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Global Strategy And Foresight London

Introduction-Global Strategy And Foresight London

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With the changing business world the organisations are facing a lot of issues related to the increasing global competition which create major threat for the firms. The changing technologies and the shifting customer preferences with time have made it very difficult for the global firms to manage their firms in the global market in an appropriate manner. It can be stated that for success and growth in the international environment the firms need to focus on having great competitive advantage over others which is crucial for managing the company performance (Fatehi and Choi, 2019).

There are different factors on which the businesses need to focus while competing in the international marketplace. This report is based on the case study of H&M and the researcher would be evaluating the case company in the context of different factors in an appropriate manner. The report would be focusing on understanding the company performance and positioning, along with this the sources of competitive advantage for the company would be analysed. Along with this the concept of innovation and it's important in internationalisation would be discussed (Srivastava et. al. 2020). Moreover the report would be focusing on exploring the relationship between company's vision, strategies and the firm’s environment. For understanding all these things in detail and critically evaluating the case company the report would be focusing on different theories and concepts which can help in exploring details about the organisation future orientation.

Critical Evaluation of current global positioning of H&M

H&M is one of the most popular clothing brand in the world and it is having great market position which helps them in having maintaining greater customer base. As per the case report the company has established themselves as the fast fashion company which is adapting the new trend and creating the fashion items which is easily available to the customers at both the online and the offline stores just after the launch (Ullah, 2021). This shows that the company is working efficiently for developing the latest designs and then creating the fashion trends which are widely accepted across the world.

H&M is investing greater capital in their marketing which is helping them in maintaining the company position in an effective manner. Along with this the company is focusing on effective branding and positioning of their products in the fashion industry. This is helping the company in getting competitive advantage over others and leading the firm towards success and development (Duoyan, 2021). Along with this it is helping them in maintaining their market position.

While working in the marketing there are different strategies on which the case company can focus. H&M focuses on making effective use of STP in marketing for ensure that they are doing segmentation, Targeting and positioning of their products and services in an appropriate manner. H&M focuses on positioning themselves as the fast fashion company (Ing et. al. 2020). This is allowing the company to develop the designs and then sale in to the global market. For maintaining the market position the company focuses on ensuring that high quality and designer dresses would be designed by them for their customers. The organisation ensures that they must not compromise over the quality of the products. Along with this they just focus on bringing the new fashion and creating the new treads. This helps them in attracting the customers in an appropriate manner. Both the potential and the existing customers of H&M are highly influenced by the products and services offered by the company. Along with this the better positioning of the company is helping them in competing effectively with Zara which is the world's largest fashion retailer. H&M is also offering unique value to their customers but the products offered by both Zara and H&M are somewhat similar.

Disruptive events and key drives of change for H&M

When the company is operating the products and services to the customers there are different factors which are having an influence on it. For the fashion industry the shifting customer preferences and choices are the major threats which are having the ability to affect the company and its sales in an significant manner (Ceci, 2021). If we look onto the different factors related to external business environment which are having an influence on the sales then social factor is the most important one. The choice of customers is highly depended on the social characteristics and they are having major impact on the sales of the case company. Market segmentation need to be done in an effective manner which can allow the case company to apply the best suited strategies for attracting and retaining and customers by offering them products as per their choice (Cao et. al. 2022). These factors such as fashion sense, age, attitude and many more are having an impact on the choice of customers. All these factors are having a major role to play when the customers are buying the fashion products.

Apart from this there are several other factors such as external events which are having higher influence to affect the firm in an appropriate manner. Covid-19 is one of the effective disruption for the case company which had affected the firms negatively. This had affected the case company in number of ways. Due to the economic recession the sales of the company is being highly effected as the customers were not having enough to spend on fashion as they are focusing on fulfilling their basic needs. In contrast to this the issues related to supply chain issues had created serious operational issues for the company.

All the fashion stores and the manufacturing units were being closed during the pandemic which is a major issue for the company. This fashion industry is facing the issues related to the shifting customer demands their demand for the designer face mask which are the new fashion trends. Along with this the fashion trends remain changing with the climate and this is important for remaining up to date (Neumann et. al. 2020). The case company is also focusing on the different fashion trends especially in the context of the shifting seasons. It can be said that H&M also have to manufacture the products as per the market trends or the on-going trend in the global fashion industry. It can be said that there can be different drives of change for the case company. While operating in the global fashion industry the firms need to focus on a lot of different issues. All the different external events are having higher potential to affect the firm and bring an significant change in the organisation which can change the entire firm. For remaining competitive the case company has to adapt the market trends and has to offer the products based on the trends only.

Threats and Opportunities for H&M

H&M is operating in an highly competitive fashion industry which is offering both the threats and opportunities for the company. The new trend of face mask during the pandemic is an new opportunity for the company. Along with this the latest fashion trends related to the environment and shifting customer preferences is also creating the new opportunities for the company on which H&M need to work in an appropriate manner. In contrast to this the political and the legal factors are having greater opportunities for the case company to create a threat for the company (Rahmah and Prasetio, 2020). The restriction made by the government related to the imports and exports can affect the case company significantly as they are operating in the global fashion industry and is highly depended on the imports and exports.

Plausible 5-year scenarios for H&M

For the coming years the case company need to focus on ensuring that they are having effective strategies for growing the firm. The company is having great opportunity to focus on the emerging markets and H&M should focus on entering into the new market for doing trade in an effective manner. Along with this the company should expand with the help of mergers and acquisitions which would help them in entering into the new markets in an effective manner (Bick et. al. 2018). Also the company would be focusing on more product differentiation by developing the diversified products which is important for the growth of the company and would help them in gaining competitive advantage.

Sources of competitive advantages and its relevance to management

When the business is operating in the highly competitive business environment then it is important for them to remain effective. The businesses strategies of the company are having an major role to play in the success of the firm. It is very important for the firm to ensure that they are using effective strategies which can help them in getting the competitive advantage of the best resources of their organisation. It can be said that for the future growth of the company it is very important for the firm to make the best use of strategies which can help the company to grow (Pandey et. al. 2020). There are different theories which can help the firm's in evaluating the factors which can offer better competitive advantage over others.

The top management of the company need to occupy the best strategy for understanding that how the company can get better advantage over others. This is very important for ensuring that the company resources are being managed in an appropriate manner and are having the ability to offer greater advantage to their customers. On the basis of the different factors related to the growth and opportunities for H&M it is necessary to explore the different theories related to competitive advantage for the firm's.

Ansoff Matrix

Ansoff matrix is one of the effective strategies which is used by the company for deciding the best suited part strategy for their growth. For getting advantage in the industry it is essential that the company should understand their strength and then focus on using the best strategy for them (Dawes, 2018). This helps the company in deciding that which plan would suit well to the growth of the company. According to ansoff matrix there are four different strategies on which the company need to focus. Four important market strategies are market development, market penetration, product development and diversification.

Market Penetration: in this the firm focuses on increasing the sales of the company in the existing market. In this strategy the firm focuses on investing on the sales and marketing which can help them in enhancing the sales in the existing market.

Product development: for this the company focuses on increasing the level of innovation and offering new product to the customers. New products would help the company in growing the firm in an appropriate manner.

Market development: as per this strategy the company need to focus on entering into the new market for expanding the business and enhancing the company performance and sales.

Diversification: in this type of strategy the businesses focuses on entering into the new market with their new product. This type of strategy is quite challenging for the companies and can led the firm towards different issues and losses as well.

For making an effective use of these strategies for leading the firm towards success the company need to focus on identifying the factors which are having enough opportunity to offer competitive advantage to the firm. Along with this in the case of H&M it can be said that due to having great customer base and greater products the case company is having greater scope for using the market development and product development for growth of the company.

Resource based theory for competitive advantage

The resources of the company are having greater ability to offer competitive advantage to the firms. The company needs to identify the important resources of the firms and the need to explore that how they can be used for getting the competitive advantage over others. In the view of the resources based theory of the competitive advantage the company need to estimate that they are having greater abilities to add value to the company (Collins, 2021). In the context of H&M the company is having effective customer base and this can be considered as an important resource for the company. Along with this the wide range of products and the product line of the company is also an important resource for the company. Moreover the strong financial performance of the company and the diversified global market presence of the firm is also an important strength of the company which can be considered as the resources for the competitive advantage of the case company (Dubey et. al. 2019).

It can be stated that H&M is having multiple resources as they are having great position and performance in the market. But it is very significant for the company to understand that how these resources can be used for adding value to the company. If H&M would be able to identify their resources and then apply better strategies for managing the firm then they can work effectively in the fashion industry. In the view of Bhasin, (2019) H&M is having greater opportunity to increase their profitability and expand themselves in their emerging markets. If the company would be focusing on these opportunities and making an optimal use of their effective resources then it would help them in inclining the profit of the company and leading it towards greater development.

VRIO Model for H&M

VRIO model is based on the resources based theory of the competitive advantage. According to Goggin, (2022) this model helps the company in identifying and classifying the company resources in such a way that it can be used by the firm in more appropriate manner. This is an internal analysis model which helps the company in making better future course of action and the using the best strategies for the company. This model focuses on classifying the resources of the company into four different parts which is stated below such as:

Valuable: the valuable resources are those which are offering great value to the customers by satisfying their need for their products or the services in an appropriate manner.

Rare resources: the resources which are quite rare in the industry and are very hard for others to generate are being considered as the rare resources of the company.

Imitable resources: the resources of the company which are expensive to acquire by others operating in the same industry are referred as the imitable resources. These type of resources are having an ability to offer long term competitive advantage to the firm over others operating in the same industry (Lopes et. al. 2018).

Organizational: this is the resource related to the organisation of the firm. This resource is related to the management systems, processes, company culture and the organisation structure of the company. Along with this it discusses that the company is making the best use of their resources or the resources are unused for the competitive advantage and can help the company in getting the sustainable competitive advantage.

Core Competencies Model

As per the core competencies model it is very important for the firms to ensuring that they are integrating the skills, resources, process in an appropriate manner which is helping the company in having competitiveness over others. According to Vitasek, (2020) the core competencies model proposed by Hamel and Prahalad there are four important core competencies of the company. This model encompasses that the businesses are having the competencies which are resources, capabilities, competitive advantage and the strategy of the company. All the four resources of the company are equally important for the firm. In case of H&M would be understanding the company's core competencies as per the model then it would help them in working on the different areas of improvement in an systematic manner.

For an instance some of the other companies operating in the international market are having greater knowledge related to their core competencies and this is helping them in leading the industries. For instance Apple Inc one of the leading technologies is creating great value for their customers with the help of their user centred design, greater innovation, design and integrated software and hardware (Nam and Yi, 2020). These factors can be considered as the core competencies of the company as it is helping the firm in gaining competitive advantage over others and is not easy for their competitors to have such designs and the ability to develop the products like Apple at the price of Apple.

Uses of theories by H&M managers for competitive advantage

From the above mentioned analysis it can be stated that it is an effective model for classification of the resources in an systematic manner. Along with this the above two models such as Ansoff matrix and the Resources based theories can help the case company in number of ways. The managers of the H&M can make effective use of these theories and models for understanding their resources and exploring their capabilities which can offer them competitive advantage over others. Along with this the if the managers and the top management of the case company would be focusing on the core competencies of the company then it would help them in number of ways. When the company is having knowledge related to the core competencies and exploring that how the company is working overs it's resources, competitive advantage, strategy and capabilities then it helps the firm in gaining competitive advantage over others.

It can be stated that if the management would be having better knowledge related to the factors which are having the ability to offer competitive advantage to the firm then it would help them in number of ways. H&M need to pay more attention towards the factors which are important for the sustainable competitive advantage. In the view of Schaeffer, (2018) the businesses are having some of the factors which are having the ability to offer them competitive advantage. The report had stated that the innovation, predictive analysis, customer affinity and the growth culture of the company is an having higher ability to offer sustainable competitive advantage to them. Thus it can be stated that the firm's need to use the different models and the theories of the competitive advantage in management of the company. This can help the company in gaining benefitted in number of ways. Moreover it can help the case company in gaining sustainable competitive advantage.

Firm’s strategy and strategic position

Businesses strategies are having an major role to play for the firms in managing the company position in the market. It is very important for the firms to ensure that they need to apply the best possible strategies for using their resources and capabilities in an appropriate manner for managing the company performance in an appropriate manner. For managing the company performance H&M focuses on ensuring that they must have an appropriate strategies for managing the performance. H&M focuses on ensuring that they should maintain the quality of their products in an appropriate manner. Along with this the company is investing better capital for the manufacturing of the high quality products in an appropriate manner. The customers of H&M are highly influenced by the high quality and the fashionable clothes offered by the company. Due to this reason it is very important for the case company to work effectively on innovation and great products design which can help them in designing fashionable clothes which is very important for maintaining their market position.

The human resource management department of the company is working effectively for ensuring performance of the firm in an appropriate manner. The company is offering different performance appraisals to their employees for managing and maintaining their performance in an appropriate manner (Bhardwaj and Fairhurst, 2010). Along with this the company focuses on having highly skilled and talented which is helping them in managing the performance of the company in an appropriate manner. The company invest better capital for motivating the employees and keeping them satisfied with their jobs. H&M is having an HIP incentive program which is helping them in offering better incentives to their employees on the basis of their performance. Along with this the company is investing in offering different benefits to the employee which is helping them in managing the company performance.

The company is having better availability of the resources due to this reason it is very important for them to use them in an appropriate manner. The higher capital of the company is investing in using the best possible technologies for managing the supply chain in an efficient manner (Varley et. al. 2018). Along with this the company is also investing better capital for improving the supply chain as it is having an impact on the overall business operations in an appropriate manner. For managing the company performance and sales in the global market investing in marketing and promotion is one of the most important thing for the global firms. H&M ensures that they are investing better capital in the promotion.

The case company uses different types of marketing strategies in the different markets as per the local trends of the market. The company uses influencer marketing and positive branding for promoting their products in the global market. Both the online and offline marketing methods are used by the company. Along with this the H&M is investing better amount of capital for the digital marketing (Hendri and Budiono, 2020). It can be said that the different marketing strategies are helping the company in using the resources in an appropriate manner for benefitting the company with the help of better performance management. Thus it can be said that the company is making optimal use of the company resources and their capabilities for managing their performance. Along with this they are having an appropriate performance management system which is helping them to work on all the different factors which are having an ability to affect the performance of the company.

Role of Innovation and internationalisation in firms competitive advantage

Role of innovation in the firms competitive advantages

Innovation is the key to success for the firms. In the view of Huaranga, (2020) the businesses need to invest greater amount of capital for bringing innovation in the firm so that they can led the firm towards success. If the company focuses on innovation then it allows the firm to understand the need of their customers and set the new trends and fulfilling the needs of the customer in an appropriate manner. It can be said that innovation can become the great source of success for the company. Due to this reason it is very important for the firm to invest in innovation and the R&D department (Xuejie et. al. 2019).

H&M is having the combination of cost leadership and the product differentiation is an core strategy of the company. In this context it can be said that for designing the best quality and differentiated products for the customers the case company has to focus on innovation in an appropriate manner. The company states that due to the greater innovation and the great initiative of the company they are able to design the most comfortable and the stylish cloths for their customers. It can be said that innovation is one of the important key success factors for H&M which allows them in designing the unique and new style fashionable clothes for their customers (Tarnovskaya et. al. 2022). This is helping them in gaining the competitive advantage over other major competitors such as Zara, Gap, and others. Apart from this the case company ensure that they work on using the great technologies and make their supply chain more efficient. The greater technological advancement of the company can also be considered as the core competencies of the company. With the help of greater innovation and the use of the latest technologies the company is working efficiently for the environment and adding great value to the customers. This is helping the company in adding value to the brand value and gaining competitive advantage over other competitors.

The strategies for the innovation is helping the case company in getting better designs for their customers which is important for attracting and retaining the customer for longer period of time. Apart from this H&M also focuses on using innovation for different areas of improvement. With the help of innovation the fashion firm H&M is trying to promote the use of the sustainable products, technologies and the production processes which can help the company in fulfilling their CSR and the responsibility related to the sustainability. From this it is well understood that level of innovation of the firm is having an direct impact on the competitiveness of the firms (Tarnovskaya, et. al. 2022). It can be suggested that H&M need to invest more on innovation which can help them in adding value to their brand and generating higher sales as compared to their competitors. Thus it can be stated that innovation is very important for the firm operating in the different industries for getting the competitive advantage over others.

Role of internationalisation in firms competitive advantages

The business world is expanding to a greater extent and now the borders are not an matter of concern while managing the trade and offering the products and services to the customers. Due to this reason it is important for the firms to enter into the new markets for generating higher profits and increasing their customer base. H&M is one of the leading fashion brand is having great opportunity to expand themselves into the emerging markets which can allow them to grow (Knutsen, 2021). H&M continuously focuses on increasing their number of stores. Each year the company operates new stores in the different nations and the basic purpose behind this is to increase the sales performance and the brand image in the different nations. The company is having Zara as their largest competitor and Zara is offering both the online and offline services to their customers. Similarly they are also investing alot in increasing their physical presence as well as enhance their website traffic as well. The fashion industry is an fast growing industry and for this a industry it is very important for the firms to focus on internationalisation (Su, 2020). The case company is having the internationalisation strategy to focus on outsourcing the new designs for attracting the customers belonging to the different nations and satisfying with the products offered by them.

Entering into the new market is not an easy task due to the dynamic business environment. H&M focuses on applying different entry mode and different expansion strategies while entering into the market and doing trade. For each country the company is having an different strategy (Lee, 2019). The company focuses on ensuring that they are opening more 10-15% stores every years across the world. This is something which is offering great competitive advantage to the case company. It can be said that the fast fashion retailer is working effectively for the competing with their competitors. Along with this the increasing number of stores every year as adding value to them and helping them in increasing their market share and getting the advantage over others firms operating in the same industry. Apart from this it can ve said that internationalisation of the firm is helping H&M in applying the different strategies related to sales, promotion, marketing, HRM and other factors in an appropriate manner. H&M is focusing on effective branding which is helping them in creating an positive influence on the customer and helping them in entering into the new market (Rana et. al. 2021). The case company is investing in multiple channel marketing strategy which is helping them in managing their global position in an appropriate manner and competitiveness in an effective manner.

Conclusion

From the above mentioned report is can be stated that the businesses have to focus on alot of factors while managing the firms in the international business and managing the competitiveness. The report had focused on the case study analysis of H&M. The organisation is investing better capital for developing the high quality products and fashionable products. H&M is operating in an highly competitive business world due to which the report had critically evaluated the diverse strategies of the firm. The strategies related to marketing, sales, promotion, operational management and the company resources are being critically evaluated in this report.

The role of innovation in the internationalisation of the firm is being discussed. Along with this the study had highlighted that the firm's need to focus on working effectively for bringing innovation in the firm for getting the competitive advantage over others and leading the firm towards success. H&M is investing better capital for developing the unique and the fast fashion clothes which is helping them in getting the competitive advantage in the fashion industry. The case company is working effectively for the innovation and leading the company towards better market position with great products. The analysis has stated that H&M is investing better competitive advantage from their great products. It can be stated that the use of best strategies and they are having further having greater opportunities to grow in the international market. The report had discussed the different types of models and the theories which can be used by H&M for competitive advantage. If the company would be having better knowledge related to their resources and their strength and then it would help them in getting competitive advantage over others. So it can be concluded that the report had evaluated the case company in an appropriate manner. H&M should focus on the different recommendations stated above in the report which would help them in number of ways.


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