Collection of data3
The Value Chain3
Porter’s Five Forces5
In 2009 H&M and Zara were accused of using child labour (www.ilo.org). Even though H&M is a huge company the scandal damaged the reputation of H&M and without the right recovering strategy the damages might have been fatal. Since the scandal H&M has worked towards a better image by implementing CSR and taking a clear stand towards social responsibility. We have chosen to make a marketing audit on the company H&M, their use of CSR, and the consequences of not using CSR. CSR has been used by many great clothing companies with both luck and failure, and we therefore find it very interesting to analyse how H&M is implementing CSR for their benefit and what could happen if they do not. Problem statement
What has H&M done to recover from the CSR crisis in 2009, and what could the consequences have been if H&M had not implemented CSR in their business? We will answer this by: * Analysing H&M’s value chain set up and their core competences * Looking at the key challenges for H&M focusing on the clothing industry * Looking at the strategies of H&M and the competing company Zara, comparing Zara’s current situation with H&M’s Scope/eliminations
To narrow the scope we will focus on the Danish market, hereby getting in depth with our analysis. We have chosen our primary focus to be on CSR, how H&M uses CSR, and what the consequences could be when not using CSR. We will compare H&M to their competitor Zara due to their similar problems regarding CSR. We haven chosen not to look at consumer behaviour due to the non-relevance for our essay. Method
We will analyse H&M’s value chain supported by the SMS-model and indicate their core competences by looking at their strategic capabilities through the VRIN-model. We will use a PEST analysis and Porter’s Five Forces to indicate H&M’s key challenges in the clothing industry. We will use a competitor analysis to compare H&M to Zara and their use of CSR. Finally sum up with a SWOT-analysis. Collection of data
Most of the data collected is internal and external secondary data. We have collected the internal secondary data by searching on H&M’s website, and by mail correspondence with H&M’s communication department. The external secondary data are collected at the CBS library databases. Internal analysis
The Value Chain
The value chain shows where H&M creates value for their customers. It helps us conclude on the company’s core competences, which match up with the VRIN; fast fashion (operations, in- and outbound logistics supported by technology and firm infrastructure), thousands of stores (outbound logistics supported by firm infrastructure), and clothes for everyone (service supported by firm infrastructure, HR, and operations). We can conclude on the strategic capabilities, which can be seen underneath.
Resources: what we have| | Competences:|
Worldwide stores| Physical | International brandKnown by everyone| CustomersFamous designers| Human| Cheap design clothing with quality Fashionable design |
Conclusion on the SMS-model
(http://www.hm.com/dk/) (enclosure 2)
We have an overview of how H&M delivers service by selling clothes and their additional products. They do this with help from the delivery system where the employees are the ones in physical contact with the costumers. H&M is delivering service through the Internet by allowing customers to shop on H&M’s website. Here the customers can see, what market segment H&M is aiming for by looking at the selection of collections. The delivery system is an...