Outline H&M's product strategy. Describe H&M's sourcing and inventory management strategies. What potential problems do you anticipate for their global plans?

Topics: Retailing, Department store, United States Pages: 3 (745 words) Published: August 9, 2004
Nobody immediately considers Sweden as a country well known for its fashion, but its Hennes & Mauritz retailer has profitably dominated the globe, with almost 1,000 stores in 20 countries. It is now Europe's foremost clothing merchant, and at present appears resistant from the anguish confronting other sellers. Even though Europe is the chain's domination, H&M is one of the few fashion retailers to have created a flourishing hold in the US market, with additional outlets by the end of the year, and more planned thereafter.

A large deal of H&M's accomplishment can be accredited to the aptitude of its internal designers, examples of piggy-backer style, swiftly acknowledging trends then acting on it, and being able to turn out patterns that look very much like what other expensive designers are creating. This might appear a little immoral from a fashion standpoint, but H&M supporters don't care. In fact, they some what are pleased in thinking they got one up on the head honchos of fashion.

Another important draw of H&M's retail strategy is the stores get new merchandise daily. Much of the new stock comes through a rotation system between stores experiencing runs on certain lines. Sources report that H&M "turns over its entire inventory a whopping eight times a year." Furthermore, they are recognized to have one of the best rotation cycles in the business, turning "merchandise from drawing board to store shelves in as little as three weeks."

As mentioned before, H&M's success is its ability to quickly recognize fashion trends and get them into its product line. Its merchandise is designed by an in-house staff of more than 60 designers and is sold under more than 20 H&M labels. However, H&M doesn't own any real estate. Instead, the company believes it should concentrate all its resources on retailing. This could be problematic if the owner of the property finds a higher bidder; this could force the retailer to move its business outside of a 'prime' area....
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