Dissertation

THE GLOBAL VALUE CHAIN, FAST FASHION AND MOVING TOWARDS SUSTAINABILITY: CAN HIGH STREET FASHION EVER BE COMPATIBLE WITH A SUSTAINABLE GLOBAL VALUE CHAIN?
ABSTRACT
Based on the different analysis and the evaluation of the different sources of research, the researcher has implied that the use of the secondary research in the context of the dissertation. The first chapter introduces to the background of the research and the problem statement that laid to the foundation of the research. Here, the aims, objectives and the research questions supported by the rationale of the research have also been mentioned.
The second chapter introduces the literary evidences that have been collected for the research. The previous researches and the articles have been reviewed in this section of the research. The third chapter is the theoretical framework. In this chapter, the theories behind the formulation of the research have been performed and discussed briefly. The forth chapter is the methodology of the research. In this chapter, the different pieces of research methods have been justified. The research approach, research design, research approach, and the parameters of research have also been mentioned that formulates the overall performance of the research.
The fifth chapter describes the analysis of the secondary data. In this chapter, the case studies pertaining to the companies and their terms of sustainability have been mentioned. It is observed that the case studies of the three companies including H&M, Zara and Victoria’s secret has been analysed. Finally, the sixth chapter or the concluding chapter describes the overall conclusion of the research and their relevant recommendations. Finally, two recommendations in terms of the high street fashions brands and their peak towards sustainability has been strategized.
ACKNOWLEDGEMENT
I would make use of this opportunity to thank my mentor and professor ___________________, who has been with me as a strong guiding strength throughout the completion of this dissertation. Besides, I would also want to thank my friends, who have been a great support to me. Besides, I would thank my parents for their love and encouragement. Last but not the least, I would show my gratitude towards the Almighty for His Blessings in my life.
Thanking you all.
_____________________
TABLE OF CONTENTS
CHAPTER 1: INTRODUCTION    7
1.0 Introduction    7
1.1 Background of the Research    7
1.2 Research Rationale    8
1.3 Research Aim    9
1.4 Research Objectives    9
1.5 Research Question    9
1.6 Structure of the Dissertation    10
1.7 Summary    10
CHAPTER 2: LITERATURE REVIEW    11
2.0 Introduction    11
2.1 Concept of Global Value Chain    11
2.2 Different Parameters Associated with the Global Value Chain    12
2.3 The Concept of High Street Fashion - Is it Fast Fashion?    13
2.4 Global Value Chain Sustainability    14
2.5 Trends of Fashion in the Modern World    15
2.6 Impact of High Street Fashion on the World    16
2.7 Gaps in the Existing Literature    17
2.8 Conceptual Framework    18
2.9 Summary    18
CHAPTER 3: THEORETICAL FRAMEWORK    19
3.0 Introduction    19
3.1 Stakeholder Theory of Business Management    19
3.2 Porter's Value Chain Model in Global Value Chain Management    20
3.3 Heckscher Ohlin Model of Global Value Chain and Trade    20
3.3 Summary    21
CHAPTER 4: METHODOLOGY    22
4.0 Introduction    22
4.1 Research Philosophy    22
4.2 Research Approach    22
4.3 Research Design    22
4.4 Research Strategy and Research Type    23
4.5 Data Collection Method    23
4.6 Data Analysis Method    23
4.7 Inclusion and Exclusion Criteria    23
4.8 Accessibility and Ethical Issues    24
4.9 Reliability and Validity    24
4.10 Time Table    24
4.11 Summary    24
CHAPTER 5: MAIN ANALYSIS    25
5.0 Introduction    25
5.1 Marketing procedures implemented by Zara, H&M and Victoria's Secret affecting Sustainability    25
5.2 Distribution networks and operations managed by Zara, H&M and Victoria's Secret    27
5.3 Research and Development in terms of the Global Value chain of Zara, H&M and Victoria's Secret    29
5.4 Product and Product Design in terms of the Global Value chain of Zara, H&M and Victoria's Secret    30
5.5 Factors contributing to Sustainability in High Street Fashion Industry of Zara, H&M and Victoria's Secret    32
5.6 Comparing sustainability policies of Fast Moving Fashion with High Street Fashion of Zara, H&M and Victoria's Secret    35
5.7 Summary    38
CHAPTER 6: CONCLUSION    39
6.0 Conclusion    39
6.1 Linking Objectives with Research    39
6.2 Recommendations    39
6.3 Research Limitations    40
6.4 Future Scope of the Research    40
BIBLIOGRAPHY    41
APPENDIX    45
LIST OF FIGURES
Figure 1.1: Structure of the Dissertation    10
Figure 2.1: Conceptual Framework    18
Figure 3.1: Stakeholder Theory    19
Figure 3.2: Porter’s Value Chain    20
Figure 3.3: Heckscher Ohlin Model    21
Figure 5.1: Distribution Network of Zara    27
Figure 5.2 Sustainability of Zara    33
Figure 5.3: Sustainability in the use of Cotton    34
Figure 5.4: Increase in the market share of Victoria’s Secret    35
Figure 5.5: Revenue earned by H&M after complying with Sustainability Policies    37
Figure 5.6: Revenue earned by Zara before it complied with Sustainability Policies    38
Figure 5.7: Revenue earned by Victoria’s Secrets after it complied with Sustainability Policies    38
Table 3.1: Time Table for the Research    45
CHAPTER 1: INTRODUCTION
1.0 Introduction
This research provides an overview of the different parameters, influences and elements associated with the sustainability of Global Value Chains and High Street Fashion and suggest whether high street fashion can ever be compatible with a sustainable Global Value Chain (GVC) or not. In doing so, this research has described and analysed the factors associated with sustainability within the Global Value Chains. In addition to that, the underlying elements of High Street Fashion have been described and analysed in order to identify the areas that give rise to the most significant issues in the context of achieving sustainability. The different conceptual models and theoretical underpinnings along with the assessment of real-life organisations have provided significant aid in terms of analysing whether or not High Street Fashion can ever be compatible with a sustainable GVC.
The assessment of real-life organisations involves reviewing factual pieces of evidence from H&M, Zara and Victoria's Secret. The types of data that have been addressed in this research paper include the company reports of the above-mentioned companies, their statistics on the creation of production wastes, the locations where manufacturing takes place and the external entities that monitor the activities of the businesses. In addition to clarifying the underlying elements of sustainable Global Value Chains and influential factors that affect the sustainability of High Street Fashion, this research also sheds light on the theoretical concepts that can be used in order to increase the sustainability of High Street Fashion.
1.1 Background of the Research
Global Value chains can be referred to as the internationalisation of production activities where two or more nations take part within distinctive phases of the production of a particular commodity or a service. The concept of Global Value Chains is very important in the context of the economy as GVCs allow organisations to spread the different processes in different countries where the associated resources cost the lowest and where the operations would promise the most efficiency and effectiveness (Taglioni and Winkler, 2016). In addition to that, the increasing rise of shared manufacturing indicates the fact that worldwide nations and their economies are becoming interdependent mutually. The development and the increasing presence of Global Value Chains add significant value to nations and economies, which is why GVCs are considerably strategic tools for organisations and nations in terms of making effective strategies to strengthen the overall economy (Los et al. 2015). Given the increasing need to address environmental issues such as climate changes and global warming, worldwide organisations are becoming more and more active in terms of establishing a standard environment-friendly practice within the Global Value Chains.
1.2 Research Rationale
With the increasing demand of consumers towards the latest trends, fast fashion and high street fashion retailers have shaped their way towards expanding the scale and range of their businesses. Fast and high street fashion can be referred to be fashion businesses where the manufacturers utilise a rapid, mass production strategy in order to provide the consumers with trendy clothes sampled out of catwalks or celebrity media that are made of cheap materials and offered at inexpensive prices. The increasing speed of production and delivery methods associated with Fast Fashion and High Street Fashion has been under constant research to analyse, the extent to which they are sustainable.
In fact, multiple numbers of empirical researches have shown how the trend of fast fashion and high street fashion is contributing to the degradation of the environment. There have been several issues including using massive water resources, land clearing, the creation of textile wastes, soil degradation and biodiversity, inefficient human rights policies, practices and low wages provided to the workers, creation of toxic chemicals and wastes and others (McNeill and Moore, 2015). With the increasing concern towards the environment, many companies, however, are now becoming more and more aware of their corporate social responsibilities and corporate sustainability, which has led to the development of Sustainable Development Goals.
Many government and non-government organisations are putting specific emphasis on making value chains sustainable and environment-friendly. In this regards, a question immediately arises and that is whether the trend of High Street Fashion can be compatible with a sustainable Global Value Chain or not. The purposes of this research are to investigate the different parameters associated with the sustainability of global value chains and the factors that adversely influence the sustainability of high street fashion and present outcomes, which would pave the way for the practices followed within high street fashion businesses of being compatible with a sustainable global value chain.
1.3 Research Aim
The aim of this research is to understand the inherent concepts and theories associated with GVCs, Fast Fashion and investigate whether or not high street fashion can ever be compatible with a sustainable Global Value Chain.
1.4 Research Objectives
The objectives of this research are:
· To identify the underlying elements of a sustainable Global Value Chain
· To evaluate the underlying factors, which influence the sustainability of High Street Fashion brands
· To analyse whether or not high street fashion is compatible with a sustainable Global Value Chain
· To recommend strategies in terms of making high street fashion compatible with a sustainable Global Value Chain
1.5 Research Question
The research question is, “Can High Street Fashion ever be compatible with a sustainable Global Value Chain?”
· In order to address the research issues, this research uses some sub-questions including:
· What are the underlying elements of a global value chain?
· What are the underlying factors that influence the sustainability of High Street Fashion brands?
· Is High Street Fashion compatible with a sustainable Global Value Chain?
· What can be recommended to make High Street Fashion compatible with a sustainable Global Value Chain?
1.6 Structure of the Dissertation
Figure 1.1: Structure of the Dissertation
(Source: Researcher)
1.7 Summary
In this chapter, the area of the research has been introduced. A brief background on the research issue has been provided. The aims and objectives of the research paper, as well as, the sub-questions for the research have been developed. The next chapter discusses the different conceptual models presented by previous researchers on similar areas of interest.
CHAPTER 2: LITERATURE REVIEW
2.0 Introduction
In this chapter, the different conceptual models associated with the global value chain, the sustainability of the global value chain and the compatibility of high street fashion with the global value chain sustainability has been discussed thoroughly. In addition, this section presents a gap analysis, which would identify and address the current gaps in the literature.
2.1 Concept of Global Value Chain
A value chain entails the full scale of activities, which are undertaken by organisations and employees in order to transform the concept of a product or service offering to its end use. The activities within value chains consist of the designing phase of a product or service, the production, advertisement and marketing, the distribution of the product to the end consumers and the consumer services. A global value chain has multiple segments in different geographic locations and across various firms.
For instance, to produce computer parts, labour and materials from various suppliers are collected from multiple nations; the assembly takes place in another nation whereas the design and sales would happen anywhere else. There are many implications for global value chains on society. The organisations and employees in vastly different locations influence one another profoundly. Some of these influences are uncomplicated, for instance, when an organisation from the UK opens a new facility in China, whereas, other concepts such as when an organisation from the UK enters into an agreement with an organisation from the USA to collaborate manufacturing in plants that are run by another organisation in China are more complicated.
In recent times, the rise of the Global Value Chain paradigm has given rise to the concept that the integration of the developing nations in terms of marketing network and global production presents an increasing opportunity to the nations in terms of economic progression, as well as, enhanced access to worldwide markets. The rise of the Global Value Chain paradigm has been influenced by the increasing fragmentation of the activities in terms of making a conceptual product or service transform into an end-use product across the world (Gereffi and Lee, 2016). There may be quite a few reasons, which contribute to the development of the Global Value Chain paradigm. For instance, in some countries, the labour cost may be low and hence, companies choose to open their production units there to reduce the cost of production whereas, in some nations, the tax benefits provided to organisations by the governments may be exploited by companies to save a huge chunk of their revenues. GVCs can also be explained to be networks of functionally interconnected manufacturers and purchasers who are involved in the procedures of creating value on a global scale as the produced units pass between different countries and different players within the chain. Given the increasing interdependence of worldwide economies, it may be said that the implications of GVCs will only increase in future.
2.2 Different Parameters Associated with the Global Value Chain
There are various features and parameters associated with the Global Value Chains. Within GVCs, there are many links of the chain, all of which conducts a certain activity. Different organisations add distinctive types of values at every phase of the manufacturing or service procedures, in which more competitive benefits can be availed by them. The flow of physical products within the activities of Global Value Chains provides significant aid to all of the involved players in terms of enhancing their supply chain operations to achieve a better competitive positioning whereas the flow of financial figures enables them to enhance their financing capabilities (Alfaro et al. 2019). In addition, the flow of knowledge that takes place in the activities of GVCs, enable participants to acquire more technological and managerial knowledge consequently leading to increased creativity and innovativeness.
The value chains are usually dominated by the powerful governances, which are established based on the power interrelations across the actors of the value chain including the purchasers, the service providers and the sellers. The players influence or operate within the vast range of operations that are necessary for terms of transforming a product from its inception to its result (Kowalski et al. 2015). It is profoundly connected with the ability and power the leading players within the value chain display in terms of controlling any point of the value chain, under which the other players function with particular specifications and parameters.
There can be two types of GVCs including purchaser-driven chains and producer-driven chains. The typology of the global value chains shape the methods of the value chain governance needed to make these chains operable (Alfaro et al. 2019). These governance methods include the captive and hierarchy methods that are driven by the demand of buyers, the relation and modular methods, which are driven by producers, and the market's method, which is, by far, has to smallest functionality in the context of global value chains.
It may be said that GVCs is a distinctive attribute of the recent increasing globalisation. The conceptual models of Global Value Chains also represent the increased interrelation among the economies. In this regards, many organisations throughout the world are prioritising and taking increasingly active participation in Global Value Chains for fostering economic development (Alfaro et al. 2019). However, it must be mentioned in this context that neither all of the involved nations nor all the organisations situated within nations profit in an equitable manner from the development and inclusion of Global Value Chains in their business strategy.
In developing nations such as India, researchers have found a rising integration of GVCs. The increasing rate of active participation in the context of global production sharing has opened many new windows in terms of social and economic enhancement within the value chains of the developing nations (Kowalski et al. 2015). Notwithstanding, it must be mentioned in this context that research has also shown that the social implications of taking an active part in Global Value Chains may not be positive always.
2.3 The Concept of High Street Fashion - Is it Fast Fashion?
Having a British origin, the term "High Street Fashion" refers to the pieces of apparels that are manufactured and bought from local ordinary shops instead of being manufactured and doctored in studios by fashion designers. The high street clothing brands usually conduct mass production techniques for manufacturing apparels with the intent to sell it to large targeted consumers. In addition to that, the buying costs of such apparels do not fall under a larger price bracket, which makes it affordable for people of any age (Bly et al. 2015). The high street fashion apparels are not specific to occasions as opposed to "Haute Couture". The low price tag along with the ready-to-wear clothes indicates why there is high demand for such products among the populous.
The apparels keep changing almost frequently given the high demand for the products among the populous and given the fact that many high street fashion retailers have integrated the e-commerce strategy in their businesses. Nowadays, high street fashion is interrelated to fast-fashion where the apparels produced are inexpensive and mass produced in a rapid manner in terms of addressing the latest fashion trends (Bly et al. 2015). The cheap, yet trendy pieces of apparels are usually sampled from fashion masterpieces that are seen on catwalks and fashion shows. The process takes place by copying the design and looks of apparels from the top-notch fashion houses and reproducing them in a rapid and inexpensive manner.
There are some common elements, which describe high street fashion or fast fashion brands. The first factor is that high street or fast fashion retailers have apparels of literally thousands of styles, which can be immediately related to the concurrent fashion trends. The turnaround time between when a trendy garment is observed in celebrity media or on the catwalk and the instances, when the reproduced pieces of apparels are exhibited on display is extremely low. Fast or high street fashion brands tend to manufacture overseas where labour costs are cheap. In addition, they also exploit the workers due to the lack of safety and rights in such nations and offer them very low wages. Furthermore, the supply chains are extremely complex and the processes beyond of subcontracting of first tied are poorly visible (Henninger et al. 2017). Pioneered by Zara, a renowned fast fashion brand based in Spain, the fast or high street fashion retailers offer only limited quantities of specific apparels to ensure they are sold fast as consumers are aware of the fact that the clothes on display change very frequently. In addition to that, the materials used for the production of clothes are cheap and of low quality.
2.4 Global Value Chain Sustainability
With the increasing integration into Global Value Chains, a question, "whether or not the Global Value Chains are sustainable?” comes in mind. Given the fact that the sustainability of global value chains is an integral feature of CS or corporate sustainability has been increasingly recognised all across the world. In this context, it may be said that the poorest connections within GVCs may negatively influence the reputation of the companies and reduce the stock prices when the vendors are deemed to be violating the practices that address sustainability (Auer et al. 2017). When it comes to the implications of such scenarios, it may be said that companies lose the right to claim to address corporate sustainability through their corporate practices while at the same time, are not able to contract out their responsibilities regarding CS to the extrinsic suppliers and service providers.
However, there are some hurdles, which must be overcome; even in cases where companies are committed to abide by the SDGs or sustainable development goals. In this context, it may also be said that thanks to the advancement of digitalisation and technology, it is becoming facilitated to implement effective sustainable development goals with increased efforts to data management, traceability and transparency throughout the GVCs (Mol, 2015). The ongoing development of advancements made in the field of technology has marked a crucial milestone in terms of improving the CS of worldwide organisations through the enhancement of the sustainability of the Global Value Chains. Various benefits can be exploited by worldwide businesses and economies with the enhancement of corporate sustainability through the enhancement of the sustainability of the Global Value Chains.
In contradiction to mainstay standpoint that the practices a business needs to abide by and follow while catering to corporate sustainability lead to increased expenditure, the implementation and integration of sustainable development goals in the context of operations really contribute to the minimisation of material and energy-related expenses (Mol, 2015). In addition to that, companies avail a stronghold on their competitive positioning, the company management is improved and the services and production operations benefit from the enhancement of creativity and innovation.
Through the adoption of Global Value Chain sustainability operations and practices, the worldwide organisations are able to increase their resilience within their supply chains that caters to gaining a competitive advantage over other players in the same sector along with guaranteeing the long-term survival of the companies (Thorlakson et al. 2018). In addition to that, it may also be said that with the implementation and integration of sustainability practices, the companies are able to enhance their reputation among all the players in the field.These include the sellers, the service providers and the buyers that improve brand awareness, brand recognition, and thereby, ultimately cater to the expansion of the businesses in many ways.
2.5 Trends of Fashion in the Modern World
Fashion in the...