H&M
Does it surprise you that the second largest clothing retailer is only selling in stores in 54 countries plus an additional 10 countries online? Why do you think it is not covering more of the world's countries?
during its life cycle, as H&M has been introducing new products like home line (2006) and is now planning to introduce sportswear, which may quickly make H&M a leader in the field thanks to advantages that H&M can boast of in the sportswear category. Moreover, Zara is quite slow in introducing their sportswear category, which gives to H&M the possibility to become the earliest “fast fashion mover” in the field. (“The 7 stages of business life cycle,” n.d.; Petro, 2015).
Secondly, H&M has recently entered the new market in India and is not going to stop here. H&M currently operates two stores in Dehli and this summer in Mohali’s North Country Mall the company will open its first Punjab store. As for Indian market in general, H&M is planning to open 50 stores more (Tandon, 2016).
As it was already mentioned the company is running stores in 61 countries with their biggest markets in Germany and the United States. They are employing 148,000 new staff. It sounds a lot, but H&M are constantly being asked whether they will continue to enter new markets and give a push to e-commerce strategy development and implementation. Their answer is quite confident, as they are sure there’s a potential to expand the store fleet for "many years." H&M' CEP Karl-Johan Persson forecasts that the company will more than double the number of stores so as get rid of the gap with its rival Inditex SA, especially taking into consideration the fact that Amazon.com Inc. has introduced a roster of fast-fashion brands making it is worth investing online. Only increases competition in the field of fast fashion. H&M plans to have for 10 to 15% store growth annually. Thus, they are planning to open 425 new stores in 2016 year and enter new markets in Cyprus, Puerto Rico and New Zealand for the first time. This year the company is also planning to launch online sales in 11 new countries, including Japan and Ireland.As for other H&M's labels (Cos, Cheap Monday, Monki, Weekday & Other Stories), they are planning to focus on the development and promotion of Cos. Moreover, according to Persson, H&M is also going to invest online and by the end of this year H&M willl tell more about a new chain that is working on now. Persson says it will be «a freed-standing brand» with the first stores planned to be open in 2017. (Brooke, 2016; Roberts, 2016).
If you worked for H&M, what would you suggest that it focus on to become even larger than it is now? Should it have its own factories? Should it expand to more than the 64 countries (54 with stores and 10 online) that it is in now? Should it control more of the global supply chains?
If I worked for H&M I would definitely promote further expansion of the company, paying attention to the market analysis so as not to lose much when entering a new country. I believe that most companies now prefer to have outsource factories which makes the production cheaper. Thus, I would keep outsource factories but would pay serious attention to the negative articles that appear about H&M in the media, claiming that H&M does very little to ensure their workers at factories have safe and comfortable working conditions. That could become a ground for development of more extensive CSR policy aiming at improvement of factory workers conditions. I would also consider the possibility of increasing their salaries so as to enhance workers’ loyalty to the company. Besides, expansion to the new markets, I would invest into social media marketing, which seems to be a marketing leading field for the nearest future. It should not only increase sales but also should contribute to the smooth entering of new markets.
Finally, being a growing fast fashion clothing retailer, H&M should control more of the supply chains, as it will only contribute to the success of H&M whose supply chain strategy is a constant search for cost-efficiency in production process, reduction in lead times for their retail inventory and promising markets (Lu, n.d.).
References
Brooke, E. (2016, January 28). H&M WILL AGAIN OPEN MORE THAN ONE STORE PER DAY THIS YEAR. Retrieved May 7, 2016, from Fashionista, http://fashionista.com/2016/01/hm-fiscal-2015-sales
Lu, C. Behind H&M’s fashion forward retail inventory control. Retrieved May 7, 2016, from https://www.tradegecko.com/blog/hm-retail-inventory-control
Petro, G. (2015, July 29). The future of fashion retailing, revisited: Part 3 - H&M. Forbes. Retrieved from http://www.forbes.com/sites/gregpetro/2015/07/29/the-future-of-fashion-retailing-revisited-part-3-hm/#87e51fc635eb
Roberts, A. (2016, April 6). H&M sees room for 4, 000 new stores even as Amazon.com Encroaches. Bloomberg. Retrieved from http://www.bloomberg.com/news/articles/2016-04-06/h-m-sees-room-for-4-000-new-stores-even-as-amazon-com-encroaches
Tandon, S. (2016, February 10). Why H&M wants to open a store in Mohali. Retrieved May 7, 2016, from LiveMint, http://www.livemint.com/Industry/zOKfhOgSkXWA9ZuRmPo07N/Why-HM-wants-to-open-a-store-in-Mohali.html
The 7 stages of business life cycle. Retrieved May 7, 2016, from Just in Time Management, http://www.justintimemanagement.com/en/The-7-stages-of-business-life-cycle
