Distribution Network Design And How They Are Managing Their Logistics

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Introduction As the world’s society becomes more prosperous, hence the market expands for automobiles, technology, fashion apparel and other luxury goods (Davies, 2007). The clothing industry, in particular has seen an increase of consumers in developing markets for example of H&Ms plans for opening a retail store in India (H&M, 2014). Recent study done by Nicola Calicchio shows that the BRIC countries account for a significant amount of recent growth, as large parts of their population rise out of poverty and realize their buying potential (Giertz-Ma˚rtenson, 2012) This essay will be based on the retail company H&M and will analyse their international strategy and how they manage their cost and responsive trade off. The essay will also focus on their distribution network design and how they are managing their logistics. Introduction of H&M According to (H&M, 2014) H&M was established in in Vasteras Sweden in 1947 by Erling Persson. H&M started off as a women’s clothing store but slowly integrated to a store where it sold both men’s and women’s clothing under the name Hennes (H&M, 2014). It first went global at around 1964 when it opened its first store in Norway (H&M, 2014). As of 2013, H&M operates in 53 countries and is the third largest clothing retailer (H&M, 2014). International Strategy One of the key components for H&M is how to promote their product globally. Global Standardization Strategy is an approach that can be used internationally (Yip, 2012). This type

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