H&M Key Development Issues - Research Paper Example

Maintain a balance between brand image and profitability in the present truly competitive times translates into gaining a competitive edge over rival companies. Every successful company has its share of problems, but success is sustained only after finding answers to those problems. H&M is no different in the sense that the organization gets its fair share of problems related to fast growth. H&M’s rate of success and growth is considered dazzling in nature. Research proves that stores like Hennes and Mauritz (H&M) “have grown to become the largest apparel retailers in the world” (Caro & Mart´ınez-de-Alb´eniz, 2014).

Fast growth has helped H&M strike a chord with a broad range of consumers from diverse backgrounds. However, on the other hand, this has also been a real source of tension for the company from a management perspective. H&M is known globally as a fast-fashion giant due to fast growth which is a good thing, but also this has brought the brand’s social responsibility under increased scrutiny (Caro & Mart´ınez-de-Alb´eniz, 2014). Fast growth also lays emphasis on accelerating the production phase.

Growing fast in a safe manner without speeding up the production phase is impossible. This is why H&M has also encountered challenges in the area of getting products to reach different stores in different parts of the world as soon as possible. Making delivery in a short time is important to deliver real value to customers. But, ensuring such a thing when there are so many international stores to look after can be understandably daunting. This is why H&M began to invest more wisely in the department of operational agility (Caro & Mart´ınez-de-Alb´eniz, 2014).

Operational agility helps to ensure quick response or QR which was missing in the way H&M operated. In the absence of QR, there are increased pressures on suppliers which readily damages “overall retailer and supply chain performance” (Caro & Mart´ınez-de-Alb´eniz, 2014). Such pressures are often witnessed by companies that are interesting in building a reputation for fast growth like H&M. Another complex challenge stemming from fast growth pertains to handling fair wages or overtime which according to the 2011 H&M’s sustainability report continues to be seen as a challenge in their industry (Drengsgaard, 2014). The social responsibility of H&M is also under increased scrutiny as mentioned above. This is because research report shows that when there are so many stores operating internationally, “ensuring high social and environmental standards can be a challenge” (Drengsgaard, 2014).