Role of Information Technology in Expanding Business: A Case Study of H&M

This report discusses the role of information technology in expanding business and gaining competitive advantage, using H&M as a case study. It explores the use of IT in improving market presence, reducing costs, and providing high-quality products and services. The report also analyzes Porter's Five Forces and the value chain of H&M.

Technology and
information

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................4
Porter's 5 Force Analysis of John Lewis & partners...................................................................4
Porter's Value Chain....................................................................................................................6
Deployment of Information Technology and use of innovative ideas in order to gain
competitive advantage.................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Information technology (IT) is the use of computers, storage and networking and other
physical device in order to exchange, secure all the information present in the organisation. In
other words this is associated with the computing technology as to provide new experience to
user. In present modern world IT is playing an essential role in expanding the business and it has
also become the essential part of day to day life (Guo and et., al., 2020). The present report is
bases upon H&M which is an Swedish multinational clothing retail company and it is known for
for its fashion. The report describe about the company product and services along with the
competition present in the market. Along with this, inbound as well as outbound logistic must be
analyses by the firm to reduce cost and provide timely delivery. Company must use key value as
to promote there product and services which help them to capture large market share.
Background information of organisation:
Hennes & Mauritz which is known as H&M is the Swedish brand which deals in clothing
retail and it is best known by its constant change in fashion clothing industry for men, women
and children. The organisation and its chain is spread all across the globe in 62 countries and
have around 4500 stores. The company head office is located in Stockholm Sweden and there are
132000 workers who are working for the company. This is the second largest global clothing
retail just behind Zara. Apart from this, company have significant online presence in different
parts of the company. The company was founded in year 1947 by Erling Persson which opened
its first shop in Vasteras Sweden. Furthermore company opened it shop in Norway in 1946 after
it success in homeland.
Company continued to expand its shop in Europe and began to retail online in 1988. this
gain popularity to the business and company listed to Stockholm exchange. The company started
to raise fund as to expand business effectively in order to earn more profit. The clothing fashion
store came in U.S. Store on 31st march in 2000 in fifth avenue in new york and also expand the
business. In the recent years company have diversified there product range from clothing to
furnishing which are mainly distributed by the company catalogue and now the firm have locates
the store internationally(Desplaces, Beauvais and Peckham, 2020). The company is focusing
on the concept store in which there are five different brands under the different concept. This
include COS which is launched as its flagship store in London Regent Street in March 2007 with
a catwalk show at the Royal Academy.

Another brand is & other stories which was launched in 2013 and the store is opening in
throughout Europe . Other product such as women clothing and accessories are been offered to
wide variety of users. There other brand product which are ARKET and cheap Monday are the
part of this brand. Hence the brand offers wide variety of collective fashion line clothing range as
to capture larger audience so that firm can earn more profit during the passage of time.
MAIN BODY
Porter's 5 Force Analysis of John Lewis & partners
In the present business environment there are different kind organisation which deals in
fashion industry and thus it become difficult for the organisation to expand and explore the
business effectively. It become important for the company to provide high quality services to
consumer as to avoid rivals and the competition present in the market. For H&M company have
to improve there market presence by taking effective measures to improve the quality present in
the market. Hence Porter's five force model is been used to explain about the market competition
in the detail manner. There is the detail explanation through which company have to improvise
there product and offering in the detail manner.
Porter's Five Forces Analysis
This is a model which is used by the organisation to figure out the best possible outcomes
to expand and explore the business effectively. It was given by Michael Porter in 1979 to
observe the level of competition and find the solution for the company to expand and explore the
business effectively(Logan, 2020). With the assistance of this model company management can
track and figure out the day to day activity present within the organisation. Such kind
competition modify the change and offer better product and services to end user.
Threat of new entreats: This is consider essential elements for the company enter into
particular industry. If an industry is profitable and there are different barriers to enter the
particular industry is profitable and there are few barriers to entry. The company entering in the
household goods so firm have to make effective decision and bring down the cost which is
essential for the company to expand the business. This also create the value proposition which
also aid firm to expand the business to larger extent. The threats of new entrants are high when
there are large amount capital requirement for the company. If there is low customer loyalty then
it provide different company to become a major threat for the organisation. Apart from this firm

have to focus on achieving desire aims and objectives as to provide high quality services to
consumer. As company can focus on improve the design of clothing as it will gather huge
amount of attention for the audience.
Bargaining power of suppliers: Strong bargaining power allows supplier to sell higher
priced or the low quality product or raw material to buyer. This also directly impact the buying
firm profit because it has to pay more amount for the material (Meeßen and et., al., 2020).
Suppliers have strong bargaining power if there are few supplier present in the market. In the
context of H&M manager have responsibility to have more than one suppliers as this will help
reducing the power of supplier. Along with this, if there are few substitute present in the market
than supplier charge huge high price for material and this will increase the cost for the final
goods. In order to minimizing such monopoly management have to switch to different suppliers
as which tend to bring the down the cost and make affordable product for the consumer. The
manager of firm have to different channel of distribution which allow to purchase raw material
from different suppliers as this slow the need of suppliers.
Bargaining power of customers: The bargaining power of the buyer is also describe as
the market output for the company. The force analyse to what extent the customer are able to put
firm under pressure to reduce cost which also effect the individual needs. In the recent years the
buyer have become more demanding and they desire to have best possible product. So in this
case H&M have to focus on satisfying the needs and wants of consumer and by doing proper
research. This is very crucial for the firm to figure out the trends and implement the changes in
order to improve the experience of the customer. The regular changing needs and desire of
individual have put immense pressure on the H&M so firm have to bring down there cost as to
survive in this competitive world. Furthermore the firm have to focus on the product and bring
new clothing as to attract the larger customer.
Threat of substitutes products: The existence of product outside the realm of the
boundaries which tend user to switch to alternative. In order to discover such kind of alternative
firm have to look beyond similar products which are branded differently from the rivals present
in the business. In the case of H&M firm have focus on differentiate the product and increase the
product line as to provide more product and services to consumer. In order to reduce the threat to
substitute company must offer unique line in fashion clothing which assist company to capture
large audience in a shorter time span. The very few substitutes accessible are of high quality but

are way more expensive. Relatively, firms producing within the business in which H M operates
sell at a lower price than secondary, with adequate quality. This means that buyers are less likely
to switch to substitute products. Apart from this, company have to focus on provide unique
product as the buyer do not shift easily to other company.
Rivalry among existing competitors: There are different competitors present in the
industry and most of the company are in the large size. This means that enterprise have to
improve the service and presence by promoting there product and services to the larger audience.
(Melián-Alzola and et., al., 2020) A positive Industry growth means that competitors are less
likely to engage in completive actions because they do not need to capture market share from
each other. In this case H&M have to focus on the new customer rather than tackling from the
existing company. Apart from this firm have focus on market research to understand the demand
and supply to prevent overproduction.
This has been critically evaluated that there are various forces which slow down the sales
and revenue of the company. This is essential for the management of H&M to identify the
market trends and keep all the aspect of consumer as well as supplier. Secondly the enterprise
have to keep price constant as this make clothing and other accessories more accessible to more
and more customer. It also create a strong business model for expansion and growth.
Porter's Value Chain
It is the method through which company measure all internal activities of the company
effectively. The main objective is to figure the performance as operational action going in
organisation. Main function for the company is to figure the performance as operational action
which is going in the company. In other words, firm have to figure out internal activities as they
are essential to facilitate consumer with high quality product and service effectively. The chain is
divided into primary and supportive activities which are explained down below in the detail
manner:
Primary Activities
Inbound Logistics: Such kind of logistic put emphasis on the transportation and these
plays an essential role in supply chain and have direct impact on the success of the company.
This create a smooth of raw material and ensure that the finished product which are used by the
user. Apart from this, firm have to implement new techniques through which entity can improve
there market service effectively. Operations are fundamentally concerned about the inputs such

as raw material, equipment and staff. Tangible resources are mainly known as the transformed
resources which are mainly reuse as to make use of company resources effectively.
Furthermore firm have take effective decision for changing internal process through
overall delivery of the product and service as they progress and increase the sales. As for the
H&M company have to implement new ways to increase speed, productivity and supply chain
which comes under inbound logistic. It is crucial for the company manager to ensure the
efficiency of network of distribution of goods to reduce the transportation as well as storage cost
which associated with the company.
Outbound logistic:
It is method of storing , transporting as well as distributing the goods and services to
consumer. This process begin with the customer order any kind of product or the service in
which they operates in the department (Koong, Liu and Liu, 2020). For the fashion giant like
H&M have to focus on achieving aims and objectives with efficient supply system. Apart from
this, there must be proper distribution channel which minimize the cost and provide affordable
product and services to consumer.
For the organisation like H&M the operational department use to manage and are liable
for the outbound logistic. At the initial stage company receive the order from the client. Then the
sales employee have job role to identify the stock is present as per the need of the customer.
Further the company deliver the product to the final user as per the given time frame. However
there are different process which include adjusting the delivery point and pickup quantity.
Operations:
Firm basically have to operate effectively and it consist of different activities which
comes under the planning, organising and managing the production process effectively as to
deliver timely services to users. The main purpose of this department is to ensure about the
different proper production on goods take place within the organisation and it also help in
increasing the output and value for the product. Apart from this management help in increasing
the overall productivity and also aid in aligning the productivity as per the needs and wants of
the company.
In the context of H&M the manager have to analyse the flaws and make changes as to
improve the capability of firm to bring out maximum output. The operation department is
consider as the heart of the company as it controls and track all the activities from raw material

to the final consumption of goods and commodity. This is a complicated process to manage and
control the operations so in depth knowledge is required to pursue the position of the operation
management.
Support Activities
Firm infrastructure: This is consider as the most venerable assets for the company as
this require to maintained properly as this provide constant growth and revenue for the company
effectively. H&M is the second largest apparel retail company and it is pioneer in pursuing the
the vertical integration with there own distribution network. The firm have open system where
employees can easily take decision as per the situation. All the staff have to report to their
managers and further decision are taken by the higher authority. Beside this top level
management take all the decision regarding the expansion and growth and employees or lower
level management have to follow the instruction accordingly. The flow of power within the
H&M is from upward to downward in which employees are liable for there roles and
responsibility.
Technology development: In the preset world is changing very fast due the assistance of
technology. In the present scenario there has been tuff competition among the companies and
they have to implement new technology as to compete with other companies present in the
market. For the organisation like H&M management have to use new technology in delivering
services to consumer as technology help in increasing the sales and profitability for the
organisation. In the recent years retail industry have seen immense change so firm is
implementing AI technology in order to attract the user and this will cater buyer as per the needs.
This kind of technology usually aid company to understand the buying behaviour of the
consumer and make easier for them during there shopping.
Deployment of Information Technology and use of innovative ideas in order to gain competitive
advantage
By the use Porters five forces model company have to focus on changing trends and
make use of information technology as this help in increasing the sales and productivity of the
company. In the context of H&M company have responsibility to focus on technology as it
ehance many industry from the financial institution to retail outlet. Secondly organisation have to
stay up to date with the increasing changes in technology for creating for the business. In the
retail sector innovation is also making the way to expand and explore business effectively.

Point of scale is new technology in which customer do not need to stand long in the line
to purchase the merchandise. It has been all possible by the technology in which company
provide digital payment service which reduce the effort for the user to purchase the product and
service effectively (Logan, 2020). Hence this has significantly improved the satisfaction of
customers because before, different customers would leave without making a purchase if they
had to wait a long time in a long line. Along with this technology have improve the customer
satisfaction level and through which it has made more personalised shopping experience and
offer them virtual views of products through augmented reality. Augmented reality allows user to
get a better idea of what they want to purchase before they make their final decision.
H&M research and development department is looking forward for the new ways to
retain the customer. As firm is constantly improving the design and developing new product and
services in clothing line as to attract larger number of customers. Enterprise is also implementing
in market research and also in workshop with the motive to set standard as for the different
companies present in the market. With the prior aid of the technology firm have figured out new
ways to manage the inventory. As this has been always the costly process for H&M so the
management have implement new software as to manage and control the inventory which tend to
maintain demand and supply present in the marketplace. With technology tracking items and
offering real-time updates about the items, administrator have a much finer sense of what is
being purchased and what component they need to order to keep their commodity in stock.
CONCLUSION
From the above mentioned report this has been analysed that managing information and
technology have become essentials for the company as to survive for the longer time period.
Along with this it has been recommended to the company is implement more in technology as
this will help in reduction competitor to some extent. Another suggestion for the company is to
analyse the trend and make high quality product to end user as consumer have become more
aware regarding the choice and material of clothing. Firm must use porters five forces as to
understand the market and value chain to as it will cater organisation to make changes and
provide better services to final users.

REFERENCES
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