In 1947, H & M, a Swedish clothing chain, opened its first store in the world. The company then conquered Europe and arrived in France in 1998. Today, H & M is a firm well known internationally and has over 550 outlets in 12 countries in Europe. Operating both in the market for menswear, women and children, underwear for men and women and accessories, the company faces strong competition every time.
To deal with this fierce competition the company has managed to create competitive advantages by setting up a complete production line from design to sales, enabling it to offer fashion and quality at the lowest price and a concept store of its own ("micro collections, large area, providing services, etc ).
So one can rightly ask: What was the strategy implemented by H & M, which explains their growing success?
This report will focus the study specifically to target the womens' segment because it was found that it represents a large portion of sales of the company. It will examine the reasons for the success of H & M, and the strategy that enabled them to achieve such an expansion.
The first part of this issue is devoted to the presentation of the brand and its market. In the second part, it will study more precisely, through matrix theory and its resources and skills, strategy and competitive advantage.Then it'll see what difficulties the company faced and it will provide the company with strategic recommendations.
Erling Persson founded H & M in 1947 and began his career as a salesman in a company that specializes in Swedish Valsts pens "Penn Specialisten" founded in 1943. Erling Persson and associated pens sold in department stores in the area of Gothenburg.
During a trip to the United States, his attention turned to a new types of stores that were making big sales by selling at reduced prices. On his return, Erling Persson opened his first store in Sweden. He christened "Hennes" meaning "hers" in English and "hers" in French ("for it") because they sell only women's clothing.
The store met success immediately and over the next few years Hennes expanded steadily. In 1968, the company wanted to settle in Stockholm and so Erling Persson bought the store "Mauritz Widforss” that specialized in the sale of weapons and hunting gear . The recovery of the premises was accompanied by the purchase of the stock of menswear. The company then changed its name to "Hennes & Mauritz" (H & M).
The first attempt to go international, took place in 1976, the year H & M opened its store in Oxford Circus in London. Since the acquisition of Mauritz in 1968 the group had experienced tremendous expansion mainly in Europe and more recently in the United States and now covers 14 countries. H & M carries 90% of its revenue outside its borders.
In this segment of ready to wear, H & M offers a wide range of clothing for women of all ages and lifestyles. Thus, women's collections bring together a large number of concepts: updated classics and basics, fashionable clothing and trendy clothing for the "connected", the collection for mothers-Mama, BIB line for the "strong women", ‘Divided' concept for adolescent girls and sports collection.
Tags: H & M case study, H & M ready to wear, strategic analysis, marketing
[...] It announced the end of "uniform", only 32% of women bought a suit in 2001 3.5 pts). This attitude is reflected in the neo cool style that revisits the traditional codes of femininity by breaking away from set conventions. The symbols of seduction are diverted from their original meaning, and the bra with 13% of buyers 2.1 pts) becomes an object "erotic beauty" that highlights the shape of the body rather than hide its absence of contours. Similarly, the transparent bra straps are finally exposed shamelessly with tops with spaghetti straps. [...]
[...] A tracking system similar to that of hypermarkets has been implemented. The 10,000 items offered for sale are distributed by zones (young fashion, classic, trendy, and sportswear). The "visual merchandisers" are in charge of the interior window display. They have only one role: to set the stage to bring added value to what otherwise would only be "good business" by matching colors and materials as directed by the "codebook" provided by Stockholm. Even the way the handle is turned up on the arm of the mannequin is according to certain set guidelines. [...]
[...] Either the store staff should make the effort to arrange them or we're leaving If they left a little more space between the shelves and closets, it would be much better H&M is right in regularly changing the windows because it pushes consumers to return more often and is in harmony with the "micro collections" presented by the brand Image For 53% of women, the brand is an outward symbol of recognition and affiliation with a certain way of living; by buying a bag or clothing, they feel they own a piece of this brand. The so-called basic brands are losing ground, they face a lack of image and imagination. [...]
[...] What is the trigger for you? The frequent arrival of new models that can be found at H & indeed, the clothes offered by H&M follow fashion trends but at the same time are original (retailers, final touches and colors that stands out from the competition) Tell us about your consumption at (Frequency and conditions of purchase) About 2 times a month and occasionally when I pass a store How do you feel about the H&M stores? (Arrangement, expectations, personal storage) Good, but not enough staff available to the customer to advise them. [...]
[...] The strategy is to purchase for many. Thus, the group sells 500 million garments every year, which weighs heavily in negotiations with suppliers. "With our 600 customers, and our offices in 21 countries, we can find the right supplier in 48 hours", says Karl Gunnar Fargelin, Purchasing Manager. “Right supplier” means someone cheap and ready to crush its margins if it wants to continue doing business with the Swedes. In addition, this Swedish company outsources its entire production to low- cost labor. [...]
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