H&M Company Analysis Essay

7160 Words Nov 18th, 2012 29 Pages

1. EXECUTIVE SUMMARY 3 2. FAST FASHION 4 3. ENVIRONMENT ANALYSIS 4 3.1. Political Factors 4 3.2. Economical Factor 5 3.3. Social Factors 6 3.4. Technology Factors 6 4. INDUSTRY ANALYSIS 6 5. H&M 8 6. STRATEGY 10 7. SEGMENTATION 11 8. TARGETING 13 9. POSITIONING 14 10. CONSUMER BEHAVIOUR 15 11. MARKETING 17 12. SUPPLY CHAIN 22 13. CONCLUSION 24 14. BIBLIOGRAPHY 25


The fashion industry is evolving to ever faster incorporate catwalk design to high street stores, with strong competition within an oligopoly market. The ever increasing speed of product
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The legislation that most affects the European market is the European Union Law Registration, Evaluation and Authorisation of Chemicals (REACH) which regulates the importation of goods containing chemical substances. The European Chemical Agency must be consulted when importing goods containing more than 0.1% of a Substance of Very High Concern (SVHC). H&M uses a chemical management system to ensure that none of its products contain a SVHC, and that the company adheres to REACH legislation.
Figure 1: PEST diagram.

4.2. Economical Factor
The economic environment has considerable influence on consumer behaviour. Kotler and Armstrong (2008) suggest that changes in economic variables including income, cost of living and interest rates will affect the market place. It was found in a June 2011 BBC report that high energy prices and living costs were leading to consumers spending less money. Due to the increasing costs of raw materials, such as cotton, and the wage inflation in Asia, clothing retailers also suffered reduced profits. Mintel stated that H&M experienced a 15% reduction in profits, which can be justified by the reduction in consumers’ disposable income (Monk, 2011).

The report also found that 51% of consumers are not willing to spend on clothing. As Kotabe and Czinkota (2001) point out, the factors

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