly detailed plan which offers a clear picture of how
team, department or section are contributing in attainment of business objectives. It covers day to
day task which are required to run an enterprise (Gwilt, 2020). Under is detailed about how
H&M operates from design, production, manufacturing, storage, distribution and also it defines
retail to end users:
Designing Plan of H&M: Company utilises technology to attract customers by ability to
visualize potential solution for design. In addition it also enhance transfer of information and
communication. By innovation in 3D design it not only used as technique or tool which identify
potential conflicts in advance as occur in operation. It also reduces design time and duration in
construction process.
Manufacturing process of H&M: As company doesn't have their own factories. The
products which are produced are by almost 850 independent suppliers mainly from Europe, Asia.
It has office of production in strategic location which are close to suppliers. These production
and manufacturing process have several functions that they have to complete as- they act as
liaison between suppliers and designers. Act as auditor and also ensures safety and quality
testing which are required by company.
Storage process of H&M: In terms of company, manufactured products are directly go
from factories to logistics centre and from there they are distributed to stores which are closely to
area. Firm have on back up as stocks but inventory is held in regional areas from where it is
distributed to end stores.
Distribution process of H&M: In this, marketer mainly prefer to fourth marketing mix as
place. There responsibility is to create a logistics and physical delivery for providing product in
market segment and also in hand of end users (Hau'ofa, 2017). Company employs a group of
members in house designers in production offices globally that work to forecast and investigate
for designing in clothing area.
Technology used in H&M
6

There are numerous technologies used in company as by innovation of new technology as
new website and mobile app as having capabilities that promise for improving retail experience
of shoppers for both online and in-store. In addition they use designers and merchandisers which
helps in figure out preferences of consumers (Holroyd, 2017). It started big data processing
algorithms to inspecting store receipt, returns and loyalty card information. Company also uses
mobile friendly workforce management which is a solution for online purchasing of products.
Furthermore, they are also uses payments which are critical part of experience in retail. Company
currently uses its fintech technology to power its stores and online in payments from selected
markets across various channels.
CONCLUSION
From above report it is concluded as, there is a fashion company which includes supply
chain and operation strategy by primary and secondary research from design to end user. There is
Pestle analysis and also there is defining of 3S as security, safeguarding and safety from point of
view of company to enhance productivity and profitability. In addition there is business strategy,
brand competitive advantage are also included by involving background of CEO and design
director. Further more it also includes operational plans and types of technologies which are
involves in increasing the value of company.
7

REFERENCES
Books and Journals
Brooks, A., 2019. Clothing poverty: The hidden world of fast fashion and second-hand clothes.
Zed Books Ltd..
Chow, P.S., 2018. Contemporary Case Studies on Fashion Production, Marketing and
Operations. Springer-Verlag Berlin Heidelberg.
Cole, R.E. and Yakushiji, T., 2020. The American and Japanese Auto Industries in Transition:
Report of the Joint US–Japan Automotive Study (p. 251). University of Michigan Press.
Crewe, L., 2017. The geographies of fashion: consumption, space, and value. Bloomsbury
Publishing.
Dillon, S., 2018. The fundamentals of fashion management. Bloomsbury Publishing.
Fernie, J. and Grant, D.B., 2019. Fashion logistics: Insights into the fashion retail supply chain.
Kogan Page Publishers.
Forster, R.H. and Knowles, W.H., 2018. Corstopitum: report on the excavations in 1909. Lulu.
Com.
Gardetti, M.A. and Torres, A.L. eds., 2017. Sustainability in fashion and textiles: values, design,
production and consumption. Routledge.
Gwilt, A., 2020. A practical guide to sustainable fashion. Bloomsbury Publishing.
Hau'ofa, E., 2017. Corned beef and tapioca: A report on the food distribution systems in Tonga.
Canberra, ACT: Development Studies Centre, The Australian National University..
Holroyd, A.T., 2017. Folk fashion: understanding homemade clothes. Bloomsbury Publishing.
Kawamura, Y., 2020. Doing research in fashion and dress: An introduction to qualitative
methods. Bloomsbury Publishing.
Kozlowski, A., Searcy, C. and Bardecki, M., 2018. The reDesign canvas: Fashion design as a
tool for sustainability. Journal of Cleaner Production. 183. pp.194-207.
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.
Varley, R., and et. al., 2018. Fashion management: A strategic approach. Macmillan
International Higher Education.
8