The Strategies of the H&M Company - Case Study Example

Case Study H&M Gets Hot Ans1. H&M a company founded by a Swedish is flourishing and known for its strategy in business through out the world. The strategies sought out by the management are carefully worked out before implemented. This gives them a great benefit over other brands in terms of strategy and branding. H&M has been well known for its marketing approach which is carefully drawn to meet the requirements of the society. Marketing forms an important part of the strategy developed by H&M and this helps it to flourish and gain profits excessively. The marketing approach adopted by H&M is different from the other brands in terms of fashion and prices. Fashion adopted by H&M is usually the one which is the ongoing trend in the society. It can be clearly seen through the massive budget allocated to the marketing sector that H&M is heavily dependent on the marketing campaign that they undergo. 4% of the revenues of H&M are allocated to the marketing campaign. Furthermore, in 2002 a top fashion legend was selected by the H&M to promote its products through marketing. The economical spending of the H&M management does not stand the marketing campaign as the management itself decides to spend a heavy amount on marketing campaigns. This shows that H&M is to a great extent marketing orientated and is heavily dependent on these approaches. Ans2. The efficiency/effectiveness matrix is a tool used by businesses to categorize companies according to their success in strategies and implementation. H&M can be categorized into the 'Thrive' cell of the effective/efficient matrix. The 'Thrive' cell in the matrix usually denotes organizations which are successful in forming and implementing strategies. Similarly H&M shows a sign that it belongs to one of these organizations because of its rapid growth and success. The strategy pursued by them is of the kind which adopts recent approaches to meet the demands of the society. The rapid growth which the company is going through shows a sign of the company thriving in the business sector. It has expanded from a small outlet to 900 garment shops all over the world. And it is known to top the list in terms of expansion with its other competitors. The effectiveness of H&M can be seen in the implementation of the strategies and the efficiency of this effectiveness is also great. Strategies pursued by H&M are different from their other competitors and most of the emphasis in these strategies is on pricing, marketing and fashion designing. H&M has incurred great profits in the years and thus best suits in the category of 'thrive'. Ans3. Customer value forms an important aspect of the strategies formed in the business world today. Firms give importance to this very aspect when forming strategies to give the customers a product or service which they desire with a better deal. H&M is known to provide customers with a better deal as required by the customer value. Customers of H&M are highly satisfied with the products they are getting as these products are according to their needs. Not only the desires are being met but also the price at which these desires are being met is exceptional. The designing section of H&M is known to be travelling through out the world to pick up the recent trends in fashion and implement them in their fashion industry. Pricing is marked as an important criterion in the firm as it helps to attract customers towards it. Prices of the H&M products are known to be very low comparatively with other brands. Their motto is a clear sign on their stand on pricing strategies according to the new fashion trends. H&M also makes sure that new trends in fashion are quickly picked up by their designers and provided to the customers. A particular design in the H&M outlets would not be seen for a longer time as it would be removed with the newer fashion designs. Furthermore the same design if provided by other brands would be comparatively higher in price so the customer value is highly considered by the management of H&M. The cheap prices and the latest apparel in H&M can be viewed as a huge step towards improving the customer value of the firm. Ans4. H&M is a brand of apparel which is expanding greatly because of its strategies. However this expansion can be stopped or decreased due to several factors. The competitors of H&M i.e. Gap Inc Zara etc can pose a major threat to the business of H&M throughout the world. The strategies of both these major competitors is different than that of H&M. The pricing and marketing strategies are two of the major strategies which have a difference. Prices of both these brands are comparatively higher than that of the H&M. However even then both these competitors are expanding and earning profits with a steady rate. A major change in the pricing and marketing strategy of both these competitors would highly affect the profitability of H&M. If the branding cost of these competitors is decreased and so are the prices at which the products are sold on their outlets H&M would suffer a blow and a section of diversity would form amongst these firms. This would decrease the expansion and profit rates of H&M. Similarly H&M is producing apparels and goods which are mostly for woman and children in some areas i.e. concentrating on only one gender. This can prove to be a setback for the brand if a single mistake is committed by the management. Diversity in the apparels and goods is necessary for H&M to remain in business. Ans5. Yes in my opinion if disposable clothes are being marketed it is in the greater interest of the society. In other words it can be said that this marketing is a form which promotes societal welfare. Disposable clothes being marketed by a firm would attract both the middle and lower classes to buy clothes according to their wants and needs i.e. on a special occasion. And as these clothes would be cheaper than other clothes the lower classes would be able to afford it. Mostly the lower classes use an old dress for special occasion, however when they will have an alternative to buy clothes with cheap rates they will automatically buy it for an occasion. Marketing of these clothes can greatly help to attract these classes to buy the clothes and this can be counted as societal welfare. Furthermore if individuals from middle classes buy these clothes they would usually tend to give away these dresses to the lower classes after wearing on one occasion. Bibliography Jobber, David. Principles and Practice of Marketing. London: McGraw-Hill, 2001. Read More