Company focus: H&M

Extract

[...] H&M has made inexpensive desirable”, Lagerfeld explains[10]. With a structure of just 30 pieces, a limited color palette (black and white with accents of brick red and plum), high collars, razor sharp tailoring, starch-fresh shirts and slim polo necks, which are very much Lagerfeld's preferred personal style, the designer created one of the most anticipated events in the ready-to-wear industry last year. This partnership once again put H&M on the stage, and increased its credibility. The advertising policy around this event was also well thought out. [...]

[...] The company should always mix fashionable and basic items on the mannequins in the windows to show classical customers that H&M items can really fit everyone To differentiate from its competitors, the company should develop its own unique marketing tools. For example, the men's and children's collections are wider today, but H&M does not promote them heavily because it knows that the core of its customers is women. However, since these items exist, the firm should promote them through new advertising campaigns: this initiative could allow it to reach these new targets more rapidly, to differentiate from Zara or emerging competitors, and to equal GAP, whose communication on all collections is real. [...]

[...] Target definition of the company The target of H&M could be defined as follows: almost everyone. The company is indeed selling clothes for women, men, teenagers and children, and produces cosmetics today too. Nevertheless, the collections are following the latest trends of fashion, and address more efficiently a young public. Collections are diverse: sportswear, casual, urban chic, trendy or basic, H&M clothes can fit every way of life. Positioning of the brand The business concept of H&M is to give the customer unbeatable value by offering fashion and quality at the best price. [...]

[...] Best prices are guaranteed by the H&M purchase policy :the enormous quantities ordered from suppliers owns no manufacturing plants) allow spectacular economies of scale that the company passes on to consumers. The company also credits cost controls--few executives have secretaries, for example.[2] Place[3]: H&M sells in 22 countries today European countries and the USA and Canada. Germany is H&M's biggest market, followed by Sweden and the UK. H&M stores, or rather mega stores, are located in the best business locations throughout the world (for example on the 5th Avenue in New York City), and in all shopping malls of European and American big cities. [...]

[...] With annual sales of about billion, H&M is smaller than Gap Inc. (sales top $15 billion, and the Gap brand represents 46% of that) but bigger than its closest rival, Zara, which reports annual sales of just over billion, nearly three-quarters of its parent Inditex's total. Inditex owns other brands such as Massimo Dutti or Berschka[6]. Nevertheless, for 2004, Inditex appears to be in a better position than its competitors, with 24% sales growth. H&M records and Gap only but H&M had seen a 30% sales growth the previous year[7]. [...]