HRM11119 Leadership, Strategy and Innovation

Introduction

The VRIO framework is utilised in case of analysing company resources, and it is a strategic tool that also help in organisations secure their resources so that they can acquire competitive advantage. Many companies have also utilised the VRIO framework for designing their vision, mission statement, as well incorporating it in the strategic planning process. In this study the company H&M, will be considered and taking into consideration the VRIO framework, the company will be analysed based on its tangible and intangible resources, which have helped H&M in acquiring the top position in the fashion retailing sector. The VRIO Framework will also helped in analysing the stability of resources in acquiring competitive advantage. The second part of the analysis, will involve in critical analysis of the VRIO framework, based on this utility and limitations.

Company Background

The Hennes & Mauritz AB(H&M) is Swedish origin multinational company, operating in the fashion-retailing business, and are best known for their clothing varieties in men, women, teenagers and children. The company has been initiated in the year 1947, and the founder of the company is Erling Persson, with its main headquarters in Stockholm, Sweden.

Implementation of the Vrio Framework to H and M

In this part of the study, the company H&M will be analysed based on the VRIO framework. The company acquires most of its competitive advantage and core competencies for increased sustainability from their organisational culture. The company values are based on their shared values for developing a down-to-earth corporate culture, which instigates the employees for working adhering to the collaborative approach and develop entrepreneurship qualities. Based on their annual report of H&M, of the year 2019, one of the reasons for their increased sustainability is their step to source their cotton in a much sustainable process. They have involved in recycling their cotton in organic way, through their program Better Cotton Initiative. By adhering to the process of organic sourcing of their cotton lead them to source 97 percentage in a much sustainable way which was 95 percentage in the year 2018.

The VRIO framework is applicable in case of analysing H&M, as it helps in analysing at right level, and helps in exploring that some of the aspects may be imitable but the company’s unique features and resources can make them inimitable. The analysis of H&M will be done based on the competitors they have on a worldwide basis. The key competitors of H&M are Zara, Gap, Hugo Boss, Chanel, Ralph Lauren and many more. The VRIO framework analysing the resource capability of H&M is given below:

Valuable

The above table has been made after considering the various facts associated with the company. This can be said that wit the best kind of approach a proper initiative can be taken as well. the organisational culture of H&M is in a proficient state and that is why it is effective in many ways. It can be further stated that with proper understanding of the scenario the decisions are made to make sure productivity is not getting hampers. The organisation responds to the call of the globalisation and depending on the brand and market of the organisation they take proficient steps to make some modification as well. on the other hand, the company’s financial condition and customer purchase power is in a significant state as well. for an example the business concept can be considered where the company stated that they prioritise ‘fashion and quality at the best price’. They make sure that the approach has been considered by getting a sustainable approach and this is the reason why H&M is getting a good kind of response from the market as well.

Rare

Shifting in accordance with the requirement is something really important and it can be said that with best kind of situational analysis a better approach can be found as well. this is seen that the company take the best kind of approach in order to meet the demands of the people. The fast approach of the company is a rare thing that makes it different from others. The company consider that fashion is changing fast and that is why they are making sure that they are up to the trend. As per reports the company structure is different from most of the similar kind of PLC in the market. It is seen that the company follows a Matrix structure that allows it to make decisions fast than others. another resource that can be considered as rare is the market reach of them, where it is reported that there are more than 170,000 people working in the organisation worldwide.

Imitable

There are many considerable approaches to be considered in order to make sure that people are taking a good care of everything that are imitable. It is seen that for a better kind of assessment of the scenario it is essential to make sure that the design of the company is not getting copied in any way. The company is focused on delivering good kind of products in low rate and that thing cannot be imitated. On the other hand, the company providing the newest fashion wares that are high in quality. This is the best thing that keeps the company apart from the competition. Making sure that the company is getting a good return on investment they are giving better kind of services to the people with newest products on a regular interval. The pace of the organisation keeps the company ahead from the competition and that is why it is one of he ace fashion garments provider.

Organisation

In order to provide quality services to the people it is essential that the company is focused on giving proper support to the internal organisation. It is seen that with a proficient support a better decision can be taken and being a company following matrix structure, the stability of the organisation is effective as well. the human resource management, designing segment, marketing division everything is very much organised and that is the reason why the company is in the current state. They are so much analytical in nature and organised data holder that by the marketing reports they have launched a new brand called Weekday, that is mainly for the youth who are following street style mostly. Without having a proper structure and organised ambience such kind of productivity cannot be delivered in a shorter time span.  

Critical Analysis Of The Vrio Framework:

Analysing the inner potential of a company is the most important thing to be considered and it is seen that with a better kind of initiative a better decision can be taken as well. Considering the VRIO analysis of a company the potential of a company to survive in the market with the competitors can be found proficiently. In the following segment a proper critical analysis can be done as well.

The company has a very unique HR management team and they are functioning a proficient manner as well. As per the analysis it is evident that the company is focused towards development of inner potential. The company considers their ‘fashion and quality at the best price’ approach to be authentic and productive but they need consider that the Human resource department needs to focus on the management of inventory department as well by recruiting efficient officials. It has been identified that the company has $4.3 Billion unsold cloths. This is a result of ineffective man management and that is why the fast fashion provider had to face a significant amount of loss.

As per the VRIO analysis the organisational culture is one of the most important things to be considered because of its importance on the business development process. The organisation is looking forward to have a proper kind of gender diverse approach. The management report says that the organisation has a very unique gender diverse culture. The number of male workers in the organisation is 29% and the female workers are in 71%. Apart from the other companies it is seen that the organisation has more female members rather than male which is a sign of fundamental respect to all the individuals. On the other hand, the fare wage system is also there and it is seen that the organisation is considering the rights of equality as well. but in some cases, it is seen that the organisation has failed to meet the fare wage requirements from some of the offshoring units they have. The company needs to focus on a primary policy which is related to building a proper policy for everyone.

The brand and market design is one of the most important things to be considered and it is observed that with proper kind of assessment of the scenario a decision will be taken as well. the management of the situation is directly linked with the organisational structure and it is seen that there is a matrix structure that is effective in nature. It is seen that the company has faced $4 Billion dollar inventory management related challenge and that is a sign of having issues in the management regarding taking inventory management related decisions. However, the “fast fashion” process is a unique thing to be considered in this case and it is seen that the company is staying abided by it for a long time. It can be said that there is a significant process to be considered and with the help of that the issues in inventory management can be resolved and the company can make sure that the resources are not getting wasted. To accomplish that the company can take Just-in-time method in order to have a better kind of decision immediately.

From the given data it is evident that the business management process needs to be redesigned in a proficient manner. the management of the organisation needs to think from the core of the problem so that they can make necessary changes that are effective in making a better kind of business environment. This is going to help in development of the situation and in a proper manner respective solution can be derived as well. On the other hand, it can be further stated that the business-related improvements need to be managed with proper kind of functioning of the departments and a rigorous monitoring that will help in reaching the new hights. The company has to think of making changes that are effective in business development in those areas that are not performing in a proficient manner. On the other hand, they have to make sure that the market analysis is not getting stumbled due to some issues that are internal ambience. The internal control is essential to have a better outcome and the organization needs to be abided by that as well. In this process a better kind of decision can be taken which is going to change any negative situation into a positive one.

Conclusion:

From the given detail it can be concluded that the business of the organisation is flourishing in a prosperous manner and this is a reflection of having a better kind of idea about the business. It is further seen that the company is focusing on giving a better kind of support to the people and that is affecting the business development process in a prosperous manner. There are many recommended approaches and it can be stated that with proper kind of implementation and monitoring of the situation a better ambience can be created as well. there is a lack of understanding the demand of the internal ambience and that is why the company is looking forward to make changes to the system accordingly. This is the best thing to be done in a proficient manner by the head of the departments in order to make significant impact on the market. It can be concluded that the company has the potential to have better kind of approach but the organisation needs to reflect on their drawbacks that are needed to be catered in order to have  abetter kind of situational advantage in the market.

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