Retail Theory and Practice

RETAIL
THEORY AND
PRACTICE

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY .................................................................................................................................3
Primary relevant changes in the external environment ..............................................................3
Primary changes in the internal environment.............................................................................6
Discussion of strategy ................................................................................................................7
RECOMMENDATIONS.................................................................................................................9
CONCLUSION ..........................................................................................................................10
REFRENCES ................................................................................................................................11
APPENDIX ..................................................................................................................................12

INTRODUCTION
Retailing is defined as the direct buying and selling of goods and a retail sale is occurs
when a business sells a product or service to a consumer for their own use. The main element of
a retail sale is that the end user of the product is the buyer. Retailing concept includes four major
principle which are followed by every retailer in order to gain success in their business
endeavours. Consumer orientation is the first retailing concept which includes identification of
consume expectations and needs associated with a product in order to maximise consumer
satisfaction. Retail organisations in the current digital age make co-ordinated efforts which h
helps them gain desired results. Multi-channel systems are formed which integrate business
plans and activities to enhance efficiency. The third concept of retailing is to produce value
driven goods and various startles such as upscaling and discount sales are adopted by retailers to
increase value given to the consumer while maintaining high profitability. Goal orientation is
another retailing concept which focuses on using strategies to attain business objectives of the
company. Fashion retail industry is a consumer goods market which provides clothing,
accessories and footwear. Main features of retail industry include short life-cycles, high
competition and fickle consumers.
Background of the company: H&M is a Swedish international firm which operates in
the fashion retail industry. The company was founded in the year 2019 and has since grown to
become one of the leading members of the global fashion retail industry. The firm owns and
controls 5000 physical stores in 74 international markets. The firm offers online shopping in 33
countries and the firm has employed 126,376 workers on a global scale in order to conduct daily
business activities effectively. The firm owns various subsidiary brands which include Monki,
ARKET Cheap Monday among other brands. The company offers a wide range of clothing and
accessories to men women and children which has helped the firm become the second largest
fashion retailer in the world. This report includes primary eternal and internal changes in British
fashion retail industry along with a strategy based on retail life-cycle theory.
MAIN BODY
Primary relevant changes in the external environment
Macro environment: The macro environment consists of primary uncontrollable forces
which influence decision making of an organisation and impact performance of the firm.

Micro environment: The environment which is directly in the business organisation and
has direct influence upon their business activities. Elements of the micro environment affect
include the supplier, intermediates, consumers and public (Chereau, and Meschi, 2017).
Basis Micro environment Macro environment
Meaning The near environment of the
company under which the firm
operates is defined as macro
environment.
Generic environment which has the
ability to influence daily operations of
every corporation is defined as the
macro environment
Elements Industry opponents, business
firm, suppliers, market
intermediaries, consumers
(What Are Internal & External
Environmental Factors That
Affect Business, 2021).
Political, economical, socio cultural,
technological, legal and environmental
(Vahlne and Johanson, 2020).
Nature of elements Particular Generic
Influence Direct and consistent Indirect and distant
PESTEL analysis
This a framework used to analyse external environment factors affecting an organisation.
PESTEL analysis of British retail firm H&M is provided below:
Political factors
 Brexit: The implementation of the Brexit deal has caused huge disruption in the fashion
retail industry. This has affected H&M as UK is the third largest market of H&M.
Increased border regulations due to the septation of UK from EU will delay daily
business operations of the company. Apart form this difference in regulations and
product standard between the EU and The UK are another major challenge for the firm.
Introduction of a new migration system under Brexit may lead to skill shortage which
will have a negative impact on H&M.