Global Business Environment: Fashion Retail Industry Analysis Report

This report delves into the fashion retail industry, examining the impact of micro and macro environmental factors on businesses within the sector. It highlights key products, market information since 2017, and comparative analyses of companies like Zara, Forever 21, and Gap Inc. The report explores competitive macro environmental factors, including political, economic, social, technological, legal, and environmental influences. A SWOT analysis based on PESTLE analysis is conducted, identifying strengths, weaknesses, opportunities, and threats. The conclusion emphasizes the importance of product differentiation and competitive strategies in the UK fashion retail market, referencing key sources to support the analysis. The report covers the industry's structure, key players, and their strategic responses to the global business environment.

Running Head: Fashion Retailing Industry
Fashion Retail Industry
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Running Head: Fashion Retailing Industry
Contents
Introduction......................................................................................................................................3
Impact of Micro and Macro environmental Factors on Fashion Retailing......................................3
Business in the industry...............................................................................................................3
Key products................................................................................................................................3
Market information of the industry since 2017...........................................................................4
Comparative Micro environmental Factors (Zara, Forever 21 and Gap Inc.).................................4
Competitive Macro environmental factors influencing the business of Fashion retail industry.....6
SWOT Analysis on the basis of Pestle analysis of the retail fashion industry................................7
Conclusion.......................................................................................................................................8
References........................................................................................................................................9

Running Head: Fashion Retailing Industry
Introduction
The employment in the fashion retail is 555000. The retail sales revenue in this industry
is 414000. Out of this, 59000 is devoted to the sale of the footwear and leather goods; 43000 is
for the wholesale distribution of the clothing and footwear. The manufacturing statistics for the
wearing apparel and footwear is that of 34000 and 500 respectively (Great.gov.uk 2020). The top
companies operating under this industry are Burberry, Next Plc, Marks & Spencer, ASOS, H&M
and ZARA among others. The sales revenue of Burberry is considered to be 10 billion dollars.
Impact of Micro and Macro environmental Factors on Fashion Retailing
Business in the industry
The company under this respective part is H&M which is regarded as the second
largest company associated under the area of fashion retailing. H&M was introduced during
the year 1947 in Sweden. Some of the key products of H&M are apparels, cosmetics,
accessories, modern home décor items and healthy foods. The business operations in the fashion
retail industry revolves around wholesale retailing, marketing and merchandising the
manufactured products and services to the clients and customers (Rathnayaka 2018). The clothes
are purchased from the manufacturers and sold to the customers. This retailing business ties the
brands with the customers, expanding the supply chain network.
Key products
Diversification in the women clothing enhances the glory of H&M (Nash 2019).
However, expansion to menswear after having strong and successful acquisition with the
brand related to men’s clothing named Mauritz Widforss, has enabled the brand to have
positive word of mouth advertising.

Running Head: Fashion Retailing Industry
Market information of the industry since 2017
The production value of manufacturing in the apparel industry of UK is estimated to be
2.7 billion EUR in the era of 2017. The number of specialized clothing stores under the industry
were 11,500.
Fig: Value of the clothing and accessories market in the United Kingdom (UK) in 2013 and
2017, by category
(Source: Rathnayaka 2018)
In 2013, women accessories encountered an increased in the sales revenue by 1.7 billion
British pounds. The predictions for this increase lied in this projection. The value of the apparel
and footwear market totaled up to 60.7 million EUR (Telegraph.co.uk 2020).
Comparative Micro environmental Factors (Zara, Forever 21 and Gap Inc.)

Running Head: Fashion Retailing Industry
H&M Zara Forever 21 Gap Inc
Competitive
rivalry
High High High High
Bargaining
power of the
buyers
Low High Moderate Low
Bargaining
power of the
suppliers
Medium Strong Moderate High
Threat of
substitutes
Low Low Low Low
Threat of new
entrants
Low High Low Low

Running Head: Fashion Retailing Industry
Competitive Macro environmental factors influencing the business of Fashion
retail industry
Justification
Political  Geopolitical events and instabilities
 Terrorists attacks obstructing the import and
export activities
 Elections
Economic  Fluctuations
 Recession
Social  Individual preference of the millennials
 Demographic changes
Technological  Social media marketing
 Mobile apps
Legal  Labor laws
 Environmental laws
Environmental  Environment friendly operations assisting in
reducing the environmental pollutions
Social media platforms would expand the scope and arena of the business of the fashion
retail industry in UK. Mobile app services is a planned and reasoned approach for increasing the
sales revenue and profit margin. According to Nash (2019), instabilities, unrest and tax
regulations heavily affect the important and export activities. Therefore, export tariffs are to be
considered for the averting an illegal instances.

Running Head: Fashion Retailing Industry
SWOT Analysis on the basis of Pestle analysis of the retail fashion industry
Strengths:
 Stable management structure,
organizational design
 Strong supply chain network
 Partnership with the trade union
members
Weakness:
 Inflation
 High prices of the raw materials
 High exchange rates
Opportunities:
 Social media marketing
 Mobile app services
Threats:
 Non-compliance with the standards
and protocols of labor laws and
environmental laws
Divisional organizational structure is assistance in terms of enhancing the efficiency in
the operations. Inflation, high prices of the raw materials and high exchange rates affects the
economies, which obstructs the process of introducing effective apparels for the clients and
customers (Telegraph.co.uk 2020). Uploading the specific information about the products would
be fruitful for fulfilling their needs, demands and requirements. Using eco-friendly labelling and
packaging for the apparel is effective for reducing the environmental pollution.

Running Head: Fashion Retailing Industry
Conclusion
Product differentiation and diversification enhances the glory of fashion retail industry in
UK. Competitive rivalry is high, the source of which lies in Zara, H&M, Forever 21 and Gap Inc.
However, competitive policies develops fairness in the operations, averting the instances of
biases and conflicts, depriving the customers of quality products and services.

Running Head: Fashion Retailing Industry
References
Great.gov.uk 2020. Department of Industrial Trade. Available at:
https://www.great.gov.uk/international/content/about-uk/industries/retail/ [Accessed on 18th
March 2020]
Nash, J., 2019. Exploring how social media platforms influence fashion consumer decisions in
the UK retail sector. Journal of Fashion Marketing and Management: An International
Journal.9(2), 100-120
Rathnayaka, U., 2018. Role of Digital Marketing in Retail Fashion Industry: A Synthesis of the
Theory and the Practice. Journal of Accounting & Marketing, 7(02).
Telegraph.co.uk 2020. Fashion market: market trends, digital strategies and top searches.
Available at: https://www.telegraph.co.uk/business/search-marketing/latest-digital-trends-
fashion-online-retail/ [Accessed on 18th March 2020]