BUSINESS MARKETING

UK High Street Retailer: H&M



Abstract3

Introduction4

Discussion4

Target Market6

PESTEL Framework of H&M7

Political Factors7

Economical Factors7

Social Factors8

Technological factors8

Legal factor8

Environmental factors9

Competition with ZARA's Retailer9

Internationalization Features9

Transactional Cost Features10

Resource-based Factors10

H&M Green Strategy11

Branding and Launching12

Recommendations13

References15

Abstract

In fashion clothing industries, different firms strive successfully by employing various business models. H&M is a famous Oxford street fashion retailer that greatly operates its business in many countries. H&M and ZARA are the two top most fashion industries that compete with each other by using different business models. H&M centres on the outsourcing model, while ZARA centres on in house production model. The paper will also cover green strategy of H&M for making environment sustainable and globalize its popularity. It will also include methods of recognising how external changes impact upon the firm and the various techniques that may be used in the implementation of change. Moreover, it will suggest few recommendations that will enhance the size and structure of the firm.

UK High Street Retailer: H&M

Introduction

Currently, many competitive firms choose to forward non-core operations to manufacturer or supplier for being able to concentrate only on key operations. Firms that adopt the model of outsourcing hope to decrease the cost of firms by specializing the firm's resource and labour more efficient. At contrast, other businesses are frequently trying to hold control over by analysing its value chain. H&M “Hennes & Mauritz” is a Swedish multinational retail-clothing industry which is famous for its trendy clothing for women, men, children and teenagers. H&M was launched by Erling Persson. The concept of H&M business model drove during the business trip of Erling to US, and there he analyzed the American readymade clothing system and brought this idea to Sweden (Pettersson, 2001). Currently, H&M has enlarged to around 1,345 outlets in twenty eight countries, having more than sixty thousand employees. The industry offers clothes and accessories to men, women, children and teenagers, and it have also its cosmetic product line. This assignment will focus on H&M's business model, and would analyse the entire progress and further improvement towards global market.

Discussion

The philosophy and message of H&M is 'Fashion and quality at the best price' via similar promotion in its entire targeted markets. H&M purchases trendy items during the year for best fitting to the targeted market. The fashion year of H&M is classified into summer/spring and winter/fall. The ongoing fashion that largely sells out is ordered around 6 months in advance; however, the trendy cloths reach the outlets within few weeks (H&M 2, 2007). In the year of 2006, the turnover of H&M was SEK 80,081 million and currently it is considered as the biggest market in Germany, followed by Sweden and UK. This retailer does not have own factories, but it outsource the entire production (Saminather, 2007). Nevertheless, H&M holds rather control on its entire outsourced phases of production. It has twenty two production offices in Asia, Africa, Europe and Central America. Moreover, it coordinates around 700 self-governing suppliers usually in Europe and Asia. Every single production office holds responsibility for making sure that the items ...