Competitive environment analysis: H&M
Introduction
We chose to write our report about H&M for many different reasons.
First of all, even if we focus on the French market, the fact that H&M is a global brand, operating from nearly everywhere in the world, both made us sure that we would have to analyze a very strong and efficient strategy, and to face some difficulties, deeply linked with the industry (such as problems of relocations or competition from Chinese textile) that would help us understand a strategy better.
Besides fashion is an unavoidable factor of our daily life. It always seemed interesting to analyze what stands behind the doors of a store in which we shop.
Presentation of the brand
H&M is a Sweden
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Textile industry is protected by a lot of patents to assure the authenticity of products and counter fakes.
Environmental: It takes care of sustainable development and global warming, implemented indices of sustainable development. H&M is an important firm, so it has the responsibility to integrate social and environmental concerns into their business operations. For example, they do not purchase raw materials like cotton and they collaborate with other organizations to help address those issues. The firm really plans to reduce its carbon dioxide emissions due to transport of H&M’s goods. Corporate Social Responsibility (CSR) is one of the most important values of the firm.
In 2007 they formulated their approach to climate change. They have considered the impact of their production and buying processes, transport and sales. They say that they will use these objectives and the information they gather to manage their carbon footprint and tackle climate change in the long term. Legal: It respects conventions linked with ILO (International Labor Organization) related to life conditions and rights of workers in application of local legislations, respect of legal length of work and wages according to current laws, children do not work, no discrimination, no forced work, application of local legislation on environment, importance of health and security.
The firm has several agreements with providers which must sign H&M’s “behavior code” for ex in 2006
H&M’s vision is that all their operations are run economically, socially and environmentally sustainable. They believe that affordable fashion with high quality can be produced and sold in a way that is both fair and sustainable to the
Many firms are learning that being environmentally friendly and sustainable has numerous benefits. (O.C Ferrell, Fraedrich, Ferrell, 2015). This could enable them to increase goodwill from various stakeholders and also save money in the long term. This will mean that they are being more efficient and less wasteful of resources, which will enable them to be more competitive by satisfying stakeholders. The CEO of
or so many years our society has been thinking of forming new creative and innovative businesses, which would be more environmental and customer friendly. Nowadays a large number of different companies follow the social, ethical, as well as moral consequences when it comes to their decision making. One of the relatively new concepts involving economic and social concerns is Corporate Social Responsibility. Many of us apply this approach not only at work, but also in everyday life without even recognizing.
H&M cruelly underlined the continuity of its expansion strategy in long-term perspective (Regnér and Yildiz, 2014), which means continuing to open stores ultimately (Barman and Petersson, 2002). It is planned that H&M will establish another 300 new stores, especially China, the United States and the United Kingdom as the largest growing market. Despite the countries mentioned before, South America, Latvia, Indonesia, Bulgaria and Thailand will be involved (Regnér and Yildiz, 2014).
* Inbound logistic: One of the core values of H&M is the sustainability, and, thus, sustainability in production. The aim of H&M is to offer good quality fashion at the best price and to achieve it, H&M tries to avoid the waste. In this purpose, all the waste coming from the manufacturing, the transport and other sources are planned to be reused, recycled and reduced.(H&M, 2012)
Every company has a responsibility to support the society it serves. This indicates that a company that wishes to truly thrive in a market should not just follow the business and consumer laws of the country but take an active interest in the community that it serves in each country. Today’s global market is led by companies that concern themselves with the sustainability of the company and its products, as well as the continual improvement of the
The International Labor Organization (ILO) sets the standards for working conditions around the globe. ILO’s main target is governments however; many of the standards recognized today affect the behavior of corporations.
Companies today are heavily influenced by the demands of customers and stakeholders. Corporate social responsibility (CSR) refers to the social and environmental responsibility policies and practices developed by an organization to increase its positive influence and reduce its negative activity towards society (Parks, 2008). The business approach and corporate philosophy of an organization is easily altered due to economic pressures, technological improvement and stakeholder needs and demands. "Going green" or being eco-friendly is one such demand. Environmental and sustainability concerns originate most often from governments, consumer activists, and the general public (Schlosser, 2008). Thus, organizations must implement sustainability into daily practices. In addition, sustainability alters the nature of competition and drives companies to think differently about products, processes, and technologies (Parks, 2008).
They looked at two scenarios, inaction, where business’ continue finding and using carbon as they see fit, and action, where business’ use a low-carbon energy mix. They found that not only would the investment cost of the action scenario be no more than inaction, but it would even cost a bit less- 190.2 trillion dollars for action and 192 trillion dollars for inaction. This is before even considering the amount of money saved by the effects of the action scenario itself. The report found that, “the difference in climate damage costs between low (1.5°C) warming and high (4.5°C) warming scenarios could be as high as $50 trillion” (Business Insider). The effect of such a large economic company reporting this data is the perfect example of how using economics for the sake of reversing global warming can be really beneficial. The argument often used by economists is that becoming more sustainable would hurt the economy, but the data in this report proves just the opposite, and how terrible it would be if we did nothing. For the sake of investment in industry’s like coal and gas, this information is often denied. But this is not anywhere near the first time industry’s have had to adapt due to uncontrollable events. This report emphasizes the importance of recognizing
H & M Hennes & Mauritz AB is one of the largest clothing-retail companies in Europe and across the world. The mission statement of the company has been to enhance quality and affordability. The company operates in more than 60 countries globally where it has also established physical stores (Alexander, 13). H&M has a strong financial performance, which is attributed to pricing strategies, product promotion, and its effective distribution channel. H&M has online stores that allow customers to place and receive the goods at their convenience. While the company continues to post positive financial performance, it still faces internal and external challenges. The change in tastes and preferences in the fashion industry has a negative effect on the company.
Corporate social responsibility has been one the key business buzz words of the 21st century. Consumers' discontent with the corporation has forced it to try and rectify its negative image by associating its name with good deeds. Social responsibility has become one of the corporation's most pressing issues, each company striving to outdo the next with its philanthropic image. People feel that the corporation has done great harm to both the environment and to society and that with all of its wealth and power, it should be leading the fight to save the Earth, to combat poverty and illness and etc. "Corporations are now expected to deliver the good, not just the goods; to pursue
LVMH’s brand portfolio is a catalogue of the finest things money can buy. Arnault said, “A Star brand is timeless, modern, fast growing and highly profitable.”[iii] LVMH has positioned its brands strongly in the luxury segment offering more than 50 different brands under their five core competencies. LVMH has been successful through all of their various brands in their portfolio giving them each their independence and creativity. “LVMH is well known for leaving much operational and marketing freedom to the various brands it owns.”[iv] “LVMH has done an excellent job of brand positioning, says Ben Cavender, senior analyst at China Market Research Group. It has succeeded in securing the particularly enviable position of gaining a following among the top percentage of China’s wealthy. As the financial crisis stretches on, LVMH customers in China still have money to spend.[v] “LVMH’s brand imaging, which relies heavily on pushing its European heritage, is so successful that it has benefited other brands by proxy, says Paul French, one of the founders of Access Asia, a group dedicated to tracking regional consumer and marketing trends. “Everyone hangs on the coattails of Louis Vuitton’s brand imaging in China.”[vi]
People are taking more and more consideration on environmental stuff. H&M has done quite well in sustainable improvements. (Activities about this are shown in the appendix.)
Since H&M opened the first shop in Sweden in 1947, using an American concept of shops selling stylish clothes with low prices bring H&M successful in the domestic market. H&M started to expand internationally from 1964. Not only Europe market, H&M also enter in North America, Asia and Middle East market.
‘Corporate social responsibility’ (CSR) means that the firm has wider responsibilities in relation to objectives and people apart from the owners or shareholders (Beal and Goyen 2005). These responsibilities are achieved when the firm adapts all of its practices to ensure that it operates in ways that meet, or exceed, the ethical, legal, commercial and public expectations that society has of business. Objectives often associated with CSR include a responsibility to manage natural assets sustainably and not to pollute by chemical discharge, smell, noise, dust or other irritants; fair treatment of employees and ethical attitude towards clients. The other people include employees, customers, suppliers,