What Macro-Environmental pressures are identified in case?
The first macroeconomics parameter identified in the case is a slowing global economy; consumers spending on clothing have reduced. The clothing and apparels industry is driven by changes in consumers’ preferences and fashion. Fashion and changes in consumers’ preferences are macroeconomic parameters portrayed in the case.
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H&M clothing company keep shifting its tailoring contracts to different countries so that it can enjoy the best deal in the market; transfer of factors of production and labor is a macro-environmental parameter. It is the company’s policy to have managers move to different countries fetching for the market as well as undertaking research on different fashions; the international approach is a macro-economic parameter (Capell, Khermouch and Sains 41).
Conduct a SWOT Analysis of H&M clothing shops. Remember to discuss how any of this information could be opportunities or threats to H&M?
H&M has a strong brand name that has enabled is sell large volumes of merchandise; with the large sales, the company enjoys economies of scale, the company can sell its commodities cheaply and offer high quality and fashionable products. In the article, a customer applauded the company and pointed this advantage when she illustrated ‘Everything is nice-and cheap” (Capell, Khermouch and Sains 38).
Another strength that the company has is an effective cost management system; the article illustrates that when buying stock or in internal management, there is minimal waste of cash, this enables the company to sell cheaply and enjoy a profit margin. The diversity that the company has in America and Europe has offered the company a market with different interests and demands for different things; in the United States, women clothes are more marketable while in the Europe men market seems to be doing better.
The company has ambitious managers, who can take the risk, for instance, they combined quality and low price effectively. The company has a robust marketing team and invests substantially in the sector; it also has an effective high fashion, low-price strategy. On weakness in the internal structure of the company is the complete specialization in one line of business; in the United States, it seems to have concentrated on female clothes while in Europe, it has focused on male clothes.
One threat that the company is facing is high competition; the competition is coming from local and international companies. To remain competitive, the company should interpolate the rate of competition positively and develop strategies to curb its effects; in the process, it will have increased sales.
The main opportunity that the company is having is the increasing the population of the youth; the company can continue supplying its commodities at least in the foreseeable future. Again, the different changes in fashion offer the company market with a change in fashion. This makes the business rejuvenated always when the company stays alert, it can tap these opportunities as they come.
What is H&M’s marketing orientation? What information is there in the reading to support your answer?
The company’s marketing orientation is to tailor its operations to fit what the consumers want; the company aims at having nice fashionable things that can be afforded by target market in both the United States and Europe. The article shows the company’s value to its customers when it says, “H&M is also shrewdly tailoring its strategy to fit the US market” (Capell, Khermouch and Sains 41), the statement is also a proof of continuous market research that assists the company come up with the required apparels at the right cost.
The company has a philosophy of treating fashion as if it was a perishable product; this means that the company is always ahead of its customers in research and stock quality and fashionable commodities even before their customers became aware of an existence of such commodities.
Discuss the elements of the value proposition H&M is offering its customers?
The H&M value proposition is “high-fashion, low-price,” this implies that the company aims at increasing its customer base by offering quality products to its customers at an affordable cost. The company has an effective marketing and fashion research team that comes up with the right commodities to stock at the best price possible (Rakesh 12-34).
The value proposition has made the shops a choice of many as they feel their needs are met by the shops. Another proposition that can be interpolated as the company’s value proposition is “Treat fashion as if it were perishable product: Keep it fresh, and keep it moving” (Capell, Khermouch and Sains 40), the company is portrayed valuing the value of keeping track with fashion.
What are the benefits to H&M of having Karl Lagerfeld and Stella McCartney design limited edition clothing ranges?
Both Karl Lagerfeld and Stella McCartney adopt niche marketing strategy; the approach has offered H&M high customer turnover; this has also built H&M’s reputation and income. When customers are aware that their apparels needs can be satisfied in a certain shop, they are likely to be loyalty to the shop; selling of Karl Lagerfeld and Stella McCartney products have improved customer loyalty on H&M.
Secondly, having Karl Lagerfeld and Stella McCartney Design companies have assisted H&M Company to widen its market base to the well-to-do (high-class population) in the community; previously the niche of the market seemed not fully exploited, this is a business opportunity to H&M (Capell, Khermouch and Sains 40).
Capell, K.elly, Khermouch Gerry, and Sains Ariane. How H&M Got Hot. Business Week, 11 November 2002.Web.14th April 2011.
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Rakesh, Mohan. International Marketing. New Delhi: Oxford University Press, 2005.print.