Strategic Issues and Challenges in the Fashion Industry
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AI Summary
This document analyzes three strategic issues facing the fashion industry, including global warming, high competition, and supply chain disruptions. It also examines the challenges faced by a specific company, H&M, and proposes solutions to address these challenges. The solutions include promoting sustainable practices, embracing fast-paced innovations, and improving labor practices. By implementing these solutions, the fashion industry can overcome its challenges and achieve sustainable growth.
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Contents
Question 1. Identify and analyze three strategic issues facing the overall sector of your chosen
business or service.....................................................................................................................................3
Question 2. Identify and analyze three challenges facing your chosen company or service................6
Question 3. Identify and analyze the three solutions to address the challenges facing your chosen
company or service....................................................................................................................................8
Question 4. Explain how your company or service could practically implement one solution from
those listed in Question 3.........................................................................................................................11
REFERENCES........................................................................................................................................14
Question 1. Identify and analyze three strategic issues facing the overall sector of your chosen
business or service.....................................................................................................................................3
Question 2. Identify and analyze three challenges facing your chosen company or service................6
Question 3. Identify and analyze the three solutions to address the challenges facing your chosen
company or service....................................................................................................................................8
Question 4. Explain how your company or service could practically implement one solution from
those listed in Question 3.........................................................................................................................11
REFERENCES........................................................................................................................................14
Question 1. Identify and analyze three strategic issues facing the overall sector
of your chosen business or service.
The fashion industry is one of the fastest growing industries across the world and
involves various sectors like production of the raw material, designing and production of fashion
goods by the designers, retail sales etc. There are many issues that are faced by the fashion
industry. Some of the same are explained below-
Global Warming – Global Warming is one of the issues that has been faced by the
fashion industry over the last few years. The fashion industry comprises of various stages before
the production of finished products. This leads to an increase in the amount of pollution that can
be harmful for the environment (Ritter and Conrad, 2016). Apart from the raw materials, the
energy that is used in the manufacturing, transporting and packing the final products are also
known too contribute to harmful emissions. Human activities have contributed enough to the
climate change and as a result there is extreme weather that includes droughts, heatwaves, floods
etc. There has also been a change in the temperature, humidity, rainfall etc. Not only humans, but
animals as will also be impacted by this. This can be explained by talking about COVID-19 or
coronavirus, which is a respiratory infection that is caused by a relatively new virus (Duke,
2016). According to a study, the climate change is expected to impact humans through an
occurrence of infectious disease.
The millennials constitute the largest part of the population world wide and is anticipated
to grow continuously. There is a need that the fashion industry implements various methods to
go green that will not harm the environment (Kaur, Kumar and Kumar, 2017). Coronavirus has
been spreading across different countries of the world rapidly and the countries have not been
able to respond to it. If this continues to grow, it will start impacting the climate like for
example, the habitats will be destroyed, ecosystems will no longer be balanced etc. Coronavirus
has led to a significant decline in the levels of nitrogen dioxide in countries like China and Italy.
It has also been reported that the virus has led to a decline in the number of pollutants in the air
as well as other warming gases in some cities (Coronavirus: Air pollution and CO2 fall rapidly
as virus spreads, 2020). Therefore, there is a requirement that the fashion industry moves
of your chosen business or service.
The fashion industry is one of the fastest growing industries across the world and
involves various sectors like production of the raw material, designing and production of fashion
goods by the designers, retail sales etc. There are many issues that are faced by the fashion
industry. Some of the same are explained below-
Global Warming – Global Warming is one of the issues that has been faced by the
fashion industry over the last few years. The fashion industry comprises of various stages before
the production of finished products. This leads to an increase in the amount of pollution that can
be harmful for the environment (Ritter and Conrad, 2016). Apart from the raw materials, the
energy that is used in the manufacturing, transporting and packing the final products are also
known too contribute to harmful emissions. Human activities have contributed enough to the
climate change and as a result there is extreme weather that includes droughts, heatwaves, floods
etc. There has also been a change in the temperature, humidity, rainfall etc. Not only humans, but
animals as will also be impacted by this. This can be explained by talking about COVID-19 or
coronavirus, which is a respiratory infection that is caused by a relatively new virus (Duke,
2016). According to a study, the climate change is expected to impact humans through an
occurrence of infectious disease.
The millennials constitute the largest part of the population world wide and is anticipated
to grow continuously. There is a need that the fashion industry implements various methods to
go green that will not harm the environment (Kaur, Kumar and Kumar, 2017). Coronavirus has
been spreading across different countries of the world rapidly and the countries have not been
able to respond to it. If this continues to grow, it will start impacting the climate like for
example, the habitats will be destroyed, ecosystems will no longer be balanced etc. Coronavirus
has led to a significant decline in the levels of nitrogen dioxide in countries like China and Italy.
It has also been reported that the virus has led to a decline in the number of pollutants in the air
as well as other warming gases in some cities (Coronavirus: Air pollution and CO2 fall rapidly
as virus spreads, 2020). Therefore, there is a requirement that the fashion industry moves
towards sustainable manufacturing and production of the clothing items so that there is no harm
caused to the environment.
Theory of change
The theory of change explains the reason behind why a particular change is expected to
occur. It primarily focuses on change initiatives and how can they help in achieving desired goals
and objectives. Required log-term change is to eradicate coronavirus and other aspects like
global warming that affect the environment. But in order to do so, there should be less use of
machines and equipment that emits harmful gases.
High Competition – The fashion industry has a lot of organizations that offer fashion
related products to the customers. The companies also pose threat and competition to each other
as they want to gain a competitive advantage over each other and attract a large number of
customers. Due to the outbreak of coronavirus, different industries including the fashion industry
had to stop operating. The companies have stopped their plan of expanding to other geographic
regions because the overall sales of the companies have gone down. This has also impacted their
productivity as well as profitability. People are cancelling orders that they had already placed
and have been asking for refunds. Due to this, the companies have kept their plans of growth and
expansion on hold. But on the other hand, it is known that the virus cannot survive on surfaces,
therefore, there is a low risk of the coronavirus spreading through products and packages that are
shipped over few weeks (Can Online Shopping Give You Coronavirus?, 2020).
The fashion industry is known among the most competitive industries in the world and
has grown exceptionally over the last years. And competition is one of the major issues that the
companies operating in the industry face (Thierfelder and Kabisch, 2016). It can be said that
COVID-19 has impacted different business irrespective of their sizes across the world and thus,
it is important to communicate any important information with the customers properly. The
fashion industry should use all the channels like website, social media, emails etc. that are
available with it effectively to communicate problems relating to delivery. This way, the
customers will remain informed and there will not be any confusion. This is important because
due to the outbreak of coronavirus, organizations in the fashion industry have to put their
operations on hold. Instead of competing with each other, it is important that the companies
should adopt measures in order to protect and safeguard their employees from the coronavirus
caused to the environment.
Theory of change
The theory of change explains the reason behind why a particular change is expected to
occur. It primarily focuses on change initiatives and how can they help in achieving desired goals
and objectives. Required log-term change is to eradicate coronavirus and other aspects like
global warming that affect the environment. But in order to do so, there should be less use of
machines and equipment that emits harmful gases.
High Competition – The fashion industry has a lot of organizations that offer fashion
related products to the customers. The companies also pose threat and competition to each other
as they want to gain a competitive advantage over each other and attract a large number of
customers. Due to the outbreak of coronavirus, different industries including the fashion industry
had to stop operating. The companies have stopped their plan of expanding to other geographic
regions because the overall sales of the companies have gone down. This has also impacted their
productivity as well as profitability. People are cancelling orders that they had already placed
and have been asking for refunds. Due to this, the companies have kept their plans of growth and
expansion on hold. But on the other hand, it is known that the virus cannot survive on surfaces,
therefore, there is a low risk of the coronavirus spreading through products and packages that are
shipped over few weeks (Can Online Shopping Give You Coronavirus?, 2020).
The fashion industry is known among the most competitive industries in the world and
has grown exceptionally over the last years. And competition is one of the major issues that the
companies operating in the industry face (Thierfelder and Kabisch, 2016). It can be said that
COVID-19 has impacted different business irrespective of their sizes across the world and thus,
it is important to communicate any important information with the customers properly. The
fashion industry should use all the channels like website, social media, emails etc. that are
available with it effectively to communicate problems relating to delivery. This way, the
customers will remain informed and there will not be any confusion. This is important because
due to the outbreak of coronavirus, organizations in the fashion industry have to put their
operations on hold. Instead of competing with each other, it is important that the companies
should adopt measures in order to protect and safeguard their employees from the coronavirus
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pandemic. This will require changing the working norms and allowing the employees to work
from remote areas.
PEST analysis
As per the point of view of Jennifer Post, PEST stands for Political, Economic, Social
and Technological and explains the way in which external forces can impact a particular business
(What Is a PEST Analysis?, 2020).
Political Factors – These factors can be the most uncertain factors for the fashion
industry and can affect its overall performance. Brexit is one political factor that has led to a rise
in competition among different companies within the industry.
Economic Factors – Economic factors can also impact the fashion industry deeply
through various fluctuations in different economies of the world. United Kingdom has a strong
economy which is why organizations operating in the fashion industry pose high competition to
other brands.
Social Factors – Social factors have contributed to the growth of the fashion industry in
the nation. This is because a large number of social factors like requirement of high-quality
products but at low prices etc. have affected the way in which people shop and make buying
decisions.
Technological Factors – Technology is advancing at a high rate and fashion industry is
one that adopts any new technology that is launched in the market. Thus, this has raised the bar
of competition in the industry.
Supply Chain – Supply chain in the fashion industry comprises of various activities like
sourcing of raw materials, factories that manufacture the finished products etc. The sudden
outbreak of the pandemic coronavirus has caused different companies to stop their business
processes (Christopher, 2016). This has led to the different activities in the supply chain of the
companies to be put on hold. There are many actions that the companies have to take in order to
respond to the coronavirus. A plan should be developed and the impact of COVID-19 on the
business operations should be analyzed. Also, channels that can directly deliver the products to
the customers should be leveraged (Hugos, 2018). The outbreak of the virus has led o a shortage
from remote areas.
PEST analysis
As per the point of view of Jennifer Post, PEST stands for Political, Economic, Social
and Technological and explains the way in which external forces can impact a particular business
(What Is a PEST Analysis?, 2020).
Political Factors – These factors can be the most uncertain factors for the fashion
industry and can affect its overall performance. Brexit is one political factor that has led to a rise
in competition among different companies within the industry.
Economic Factors – Economic factors can also impact the fashion industry deeply
through various fluctuations in different economies of the world. United Kingdom has a strong
economy which is why organizations operating in the fashion industry pose high competition to
other brands.
Social Factors – Social factors have contributed to the growth of the fashion industry in
the nation. This is because a large number of social factors like requirement of high-quality
products but at low prices etc. have affected the way in which people shop and make buying
decisions.
Technological Factors – Technology is advancing at a high rate and fashion industry is
one that adopts any new technology that is launched in the market. Thus, this has raised the bar
of competition in the industry.
Supply Chain – Supply chain in the fashion industry comprises of various activities like
sourcing of raw materials, factories that manufacture the finished products etc. The sudden
outbreak of the pandemic coronavirus has caused different companies to stop their business
processes (Christopher, 2016). This has led to the different activities in the supply chain of the
companies to be put on hold. There are many actions that the companies have to take in order to
respond to the coronavirus. A plan should be developed and the impact of COVID-19 on the
business operations should be analyzed. Also, channels that can directly deliver the products to
the customers should be leveraged (Hugos, 2018). The outbreak of the virus has led o a shortage
of labor available to the companies. This has led to an overall decline in the productivity and
profitability levels of companies. Also, various fashion companies in different countries have
also been asked by the governments to move their production or manufacturing houses from
China.
There are chances that the pandemic will change the way in which supply chains work
globally. But still, companies will be able to maintain low costs of manufacturing by moving into
different countries. In order to reduce the impact of global pandemic coronavirus on their overall
supply chains, the companies should have a clear idea of how can these impact their performance
(Giannakis and Papadopoulos, 2016). Therefore, it can be said that the different industries
including fashion industry have been hit hard by the global pandemic, COVID-19 and since it is
spreading at alarming rates, different strategies should be adopted so that the impact of the same
can be reduced to as much extent as possible. This is because the pandemic has a lot of
uncertainties associated with it that can lead to an imbalance between the demand and supply of
the products.
The Fast Chain Model
This model is basically ideal for the fashion industry as the organizations in this industry
manufacture products that are trendier but have a short lifespan. This model can have a positive
impact on the industry and thus the issue can be resolved.
Question 2. Identify and analyze three challenges facing your chosen company
or service.
H&M is a widely recognized clothing brand that offers high quality products to the
customers. It has operations in different parts of the world as well as a large base of customers.
The company has been able to maintain its position in the minds of the people and thus gain a
competitive advantage against others. The company has also been exposed to a lot of challenges
that can impact its overall performance as well as levels of productivity. Some of the challenges
that are faced by the company are explained below-
Sustainability and Compliance – Organizations that operate in the fashion industry
have to face many criticisms (Rezaee, 2017). They are inspected regarding sustainable
development and have to adhere to different sustainability laws as well as principles. H&M
profitability levels of companies. Also, various fashion companies in different countries have
also been asked by the governments to move their production or manufacturing houses from
China.
There are chances that the pandemic will change the way in which supply chains work
globally. But still, companies will be able to maintain low costs of manufacturing by moving into
different countries. In order to reduce the impact of global pandemic coronavirus on their overall
supply chains, the companies should have a clear idea of how can these impact their performance
(Giannakis and Papadopoulos, 2016). Therefore, it can be said that the different industries
including fashion industry have been hit hard by the global pandemic, COVID-19 and since it is
spreading at alarming rates, different strategies should be adopted so that the impact of the same
can be reduced to as much extent as possible. This is because the pandemic has a lot of
uncertainties associated with it that can lead to an imbalance between the demand and supply of
the products.
The Fast Chain Model
This model is basically ideal for the fashion industry as the organizations in this industry
manufacture products that are trendier but have a short lifespan. This model can have a positive
impact on the industry and thus the issue can be resolved.
Question 2. Identify and analyze three challenges facing your chosen company
or service.
H&M is a widely recognized clothing brand that offers high quality products to the
customers. It has operations in different parts of the world as well as a large base of customers.
The company has been able to maintain its position in the minds of the people and thus gain a
competitive advantage against others. The company has also been exposed to a lot of challenges
that can impact its overall performance as well as levels of productivity. Some of the challenges
that are faced by the company are explained below-
Sustainability and Compliance – Organizations that operate in the fashion industry
have to face many criticisms (Rezaee, 2017). They are inspected regarding sustainable
development and have to adhere to different sustainability laws as well as principles. H&M
failed to promote sustainable development through its various practices that were polluting the
environment and were also harmful for it. It was observed that besides being one of the market
leaders in the fashion industry, the company has been responsible for generating 5% of carbon
dioxide into the environment which is more as compared to any other company in the world.
The global pandemic coronavirus has although been harmful to the humans, it has proved
out to be sustainable for the environment (Hallstedt, 2017). And also, the outbreak has taught the
respective company to stay prepared for anything of such sort in the future. On the other hand,
the spread of COVID-19 has led to an increase in the number of employees having low levels of
productivity as well as performance. H&M has not been able to carry out its operations
effectively in countries that have been severely affected by the pandemic. Due to this, the
company’s overall performance and profitability have been affected adversely.
Compliance Theory
This theory states that organizations can be classified according to the power they use to
direct the behavior of their employees as well as their level of involvement. The fashion industry
has to deal with a lot of compliance at all times and thus organizations operating here should
know how to carry out their operations in an effective manner.
Fast-Paced Innovations – Constant changes in the buying behavior as well as decision
making process of the customers has led companies like H&M to bring in constant innovation in
their products and services to be able to survive in a highly competitive market (Demirkan,
Spohrer and Welser, 2016). This has led to an increase in the number of challenges faced by the
company because there is a constant requirement to innovate and bring in new ideas for the
products not only to fulfil the demands of the customers but also stand out in the market against
competitors. And to do so, H&M has been working under tough pressure so that the customers
remain loyal to it.
Due to the outbreak of coronavirus across the world, the economy has been getting
affected adversely and the virus is being expected to result in a huge loss to different industries.
H&M has invested significantly in developing a supply chain that is efficient and help the
company deliver the finished products to the customers (Jones and Mahon, 2018). But
coronavirus has laid a challenge towards this as the company’s operations have been put on hold.
environment and were also harmful for it. It was observed that besides being one of the market
leaders in the fashion industry, the company has been responsible for generating 5% of carbon
dioxide into the environment which is more as compared to any other company in the world.
The global pandemic coronavirus has although been harmful to the humans, it has proved
out to be sustainable for the environment (Hallstedt, 2017). And also, the outbreak has taught the
respective company to stay prepared for anything of such sort in the future. On the other hand,
the spread of COVID-19 has led to an increase in the number of employees having low levels of
productivity as well as performance. H&M has not been able to carry out its operations
effectively in countries that have been severely affected by the pandemic. Due to this, the
company’s overall performance and profitability have been affected adversely.
Compliance Theory
This theory states that organizations can be classified according to the power they use to
direct the behavior of their employees as well as their level of involvement. The fashion industry
has to deal with a lot of compliance at all times and thus organizations operating here should
know how to carry out their operations in an effective manner.
Fast-Paced Innovations – Constant changes in the buying behavior as well as decision
making process of the customers has led companies like H&M to bring in constant innovation in
their products and services to be able to survive in a highly competitive market (Demirkan,
Spohrer and Welser, 2016). This has led to an increase in the number of challenges faced by the
company because there is a constant requirement to innovate and bring in new ideas for the
products not only to fulfil the demands of the customers but also stand out in the market against
competitors. And to do so, H&M has been working under tough pressure so that the customers
remain loyal to it.
Due to the outbreak of coronavirus across the world, the economy has been getting
affected adversely and the virus is being expected to result in a huge loss to different industries.
H&M has invested significantly in developing a supply chain that is efficient and help the
company deliver the finished products to the customers (Jones and Mahon, 2018). But
coronavirus has laid a challenge towards this as the company’s operations have been put on hold.
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Thus, fast-paced innovations can pose a tough challenge to the fashion industry for it to satisfy
the needs of customers.
Diffusion of Innovation Theory
This theory explains why and the rate at which a technology or an idea spread in the
environment. The online website of the respective company is very poor which means that not all
customers are able to get used to adopt it. On the other hand, outbreak of coronavirus has
impacted the adaptability adversely as the customers have no idea how to browse through it and
place an order as per their needs.
Labor Practices – H&M has been reported not to have effective labor practices and was
reported to employ teenagers to work for it. The company was accused of child labor which
impacted its overall position in the market. The company aims to stay competitive and satisfy the
needs of customers in the market. The spread of coronavirus has proved out to be as a challenge
for the company as there are no labors available to carry out different practices within the
company. H&M hiring children n the age groups of 14-18 years proved out to be the greatest
challenge that the company has faced over the last few years.
Coronavirus will also impact the overall labor practices of all the companies across the
world (Peluso, 2018). Thus, in order to overcome the challenges posed by coronavirus, H&M
will have to adopt effective strategies. Labor practices in among important challenges that can
impact the company as if there will be no labor, the company will not be able to carry out its
operations effectively (Zhu, Liu and Lai, 2016). This can also affect the company’s overall
productivity as well as profitability in the market. Also, regular complaints can also pose
challenge to the company and change the ways in which it carries out business (Schor and
Attwood‐Charles, 2017).
Fast Chain Model
This model is basically ideal for the fashion industry because the trends keep on changing
and have a short life span. Coronavirus has impacted the supply chain of the fashion industry
adversely because there is a lockdown everywhere and thus raw material is not being able to be
supplied to the factories. Due to this, manufacturing is not being able to take place and the
finished goods are not being delivered to the retail stores.
the needs of customers.
Diffusion of Innovation Theory
This theory explains why and the rate at which a technology or an idea spread in the
environment. The online website of the respective company is very poor which means that not all
customers are able to get used to adopt it. On the other hand, outbreak of coronavirus has
impacted the adaptability adversely as the customers have no idea how to browse through it and
place an order as per their needs.
Labor Practices – H&M has been reported not to have effective labor practices and was
reported to employ teenagers to work for it. The company was accused of child labor which
impacted its overall position in the market. The company aims to stay competitive and satisfy the
needs of customers in the market. The spread of coronavirus has proved out to be as a challenge
for the company as there are no labors available to carry out different practices within the
company. H&M hiring children n the age groups of 14-18 years proved out to be the greatest
challenge that the company has faced over the last few years.
Coronavirus will also impact the overall labor practices of all the companies across the
world (Peluso, 2018). Thus, in order to overcome the challenges posed by coronavirus, H&M
will have to adopt effective strategies. Labor practices in among important challenges that can
impact the company as if there will be no labor, the company will not be able to carry out its
operations effectively (Zhu, Liu and Lai, 2016). This can also affect the company’s overall
productivity as well as profitability in the market. Also, regular complaints can also pose
challenge to the company and change the ways in which it carries out business (Schor and
Attwood‐Charles, 2017).
Fast Chain Model
This model is basically ideal for the fashion industry because the trends keep on changing
and have a short life span. Coronavirus has impacted the supply chain of the fashion industry
adversely because there is a lockdown everywhere and thus raw material is not being able to be
supplied to the factories. Due to this, manufacturing is not being able to take place and the
finished goods are not being delivered to the retail stores.
Question 3. Identify and analyze the three solutions to address the challenges
facing your chosen company or service.
Although there are many challenges that are faced by companies like H&M that operate
in the fashion industry, there are equally available solutions that can help in addressing the same.
Some solutions to address the challenges that are faced by the company are explained as follows-
Corporate Social Responsibility (CSR) – Businesses, both small as well as large have
started understanding the fact that people are increasingly becoming aware about the
environment and prefer associating themselves with brands that are socially responsible (Crane,
Matten and Spence, 2019). Thus, H&M can also implement various practices that are sustainable
and not harmful for the environment. The company can focus on building a sustainable business
so that least harm is caused to the environment and the company is also able to stand out in the
market. By practicing corporate social responsibility, H&M will be able to carry out its business
operations in an effective way as well as strengthen its relationship with customers and potential
stakeholders. H&M should plan CSR activities as well as campaigns in such a way that it
contributes to the environment but at the same time creates awareness about different sustainable
practices among people as well (Lins, Servaes and Tamayo, 2017). This way, the company will
be able to build a better brand recognition among the people as well as a positive reputation.
Practicing corporate social responsibility will not only help H&M to battle against the
coronavirus but also in increasing the overall satisfaction of the employees. Although, the
company did launch its Conscious Collection that was made with recyclable materials in order to
show its support towards the environment. This helped it in reaching out to a large number of
customers as well as raise the concern of an environment friendly brand. Respective company an
also contribute in curing and completely eliminating COVID-19 and its negative impact on the
society (Jamali and Karam, 2018). This will lead to the customers gaining trust in the brand and
thus purchasing its products which will further lead to an increase in the overall profitability and
productivity of the company. H&M will also be able to gain a competitive edge against other
brands in the market. Thus, if H&M spends it CSR funds for fighting COVID-19, it will be
considered eligible for CSR activity.
Utility Maximization
facing your chosen company or service.
Although there are many challenges that are faced by companies like H&M that operate
in the fashion industry, there are equally available solutions that can help in addressing the same.
Some solutions to address the challenges that are faced by the company are explained as follows-
Corporate Social Responsibility (CSR) – Businesses, both small as well as large have
started understanding the fact that people are increasingly becoming aware about the
environment and prefer associating themselves with brands that are socially responsible (Crane,
Matten and Spence, 2019). Thus, H&M can also implement various practices that are sustainable
and not harmful for the environment. The company can focus on building a sustainable business
so that least harm is caused to the environment and the company is also able to stand out in the
market. By practicing corporate social responsibility, H&M will be able to carry out its business
operations in an effective way as well as strengthen its relationship with customers and potential
stakeholders. H&M should plan CSR activities as well as campaigns in such a way that it
contributes to the environment but at the same time creates awareness about different sustainable
practices among people as well (Lins, Servaes and Tamayo, 2017). This way, the company will
be able to build a better brand recognition among the people as well as a positive reputation.
Practicing corporate social responsibility will not only help H&M to battle against the
coronavirus but also in increasing the overall satisfaction of the employees. Although, the
company did launch its Conscious Collection that was made with recyclable materials in order to
show its support towards the environment. This helped it in reaching out to a large number of
customers as well as raise the concern of an environment friendly brand. Respective company an
also contribute in curing and completely eliminating COVID-19 and its negative impact on the
society (Jamali and Karam, 2018). This will lead to the customers gaining trust in the brand and
thus purchasing its products which will further lead to an increase in the overall profitability and
productivity of the company. H&M will also be able to gain a competitive edge against other
brands in the market. Thus, if H&M spends it CSR funds for fighting COVID-19, it will be
considered eligible for CSR activity.
Utility Maximization
According to this model, the consumers decide to allocate their incomes so that the last
amount of money spent on each product so that each purchase yields an equal amount of extra
marginal utility. Thus, H&M should pay focus on offering its customers a high utility
maximization so that the products that are delivered are of value to them. Conscious collection
was one such move of the company. It can plan other strategies so that coronavirus can be
eliminated effectively.
Human Resource Management (HRM) – Human Resource Management has become
one of the major considerations in today’s time. H&M considers its employees to be most
important and with the sudden outbreak of coronavirus, it has become even more important for it
to make sure that the employees are safe and secure. The HR department of the company should
follow various protective measures so the confidential information about the employees and
other details can be kept safely (Delery and Roumpi, 2017). Most of the company’s employees
are engaged with the suppliers or customers which is why it is important that the company
manages its human resources effectively. Doing so will help it in reducing unnecessary costs that
would have otherwise been invested in training and developing new employees. Also, it will be
able to maintain is goodwill and position of one of the market leader’s in the fashion industry. If
the human resources, i.e., employees are not managed properly, they will not perform effectively
and the company might not be able to achieve its goals and objectives.
Also, if the company wants to hire new employees during the outbreak of coronavirus, it
can do so through various online channels like video conferencing, online group discussions etc.
The existing employees who work for the company should be offered the option of working from
home as there is complete lockdown in different parts of the world (Kianto, Sáenz and
Aramburu, 2017). This will help the company to reduce unnecessary costs and also hire the
people which the managers think would be the right fit for a particular job position in the
company. A sustainable business will be created and also, H&M will be able to adopt various
innovations in its system. This will lead to innovative and new products being launched in the
market. Thus, managing employees is one of the solutions if the company wants to address the
challenges.
Strategic Management
amount of money spent on each product so that each purchase yields an equal amount of extra
marginal utility. Thus, H&M should pay focus on offering its customers a high utility
maximization so that the products that are delivered are of value to them. Conscious collection
was one such move of the company. It can plan other strategies so that coronavirus can be
eliminated effectively.
Human Resource Management (HRM) – Human Resource Management has become
one of the major considerations in today’s time. H&M considers its employees to be most
important and with the sudden outbreak of coronavirus, it has become even more important for it
to make sure that the employees are safe and secure. The HR department of the company should
follow various protective measures so the confidential information about the employees and
other details can be kept safely (Delery and Roumpi, 2017). Most of the company’s employees
are engaged with the suppliers or customers which is why it is important that the company
manages its human resources effectively. Doing so will help it in reducing unnecessary costs that
would have otherwise been invested in training and developing new employees. Also, it will be
able to maintain is goodwill and position of one of the market leader’s in the fashion industry. If
the human resources, i.e., employees are not managed properly, they will not perform effectively
and the company might not be able to achieve its goals and objectives.
Also, if the company wants to hire new employees during the outbreak of coronavirus, it
can do so through various online channels like video conferencing, online group discussions etc.
The existing employees who work for the company should be offered the option of working from
home as there is complete lockdown in different parts of the world (Kianto, Sáenz and
Aramburu, 2017). This will help the company to reduce unnecessary costs and also hire the
people which the managers think would be the right fit for a particular job position in the
company. A sustainable business will be created and also, H&M will be able to adopt various
innovations in its system. This will lead to innovative and new products being launched in the
market. Thus, managing employees is one of the solutions if the company wants to address the
challenges.
Strategic Management
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Strategic management involves setting goals and objectives, analyzing the performance
of competition, evaluating strategies etc. The company should redefine its objectives and
strategies during the time of coronavirus outbreak. They should be managed properly like hiring
should be done online through various channels etc. Strategic management will also help in
monitoring and evaluating the performance of the workforce as well as in formulating strategies
for the future.
Monetizing Voluntary Simplicity - Voluntary Simplicity can be defined as a kind of
lifestyle wherein the choices that are not needed like material goods as well as pursuit of wealth
etc. can be minimized. H&M can implement this concept as a solution to overcome the challenge
of fast paced consumerism. It can decrease the overall production as well as over usage of
natural resources for manufacturing apparels (Graham, Marco and Myers, 2018). This would
help in reducing the excessive consumption of natural resources as well as encourage simplicity
among the people. The usage of energy will also reduce which will be helpful for the
environment. The employees of the company will also not have to put in unnecessary long
working hours in getting a particular task done. The challenge of constantly increasing
consumerism will also be resolved. The overall money that company would have spent on
energy usage in order to manufacture goods will also be reduced.
Voluntary Simplicity will also help H&M in reducing its focus on extensive consumption
and fancy consumerism because the company will limit the amount of raw materials that are
needed to produce finished goods as well as the work put in will also be meaningful, whether
through volunteering or by paying people. The company will be able to connect to the
community and this will be helpful in gaining a competitive edge against the customers
(Retolaza, San-Jose and Ruíz-Roqueñi, 2016). Thus, H&M should adopt the concept of
voluntary simplicity in order to address the above stated challenges in the most effective manner
and as a result increase the productivity as well as profitability in the market. And in order to do
so, it should first cut down its needs to only basic essentials that are required to manufacture and
produce finished products. This will require time and careful planning to be implemented in a
proper and effective manner (Jarvis, 2019).
Consumerism theory
of competition, evaluating strategies etc. The company should redefine its objectives and
strategies during the time of coronavirus outbreak. They should be managed properly like hiring
should be done online through various channels etc. Strategic management will also help in
monitoring and evaluating the performance of the workforce as well as in formulating strategies
for the future.
Monetizing Voluntary Simplicity - Voluntary Simplicity can be defined as a kind of
lifestyle wherein the choices that are not needed like material goods as well as pursuit of wealth
etc. can be minimized. H&M can implement this concept as a solution to overcome the challenge
of fast paced consumerism. It can decrease the overall production as well as over usage of
natural resources for manufacturing apparels (Graham, Marco and Myers, 2018). This would
help in reducing the excessive consumption of natural resources as well as encourage simplicity
among the people. The usage of energy will also reduce which will be helpful for the
environment. The employees of the company will also not have to put in unnecessary long
working hours in getting a particular task done. The challenge of constantly increasing
consumerism will also be resolved. The overall money that company would have spent on
energy usage in order to manufacture goods will also be reduced.
Voluntary Simplicity will also help H&M in reducing its focus on extensive consumption
and fancy consumerism because the company will limit the amount of raw materials that are
needed to produce finished goods as well as the work put in will also be meaningful, whether
through volunteering or by paying people. The company will be able to connect to the
community and this will be helpful in gaining a competitive edge against the customers
(Retolaza, San-Jose and Ruíz-Roqueñi, 2016). Thus, H&M should adopt the concept of
voluntary simplicity in order to address the above stated challenges in the most effective manner
and as a result increase the productivity as well as profitability in the market. And in order to do
so, it should first cut down its needs to only basic essentials that are required to manufacture and
produce finished products. This will require time and careful planning to be implemented in a
proper and effective manner (Jarvis, 2019).
Consumerism theory
The theory states that it is economically desirable that the goods and services are
consumed increasingly. Companies operating in the fashion industry including H&M should
focus on using natural resources while manufacturing their product so that the rights as well as
interests of the public are maintained. Also, various laws and rules can be implemented to
protect people who shop online.
Question 4. Explain how your company or service could practically implement
one solution from those listed in Question 3.
The company can implement all the solutions that are explained above practically in
order to overcome the challenges and thus carry out business operations effectively. The
practical implementation of how can the company incorporate the solution monetizing voluntary
simplicity in its system is explained below-
Approach – One of the approaches that H&M can use to practically implement the
concept of monetizing voluntary simplicity is Upcycling. It can be defined as the process in
which the company uses all the unwanted and waste materials that are left out during the process
of manufacturing and transforms them into useful products so as to not cause any kind of harm to
the environment (Wang and et. al., 2018). If the environment will be safe, the spread of
coronavirus will also be restricted. Other approach that can be used is Second Hand, wherein the
products that are used and not needed are handed over to people who can use them. The
company should set up a model that is service centered wherein the customers can purchase both
second hand as well as new and innovative products. The company can also upcycle some of its
products and should position itself in such a way that it gains a competitive advantage.
Stage 1: Inputs, technological, financial, human and material
Technical Input - H&M should incorporate the latest technology in its system in order to
minimize the amount of human efforts and ensure that its operations are carried out effectively.
Human Resource Input - It should also focus on increasing the engagement of employees
towards their jobs. This will help in achieving the organizational goals and objectives.
Financial Input - H&M should invest money in the effective marketing of its products
through various platforms of social media (Bowers, 2017). The products that are no longer
consumed increasingly. Companies operating in the fashion industry including H&M should
focus on using natural resources while manufacturing their product so that the rights as well as
interests of the public are maintained. Also, various laws and rules can be implemented to
protect people who shop online.
Question 4. Explain how your company or service could practically implement
one solution from those listed in Question 3.
The company can implement all the solutions that are explained above practically in
order to overcome the challenges and thus carry out business operations effectively. The
practical implementation of how can the company incorporate the solution monetizing voluntary
simplicity in its system is explained below-
Approach – One of the approaches that H&M can use to practically implement the
concept of monetizing voluntary simplicity is Upcycling. It can be defined as the process in
which the company uses all the unwanted and waste materials that are left out during the process
of manufacturing and transforms them into useful products so as to not cause any kind of harm to
the environment (Wang and et. al., 2018). If the environment will be safe, the spread of
coronavirus will also be restricted. Other approach that can be used is Second Hand, wherein the
products that are used and not needed are handed over to people who can use them. The
company should set up a model that is service centered wherein the customers can purchase both
second hand as well as new and innovative products. The company can also upcycle some of its
products and should position itself in such a way that it gains a competitive advantage.
Stage 1: Inputs, technological, financial, human and material
Technical Input - H&M should incorporate the latest technology in its system in order to
minimize the amount of human efforts and ensure that its operations are carried out effectively.
Human Resource Input - It should also focus on increasing the engagement of employees
towards their jobs. This will help in achieving the organizational goals and objectives.
Financial Input - H&M should invest money in the effective marketing of its products
through various platforms of social media (Bowers, 2017). The products that are no longer
needed can be redesigned and the retail shops should be reorganized in order to create space for
recreation. Effective implementation will be beneficial and help the company in gaining a
competitive edge in the market.
Stage 2: Actions and Timeline
Respective project will be tested in the United Kingdom for at least 5 years so that the
customers will accommodate themselves to it. The company should adopt various ways to
promote environment conservation among the people. And this can be done by marketing its
fashion products through ageless, flexible and innovative methods to promote the same in the
market. It should create a system wherein both used as well as unused products can be collected
from the customers, medium-sized businesses as well as retailers (Dengler and Strunk, 2018). By
doing this, the company will be able to recycle the products and then sending the same back to
the retail stores for the customers to purchase and use them. Testing the project will help in
identifying any kind of error or mistakes that should be properly eliminated so that there is no
problem in the future.
Stage 3: Delivery and Evaluation
The upcycled and second hand products can be delivered through existing shops in the
UK and by also establishing a network through which the customers will be able to resell their
used fashion clothes to people who can use them at cheaper rates (Saltamacchia, 2020). The
company can also build a network by which the process of selling can take place online on its
website as well, considering the outbreak of the pandemic. This will help in maintaining the
levels of sales and the company will not go into loss.
Evaluation - On the other hand, the evaluation can be done by analyzing the feedbacks of
the customers as well as other tools in order to understand if the strategy has been successful or
not (Skilton, 2016). It can also be analyzed by measuring the amount of revenue generated by the
company against its competitors in the market.
Models
Digital Servitization – It refers to the utilization of different digital technologies through
which a company shift s from being product-centric to being service-centric business model
recreation. Effective implementation will be beneficial and help the company in gaining a
competitive edge in the market.
Stage 2: Actions and Timeline
Respective project will be tested in the United Kingdom for at least 5 years so that the
customers will accommodate themselves to it. The company should adopt various ways to
promote environment conservation among the people. And this can be done by marketing its
fashion products through ageless, flexible and innovative methods to promote the same in the
market. It should create a system wherein both used as well as unused products can be collected
from the customers, medium-sized businesses as well as retailers (Dengler and Strunk, 2018). By
doing this, the company will be able to recycle the products and then sending the same back to
the retail stores for the customers to purchase and use them. Testing the project will help in
identifying any kind of error or mistakes that should be properly eliminated so that there is no
problem in the future.
Stage 3: Delivery and Evaluation
The upcycled and second hand products can be delivered through existing shops in the
UK and by also establishing a network through which the customers will be able to resell their
used fashion clothes to people who can use them at cheaper rates (Saltamacchia, 2020). The
company can also build a network by which the process of selling can take place online on its
website as well, considering the outbreak of the pandemic. This will help in maintaining the
levels of sales and the company will not go into loss.
Evaluation - On the other hand, the evaluation can be done by analyzing the feedbacks of
the customers as well as other tools in order to understand if the strategy has been successful or
not (Skilton, 2016). It can also be analyzed by measuring the amount of revenue generated by the
company against its competitors in the market.
Models
Digital Servitization – It refers to the utilization of different digital technologies through
which a company shift s from being product-centric to being service-centric business model
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(Sánchez‐Montesinos and et. al., 2018). If the model is correctly designed, then it can prove to be
beneficial for both the companies as well as the society on the whole.
Monetization – It can be defined as the process of converting something to money and
H&M can do so by analyzing how do its products add value to the customers (Suliman and et.
al., 2018). The company can also do this by offering innovative and new designs to the
customers and encourage them to buy the same (Johnson,Friend. and Lee, 2017).
beneficial for both the companies as well as the society on the whole.
Monetization – It can be defined as the process of converting something to money and
H&M can do so by analyzing how do its products add value to the customers (Suliman and et.
al., 2018). The company can also do this by offering innovative and new designs to the
customers and encourage them to buy the same (Johnson,Friend. and Lee, 2017).
REFERENCES
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Graham, S. J., Marco, A. C. and Myers, A. F., 2018. Monetizing marks: Insights from the
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Hallstedt, S. I., 2017. Sustainability criteria and sustainability compliance index for decision
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Jamali, D. and Karam, C., 2018. Corporate social responsibility in developing countries as an
emerging field of study. International Journal of Management Reviews. 20(1). pp.32-61.
Jarvis, H., 2019. Sharing, togetherness and intentional degrowth. Progress in Human Geography.
43(2). pp.256-275.
Johnson, J. S., Friend, S. B. and Lee, H.S., 2017. Big data facilitation, utilization, and
monetization: Exploring the 3Vs in a new product development process. Journal of
Product Innovation Management. 34(5). pp.640-658.
Jones, N. B. and Mahon, J. F., 2018. Knowledge Transfer and Innovation. Routledge.
Kaur, K., Kumar, N. and Kumar, M., 2017. Strategic review of interface carrier recombination in
earth abundant Cu–Zn–Sn–S–Se solar cells: current challenges and future prospects.
Journal of Materials Chemistry A. 5(7). pp.3069-3090.
Kianto, A., Sáenz, J. and Aramburu, N., 2017. Knowledge-based human resource management
practices, intellectual capital and innovation. Journal of Business Research. 81. pp.11-20.
Lins, K. V., Servaes, H. and Tamayo, A., 2017. Social capital, trust, and firm performance: The
value of corporate social responsibility during the financial crisis. The Journal of
Finance. 72(4). pp.1785-1824.
Peluso, N. L., 2018. Entangled territories in small-scale gold mining frontiers: Labor practices,
property, and secrets in Indonesian gold country. World Development. 101. pp.400-416.
Retolaza, J. L., San-Jose, L. and Ruíz-Roqueñi, M., 2016. Social accounting for sustainability:
Monetizing the social value. Cham: Springer.
Books & Journals
Bowers, C., 2017. Educational reforms for survival. Tikkun. 32(4). pp.25-32.
Christopher, M., 2016. Logistics & supply chain management. Pearson UK.
Crane, A., Matten, D. and Spence, L. eds., 2019. Corporate social responsibility: Readings and
cases in a global context. Routledge.
Delery, J. E. and Roumpi, D., 2017. Strategic human resource management, human capital and
competitive advantage: is the field going in circles?. Human Resource Management
Journal. 27(1). pp.1-21.
Demirkan, H., Spohrer, J. C. and Welser, J. J., 2016. Digital innovation and strategic
transformation. IT Professional. 18(6). pp.14-18.
Dengler, C. and Strunk, B., 2018. The monetized economy versus care and the environment:
Degrowth perspectives on reconciling an antagonism. Feminist Economics. 24(3).
pp.160-183.
Duke, S., 2016. Europe as a stronger global actor: Challenges and strategic responses.
Springer.
Giannakis, M. and Papadopoulos, T., 2016. Supply chain sustainability: A risk management
approach. International Journal of Production Economics. 171. pp.455-470.
Graham, S. J., Marco, A. C. and Myers, A. F., 2018. Monetizing marks: Insights from the
USPTO trademark assignment dataset. Journal of Economics & Management Strategy.
27(3). pp.403-432.
Hallstedt, S. I., 2017. Sustainability criteria and sustainability compliance index for decision
support in product development. Journal of Cleaner production. 140. pp.251-266.
Hugos, M. H., 2018. Essentials of supply chain management. John Wiley & Sons.
Jamali, D. and Karam, C., 2018. Corporate social responsibility in developing countries as an
emerging field of study. International Journal of Management Reviews. 20(1). pp.32-61.
Jarvis, H., 2019. Sharing, togetherness and intentional degrowth. Progress in Human Geography.
43(2). pp.256-275.
Johnson, J. S., Friend, S. B. and Lee, H.S., 2017. Big data facilitation, utilization, and
monetization: Exploring the 3Vs in a new product development process. Journal of
Product Innovation Management. 34(5). pp.640-658.
Jones, N. B. and Mahon, J. F., 2018. Knowledge Transfer and Innovation. Routledge.
Kaur, K., Kumar, N. and Kumar, M., 2017. Strategic review of interface carrier recombination in
earth abundant Cu–Zn–Sn–S–Se solar cells: current challenges and future prospects.
Journal of Materials Chemistry A. 5(7). pp.3069-3090.
Kianto, A., Sáenz, J. and Aramburu, N., 2017. Knowledge-based human resource management
practices, intellectual capital and innovation. Journal of Business Research. 81. pp.11-20.
Lins, K. V., Servaes, H. and Tamayo, A., 2017. Social capital, trust, and firm performance: The
value of corporate social responsibility during the financial crisis. The Journal of
Finance. 72(4). pp.1785-1824.
Peluso, N. L., 2018. Entangled territories in small-scale gold mining frontiers: Labor practices,
property, and secrets in Indonesian gold country. World Development. 101. pp.400-416.
Retolaza, J. L., San-Jose, L. and Ruíz-Roqueñi, M., 2016. Social accounting for sustainability:
Monetizing the social value. Cham: Springer.
Rezaee, Z., 2017. Business sustainability: Performance, compliance, accountability and
integrated reporting. Routledge.
Ritter, E. H. and Conrad, C. R., 2016. Preventing and responding to dissent: The observational
challenges of explaining strategic repression. American Political Science Review. 110(1).
pp.85-99.
Saltamacchia, M., 2020. A Button, an Egg, a Piece of Cheese: Gifts and Donations for the
Cathedral of Milan. The Catholic Historical Review. 105(4). pp.617-644.
Sánchez‐Montesinos, F. and et. al., 2018. Creating isolating mechanisms through digital
servitization: The case of Covirán. Strategic Change. 27(2). pp.121-128.
Schor, J. B. and Attwood‐Charles, W., 2017. The “sharing” economy: labor, inequality, and
social connection on for‐profit platforms. Sociology Compass. 11(8). p.e12493.
Skilton, M., 2016. Building the digital enterprise: a guide to constructing monetization models
using digital technologies. Springer.
Suliman, A. and et. al., 2018. Monetization of IoT data using smart contracts. IET Networks.
8(1). pp.32-37.
Thierfelder, H. and Kabisch, N., 2016. Viewpoint Berlin: Strategic urban development in Berlin–
Challenges for future urban green space development. Environmental science & policy.
62. pp.120-122.
Wang, L. and et. al., 2018. Upcycling wood waste into fibre-reinforced magnesium phosphate
cement particleboards. Construction and Building Materials. 159. pp.54-63.
Zhu, Q., Liu, J. and Lai, K. H., 2016. Corporate social responsibility practices and performance
improvement among Chinese national state-owned enterprises. International Journal of
Production Economics. 171. pp.417-426.
Online
Can Online Shopping Give You Coronavirus?. 2020. [Online]. Available through:<
https://www.msn.com/en-ph/health/medical/can-online-shopping-give-you-coronavirus/
ar-BBZPK8e?li=BBr8zL6 >.
Coronavirus: Air pollution and CO2 fall rapidly as virus spreads. 2020. [Online]. Available
through:< https://www.bbc.com/news/science-environment-51944780>.
What Is a PEST Analysis?. 2020. [Online]. Available through:<
https://www.businessnewsdaily.com/5512-pest-analysis-definition-examples-
templates.html>.
integrated reporting. Routledge.
Ritter, E. H. and Conrad, C. R., 2016. Preventing and responding to dissent: The observational
challenges of explaining strategic repression. American Political Science Review. 110(1).
pp.85-99.
Saltamacchia, M., 2020. A Button, an Egg, a Piece of Cheese: Gifts and Donations for the
Cathedral of Milan. The Catholic Historical Review. 105(4). pp.617-644.
Sánchez‐Montesinos, F. and et. al., 2018. Creating isolating mechanisms through digital
servitization: The case of Covirán. Strategic Change. 27(2). pp.121-128.
Schor, J. B. and Attwood‐Charles, W., 2017. The “sharing” economy: labor, inequality, and
social connection on for‐profit platforms. Sociology Compass. 11(8). p.e12493.
Skilton, M., 2016. Building the digital enterprise: a guide to constructing monetization models
using digital technologies. Springer.
Suliman, A. and et. al., 2018. Monetization of IoT data using smart contracts. IET Networks.
8(1). pp.32-37.
Thierfelder, H. and Kabisch, N., 2016. Viewpoint Berlin: Strategic urban development in Berlin–
Challenges for future urban green space development. Environmental science & policy.
62. pp.120-122.
Wang, L. and et. al., 2018. Upcycling wood waste into fibre-reinforced magnesium phosphate
cement particleboards. Construction and Building Materials. 159. pp.54-63.
Zhu, Q., Liu, J. and Lai, K. H., 2016. Corporate social responsibility practices and performance
improvement among Chinese national state-owned enterprises. International Journal of
Production Economics. 171. pp.417-426.
Online
Can Online Shopping Give You Coronavirus?. 2020. [Online]. Available through:<
https://www.msn.com/en-ph/health/medical/can-online-shopping-give-you-coronavirus/
ar-BBZPK8e?li=BBr8zL6 >.
Coronavirus: Air pollution and CO2 fall rapidly as virus spreads. 2020. [Online]. Available
through:< https://www.bbc.com/news/science-environment-51944780>.
What Is a PEST Analysis?. 2020. [Online]. Available through:<
https://www.businessnewsdaily.com/5512-pest-analysis-definition-examples-
templates.html>.
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