Challenges and Solutions for H&M in the Fashion Retail Industry

UG major project
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CONTENTS
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
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INTRODUCTION
The fashion retail industry is that section of a business which act as a intermediary
between the manufacturer of textile and the consumers. The supply chain of fashion or apparel
industry lies in several different areas that are very much prone to get affected through the
external environment changes (Ho, 2014). To determine this the report is prepared which is
based on H&M a multinational fashion retailer deals in offering range of apparels, shoes and
other accessories related to fashion to women, men, children and teenage group to cater their
different taste as per the age group. This report includes challenges and issues faced by brand
along with solutions to solve them. At last it also includes a practical implication of a solution to
resolve the biggest issues among the rest.
MAIN BODY
The Fashion retail industry is considered to be one of the most complex sectors to operate
business or achieving sustainability at market place this is so because there are number of
challenges that are present for the fashion retailer within marketplace. This mainly includes
changes in social factor like change in trend, expectation, demand etc., environmental factors,
cultural believe and values. All these have a huge influence over the execution of retail business
as it brings changes. The H&M is a larger multinational clothing retailer that cater the fashion
need pf men, women, teenager and children’s by offering highly fashionable and trendy clothes.
It severs in around 74 countries and consider to be the second largest global clothing retailer. The
company provide high quality products with latest trends prevailing in market which is a main
factor that make it successful and develop its brand image. But other than all of these there are
certain strategic issues faced by H&M which are mentioned below,
Climate change is considered to be a key challenge for all the industry including fashion as it
directly influences the operational process followed by an organisation. The H&M follows a
comprehensive approach to environmental sustainability as a main pillar over which business
operates. But the appeal sector maintains a complex supply and production chin which involve
several types of environmental touch points which remains at a risk and bring meaningful
influence by climate change (Piercy, 2016). The major issues that get arises or may threaten
H&M being a fashion retailer is that climate change may results into scarcity of resources. This
is so because the greenhouse emission is expected to increase or get almost double within
upcoming 50 years, along with this the average temperature of earth also get increased which
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directly affect the cotton farming which is base of textile industry. This is so because cotton
farming as well as core elements of textile is considered to be a water intensive process. As per
this it can be said that a pair of jeans require at least 3000 litter of water for being produced.
Hence, this climate change affects the textile business badly if resources are continuing to being
used in such manner as it results into scarcity of resources which make it difficult to perform
more production as per demand. H&M also started experience a significant impact of climate
change over its business as its raw material cost is increasing which so gradually increasing the
cost of its clothes in market. Hence, these climate changes are making it difficult for H&M to
mitigate from such climate change.
Another major startgic issues that H&M facing is Wage strategy which is called fair living. It is
refers to earning that is expected by a worker which can satisfy their and family’s basic need, as
well as provide some flexible income as per the work performed by employees. But H&M is
accused regarding not paying the garment workers with fair living wages who supplies their high
street store. In addition to this many of the worker are being forced by the company to work for
extra hours for survive which is being argued by the Clean clothing campaign (Strand, 2014).
After investigating information about it from six H&M suppliers factory throughout several
countries like Turkey, Bulgaria, Cambodia and India it has been found that the worker are not
even getting their earning close to living wage that is necessary for fulfilling the basic need of
their family. The CCC said that H&M failed to meet the commitment which it made in year 2013
to ensure its suppliers would pay a living wages of approx. 850000 textile workers by 2018. This
is the major issues which H&M must be try to remove by being fair to the wokers who are
working for the brand. But over this H&M stated that the there is not any agreed level for living
wages and wage level is mainly defined by the parties on labour market through fair negotiation
among the employer and worker representative.
Another strategic issue that H&M faced is competition, which is one of the biggest
issues that company is facing from other big fashion brand such as Boohoo, Zara, Next, Bershka
and many more. As H&M is dealing within the fashion industry it required to bring best possible
trend in the market in order to keep the customer bring with the brand, but increasing number of
option and variety in market the customers get end up with the brand switch which creates a cut
throat competition in the marketplace (Soares Oliveira, 2018). The main competitor of H&M is
Zara which also maintain a same market performance as H&M. But the things aren’t looking
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