The World of H&m
Essay Preview: The World of H&m
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Because of the lack of inventory control at H&M, this memo will be outlining why Team H&M believes it is an important issue and how we will go about addressing it. The objective is for you, Deirdre Maultsaid, to comment and give further feedback so that Team H&M can develop their analysis. This memo will include an environmental scan that will report on the current state of affairs at H&M. Furthermore, the problem will be defined and an audience analysis completed. Finally, our team dynamics will be examined in order to make the best possible use of each team members assets. Sources that have been used include an interview with a long-time H&M employee. In addition to H&Ms own comprehensive website, an interesting article from Harvard Business Review will be discussed.
The World of H&M
Business Concept: As told by H&Ms website, “Our business concept is to give the customer unbeatable value by offering fashion and quality at the best price.” Quality is the most important variable when it comes to H&M. Clothing must go through widespread testing and be produced in a way that impacts the environmental minimally. Quality is also a central issue for the company when deciding on where to open a new location. Demographics, buying power and political risk are just a few of the elements that are examined. According to H&Ms website, they are able to provide low prices due to the following reasons
having few middlemen
buying large volumes
having a broad, in-depth knowledge of design, fashion and textiles
buying the right products from the right market
being cost-conscious at every stage
having efficient distribution
Production & Expansion: H&Ms website explains that they buy all of their products from 700 independent suppliers across Asia and Europe; they do not own any production facilities. Also, their stores are all rented space from landlords; this gives them the ability to remain adaptive and flexible. H&M has a self-financed growth rate of opening 10-15 percent of new stores every year. For 2012 there will be 275 new stores with a focus in China, the United Kingdom and the United States.
Distribution: H&M tries to use the most environmentally friendly method for distribution, which is why air travel is used only when fast deliveries are required. According to their website, “Goods sent from producers in Asia are transported almost exclusively by ocean. Within Europe, H&Ms ambition is to increase the share of movements by rail over road. More than 90 percent of all transports are done via ocean, rail or road.” Merchandise is sent to a distribution center