Strategic Issues and Challenges Faced by H&M

This document discusses the strategic issues faced by H&M in the fashion industry, including sustainable fashion, social issues, and environmental concerns. It also explores the challenges faced by H&M and provides solutions to address them. The document suggests implementing organic raw materials and local sourcing as solutions and discusses the McKinsey 7S model and Lewin change model for effective implementation. It includes references to books and journals for further reading.

Undergraduate Major
Project
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Table of Contents
Question 1 Three strategic issues faced within the sector...........................................................3
Question 2 Three challenges faced by H&M..............................................................................4
Question 3 Three solutions to address or overcome challenges..................................................7
Question 4 How H&M can implement one solution.................................................................10
REFERENCES..............................................................................................................................15
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Question 1 Three strategic issues faced within the sector
Poin
t
Strategic Issues Evidence (financial, reports, news etc.) Model(s)/
Theory(ies)
1 Sustainable
fashion
Research article In this nudge theory
is applicable as it is
related with
behavioral concept.
there is positive
reinforcement on
people which
influence their
behavior and
motives. thus, they
are able to make
effective and better
decisions (Dillon,
2018). Moreover,
freedom of choice is
restricted as there
are few options For
instance- allowing
people to protect
and save
environment by
wearing sustainable
clothes. This brings
change in trends.
2 Social issue Research article In this type of issue,
usually ethical
theory is applicable
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as it is related with
ethics of people and
decision making
within community.
3 Environmental
issue
Research article The stakeholder
model is applied
here which is related
to CSR policies. this
adhere organizations
to protect
environment by
following various
CSR practices. in
this stakeholders are
investors, suppliers,
government, etc.
(Kimenyi and
Wieland, 2019) It
ensure sustainability
within society for
long term business
growth.
Question 2 Three challenges faced by H&M
Poin
t
Challenges Evidence (financial, reports, news etc.) Model(s)/
Theory(ies)
4

1 Financial
challenge
Research article BCG matrix – the
matrix consists of a
method that allows
business to expand
with help of various
strategies. they are :
Star- the strategy
state that there is
high growth and
market share of
product within the
market.
Cash cow- in this
product is having a
high market share
but growth is low.
Dogs – the product
is having a low
growth and market
share (Putsche and
Sandor, 2018).
Question mark- the
product is having a
high growth but low
market share.
2 Sustainability
challenge
Research article Kubler Ross model-
the model state or
express feeling of
people that they
experience in lives
in order to deal with
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change. in this five
stages are:
Denial – as name
depicts it refers to
refusing change to
be accepted
Anger – the change
impact on people
and they become
angry.
Bargain- in this
people bargain with
change that is resists
of accept it
(Rushmer, Parker
and Phillips, 2017).
Depression- the
stage shows people
get depressed when
they are not able to
bargain with change.
Acceptance – in this
people accept
change as there is no
option.
3 Green carpet
challenge
Research article Kotter change model
– it consists of 8
steps which is
related to implement
change. the stages
are creating change,
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form coalition,
create vision,
communicate,
remove obstacles,
form short term
goals, build change
and apply into
culture. so, it
provides a
framework that is
applied in
implementing
change (Schrader,
2020). H&M can
use this to model to
implement change.
Furthermore,
process or procedure
of business
operation can be
changed.
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Question 3 Three solutions to address or overcome challenges
Poin
t
Solutions Evidence (financial, reports, news, best
practice guidance, etc.)
Model(s)/
Theory(ies)
1 Use of organic
raw materials
News Here, Ansoff
growth matrix is
applicable. it
consists of 4
strategies that can be
used by business to
expand in other
markets.
Market penetration-
It refers to
increasing sales in
existing market with
existing products
(Singh and Kumar,
2020)
Market development
– here, firm enter in
new market with
existing product.
Product
development- in
this new products
are developed within
existing market
Diversification – the
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strategy refers to
expanding in new
market with new
products.
So, H&M can obtain
strategy of product
development it will
enable in developing
new product and
attracting more
people in existing
market. they will be
able to generate
more profit and
sales (Wehrmeyer,
2017).
2 Greenwashing Reports The Lewin change
model is suitable
here. the company
can implement green
washing with help
of this model. there
are 3 stages here:
Unfreezing – in first
stage awareness is
generated among
people regarding
change.
Change- here,
change in
implemented with
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help of proper
planning and
strategy (Kimenyi
and Wieland,
2019).
Freeze – it is last
stage where people
accepts change.
3 Local sourcing
and production
Best practice In this SWOT is
suitable as it will
allow H&M to
overcome challenge.
it specifies strength,
weakness,
opportunity and
threats of business.
thus, company can
improve strength by
sourcing it from
local suppliers and
increasing
production.
Along with it, Porter
generic model is
applicable. in this 3
strategies are there
which are cost
leadership,
differentiation and
cost focus, by using
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it, firm can gain
competitive
advantage within
industry (Putsche
and Sandor, 2018).
Question 4 How H&M can implement one solution
Specific
objective
Approach
(marketing,
HRM,
Operations,
Practice etc.)
Stage 1:
Inputs,
financial,
technological,
material,
human.
Stage 2:
Actions and
timeline
Stage 3:
Delivery and
Evaluation
Model(s)
Use of
organic raw
material
This solution
can be
implemented
by changing
the
operational
approach
(Schrader,
2020.). they
can use
organic raw
material in
The stage will
include use of
raw material.
for this H&M
needs to find
out new
suppliers that
sells this type
of material.
through this,
a new
operational
in this stage
various
actions can
be taken.
first is plan
or strategy
needs to be
formed.
then,
accordingly
schedule is
to be
The stage
refers to
providing
new clothes
to people
that are
produced
with organic
raw
material.
The
The model that
is applied here
is McKinsey 7
S. here, soft
and hard are
categorized.
Strategy – in
this first S a
strategy is
developed
which contain
goals, system
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manufacturin
g clothes.
here, new
tools and
techniques
can be used
in operational
process.
similarly,
marketing
approach can
be changed to
promote
marketing of
new products.
process will
be added for
manufacturin
g new
clothes.
prepared that
how change
will be
implemented
, time and
what
resources are
required in it
(Singh and
Kumar,
2020).
outcomes
are
measured by
comparing it
with goals
and
objectives
which is set
in strategy.
through which
competitive
advantage will
be gained
(Wehrmeyer,
2017).
Structure – as
name depict it
reflect
interrelationshi
p between
different
division. it
shows who has
assigned what
roles and
responsible to
whom. thus,
structure is
shown in this.
System- the
system shows
organization
activities and
what procedure
is followed in
taking decision
(Rushmer,
Parker and
Phillips,
2017).
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Skills- this S is
related to skills
and capabilities
that is required
by staff of
H&M in order
to implement
solution.
Staff- the staff
refers to
number of
employees that
is required to
implement
solution and
through which
source they will
be recruited by
H&M.
Style- the style
refers to how
top
management
communicate
with low
management
and
information is
shared.
furthermore,
what ethics and
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values are
shown by top
management
towards
employees
Shared values-
it is
fundamental
component of
this model. it
consists of
norms and
guidelines that
are to be
followed by
staff. This
depict their
behavior and
action.
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REFERENCES
Books and journals
Dillon, M., 2018. Emerging strategic issues in native title: future political and policy challenges.
Kimenyi, M.S. and Wieland, R.C., 2019. Strategic issues in microfinance. Routledge.
Putsche, V. and Sandor, D., 2018. Strategic, economic, and environmental issues for
transportation fuels. In Handbook on Bioethanol (pp. 19-35). Routledge.
Rushmer, R.K., Parker, J. and Phillips, S., 2017. Introducing self-directed primary care teams in
the NHS: an overview of initial strategic issues. In Organisation Development in Health
Care (pp. 51-59). Routledge.
Schrader, J.S., 2020. Strategy Formation in Complex Organizations: The Evolution of Strategic
Issues in Hospitals. International Journal of Public Administration, 43(3), pp.262-276.
Singh, R.K. and Kumar, R., 2020. Strategic issues in supply chain management of Indian SMEs
due to globalization: an empirical study. Benchmarking: An International Journal.
Wehrmeyer, W., 2017. Strategic issues. In Greener Marketing (pp. 95-110). Routledge.
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