Analysis of Hennes & Mauritz - Assignment Example

The first piece of work requires you to assess an ecommerce business solution for your chosen organisation. ID: details: ModuleTitle: Module Code: The Module leaders name: Deadline date: Word count: Contents Contents 2 Section 2: Main Findings 3 Section 3: Analysis and Conclusions 7 Section 4: References and bibliography 9 Section 5: Appendices 11 Appendix 1: The world of H & M. 11 Appendix 2: Blueprint on electronic commerce system 12 Section 1: Introduction Hennes & Mauritz is a highly successful fashion group engaged in the manufacture and retail sales of fashion apparels and accessories. . The company is of Swedish origin and is one of the most successful fashion group retailers in the global fashion apparels and accessories market. The company is renowned for its performances, in terms of financial, operational and strategic performances. Hennes & Mauritz (H&M) offers a wide range of products for men, women and children. The product portfolio includes apparels, footwear, accessories and cosmetics products. Hennes & Mauritz operates in more than 38 countries across the globe with its main operations in North America, Europe and Asia. The headquarters of Hennes & Mauritz is located in Stockholm in Sweden. Currently, Hennes & Mauritz is one of the global leaders in the business of fashion products and is highly renowned for the robust strategic management processes employed by the management of the company over the many years of its operations. The valuation of the company is over USD 100 billion as of 2013. Section 2: Main Findings The electronic commerce market is a high potential market which is experiencing exponential growth (Laudon and Traver, 2003). As such, Hennes & Mauritz has focused in tapping in the large online marketing domains, especially in the delved countries like the United States of America and the United Kingdom. The company has introduced the electronic commerce business wing from 2010 when it had started selling its products through its corporate electronic commerce website. The online shopping website of H&M, was launched in the year 2010 which offered online retail sales only in the European countries. The electronic commerce wing of H&M was launched as a part of their strategic management function. The main aim of launching the electronic commerce business in the company was to ensure higher levels of competiveness and sustainability in the dynamic business environment, the fact that the electronic commerce domain of businesses across various industries had been experiencing a boost in the last 10 years had made it necessary for Hennes & Mauritz to invest and focus on this part of conducting business so as to ensure higher levels of competitiveness in the global markets of operation of the company (Dave, 2008). The company used to operate with 2200 physical stores locate in diverse geographical locations across the globe. However, currently, Hennes & Mauritz has also entered into the electronic commerce business domain by providing internet based services to its global customer groups. These services include catalogue sales and internet shopping in a number of countries of its operation like Norway, Sweden, the Netherlands, Austria, Finland and Germany (Carton, 2010). H & M uses a simple electronic commerce business model in which the user can browse through the catalogue of products, select the products and add them to the cart (Figure 1). Once the customer has decided to buy the products he can proceed to confirm the order and pay for the products through different internationally accepted payment systems. After the payment is done by the customer through the online portal of the company, then the order is sent to the warehouse for the fulfilment and at the same time a confirmation mail is sent to the customer for enabling him to keep a track of the order. The customer can also track his order through the "My accounts" sections in the website in which all the details of the orders and the transactions carried out by the specific customers are recorded. Once the products are ready, they are dispatched to the customer through a third party logistics service provider or the company’s logistics departments as per the location of the buyers. Figure 1: An electronic commerce business model (Source: Turban, King, McKay, Marshall and Lee, 2010). H&M is a very good example of a company that has successfully generated competitive advantage and success in a hyper competitive and overly dynamic market through the establishment of a value adding electronic commerce business platform. The integration of the electronic commerce business solutions in the organizational processes have made it possible for the company to gain additional revenues and profits by selling its products across wider geographical locations and among a broader group of customers (Hendrick and Heiman, 2001). The electronic commerce and Information Technology platform used by the company is a consistent and highly developed platform in terms of technology usage which has made the platform extremely robust, efficient and value adding in nature (Turban, King, McKay, Marshall and Lee, 2010). Since, the company has been an early adopter of different technological advancements; therefore it has been able to use its available Information and Communication Technology (ICT) capabilities in the electronic commerce business model. The fact that Hennes & Mauritz has been much adept at using the technological advancements and discoveries for the value addition to the company has been a main reason for the widespread success of the electronic commerce platform of the business (Shneider, 2008). The use of a number of technological specifications can be identified as one of the key drivers of the success of the electronic commerce business model of Hennes & Mauritz (Chaffey, 2012). The designer and developers of the electronic commerce website of Hennes & Mauritz have carefully designed an electronic commerce platform which is user friendly, enables easy payment options and facilities and offers proper guidance and support to the customers while navigating through the website. The use of a number of pictures of each of the products taken from various angles is a plus point for the robustness of this platform. Apart from this, the website offers the users to play videos of the display of the chosen products and models wearing the products and ramp walking. This enables the users to have a 360o view of the products that they are wishing to purchase and also get an idea about how well the product can suit their body features and personality (Hennes & Mauritz, 2014). The use of the fit visualizer tool is also a long sighted option provided by the developers of the electronic commerce platform of Hennes & Mauritz to the buyers which enables the buyers to enter their body measurements in the tool to find out which size would fit them exactly. This tool acts as a very useful tool for the buyers as well as the company wherein, the buyers can get a proper idea regarding whether the product would suit them and the company can reduce the number of return of products back to the warehouses because of being rejected by the customers on trials after delivery. Section 3: Analysis and Conclusions The electronic commerce business of Hennes & Mauritz seems to have added much value to the existing business of the company. Firstly, this platform has enable Hennes & Mauritz to reach a wider group of customers. Secondly, the online store of the company has not only acted as a main channel for selling the products to new customer groups but has also enhanced the international presence, visibility and accessibility of the brand among the global customer groups. The online presence has also increased the visibility, brand recognition, customer base and availability of the products of Hennes & Mauritz. Additionally, this channel of sales has also helped to decrease the traffic level in the physical stares of the company while having a positive impact on the turnover and profitability of the global business sales under the group. The electronic commerce business platform of Hennes & Mauritz has been set up as a part of the international strategy of the company with the aim of making the company competitive and existent across national borders as well as across business, function and corporate levels. The advent of globalization and the transnational flow of resources and information has made the global markets hyper competitive in nature. The same is true for the fashion industry due to which the electronic commerce business platform in Hennes & Mauritz has been established as a main source of competitive advantage creation (Bothma, 2008). Though the company has started taking the initiatives for establishing globally operational electronic commerce business solution at a later date as compared to the other players in the industry, yet the robust nature of the electronic commerce business model used by the Hennes & Mauritz has already led to higher levels of profitability and sales for the company within a short period of time of the introduction of the new channel of sale of the products of the company (Dishman, 2014). Currently, the online presence of the company is much limited outside Europe. Nevertheless, in order to expand the addressable market for the business, the company should focus on extending its online presence by offering catalogue sales, internet shopping and purchase capabilities across more number of countries in the world. Additionally, the company should try to enter into the emerging markets, especially in the Asia pacific region because of the large scopes of new opportunities for selling fashion products available in these markets (DeLone and McLean, 2004). Since, Hennes & Mauritz is an established company in terms of financial and other capabilities and resources, therefore, the company should invest sufficiently towards the development of an electronic commerce business platform that would be functional on a global scale and that would help Hennes & Mauritz to penetrate the untapped market segments across the globe. Section 4: References and bibliography Bothma, H. 2008. Managing e-commerce in business. London: Routlegde. Carton, S. 2010. The Dot. Bomb Survival Guide: Surviving (and Thriving) in the Dot.Com Implosion. Boston: McGraw-Hill. Chaffey, D. 2012. E-business and E-commerce Management: Strategy, Implementation and Practice. New York: Prentice Hall. Choi, K. 2000. The Economics of Electronic Commerce. New Jersey: Macmillan Technical Publications. Dave, C. 2008. E-Business and E-Commerce Management. United Kingdom: Pearson Education India. DeLone, W. H. & McLean, E. R. 2004. Measuring e-Commerce Success: Applying the DeLone & McLean Information Systems Success Model. International Journal of Electronic Commerce. Vol. 9 (1), pp. 31-47. Dishman, L. 2014. Fashionably Late: H&M Finally Launches E-Commerce in the U.S. [Online]. Available at http://www.forbes.com/sites/lydiadishman/2013/08/01/fashionably-late-hm-finally-launches-e-commerce-in-the-u-s/. [Accessed on 26 March 2015]. Hendrick, K., and Heiman, R.V. 2001. Achieving ROI with Rational Clear Case. Stamford: Cengage. Hennes & Mauritz. 2014. Customer Service. [Online]. Available at https://www.hm.com/us/customer-service. [Accessed on 26 March 2015]. Laudon, K.C. and Traver, C.G. 2003. E-Commerce: business. Technology and society. Boston: Pearson. Schneider, G. 2008. Electronic Commerce. London: Cengage Learning. Turban, E., King, D., McKay, J., Marshall, P. & Lee, J. K. 2010. Electronic Commerce: A Managerial Perspective. London: Prentice Hall. Section 5: Appendices Appendix 1: The world of H & M. Appendix 2: Blueprint on electronic commerce system Read More