H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion
The H&M case is set immediately after the Rana Plaza collapse in Bangladesh. The case explores questions of who is to blame and how it should be addressed. There is no guarantee that H&M garment manufacturing had not been subcontracted to one of the factories in Rana Plaza, and Helena Helmersson, head of sustainability at H&M, must meet with the CEO, Karl-Johan Persson, to discuss how the company will respond and devise a plan to face the media coverage and public scrutiny of the apparel industry that is sure to follow. This case was written under the supervision of Andrew Hoffman at the University of Michigan by graduate students Marianna Kerppola, Ryan Moody, Likangjin Zheng, and Amaryllia Liu.
Swot Analysis of "H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion" written by Andrew Hoffman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Rana Plaza facing as an external strategic factors. Some of the topics covered in H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion case study are - Strategic Management Strategies, Labor, Social responsibility, Supply chain and Strategy & Execution.
Some of the macro environment factors that can be used to understand the H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion casestudy better are - – cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , geopolitical disruptions, increasing transportation and logistics costs, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google,
there is backlash against globalization, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Rana Plaza, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Rana Plaza operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion can be done for the following purposes –
1. Strategic planning using facts provided in H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion case study
2. Improving business portfolio management of Rana Plaza
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Rana Plaza
Strengths H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Rana Plaza in H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion Harvard Business Review case study are -
Ability to lead change in Strategy & Execution field
– Rana Plaza is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Rana Plaza in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Rana Plaza has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Learning organization
- Rana Plaza is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Rana Plaza is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Rana Plaza is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Andrew Hoffman can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Effective Research and Development (R&D)
– Rana Plaza has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Strategy & Execution industry
– H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion firm has clearly differentiated products in the market place. This has enabled Rana Plaza to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Rana Plaza to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Rana Plaza has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Rana Plaza is one of the leading recruiters in the industry. Managers in the H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Rana Plaza is one of the most innovative firm in sector. Manager in H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Rana Plaza in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Rana Plaza is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Rana Plaza in the sector have low bargaining power. H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Rana Plaza to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion are -
Need for greater diversity
– Rana Plaza has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Rana Plaza is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion, it seems that the employees of Rana Plaza don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion, is just above the industry average. Rana Plaza needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
No frontier risks strategy
– After analyzing the HBR case study H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion, in the dynamic environment Rana Plaza has struggled to respond to the nimble upstart competition. Rana Plaza has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Rana Plaza has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Rana Plaza even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High bargaining power of channel partners
– Because of the regulatory requirements, Andrew Hoffman suggests that, Rana Plaza is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Rana Plaza supply chain. Even after few cautionary changes mentioned in the HBR case study - H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Rana Plaza vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion HBR case study mentions - Rana Plaza takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Aligning sales with marketing
– It come across in the case study H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion can leverage the sales team experience to cultivate customer relationships as Rana Plaza is planning to shift buying processes online.
Opportunities H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion are -
Leveraging digital technologies
– Rana Plaza can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Developing new processes and practices
– Rana Plaza can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Rana Plaza to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Rana Plaza can use these opportunities to build new business models that can help the communities that Rana Plaza operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Rana Plaza in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Rana Plaza can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Rana Plaza is facing challenges because of the dominance of functional experts in the organization. H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Loyalty marketing
– Rana Plaza has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Manufacturing automation
– Rana Plaza can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Buying journey improvements
– Rana Plaza can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Better consumer reach
– The expansion of the 5G network will help Rana Plaza to increase its market reach. Rana Plaza will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Rana Plaza can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Rana Plaza can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Using analytics as competitive advantage
– Rana Plaza has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Rana Plaza to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion are -
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Rana Plaza needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion, Rana Plaza may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
High dependence on third party suppliers
– Rana Plaza high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Rana Plaza can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Rana Plaza has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Rana Plaza needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Shortening product life cycle
– it is one of the major threat that Rana Plaza is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Rana Plaza needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Rana Plaza can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Consumer confidence and its impact on Rana Plaza demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Rana Plaza can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion .
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Rana Plaza with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Rana Plaza can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Weighted SWOT Analysis of H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of H&M's Global Supply Chain Management Sustainability: Factories and Fast Fashion is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Rana Plaza needs to make to build a sustainable competitive advantage.