H&M Company Analysis

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COMPANY ANALYSIS & PROBLEM IDENTIFICATION MARKETING MANAGEMENT BMKT601

TABLE OF CONTENTS
Contents
1.EXECUTIVE SUMMARY3
2.FAST FASHION4
3.ENVIRONMENT ANALYSIS4
3.1.Political Factors4
3.2.Economical Factor5
3.3.Social Factors6
3.4.Technology Factors6
4.INDUSTRY ANALYSIS6
5.H&M8
6.STRATEGY10
7.SEGMENTATION11
8.TARGETING13
9.POSITIONING14
10.CONSUMER BEHAVIOUR15
11.MARKETING17
12.SUPPLY CHAIN22
13.CONCLUSION24
14.BIBLIOGRAPHY25

1. EXECUTIVE SUMMARY

The fashion industry is evolving to ever faster incorporate catwalk design to high street stores, with strong competition within an oligopoly market. The ever increasing speed of product supply within the industry allows competitors to frequently change strategies to suit observed trends in consumer behaviour.

Hennes & Mauritz stands as one of the forefront competitors within the fast fashion retailers, characterised by a wide geographical presence spanning 38 countries and a turnover of £127 billion in 2010. This being said, the company still experiences strong forces that hinder growth and even the maintenance of market share. Predominantly H&M is following a market penetration growth strategy; however, the company also focuses on product development, when introducing unique apparel such as the collaborations with iconic designers, and a diversification strategy when taking new products aimed at a new market, such as the H&M home ware line.

H&M’s target market is people aged between 15 and 40 years of age, who are interested in fashion, beauty and spending money on trendy clothes, however also provide for children, cosmetics and home ware assortments. The company recognises though, that the most profitable and popular segment within its market lies in females aged between 15 and 25. H&M provides for two types of shoppers: a necessity based shopper and a fashion enthusiast whose self-opinion is largely based on social response to dress and appearance. It achieves this through offering a wide range of products that suit the demands on quality, design, and affordability of both types of shoppers.

H&M’s mission statement is clear: “quality and fashion at the best price”, in order to achieve competitive advantage. Current economical influences have led to this strategy proving more successful, with the recession hitting the disposable income of most households in the UK and especially within H&M’s target market. In response to the financial hardship, many consumers are switching to value retailers with many claiming they will continue to purchase cheaper products even when the national economy shows signs of recovery. In order to prevent raising prices, H&M has had to outsource production and control costs effectively, especially with increases in VAT also affecting profitability.

Additionally, H&M has developed an effective advertisement strategy with campaigns designed to show current season designs and prices, utilising all forms of medium including TV, magazines, posters and endorsements. Nevertheless, there are still areas for improvement within the company: improving responsiveness from less successful segments, such as men’s clothing, and product awareness and consumer loyalty, as found in the Mintel 2011 report.

2. FAST FASHION

Fast fashion describes the nature of the majority of high street clothing retail in that designs move from catwalk to store in the shortest possible time in order to encapsulate current trends and changes to consumer behaviour. This strategy was founded on a manufacturing model known as ‘quick response’, developed in the USA; the industry requires responsive manufacturing capabilities and an extremely efficient and productive design force to exploit current and developing trends and meet the demands of the consumer. The fast fashion strategy has been employed by market leaders H&M,...
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