Analysis of company: H&M

Abstract

Large companies and major groups have a more enhanced transparent business strategy than small and medium sized ones. Some elements are present in our daily life, such as marketing campaigns, communications, advertising etc. They make us dream and we are passionate because they seem out of reach for people. Yet, they do face some difficulties and vulnerabilities as any existing business does. Addressing a large group such as H & M is a challenge.

However, H & M makes a repositioning and tries to leave its image to enter into a new market and image to achieve a more rewarding image in the eyes of its customers. This is obvious from the launch of its latest collection, "M by Madonna". While some items are priced to reflect the spirit of H & M, other products have surprisingly excessive prices (such as dresses at 50 euros, leather coats around 152 euros).

H & M wants to move closer to its direct competitor Zara. For this new collection, H & M once again used pop star, Madonna, as its icon. After Karl Lagerfeld, Stella McCartney and Victor and Rolf, H & M continues to associate its brand and the creation of its clothes to stars with high status. It is known for carrying high-end clothing, and fashion designers luxury.

H & M uses the same star and the same designers for their collections, which are still distributed to the international markets. Is this a good strategy to communicate without a standard way to adapt to cultural specificities of each country? While stars like Madonna have international recognition, stars like Emmanuelle Beart (who did the lingerie campaign for H & M in 2006) did not have the same reputation in the world, and not even yet known in the United States.

Is it then wise to continue to operate in a standard communication in all respects? Also, with the expansion in the Middle East and Asia, it will be harder for H & M to continue in this niche. Our problem is thus based on this question: Should we not revisit the concept of the communication standard in favor of an appropriate communication to better reach customers through advertisements?

2006 was a good year for the Nordic countries. However, Germany remains the largest market for H & M and one of the most profitable. The reasons for this success lie in the large resident population, the large number of major cities and also in the strong purchasing power of the Germans. The UK continues its momentum and took second place in Sweden.

Most stores that have opened in 2006 are the United States, Spain, Germany, France and Canada.

In September 2006, H & M opened a franchise in the Middle East, Dubai and Kuwait. Indeed, a franchise agreement was signed with Alshaya. It operates over 900 franchise stores in eleven countries. And H & M sells and delivers its products in Alshaya, who sells to end customers.

This has allowed H & M to locate in an area where it is impossible to create private subsidiaries. Also in this geographical area, the economy is constantly growing and customers have a high purchasing power.

Tags: H&M; strategy of H&M; H&M competition