University of X: Retail Theory and Practice - H&M Report (2024)

This report provides a detailed analysis of H&M's retail operations within the UK fashion market. It begins with an introduction to retail and the company, highlighting H&M's global presence and market position. The main body of the report examines key changes in the UK fashion retail landscape, utilizing a PESTLE analysis to assess political, economic, social, technological, legal, and environmental factors impacting the company. Furthermore, it employs Porter's Five Forces to analyze the microenvironment, including the threat of competitors, bargaining power of suppliers and customers. The report then discusses potential strategies and tactics, such as social shopping, to address market challenges and capitalize on opportunities. Finally, it offers recommendations and a conclusion based on the analysis, providing a comprehensive overview of H&M's retail strategy and its response to the dynamic fashion industry. The report covers various aspects including marketing, consumer behavior, and competitive analysis to derive actionable insights.

RETAIL THEORY
AND PRACTICE

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Introduction to the company........................................................................................................3
Key relevant changes within the UK fashion retail.....................................................................4
Changes within the micro environment.......................................................................................6
Discuss the Strategies and tactics that could be used..................................................................7
RECOMMENDATIONS.................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Retail depicts to the way toward offering items and administrations to their individual clients
through their different channels of dispersion which helps in gaining benefit and furthermore
they helps in fulfilling the interest which is distinguished through gracefully chain. The term
retail is gotten from the French word Retailer. Retailers buy in enormous amount from the maker
and gap the mass in little amount and afterward sell those items and administrations according to
the interest and need of clients. Retail promoting is a use of the advertising capacities so as to
disseminate the products and ventures to their separate clients (Ko, Phau and Aiello, 2016).
Retail industry incorporates numerous exercises, for example, bundling, advancement,
commercials and demonstrating the assortment of merchandise and items at a truly sensible cost.
Their motivation is to convey the items to their potential clients which can bring about the
consumer loyalty.
The piece of the overall industry of UK style industry is 7% and market esteem is around 66
billion pounds and as of now 555,000 individuals are utilized in design and retail industry.
additionally, there are top organizations which depend available capitalization are Burberry 10
billion dollar, Next 7.16 billion and H&M 23.80 billion. This report is going to concentrate on
the different key components of outside and interior condition that impacts the organization and
furthermore propose a few procedures and strategies by utilizing different speculations and
proposals so as to beat those obstructions.
MAIN BODY
Introduction to the company
H&M is a Swedish multinational clothing Retail organisation well known for its durable
fashion clothing for men women teenagers and kids. Company operates its business around 74
countries with over 5000 stores under its brand. Moreover it is the second largest global clothing
retailer in the world and also has significant online presents that are available within around 33
countries. The company was founded by Erling Persson in 1947 and exclusively sold women’s
clothing. Moreover in 2008 the company announced it would begin selling home furnishings and
at the beginning distribute their online catalogue regarding their home stores that are located
internationally. Moreover company introduce its various marketing plan that helps in increasing
their sales and profitability with the purpose of describing suitable environmental factors

regarding their manufacturing and production to their customers considering sustainability free
trade commodities and environmental friendly textile. Despite from this the marketing and
collaborations of company describe that in November 2004 the selected stores of company
exclusively offer the collection of various fashion designer in the large cities that was sold out
just within an hour. Along with this in March 2007 company start collaborating it’s designed by
the Popstar Madonna. For this company start working with game developers in order to create
their stuff pack for their computer game.
Key relevant changes within the UK fashion retail
PESTLE Analysis: This structure is utilized to break down the outer factors and should screen
those variables which impact the association and its general execution. It is helpful so as to begin
another business or going into another market (Kamran-Disfani and et. al., 2017). This
instrument is utilized in the promoting and utilized as a device by organizations so as to follow
nature in which they are working.
Political: H&M is the Global brand operates its number of stores across the world and also
monitors the political risk which is important for the company regarding its expansion and
operations. Along with this the H&M has franchise stores in various countries that rapidly
increases by considering the political instability including the countries like Turkey Egypt and
many more and also monitor that changes with their contingency plan that helps them to deal
with the political conditions which is feasible for both the stakeholders and company as well. In
addition, the best effect of design industry is unhindered commerce which has been set up
between the huge numbers of nations (H&M PESTLE Analysis. 2020). Facilitated commerce
permits H&M need to import outside items in the stores at low costs as organized commerce has
been around for hardly any time, exceptionally for the European brands and the UK's choice to
leave the EU influence the retail business
Economical: Despite from the impact of brexit the sales of H&M Rose by 7% which
describe the positive impact on the business considering the political conditions that does not
impact the profitability of company. Moreover in various countries company also consider labor
laws for their employees as it leads to set up the manufacturing unit that become profitable for
the company. Along with this it also leads to improve the economy around the world that leads to
increase the disposable income of people (Karrholm, 2016). Moreover the corporate tax policy of
company varies according to country and H&M need to align it with its business suitability.

Also, the financial unpredictability influences the deals and benefits. In any case, the stoppage in
the Chinese economy in 2016 was terrible news however after that circumstance has improved
and work has developed comprehensively (H&M PESTLE Analysis. 2020).
Social: Clothing is the area and sector that prominently influenced by the needs and
requirements of customers celebrities and social media. It directly related with the brand and
promotion of favorite celebrity. Therefore promoting the product through social media leads to
create Buzz for the company around the various channels that are also important. It influences
the purchasing power of buyers and helps in changing their perspective (H&M PESTLE Analysis.
2020). H&M always prefers designer clothes as the demand for the same is rising day by day.
This changing Trend is describing the attitude and buying Behavior of people that should be
analyzed by the company.
Technological: In the era of technological world people want advanced and interested
Technology in the stores that leads to influence their buying merchandise which day can do the
same with the help of their mobile application. Moreover Technology gives the easy customer
base in ordering their product from their home and anywhere. Despite from this H&M need to
keep up with the advancement of Technology and also relate with the changing behavior of
customers (H&M PESTLE Analysis. 2020). Along with this the artificial intelligence element
help the company in order to design the merchandise analyze and study the behavior of
customers in order to provide them suitable product.
Legal: Each and every country has its own legal policies and norms and the company that
expand in the area need to consider those policies in order to operate their business. Along with
this H&M need to collaborate with the franchising partners in the Kuwait UAE and many more
regarding their expansion strategy (H&M PESTLE Analysis. 2020). Along with this company to
consider the intellectual property rights for itself as it is its major concern (Croft, 2016). For
example an innovative design is produced by H&M and if it is not legally secured then it can be
stolen by any other Rival of the company.
Environmental: Clothing industry is considered as the second most polluting industry after
petroleum and oil. These industries lead to pollute high amount of water waste that generate
pollution within the water bodies. Along with this the people living nearby those areas suffers
from various diseases. In respect of this there are various government norms and regulations
regarding these emissions that should be considered by H&M (H&M PESTLE Analysis. 2020).

Apart from this company have its goal in which they use completely recycled clothes material
for its manufacturing and production.
Changes within the micro environment
The key plans and long haul goals make the eventual fate of the organization and they are
set in seven key territories, for example, efficiency, productivity, rivalry, representative turn of
events and relations and some more. These targets should be rousing, quantifiable, reasonable,
practical and adequate by workers. So as to break down the smaller scale natural factors, porter’s
five forces is utilized, which is a methodology so as to decide the opposition and dangers in the
market and gainful it is for business. This system incorporates different components which
include:
Threat from competitors: The design and retail industry is keen on deciding the power of
their adversaries as there are numerous clients who sell comparative items and administrations.
In any case, the patterns are influenced by the brands and this permits a few organizations to sell
their items at modest rates (Hayes, 2018). Here, organizations are battling for piece of the overall
industry on the grounds that the force or danger from contenders and adversaries are high yet so
as to turn into a powerless rivalry, H&M additionally sell clothes and family things. Besides, it
faces rivalry from different attire retailers, For example, Topshop, Next, Zara and some more. At
present, organization utilizes separation procedure by situating itself as a higher calibre and
incentive for cash.
Bargaining power of suppliers: In the design retail industry, the intensity of providers is
similarly little. Here, the providers have little control on the design business as the dealing
intensity of providers is low and it turns into an open door for the organization as they can
without much of a stretch deal from them at their own cost (Bowen, 2016). As part of providers
is accessible in the market in style industry and they are unimportant and can be traded out
whenever. Thus, the information costs for the organization are generally low. Monopolistic
providers in the buyer administration part utilize their bartering power so as to extricate
significant expenses from the organizations. In the terms of H&M, they tackle their providers by
building effective gracefully chain with different providers and by testing the new structures and
materials.
Bargaining power of customers: It is the significant power which delineates the haggling
capacity of purchasers who can push the costs down or change to the retailers. Here, the clients

have more control on the retailers as the exchange power is high which can turn into a danger for
the organization. As the deals and incomes of the organization rely upon the client so they have
to dispatch items and administrations according to the interest of the individual clients. Clients
have different options so as to buy their clothing and pull in offers so as to remain with one
specific organization (Bradlow and et. al., 2017). In view of the amazing client impacts the
H&M prompts increment and limits and offers. Organization tackles their clients by building a
huge base of clients and furthermore presenting inventive new items which can fulfil the
necessities and request of clients.
Discuss the Strategies and tactics that could be used
There are different measurements, strategies and speculations picture utilized so as to
recognize those variables impacts the retailers which are examined as under:
Social shopping: It is a factor which helps in expanding the incomes and deals of the
organization as it helps in breaking down the necessities and requests of clients. Social shopping
depends on the patterns and design which is right now going in the general public and in the
event that organizations need to make progress and development, at that point they should
dispatch the items according to their need (Cleophas and et. al., 2019). With regards to H&M
they dispatch their items and administrations by directing the statistical surveying which
abandons the need and necessities of their individual clients so as to fulfil them.
Power of customers: Clients are the significant factor is it helps in expanding the deals and
building up the brand picture in the business condition. Through the faithful clients organization
can get by in the market for the significant stretch of time. In the terms of H&M they hold their
clients by utilizing the separation technique which helps in fulfilling the clients. Maintenance of
clients is significant as though the does not get what they need it then clients can without much
of a stretch change starting with one retailer then onto the next which can become danger for the
organization (Morcol and et. al., 2017).
Fair trade policy: The strategies utilized by organization so as to spread mindfulness before
their clients as by indicating their bundling naming and cost. These elements impacts the
purchasing intensity of client the same number of them think about the bundling and cost before
purchasing item. It is a little activity which is taken by the makers of Retail Industry which helps
in increasing numerous advantages and economical condition so as to make due for a more

drawn out timeframe. In this unique circumstance, H&M by this procedure help in building up
its notoriety and brand picture and furthermore building up their separate client base.
So as to mirror these elements different speculations are utilized which are examined as
under:
Retail life cycle theory: This hypothesis delineates the essentialness of spotlight on the
social variables which drive in the design business. Like the item life cycle it is additionally has
different stages, for example, presentation development and decay. As in the design business
each item as its presentation is instruct according to the interest of clients then it comes to
development and decay and it is a persistent cycle which occurs with each item (Grzeskowiak
and et. al., 2016). With regards to H&M they face issues in social shopping, for example, in
internet shopping or advertising. So as to defeat from these issues organization ought to build up
its market zone via web-based networking media and online sites which helps in expanding its
deals and income.
Conflict theory: This hypothesis depicts the different clashes which occur in the general
public due to the constrained assets which happens the opposition in the market. The story
mirrors the intensity of clients which can become danger for the organization and furthermore
can create strife from their Rivals.
Environmental evolution theory: This hypothesis describes the different changes what
occur in nature and mirrors those components which are interlinked with the organization. This
theory depicts the progressions which are embraced by the organization as these ecological
changes help in making the progress and development for an association (Elbeltagi and Agag,
2016). With regards to H&M they utilize their reasonable exchange approach when they
increment mindfulness among individuals with regards to items and administrations and
furthermore about the bundling naming and cost.
RECOMMENDATIONS
There are numerous proposals which are given to organization as it is useful for them to
make progress and its development:
 Company has no control on the exchange approaches as it is controlled and coordinated
by the administration and impacts the organization and its position. In this way, it is
suggested that they should show their assembling cost by the strategy which is useful for
the clients.

 Moreover, it is recommended them that they should refresh and make changes in its
social elements like in its innovative work which is helpful so as to pick up and gain the
new piece of the overall industry.
CONCLUSION
From the above data it is inferred that retail industry is valuable so as to sell and trade
different items and administrations which helps in making the progress for an association. For
the retail business it turns out to be extremely troublesome and complex so as to make due in the
mind boggling business condition. This report portrays the different key components which
influences the outer condition of an association and become obstacle in its prosperity. In
addition, different miniaturized scale factors are talked about which incorporate the clients,
providers and contenders which impacts the interior dynamic of organization. Besides, it
additionally portray the different methodologies and strategies which mirrors the different which
are looked by organization and for this, they utilize various hypotheses, for example, retail life
cycle, struggle hypothesis and natural advancement hypothesis.

REFERENCES
Books and Journals
Bowen, D.E., 2016. The changing role of employees in service theory and practice: An
interdisciplinary view. Human Resource Management Review. 26(1). pp.4-13.
Bradlow, E.T and et. al., 2017. The role of big data and predictive analytics in retailing. Journal
of Retailing. 93(1). pp.79-95.
Cleophas, C and et. al., 2019. Collaborative urban transportation: Recent advances in theory and
practice. European Journal of Operational Research. 273(3). pp.801-816.
Croft, W., 2016. Comparative concepts and language-specific categories: Theory and
practice. Linguistic Typology. 20(2). pp.377-393.
Elbeltagi, I. and Agag, G., 2016. E-retailing ethics and its impact on customer satisfaction and
repurchase intention. Internet Research.
Grzeskowiak, S and et. al., 2016. Linking retailing experiences with life
satisfaction. International Journal of Retail & Distribution Management.
Hayes, J., 2018. The theory and practice of change management. Palgrave.
Kamran-Disfani, O and et. al., 2017. The impact of retail store format on the satisfaction-loyalty
link: An empirical investigation. Journal of Business Research. 77. pp.14-22.
Karrholm, M., 2016. Retailising space: Architecture, retail and the territorialisation of public
space. Routledge.
Ko, E., Phau, I. and Aiello, G., 2016. Luxury brand strategies and customer experiences:
Contributions to theory and practice. Journal of Business Research. 69(12). pp.5749-
5752.
Morcol, G and et. al., 2017. Business improvement districts: Research, theories, and
controversies. Routledge.
Online
H&M PESTLE Analysis. 2020. [Online] Available through <https://www.mbaskool.com/pestle-
analysis/companies/17954-h-and-m.html>./