Operates In Industry Of Fashion Retailing †Myassignmenthelp.Com

Question: Discuss About The Operates In Industry Of Fashion Retailing? Answer: Introducation Hennes Mauritz is a Swedish company that operates in the industry of fashion retailing, currently the brand is operational worldwide, they have 4,500 stores all around the word and they are operational in 62 countries. The total number of employees in HM is 132,000. The company is ranked second largest company in the field of fashion retailing after Inditex, owned by Zara. The brand has online stores as well and it is further planning to expand its online stores. The global presence of the company makes it a very popular and well-known brand. The company currently is in a very good position. There are certain threats that are faced by the country though that is affecting the business of the company. The company is forced to sell its product at low cost because the shipping cost is very low, that indicates there is too much of stocks for which the company is forced to put its garments in sale (Hansson, Wrangmo Solberg Silen, 2013). A very high cost is involved in the distribution of the garments. The report below will show all the details of the market situation of HM. According to the CEO Karl-Johan, the year was very significant in terms of financial performance and it was eventful too (Thompson McLarney, 2017). In the same year, there was a shift in the industry, online market was in the trend and many companies were choosing digital marketing. The digital marketing and online marketing proved profitable to the firm as well because they have to target many customers at a very less cost (Hammoudeh, 2014). However, there are lot of competition in this industry as there are many companies in the fashion retail industry like Zara and Inc. The online market of HM is one of the factors that makes the company strong, a lot of customers prefer the online retail because it is convenient for the customers. The present situation of the company is very favorable and the retail chain has a very good position in the mark et with a very good market share. The future expansion of the organization ensures that the company will have a sound growth and will continue to hold the position in future as well (Regnr Yildiz, 2014). Situation Analysis Report Executive Summary The following report is a Situational analysis report on the company HM that is a Swedish multinational brand operational all around the world. The company is operational in 62 countries and has 4,500 stores. The report focuses on the situation of the market in which the company. The topics of the report include Market size and trends, SWOT analysis, financial performance, strategic options and recommendations are given for the company in the end of the report. The CEO of the company is Karl-Johan. Market size and trends Four big global companies that are Zara, HM, GAP, Inc dominate the market in the field of fashion retailing. HM is operational in 62 countries with their 4,500 stores. The brand offers its fashion garment for men, women and children. In august 2017 HM opened online stores in 18 European markets that included Copenhagen, Brussels, London and Munich ("HM group | About", 2017). The company ensures that its store portfolio is right so they have closed around 100 stores and opened 400 new stores. They are further planning to open its Online Market in India, Uruguay and Ukraine. Australia is one of the most profitable market segment for the company their sales is surging around 50 percent even in the highly competitive market (Regnr Yildiz, 2014). Market trends The market has changed a lot in the field of fashion retailing; the shift in the patter of buying behavior of people has changed in the last three for years. The change in trend is mainly because of digitalization, in the last few years the concept of online markets has emerged. Online stores are very convenient for the people they do not have to walk down to the stores to buy things. This particular trend is very popular in fashion retailing. The customers prefer to buy apparels from the online stores, because they get items at cheaper rates because often the shipping cost is not involved, but that is not the only reason, in order to save their time people prefer to buy products from the online markets (Hansson, Wrangmo Solberg Silen, 2013). Financial and Corporate performance From December 2015 to November 30 2016 the sales of the retail inclusive of vat has increased by percent in the local currency of financial year. The gross profit was SEK 106,177 m which is equivalent to gross margin of 55.2 percent. After including the financial item the profit amounts to SEK 24,039 m. The profit after the tax was around 18,363 m which amounted to 11.26 SEK per share. The profit in that financial year was shown adversely affected by the mark downs and the increased purchasing due to the strong dollar rates. In that year 427 new stores were opened and 11 new online markets were also opened. In total there were 35 online markets and stores that summing up to 4,351 in overall 64 markets. In the year 2016 HM created new employment opportunities, around 13,000 new jobs. The total number of employees recorded in that year was 161,000 (Regnr Yildiz, 2014). SWOT Analysis Strengths HM is on the leading fashion retail store in Australia they have a huge market size because there are many customers of the retail store HM across Australia. The customer service of the fashion retail is very efficient that attracts the customers to purchase from the store. The retail store has a wide range of fashion clothing, apparels, footwear, accessories and jewelries. They have expanded their online stores, which will help in increasing the customer base. Celebrity endorsement is also one of the strengths of the fashion retail. The brand organizes many runway shows that display the latest designs from new and young designers. They post their events and fashion runaways shows in you tube and other social networking sites like facebook and twitter. Weakness There is weakness in the consumer standpoint of the company. They treat all the customers similar, they offer high fashion clothes even in the areas where the customers do not like it. The shipping time that means that they have huge stock of clothing, if not all of the stocks are not sold in the premiere season they will have to sell some of the high fashion expensive clothes in sale, this will be big disadvantage for the organization. Some of the product ranges are so high that is very difficult for the customers to afford it, therefore making selective premium clients of the company. The research and development of the company is not very good this is evident from the the same designs available all around the world, the brand is not much innovative in this context. Opportunities They are becoming sustainable, so they have an opportunity to become responsible and care about the animal welfare. They also have chance to become health conscious brand and represent themselves to its customers (Diallo, 2013). Threats HM is facing huge competition from the customers from brands like Zara and Inc. Other online portals also pose a huge threat on the fashion retail (Gremme, 2014). Competitive advantage ; The unique designs and the latest fashion trends that are sold by the brand help them in gaining competitive advantage over other brands in the market. Their online website is helping the organization increasing the customer base thus creating a competitive advantage. Their expansion strategies to serve globally have helped a lot in beating the competition and gaining advantage over the local players (Ancona, 2016). Strategic options The brand has great opportunity in opening their stores in the countries they have not yet covered. They have options to make alliances with big fashion houses so that they can offer good high fashion garments for their customers. They can include a wide range of clothes that are made of fabrics that are most used by the customers and are comfortable. The company has a very bright opportunity to expand its online presence by opening more online markets. In countries like France they can offer high fashion garments to the premium clients apart from that they can organize more fashion events (Borja de Mozota, Valentine Nelson, 2016). Possible Recommendations The company should collaborate with the fashion designers and offer latest fashion garments for its customers. The company needs to expand more in the Asian countries and African countries. They should improve their online website so that it attracts more customers and is user friendly. HM should improve their customer service. They can expand their target market and enter the market of high fashion by offering fashion garments for the premium clients as well. There needs to be improvement in the way the brand communicates its values to its customers, the advertising and promotional activities needs to be more aggressive. They should use both print and digital media for advertising, billboards and newspapers should be used more. More promotional activities needs to be done. For promotions, they can launch their own fashion channel (Wong Yazdanifard, 2014) References Ancona, A. (2016). Sizable Subject: The Plus Side of Fashion. Borja de Mozota, B., Valentine, L., Nelson, J. (2016). The Value of Design Research. Diallo, I. A. (2013). The application of Marketing within a company-case study of HM. Gremme, M. (2014). Zara. Global Fashion at Local Prices. HM group | About. (2017).About.hm.com. Retrieved 25 August 2017, from https://about.hm.com/en/about-us.html Hammoudeh, R. (2014). Zara, from Spain to the big wide world. Company analysis, markets and competition. Hansson, L., Wrangmo, A., Solberg Silen, K. (2013). Optimal ways for companies to use Facebook as a marketing channel.Journal of Information, Communication and Ethics in Society,11(2), 112-126. Regnr, P., Yildiz, H. E. (2014). HM in Fast Fashion: continued success?. Thompson, J., McLarney, C. (2017). What Effects will the Strategy Changes Undertaken by Next Plc Have on themselves and their Competition in the UK Clothing Retail Market?.Journal of Commerce and Management Thought,8(2), 234. Wong, K., Yazdanifard, R. (2014). How Fast-Fashion Apparel Stores are able to Operate Sustainably in New Global Economy.Journal of Research in Marketing,3(2), 274-278