Sam Curry, General Manager, Retail Services at ISPT said, "Melbourne's GPO is an iconic landmark building in the heart of Melbourne's retail precinct. Melbourne's GPO is a destination for all Melbourne shoppers as they embrace the fashions delivered by H&M for the first time". The new store will become H&M's Australian flagship store and one of its biggest in the world occupying three floors and almost 5000 square meters of the heritage listed GPO building (Zielinski, 2014). Expanding to another country, more specifically Melbourne, will aid H&M in achieving the goal of increasing its number of stores by 10-15% per year. In terms of sales, the H&M Group's sales including VAT increased in local currencies by 16 percent during the second quarter of 2014, which amounted to SEK 37,827 million, an increase of 20 percent (H & M Hennes & Mauritz, 2014). Similarly, gross profit amounted to SEK 23,010 million, an increase of 19 percent (H & M Hennes & Mauritz, 2014). H&M has currently a vast number of competitors. Namely the major competitors include, Uniqlo, Zara, David Jones, Myer and Forever 21. Hence with the intense competition in the fashion industry, the global expansion of H&M and opening a new store in Melbourne allows them to gain a competitive advantage over its competitors. This essay will aim to highlight the key issues of the powerful and extreme competition in the fashion industry, through the expansion of H&M to Melbourne. It will further incorporate and discuss the issues and challenges to current business competitiveness faced by management, the growing importance of corporate citizenship and social responsibility effective execution process and recommendations for future strategic development to over come the challenges. .
Current management challenges to business competiveness for H&M include the issues such as operating in an internationalised approach despite a centralised control and distribution system.