PGBM135

Assignment Guidelines
Before you start to write, spend time to understand the key points/ requirements of the
assessment/ each questions. It is a good idea to highlight the key word/s or sentence/s. This will help
you to keep focused on the critical aspects of the question.

Step 1

Where to start….

Before you start to answer the questions, suggest that you have good understanding of the firm
(H&M) and the industry.

Start by looking at H&M’s website. Make a brief note of their key business units/ segments that
they are servicing. What is their annual revenue, how is this spilt between their business units,
which regional markets do they dominate. At this stage, I would suggest that you have a basic
understanding of the firm (you can revisit later to enhance your understanding).

Step 2

Once you have established a basic understanding of H&M, suggest you do an industry analysis
(Global media and entertainment)

Identify who are the key players, key segments within the industry, who are the key players
in those segments, current Global revenue, key players % of global revenue, region wise
revenue figures, key players in various regions, etc

Also, look at industry projections for the next 5 to 10 years, in which direction is the industry
moving in terms of trends, technology, market/s and so forth. You may get this information from
databases available online via UoS library and reports from major consultancies like McKinsey, PwC,
Deloitte, etc (don’t get from unreliable sources). Refer to the links below

https://www.mckinsey.com/~/media/mckinsey/industries/retail/our%20insights/the%20state%20of%20fashion%202019
%20a%20year%20of%20awakening/the-state-of-fashion-2019-final.ashx

https://www.mckinsey.com/industries/retail/our-insights/ten-trends-for-the-fashion-industry-to-watch-in-2019

https://www.forbes.com/sites/sanfordstein/2019/02/10/how-could-changing-consumer-trends-affect-fast-fashion-
leaders-hm-and-zara/

https://www.pwc.co.uk/press-room/press-releases/consumer-sentiment-may.html

https://www.pwc.co.uk/assets/pdf/uk-premium-lifestyle-market.pdf

Make a note of all the relevant information. If necessary, create your own tables, graphs.

Step 3

• Identify H&M’s key competitors (refer to ‘competitor analysis’ in Exploring Strategy book).

• Do an analysis of how H&M’s revenue, key business units (segments) compare with its
competitors and other major players in the industry. Are there any new emerging segments
/ trends/ technologies that you could identify from the reports?
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Q1

Now let’s move to Q1 [40 marks] ..so around 1600 words

Critically review the theoretical basis for sources of (2) competitive advantage (1) and
evaluate their relevance to H&M’s management . In particular, discuss how such theories
could inform H&M managers in their quest to gain sustainable competitive advantage (5 &
4)

1. Establish a good understanding of what is ‘competitive advantage’ (CA). Read literature on

CA.
2. Identify the sources of CA (again from relevant literature)
3. Critique the sources of CA (in general based on the CA theories)
4. Read the Annual Reports, identify key points within the report (you don’t have to read the
entire report word by word, scan and highlight the key information/ points)
5. Go back to the firm’s website. Look at their various business units, their latest annual reports
and identify H&M’s sources of competitive advantage. Here, it is good idea to review (again
from the literature) how firms can gain sustainable competitive advantage
You may have a table that list all their key resources and capabilities and do a VIRN/ VIRO
analysis. For example, you may draw a table like the one below to help your analysis.

Refer to week 3 case study notes for examples of VIRO analysis. We did this for Groupon and Rocket
Internet.

Resource V I R N

Capability V I R N

6. Again, gleaning from relevant literature, identify how the various CA theories that you
reviewed might help or inform H&M’s managers (or any managers) on how to achieve
sustainable CA

Key resources

There are several books on competitive advantage in your library….grab a few of them including
your key text!

 Chapter 4 – Exploring Strategy book

 Arend and Lévesque, 2010. Is the resource-based view a practical organizational theory?
 Barney, 1995. Looking inside for competitive advantage. Academy of Management
Perspectives, 9(4), pp.49–61.

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  Barney and Hesterly, 2015. Strategic management and competitive advantage concepts and
cases (book).
 Barney, 1995. Looking inside for competitive advantage. Academy of Management
Perspectives, 9(4), pp.49–61.
 Barney, J., 1991. Firm Resources and Sustained Competitive Advantage. Journal of
Management, 17(1), pp.99–120.

 Bowman, C. and Ambrosini, V., 2007. Identifying Valuable Resources. European

Management Journal, 25(4), pp.320–329.

 Bowman, C. and Ambrosini, V., 2010. How value is created, captured and destroyed.
European Business Review, Volume 22(Issue 5), pp.479–495.
 Connor, T., 2002. The resource‐based view of strategy and its value to practising managers.
Strategic Change, 11(6), pp.307–316.
 Grant, 1991. The resource-based theory of competitive advantage: implications for strategy
formulation.
 Teece, D. J., Pisano, G. and Shuen, A. (1997) ‘Dynamic Capabilities and Strategic
Management’, Strategic Management Journal 18(7): 509–33.
 Teece, D., 2007. Explicating dynamic capabilities: the nature and microfoundations of
(sustainable) enterprise performance. Strategic Management Journal, 28(13), pp.1319–
1350.
 Wang, C.L. and Ahmed, P.K., 2007. Dynamic capabilities: A review and research agenda.
International journal of management reviews, 9(1), pp.31-51.
 BarrH&M, I., 2010. Dynamic capabilities: A review of past research and an agenda for
the future. Journal of management, 36(1), pp.256-280.
 Eisenhardt, K. and Martin, J., 2000. Dynamic capabilities: what are they? Strategic
Management Journal, 21(10‐11), pp.1105–1121.

 Wernerfelt, B., 1984. A resource‐based view of the firm. Strategic Management Journal, 5(2),
pp.171–180.

 Peteraf, M., 1993. The cornerstones of competitive advantage: A resource‐based view.

Strategic Management Journal, 14(3), pp.179–191.

Question 2 [30 marks]

Critically review the relationship between organisational resources, external environment and
firm performance. You may use H&M as an illustration in your discussion

1. The answer to this questions is basically a continuation of the first question but focuses on
organizational resources (but you may also consider capabilities or knowledge as a resource
hence might include capabilities based view and knowledge based view theories in your
discussion) and external environment.
2. Start by having a clear understanding on what is ‘performance’ and which definition/s are
you going to use in your discussion
3. What is the relationship between ‘CA’ and firm ‘performance’? Get this clarified as this will
help in your review.

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Question Three: The role of(2) innovation(1) and internationalisation (3) in a firm’s
Competitive Advantage(3)

Evaluate the relevance of innovation and internationalisation in designing and

implementing H&M’s strategy/ competitive position(4)

To answer this question, you may deconstruct the question as we have done before,
answer individual components separately and then put them together to answer the
question.

1. You may start with a review relevant innovation literature and write about
what is innovation, various definitions and so forth.
2. Then look at the literature (probably the same ones that you considered for
the previous questions) to identify the role of innovation in a firm’s
competitive advantage ie what is the link between innovation and
competitive advantage.

 Repeat the same for internationalisation

3. You may start with a review relevant internationalisation literature and write
about what is internationalisation, various definitions and so forth.
2. Then look at the literature (probably the same ones that you considered
previously) to identify the role of internationalisation in a firm’s competitive
advantage ie what is the link between internationalisation and competitive
advantage.

Following this, based on your review, present an analysis of why innovation and internationalisation
in important for H&M’s strategy. You may discuss innovation followed by internationalisation and
then their relevance to H&M. Ideally, you should synthesis and present a coherent/ seamless
argument. However, when your first draft the answers, you may follow the steps I have given above.

Remember, it is easy if you break the question into various components, answer those components
and put them together to produce a coherent, seamless analysis.

Key resources

There are several books on innovation and internationalisation in your library….grab a few of them
including your key texts!

 Bower, J.L. and Christensen, C.M., 1995. Disruptive technologies: catching the wave.

 Christensen, Clayton, Michael Raynor, and Rory McDonald. "Disruptive innovation." (2011).

 Christensen, C.M., Raynor, M.E. and McDonald, R., 2015. What is disruptive innovation?, Harvard
Business Review, 93(12), pp.44-53.

 Lengnick-Hall, C.A., 1992. Innovation and competitive advantage: What we know and what we
need to learn. Journal of management, 18(2), pp.399-429.

 Weerawardena, J. and Mavondo, F.T., 2011. Capabilities, innovation and competitive advantage.
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Industrial Marketing Management, 40(8), pp.1220-1223.

 Chatzoglou, P. and Chatzoudes, D., 2018. The role of innovation in building competitive
advantages: an empirical investigation. European Journal of Innovation Management, 21(1),
pp.44-69.

 Distanont, A. and Khongmalai, O., 2018. The role of innovation in creating a competitive
advantage.Kasetsart Journal of Social Sciences.

 Markides, C., 2006. Disruptive innovation: In need of better theory. Journal of product innovation
management, 23(1), pp.19-25.

 Ireland, R.D. and Webb, J.W., 2007. Strategic entrepreneurship: Creating competitive advantage
through streams of innovation. Business horizons, 50(1), pp.49-59.

 Weerawardena, J. and Mavondo, F.T., 2011. Capabilities, innovation and competitive advantage.
Industrial Marketing Management, 40(8), pp.1220-1223.

 Engine, W. and Railroads, E., 2006. Innovation for Competitive Advantage. Journal of Advanced
Manufacturing Systems, 5(1), pp.1-2.

 Creativity, C.F., Creativity, F., Creativity, U. and Creativity, L., Innovation for Competitive
Advantage. NY: Oxford.

 Internationalisation and global competitive advantage: implications for Asian emerging market
multinational enterprises

https://www.researchgate.net/profile/Rajesh_k_Pillania/publication/264834773_Internationalisation_and_global_competitive_advan
tage
implications_for_Asian_emerging_market_multinational_enterprises/links/55ab9c2708aea994672467df/Internationalisation-and-
global- competitive-advantage-implications-for-Asian-emerging-market-multinational-enterprises.pdf

 Competitive Advantage Achievement through Innovation and Knowledge

https://www.cjournal.cz/files/127.pdf

 Competitive Advantage -- How Innovation Is Shaping The 21st Century Company

https://www.forbes.com/sites/christopherskroupa/2017/10/04/competitive-advantage-how-innovation-is-shaping-the-21st-century-
company/#601260cb6a4c

Good luck

Mohan