The fashion industry is both dynamic and highly competitive. Tastes in fashion can be very fastchanging and subject to influence by many factors, including famous fashion designers and celebrities (e.g. from TV, music, movies and sports). H&M is one of a large number of retailers serving what is known as the ‘fast fashion’ market. They seek to offer clothes in the most contemporary styles, as exemplified on the catwalks of the major fashion shows at New York, London, Milan and Paris, to mainstream consumers at affordable prices. The aim is to constantly design, manufacture and deliver the latest styles into high-street stores as quickly and as cheaply as possible. This means that for retailers such as H&M, who offer a wide range of garments and accessories, demand for any particular product is likely to be highly unpredictable, short term and volatile, making forecasting incredibly difficult. On the one hand, H&M do not wish to miss sales opportunities by running out of goods that customers wish to buy. That would only benefit its many competitors. On the other hand, they do not wish to be left with excess stock of goods that no one wants to buy or will only do so at a knock-down price. That would impact its profits. The challenge for H&M is to match their production capacity with customer demand, and to do this in both the long term and the short term.
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