H & M Analysis

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  • Topic: H&M, Fashion, Erling Persson
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  • Published : March 7, 2013
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H&M
6 October 2012

 

Established by Erling Persson in Sweden in 1947 H & M Group comprises five different independent brands – H&M, COS, MONKI, WEEKDAY, AND CHEAP MONDAY Is represented on more than 47 markets, 2,600 stores all over the world along with over 94,000 employees



 

Fashion and quality at the best price Manufacturing under good working conditions and with limited impact on the environment



To offer products to customers ranging from women, men and young people to children. To offer new items to customers every day

 H & M utilizes matrix structure to manage its organization

 Produce without factory:

H & M has a good long term contracts with its producers and suppliers 

Does not work with franchises: All the points of sale are held only by Hennes and Mauritz Does not purchase real estate: H & M rents its store location in order to keep capital free to produce its collections





H & M follows cost leadership strategy & market
expansion strategy In 2012: H & M enters to 5 new markets in Bulgaria, Latvia, Malaysia, Thailand, Mexico Also, opens a total of 257 new stores this year and their goal is increasing 10 to 15 percent of outlets annually





Threat of New Entrant

Threat of bargaining power of Supplier

Threat of intense segment of Rivalry

Threat of bargaining power of Buyer

Threat of Substitute

Strong

Moderate

Weak

Threat of intense segment of rivalry Threat of new entrants Threat of bargaining power of supplier Threat of bargaining power of buyer Threat of substitutes











H&M

H&M

Initial Design Idea

Raw Materials

Production

• Kind of materials • Easy care for customers

• Cotton • Sustainable

• 750 independent supplier • High social and environmental

• Fashion and affordable
• Several seasons

alternatives

standards
• Partnership with mills

Logistics

Marketing and Sales

Services

• Via ocean, road, railroad

• A few franchises

• Influence on customers to

• Environmental
consciousness

• 2600 stores in 47 markets
• 90% of total activities • Use resources efficiently

care
• And to recycle

 Is firm able to exploit an opportunity or neutralize an

external threat with the resources/capabilities? Is a resource currently controlled by only a small number of competing firms? [are the resources used to make products/services or the products/services themselves rare?]



 Is it difficult to imitate, and will there be significant

cost disadvantage to a firm trying to obtain, develop, or duplicate the resource/capability? Is the firm organized, ready, and able to exploit the resource/capability?



Resources & Capabilities
Financial

V

R

I

O

Competitive Implication
Temporary Competitive Advantage Temporary Competitive Advantage Temporary Competitive Advantage

performance

YES

YES

NO

---

Above Normal

Human Resource Innovation & Creativity

YES YES

YES YES

NO NO

-----

Above Normal Above normal

Production & Logistic

YES

YES

YES

YES

Sustained Competitive Advantage Sustained Competitive Advantage Sustained Competitive Advantage

Above normal

Reputation Sales & Marketing

YES YES

YES YES

YES YES

YES YES

Above normal Above normal



During a slowdown in the economic recovery process around the world did not negatively impact Malaysia.



Boost purchasing power within the country.



Many sales and promotional activities being organised by
major fashion retailers



International fashion brands dominance apparel (Highly competitive market) Apparel specialist retailers remained the largest distribution channel in Malaysia for apparel





Bright outlook for apparel in Malaysia



Now, it is going to be a
challenge for the other fast fashion retailers in Malaysia to keep up with the new competition....
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