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H&M Company Location Analysis Case Study


Importance of location decisions

Location decisions are crucial for any retailer, as they determine the target consumers and market share. A right decision about a location of business facilitates the growth of a retailing firm since they help retailers to select a strategic location, which is accessible to potential clients (Levy, Wietz, and Grewal 189).

Conversely, the location of a retailing firm determines its success potential as it has irreversible effects, which are very costly to correct. For instance, if a retailer places itself in a location, which is not accessible to its potential clients, the purchase of its products will decrease because potential clients will opt to purchase products from close and strategically located competitors.

Points that are taken into consideration when a retailer chooses its location

The main points that a company should consider when choosing a location include the availability of raw materials, availability of consumers, nearness to suppliers, spacing available, and the quality of infrastructures such as roads and electricity. The location of the downtown location of H&M in Figueroa Street, Los Angles is a strategic position for it meets the points mentioned above.

Position of H&M

H&M channel is in the downtown part of Los Angeles in the United States. The positioning of the channel is in the manner of a single store or a freestanding boutique. Remarkably, the positioning choice is very vital for the retailer since most of the potential clients live and undertake their activities in the downtown part of the state. According to Burton, Parker, and Lawley location is very important for a company as it helps its potential clients to access the products it offers (103). Easy access to the products from the retailer ensues due to the downtown location of the channel.

Reasons for this type of H&M’s location

By choosing a downtown location, the retailer is in a position of delivering high-end products because the infrastructure, which is in good condition facilitates the delivery of the required materials in time and their expected qualities and quantities. Through the right choice of location, the retailer gets a good chance to outsmart its competitors, increase its market share, and enhance sales volume.

The closeness of direct competitors

Competitors of H&M like Forever 21 and Topshop Topman are within the state. The location of Forever 21 and Topshop Topman is within the proximity of the retailer, H&M. As a result, they increase the level of competition that the retailer encounters in the market. However, the quality of clothes that the retailer offers enables it to outsmart its competitors and enjoy a significant market share.

Advantages and disadvantages of multi-channel and a single location

The retailer is a multi-channel store and uses several marketing channels in advertisements for its products and creating consumer awareness. The ability to employ multi-channel marketing and strategy is achievable when a firm employs good chain management (Burton, Parker, and Lawley 104). Some of the advantages associated with the multi-channel strategy include increased awareness of consumer, increased demand, and the willingness of potential clients, as well as a high level of customer satisfaction.

Advantages and disadvantages of store vs. non-store locations

A store retailing entails selling products within the confines of the store, whereas non-store retailing involves the sale of products outside the store. Some of the advantages of store retailing include minimal staff since employees work within the stores and low cost linked to soliciting and direct selling of products (Levy, Wietz, and Grewal 186). However, since store retailing limits the spectrum of supply to the premises of its stores, it requires extensive marketing so that retailers can increase client awareness and persuade them to visit the stores and purchase the products of their choice. On the other hand, non-store retailing has advantages, which include reduced advertisements for employees are always in the field selling and marketing products and increased purchases from consumers within and outside the stores. The disadvantages include the high cost of employment since the stores need to hire retail staff, who will work in and outside the stores.

Works Cited

Burton, Phil, Gary Parker, and Brian Lawley. 42 Rules of Product Marketing:

Learn the Rules of Product Marketing from Leading Experts from Around the World. New York: Happy About, 2012. Print.

Levy, Michael, Barton Wietz, and Dhruv Grewal. Retailing Management. New York: McGraw Hill Education, 2014. Print.

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IvyPanda. 2020. "H&M Company Location Analysis." April 30, 2020. https://ivypanda.com/essays/hm-company-location-analysis/.

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IvyPanda. (2020) 'H&M Company Location Analysis'. 30 April.

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