Table of Contents
Issues of Resources and How They are Used and Managed in the Selected Brands. 3
Three Fundamental Approaches- Narrow, slow and Close Loops. 6
Value Dimensions and the Corresponding Questions. 7
Reference List 9
The circular economy has become a major part of every business (Kirchherr et al., 2017). The circular economy is an economic system that aims to reduce material wastages by using renewable sources (Bocken et al., 2016). It is a system of resources utilization where reduction, reuse, and recycling of elements prevail. Organizations are now giving priority to the circular economy because of constant pressure on the global environment. The environment is becoming polluted for man-made activities. The report is about the critical analysis of the linkage between marketing and management for sustainability. The report aims to address the challenges and opportunities of value dimension of marketing and management decisions and strategies in RMG circular economy. It is based on six brands of readymade garments (RMG) industries from three tiers given in the instruction file. The selected brands for this report are H&M Group, Nike, Adidas, Primark, Aditya Birla, and Asos. The report will include how the circular economy allows people to focus on issues of resources and how they are used and managed in the selected brands, three fundamental approaches, and the value dimensions and corresponding question.
Issues of Resources and How They are Used and Managed in the Selected Brands
The selected fast fashion brands H&M Group, Nike, Adidas, Primark, Aditya Birla, and Asos are well-known brands in the fashion industry. The fashion industry causes environment pollution and it is ranked second after oil sector as dangerous polluter in the world. Heyes et al. (2018) stated that nearly 20% of water pollution is caused by fashion industry. According to Geissdoerfer et al., (2017), the recycling capability of the materials used in RMG is less than 1%.
The selected six brands are fast fashion brands in the RMG industry.
- Issues of Resources in H&M: The report suggested that the H&M Group is a sustainable fashion brand that is killing the environment. The marketing perspective of H&M is to promote a new type of clothing collection that is made of recycled and organic materials. The clothes cost £5. So it means that the clothes are made for short-term period. It suggests that the sustainability rate is 5% of these products. Though the brand started an initiative of recycling products by offering vouchers to the customer for recycling their old clothing but this is indirectly influences them to purchase new clothes.
- Issues of Resources in Nike: Nike is a well-known brand for active wears, shoes, equipment, accessories, and services. Though the brand has taken some steps forward to adopt positive changes in terms of environmental practices and becomes a member of the Sustainable Apparel Coalition. But Nike does not eliminate dangerous chemical usages in production.
- Issues of Resources in Adidas: In 2012, Adidas was blamed for contaminating water bodies through chemical disposal in some restricted. A report claimed that Adidas Group and H&M tie with the PT Gistex Group. PT Gistex Group is a controversial brand name that repeatedly contaminates Citarum River in West Java, Indonesia. But Adidas has now become the sustainable brand in the RMG industry by implementing new strategies to focus on the circular economy.
- Issues of Resources in Primark: Primark is a well-known brand for fast fashion and using environment-friendly resources but it does not minimize carbon footprint. He brand does not take any initiative to eliminate greenhouse gas emission.
- Issues of Resources in Aditya Birla Group: Aditya Birla Group has a plant of Viscose production. Viscose is a mixture of dangerous chemicals which can harm people and ecosystems if they are released into the environment. The plant is located near Chambal River in Madhya Pradesh, India. The villagers who live near the river are suffering from major health issues.
- Issues of Resources in Asos: Asos brand uses limited eco-friendly materials in its clothing. It does not take any initiative to reduce the use of hazardous chemicals in the production process. This issue is stopping the brand to become a sustainable brand in the RMG industry.
Uses and Management of Resources for the Six Brands
Circular economy allows people to focus on issues of resources and how they are used and managed in the organizations (Jansson et al., 2017). The management of the resources and utilizing the resources for recycling or reuse is important. The RMG industry should make collaboration between marketing and management for sustainability. The marketing team needs to think about the sustainability of the brand before producing any hazardous material and the management team needs to take initiative to implement three R's of the environment- reduce, reuse and recycle (Ghisellini et al., 2016). These brands need to use 100% recycled or sustainable materials. Sustainable RMG industry has effective marketing and management strategies to become a sustainable industry (Korhonen et al., 2018). People become more conscious about their health and the environment so the RMG industry needs to take initiative to replace and reduce chemical materials in making fashion garments and accessories. Fashion brands can purchase renewable energy to eliminate greenhouse gas emission (Kumar, 2016). The brands can take initiative on low-waste material. The marketing team needs to assure that the product development team would use eco-friendly raw materials like organic and recycled cotton and polyester for making garments or other accessories. These selected six brands can use wastages collected from oceans, rivers, and seas and turn it into consumable products. There is a link between marketing and management as these two are incomplete without each other (Lewandowski, 2016). An RMG industry cannot have sustainability if these two are not working together. Now the circular economy has become a major part of RMG industries so every fast fashion brand needs to assure that they are positively utilizing their resources to become a sustainable brand (Lüdeke‐Freund et al., 2019).
Three Fundamental Approaches- Narrow, slow and Close Loops
Circular economy uses three fundamental approaches in supply chain loops. Circular economy mainly aims to redefine economic growth in such a way to capture positive benefits by shifting the focus of consumerism to the use of eco-friendly renewable resources (Murray et al., 2017). Every RMG industry needs to adopt supply chain strategies to reconfigure distribution channels, technology, and forecast methods to generate value across the business ecosystem. The fast-fashion brands must create new business models and improve supply chain management functions to achieve this goal. These brands need to improve their market response on times to build business ecosystems which are compatible with the goals of circular economy (Pal & Gander, 2018). These six selected fashion brands need to develop new product ranges, production process, sourcing strategies and distribution channels to achieve sustainability. These changes require the adoption of new strategies like narrow, slow and close resource loops.
These three strategies are simply reducing, reusing and recycling materials.
- Narrow Resource Loop: The narrow loop is reducing the number of materials needed per product (O'Reilly & Kumar, 2016). This strategy aims to improve the efficiency of production, distribution and consumption processes. For example, Asos has purchased renewable energy to reduce greenhouse gas emission.
- Slow Resource Loop: Slow resource loop aims to develop the business models and value chains to support continuous reuse over time (Pedersen & Clausen, 2019). This strategy aims to extend product life and reduce or avoid waste are central elements of this approach. For example, Primark uses paper bags and introduces initiatives to reduce waste and packaging.
- Close Resource Loop: Close resource loop strategy asks industries to close the loop and recycle after many cycles of reuse (O'Reilly & Kumar, 2016). For example, Adidas produces Ultraboost trainers, one kind of shoe that is made from recycled waste from the sea. 11 plastic bottles can make one pair of shoe. They aim to eliminate wastage. This strategy is used to transform many product categories as it changes the production and sourcing processes.
Value Dimensions and the Corresponding Questions
What value is proposed to whom?
· The product will be eco-friendly and the six brands will aim to reduce environment pollution, reuse and recycle products (Ritch, 2015).
· The segmented customers will be both men and women from the age group of 15-70 years.
· These RMG industries will make Partnership with other companies to make products from wastages.
Value Creation and Delivery
How is Value Created and Delivered?
· The key activities will include reducing carbon footprint and greenhouse gas emission, innovative product design, better marketing and supply chain management, public awareness on reuse and recycling of garments.
· Key resources for this will be designers, high-quality raw materials and craftsmen.
· Key partners will be distributors, franchises, factories worldwide and wholesalers.
· Channels for the value distribution will be stores, media, social media channels and campaigns.
How is Value Captured?
· The cost will include investment in raw material purchase, sponsorships, R&D, marketing, management cost for employee and organization.
· Product sales will help to generate revenue.
· Customer loyalty can be achieved by keeping in mind the concept of a circular economy.
Table 1: Value Dimensions and Corresponding Question canvas
Source: Created by the Learner
Therefore it can be concluded that there is a link between marketing and management for sustainability. These two are incomplete without each other. RMG industries are causing great environmental pollution so the fast fashion brands need to implement new strategies and adopt the concept circular economy to be a sustainable brand.
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