The Global Business Environment: Impact of Covid 19 on Fashion Industry

This report discusses the impact of the Covid 19 pandemic on the fashion industry, including both positive and negative effects. It also explores the major forces that have shaped the business environment of the fashion industry, using PESTLE and SWOT analysis. Additionally, it examines how some firms have been able to adapt better than others to the changing business environment.

The Global Business
Environment

Table of Contents
Introduction .....................................................................................................................................3
Main body........................................................................................................................................3
Impact of Covid 19 pandemic on fashion industry ....................................................................3
Major forces that have shaped business environment of fashion industry .................................4
PESTLE analysis ........................................................................................................................4
SWOT analysis ...........................................................................................................................5
How some firms have been able to adapt better then others to the changing business
environment. ...............................................................................................................................6
Conclusion.......................................................................................................................................7
References .......................................................................................................................................8
Books and journals ....................................................................................................................8

Introduction
Fashion industry is one of the biggest industry of the world. As it is fully depends on the
customer choices and trends. Fashion industry works towards the interest of customer and their
preferences (Ali, and Garg, 2017). At the time of covid pandemic this industry is fully affected.
It is affected at every stage from retailers to supply chain management and to vendors. In this
report there is a impact of pandemic on fashion industry can be positive and negative. Then there
is a PESTLE analysis which is conducted by business. Then it includes SWOT analysis and
details about changing business environment across globally.
Main body
Impact of Covid 19 pandemic on fashion industry
The fashion industry is getting very much affected by the pandemic in 2020 as this has
affected all retailers to supply chains and to vendors. It is seen that many of the retailers have
closed there shops, there production has been end and demand was plumb. In the large
corporation and firms, they have tries a lot of save their profits and fire many of the workers
from the job. For example- H&M has recently declared that they have announced closing of 70%
of their stores in worldwide. Many of the brands have shown that there sales has been decreased
by 70% off their items. Fast fashion online retailers have been defendant of using sales as a tactic
in more customers during lock down (Coronavirus impact: H&M's March-May sales tumble by
50%, 2021). Many of the online retailers have reduced their price of their products and services.
Because they come under fire keeping stores and they cannot be able to open their shops and
stores offline and sell their products to customers at the time of lock down. At there are both
positive and negative impacts of pandemic on the fashion industry.
Positive impacts: People are understanding about the pandemic situation and also
understanding social behaviour in same situation (Anderson, and et.al., 2017). Many of the
companies are introducing new innovations and techniques in order to engage customers towards
their products and services. Fashion industry is helping to manage supply chain in all over the
country. The one of the most positive impact of pandemic is on fashion industry is that it is
increased the level of innovation among people and enterprises. Industry starts saving money
and doing low cost production, and making use of technological advancements etc.

Negative impacts : Covid 19 pandemic situation has spread in all over the world and has
impacted a lot of industries. Fashion industry is one of them. This pandemic situation has results
in stress, stigma, minimising of social network and results in losses of the company. In case of
H&M company, they have shut down over 250 shops. There is a decrease in net sales of the
company for three months to May 31 which was fell with 50%. However, company has start
reopening its stores later after they have shuttered 80% of stores in the pandemic.
Major forces that have shaped business environment of fashion industry
The fashion industry consist of various factors which can influence there business by
their actions and demands. These factors are internal and external factors which can impact
business overall functions and its activities. For analysing external factors, company uses
PESTLE analysis to analyse the external forces which can affect the business environment.
PESTLE analysis
 Political: Government have a ability to encourage fashion industry to make use of fabric
locally. In context of H&M company there is a shift of power of mastery over period of
time which can be results in war and similar situation. At the time of covid pandemic,
many of the workers have migrants to their cities and places and this has impacted
company in reducing their employee turnover and this becomes threat for company.
 Economical: In fashion industry,. It is seen a good sign to the business as big political
didn't impact its profit making rate (Gandhi, 2017). At the time of covid pandemic, many
of the customers are purchasing their products and services online with company website
and this becomes a opportunity for the company to target more customers.
 Social: Clothing is followed by the celebrities and social media persons. People get
influenced by them. Thus, H&M company introduced their brand through social media at
the time of pandemic. This becomes opportunity for the company to create a buzz around
various channels on social media.
 Technological: At the time of pandemic, about 80% of the people started paying through
online. For that industry should also be advanced and use modern technologies in order to
enhance customers towards their products and services. Also by this employees
productivity will get increased and by this company will get opport7unity to attract
employees and customers both.

 Legal: Every country has there regulatory policies and rules which are to be followed by
fashion industries. If any of the company did not follow the rules then should be punished
and government can take legal action on them. For example: at the time of pandemic,
government rules is to stay in the home and do not go outside, there is a curfew etc.
H&M company has to follow all these rules in order to stay in the market.
 Environmental: In this pandemic time, customers are becoming more friendly with
nature and forcing on keeping safe through sanitizers (Hickmann, 2017). So, if H&M
Company will not use these safety measures in the company then this becomes a threat
for company and if they uses these then this creates opportunity for them.
SWOT analysis
A clothings and fashion industry is affected so much by the pandemic and this has
impacted their whole organisations. SWOT analysis is conducted by the researcher to analyse the
internal forces which can impact overall business. This is discussed below:
Strength: The biggest strength of the fashion industry is that is provides variety of
products to the customers and results in increasing customer satisfaction and their demands. For
example- H&M company will provide wide range of products to customers that includes décor
pieces, shoes, cosmetics, blankets etc. it has also a online presence, so person which are stuck at
home at the time of lock down can purchase through online websites also. Then its presence is
also in global market, so there products are being sold in different countries to attract their
customers.
Weakness: The weakness of fashion industry is that they are mostly involves in
controversies and they are over dependent on the producers. In case of H&M company, it is
heavily dependent on external producers all of its products (Kasemsap, 2016). Company
sometimes lacks of originality because it is heavily on current trends and designs.
Opportunity: Fashion industry looks at the politics of each country and make relation
with them accordingly. They identify opportunity to expand there business and this results sin
increasing their consumer base. Fashion industry watch the originated of raw materials like
fabrics and thread. For example : In coronavirus pandemic, H&M is using E- commerce
shopping to the customers and this become opportunity for them. They are focusing on mergers
and acquisitions with the other brand in global market.

Threats : Political and economics is the major threat of the fashion industry. Because
they have to be expand their brand into the global market. Trade and political unrest in an area of
raw material supply and economic downturns. Then another threat for fashion industry is that it
has various of competitors which can attract customers towards their brand. The competitors of
H&M brand are Gucci, Prada, Burberry and Chanel etc. these all have their promotional
strategies which can impact H&M brand.
How some firms have been able to adapt better then others to the changing business
environment.
Organisational change is the change which have been adopted by every company or
brand in the market. Flexibility and willingness to change is the embracing of the change which
becomes more valuable in the organisation (Knežević Cvelbar, and et.al., 2016). The company
which is bale to adopt the change in the market can stay for longer period in the market and will
be influenced by the customers also. In context of fashion industry, they should have to be
change according to the changing environment to fulfilled customers needs and demands. Some
of the firms can easily adopt the changes which are occurring in the environment and results in
increasing there customer satisfaction. Some of the firms can gain competitive advantage in the
market and easily change their business environment by:
 As some of the firms have the ability to experiment and they try to make new and
innovative products. For example in case of H&M brand they have enough resources by
which they have a ability to introduce in new market and also on global level. They have
a capability to introduce unique products which is being given to the customers to satisfy
there needs and demands.
 Then another is ability to manage complex multi company system. As some of the firms
may experiments and require a company to thing beyond. They provide ability to think
employees and creates new ides and innovation related to the customers needs and
demands and current trend (Kwilinski, and et.al., 2019). This will results in gaining
competitive advantage and also gaining customer satisfaction in fashion industry.
 They focus on new designs. At the time of covid pandemic, some of the firms are making
use of safety measures like proper sanitation at the time of packaging and delivering of
the products and at the sops also they are maintaining social distancing. This creates

opportunity for them to gain competitive advantage in the market and results in
increasing their profitability and revenues.
Conclusion
From the above report it is analysed that fashion industry is one of the biggest industry in
all over the world. But at the time of Covid 19 pandemic, this industry has faced a lot because
many of the organisation comes into loss and they have fired employees from their organisation.
For example in case of H&M they also faced certain losses. But they have analysed the internal
and external factors which have been faced by them. Fashion industry should have to focus on
adaptability change across globally so that there profits will get increased.

References
Books and journals
Ali, I. and Garg, R.K., 2017. Marketing of services: Challenges & opportunities in context of the
globalization of business. International Journal of Engineering and Management
Research (IJEMR), 7(3), pp.522-526.
Anderson, W and et.al., 2017. The dialogue and advocacy initiatives for reforming the business
environment of the tourism and hospitality sector in Tanzania. Tourism Review.
Gandhi, L., 2017. Human Resource Challenges in VUCA and SMAC Business
Environment. ASBM Journal of Management, 10(1).
Hickmann, T., 2017. Voluntary global business initiatives and the international climate
negotiations: A case study of the Greenhouse Gas Protocol. Journal of Cleaner
Production, 169, pp.94-104.
Kasemsap, K., 2016. The roles of lean and green supply chain management strategies in the
global business environments. In Designing and implementing global supply chain
management (pp. 152-173). IGI Global.
Knežević Cvelbar, L and et.al., 2016. Drivers of destination competitiveness in tourism: a global
investigation. Journal of travel research, 55(8), pp.1041-1050.
Kwilinski, A and et.al., 2019. Formation of the entrepreneurship model of e-business in the
context of the introduction of information and communication technologies. Journal of
Entrepreneurship Education, 22, pp.1-7.
Rialp-Criado, A. and Komochkova, K., 2017. Innovation strategy and export intensity of Chinese
SMEs: The moderating role of the home-country business environment. Asian Business
& Management, 16(3), pp.158-186.
Online
Coronavirus impact: H&M's March-May sales tumble by 50%, 2021. [online] Available through
<https://www.businesstoday.in/current/corporate/coronavirus-impact-hm-march-may-
sales-tumble-by-50/story/406959.html>