Leadership and Business Environment of Shein Case Study

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Introduction

Founded in 2008, Shein is an online fashion retailer specializing in quick-fashion clothing that comes at quite cheap prices. Shein is one of the world’s fast-growing apparel companies that was established in China and operates in the UK through the use of digital marketing, efficient supply chain management, and an effective influencer marketing strategy. Nevertheless, the brand development is not without challenges as it operates in the market while meeting sustainability of its supply chain and regulatory requirements especially those in the developed nations with stringent standards of environment and labour.

This paper focuses on Shein and performing a SWOT analysis and Porter’s five forces model of the company’s current position in the UK market as well as PESTEL analysis. The study goes further scrutinizing leadership behaviours suitable for Shein’s expansion to the UK by evaluating leadership models from Daniel Goleman. Furthermore, the work examines the role of stakeholders in the company and how Shein can ensure that its business tactics correspond to the stakeholders’ preferences and demands.

Reference materials and samples are provided to clarify assignment structure and key learning outcomes. Through our assignments writing help, guidance is reflected while maintaining originality and ethical academic practice. The Leadership and Business Environment of Shein Case Study highlights leadership strategies, organisational dynamics, and decision-making processes within a fast-growing fashion business. These resources are intended solely for study and reference purposes.

Task 1 – SWOT and PESTEL Factors

SWOT Analysis of Shein (UK Operations)

PESTEL Analysis of Shein (UK Operations)

Task 2 – Strategic Analysis UK Market

Shein has the following strengths, being a fast-fashion retailer; it has a very efficient supply chain, it closely analyses its consumers’ preferences, and is very cost-effective in its production. Such factors enable Shein to leverage opportunities of the external environment, especially in technology innovations, customers’ shift towards more environmentally friendly products, and expanding markets. For instance, Shein can offer trendy apparel faster and cheaper than the competitors, thus expanding its market niche, especially in emergent markets where the population has adopted the Culture of consuming fashion products, but at a very low price as compared to the crafted apparel (Brydges et al., 2023). Further, proper analysis enables the company to forecast the market trends better, which they adopt effectively to fill the increasing niche of ethical fashion without a lot of fuss.

Nonetheless, Shein has significant threats such as ethics in labour, environmental issues, and regulation. These threats indicate that the company is exposed to forces outside it such as new and more stringent environmental laws, growing concerns over labour appellations, and changing trends toward sustainable consumption (Jia et al., 2023). For instance, governments are now placing restrictions on the amount of fast fashion waste produced, hence encouraging circular economy models. These threats can be addressed in the following ways; Shein can improve by ensuring that it incorporates sustainable production, supply chain, and using recyclable material.

As for the threats, that affect Shein, they are circular fashion trends, consumer concern for sustainable clothing, regulation for sustainable firms, and technological advancements that would help the company attain a green economy. On the other hand, threats include the increasing cost of waste disposal due to a growing regulatory environment in the management of waste, risk arising from consumers’ rejection of certain practices, risk arising from instance public pressure from groups advocating for climate change, and the likelihood that imports might be restricted due to environmental reasons. To address these issues, Shein should include sustainable fabrics, build cooperation for ethical manufacturing, and encourage recycling in the company to meet international sustainability standards.

Task 3 – Suitable Leadership Styles

Goleman Leadership styles

Daniel Goleman asserts that there are six models of leadership, appropriate for various business circumstances.

1. Coercive – Simply involves the use of force in order to ensure that goals are achieved especially in special circumstances although it hampers creativity.
2. Authoritative – Sets a clear vision, motivating employees toward long-term goals.
3. Affiliative – Prioritizes team harmony and emotional bonds, useful for morale building.
4. Democratic – Promotes involvement and thus fosters creativity and active participation.
5. Pacesetting – fosters high levels of performance; useful when implemented with teams that are highly competent, but can be demotivating to the workforce.
6. Coaching – Fosters people’s capacity for growth over time to improve personal and team performance.

There is a need to find a balance between all these styles of leadership.

Leadership Styles for Shein’s UK Expansion

Shein is a consciously growing fashion retail business, thus, it means it needs a leadership style that is responsive to its fast-growing nature and is highly inclined towards data and data as services. Understanding of six leadership styles found by Daniel Goleman will be helpful for Shein to apply to manage and develop its UK office properly. Three particular leadership styles that are most suitable for Shein include visionary, affiliative, and democratic.

Visionary leadership is important to Shein’s expansion since it gives long-term guidance and ensures that its employees think and act in unison. According to Goleman (2000), leaders need to paint a picture of the future and see and ensure the organizational objectives of the organization are in harmony with industry trends. Since Shein is entirely an online clothing company, data-driven, analytical, and focused on its supply chain flexibility and adaptive to market needs, a visionary leader would keep Shein competitive in the UK market. This makes the approach effective in encouraging flexibility and improves the morale of employees due to the clear and balanced dynamism of a strategic plan.

The affiliative leadership style aims the foster strong relationships and teamwork in an organization. When Shein opens to a new cultural and business environment, the key issues that will be quite important will be cooperation and staff satisfaction. Goleman (2000) further posits that affiliative leadership counts on the increase of unity within the team, especially when there is change within the organization. The most integral aspect that can address these issues in Shein is bringing in a leader who cares about employee relations and practices good workplace values. Due to its approach to eliminating discrimination in the workspace, Shein is in a good position to secure the best talents in the fashion market within the UK.

The type of leadership that is applied in this type of organizational structure is democracy, making the employees feel that they are involved in the decision-making process. This style is particularly useful when a group has to include different perspectives and it is a key for Shein as it is operating in a new country with specific regulations and customers’ expectations. The existing literature points to the fact that democratic leadership is effective in the development of innovation and the improvement of the problem-solving process since it allows for the free discussion of ideas and opinions (Harms et al., 2022). Since Shein operates based on data, it is wise to incorporate data from its employees from the trends that are witnessed in the market and the feedback received from the customers.

Task 4 – Internal Stakeholder

Based on the research, Shein’s expansion to the UK market needs a better evaluation of stakeholders to achieve sustainable success. The activities of the organization must also ensure that they meet the expectations of internal constituencies such as suppliers, personnel, and customers. Interacting with these stakeholders can help in improving the reputation of the brand, conforming to regulatory policies and practices in the UK and the expansion of sustainable business.

Suppliers

Suppliers are a vital input in Shein’s model since they allow the company to sustain its operation within the fast fashion market. However, the company has come under criticism over some of its supply chains for the products that covers working conditions and transparency (Zhou et al., 2023). In the UK, consumer concern for ethical sourcing is high, thus requiring Shein to be very keen on suppliers to ensure compliance with obligatory legal requirements on labour and environment.

Among important policies that Shein ought to implement is the supplier code of conduct that should require payment of fair wages to workers, protection of their rights, and environmental conservation. Existing research shows that increased supplier policies achieve greater enhancement in the organizations’ CSR performance thereby doing well in the competitive and socially sensitive markets (Brammer & Pavelin 2022). Another thing that Shein should urgently implement is third-party audits for suppliers to check compliance with ethical labour standards as well as UK legislation. The second strategy is to form long-term relationships with major suppliers as opposed to engaging in short-term contracts that focus purely on costs. Such relationships should also involve suppliers investing in ethical ways of manufacturing since stability in supply chains is achieved. De Giovanni (2023) presents minutes on the primary benefits of long-term suppliers and the obviation of the various risks that come with an uncertain global supply chain. Thus, Shein can enhance its relations with suppliers to achieve higher product quality and ethical procurement by the UK market demand.

Employees

Shein’s UK employees are key to the operational effectiveness, especially on operations, marketing and customer service aspects. The company has to ensure that there’s a good working environment with employees and parties to help bring in better talents, freedom, rights, and satisfaction for the employees.

Implementing an efficient employee well-being policy for Shein will contribute positively to the quality of its personnel by enhancing their morale and productivity. Bakker and Demerouti (2023) have argued that when companies focus more on their employees’ well-being, more of them do not quit their jobs, and the remainder are more committed to their employers. Shein should adopt flexible employment policies, reasonable remuneration policies, and employee well-being policies to correspond to the UK labour market. Thus, for organizations within the fashion industry, providing professional development programs can also improve job satisfaction or productivity within that area of work as well. A second strategy is an improvement of D&I in Shein company, specifically in the UK market. The UK considers employment for all people without stereotyping; research shows that diverse workplaces yield higher earnings in the areas of creativity and retention (Roberson, 2022). Shein can also use a top-down approach where she will employ a policy to recruit talented people who will comprise a diverse group of people. Besides, other programs aimed at creating early career mentorship and leadership development for the underrepresented groups would go a long way in the improvement of employer branding. Thus, Shein can increase retention rates and attract and employ talent that will support the company’s development.

Customers

The major target market of Shein is the youth who are trendy, conscious of fashion trends, and willing to spend their money on flexible fashion trends and affordable price categories. Nonetheless, there is an emerging issue of sustainability and ethical fashion consumption among the people in the UK. To retain the clients in the long run, Shein has to meet these expectations, at the same time it is crucial to stay as affordable as possible and deliver a large variety of products in a short period.

A sustainable product line policy will assist Shein in meeting the needs of consumers from the UK who are increasingly becoming environmentally conscious. According to Niinimäki et al. (2023), fast fashion brands that launch environmentally responsive collections increase brand authenticity and appeal to the increasing group of sustainability-conscious customers. Shein can consider sourcing its materials from recycled fabrics and use proper production methods and mechanisms that can correspond to the expectations of the UK market concerning carbon footprint. Other aspects like revealing the origin of the product, and the effort put in place towards sustainability also go a long way in adding to consumer trust. Another key issue is the increase in customer involvement through the use of new technologies. One of Shein’s biggest strengths is the fact that it leverages data in identifying customer needs, though the company can still enhance customer interactions and engagements. The availability of AI recommendation systems and virtual try-on options in the shopping websites make the shopping process even more fulfilling to the users, (Rahman et al., 2022). Shein can also utilize the techniques of influencer marketing in the UK to enhance its association with consumers. Since merging technology with the engagement of customers, Shein has an opportunity to prevail in the market and at the same time respond to the changes that are happening in the marketplace.

Task 5 – Social and Environmental Responsibilities

Shein’s Social and Environmental Responsibility Strategies

Justification and Long-term Benefits of Recommendations for Shein

As a fast fashion company, Shein has been receiving more heat in the recent past regarding issues of sustainability, supply chain, and responsibility. While the management of Shein knows that it is high time to implement strict sustainability standards to meet the desires of the global population and country regulations, doing so will also be beneficial in other ways such as building customer loyalty, avoiding risks, and improving business performance. For any business operating in the contemporary business environment, sustainability has become inevitable for the achievement of long-term profitability and competitiveness.

Leadership and Business Environment of Shein Case Study

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Another recommendation is that Shein should integrate the aspects of ethical supply chain management through willingness, fair wages, safe surroundings, and compliance with the environment. According to Pal et al. (2023), brands that deal with ethical supply chains enjoy more customers’ trust and fewer reputational losses. Thus, through decent labour approaches and Policies Shein will be able to avoid negative media coverage, hence improving its brand reputation. The other advantages of ethical sourcing of materials, waste minimization, and green packaging are compliance with regulations and cost savings in the long run.

Another crucial issue is circularity inside and outside fashion, including recycling, upcycling, and resale models. In their paper, Fletcher and Tham (2022) claimed that the circular economy model doesn’t just decrease waste, but opens up additional economic value propositions in second-hand markets and rental markets. By integrating technology applications and digital interfaces, Shein is in a position to encourage resale and thus make consumers return their garments. In line with developing the relevant market niche regarding sustainable fashion consumption, this approach is also beneficial for Shein’s long-term business development.

The use of technology in demand forecasting such as AI also helps in improving the efficiency of the supply chain. Chen et al. (2024) further state that due to AI, analytics assist brands in making better forecasts on what will be trending next so that they can help cut down on overproduction and, thus, inventory wastage. Applying AI in the case of Shein means that the company can make items as they are ordered and ordered, thereby cutting on cost most importantly reducing cases of unmatched inventories which are usually disposed of posing harm to the environment.

Finally, enhancing the understanding and consciousness of customers on sustainability causes a better perception of the brand. Attributing to the findings made by Jones and Parker (2023), it was found that companies providing information regarding sustainability and launching promotional campaigns to the same are preferred by environmentally concerned customers. They need to use sustainability badges that point customers to dresses with a sustainable background, detailed production information, and cooperation with environmentally aware influencers.

Conclusion

This paper has evaluated Shein’s strategic position within the UK market through the use of SWOT and PESTEL analyses. This paper also established that Shein benefited from cost leadership supply chain, digital marketing skills, and data-orientated strategy as strengths whereas, ethical issues and regulations were weaknesses. The analysis of various leadership styles revealed that Shein should apply the provisions of adaptive leadership for its further expansion in the UK, focusing on the models of authoritative, democratic, and coaching leadership. It called for ethical supplier management as a way of ensuring appropriate supply chain management and management of customer relations as a way of developing long-term relations with the clients. Further, action on criticisms of social and environmental implications was suggested through sustainable procurement, circular systems of fashion, and technologies. The long-term advantages of such strategies include increased brand image and credibility to customers, compliance with the law, and increase in customer loyalty as well as efficiency in the operations.

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References

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