Market strategy H&M
H&M's core competitive strategy in the global market can be identified as a combination of cost leadership and differentiating elements. The company’s fast fashion business model is built on outsourcing new designs from multiple independent suppliers. These companies make small batches of H&M products throughout the year, allowing the brand to quickly present clothing collections reflecting the latest fashion trends. It may be suggested that direct and indirect exports may not be suitable for H&M as the company operates primarily through mono-brand stores, which makes its business model inconsistent with multi-brand distribution (H&M, 2018). Similarly, the company in question could not license the production of its clothing and lifestyle items to local manufacturers. Recent expansion plans in Europe and the Middle East rely primarily on franchising options where local representatives provide loyalty to original brand and open brand stores under its supervision (H&M, 2018). This model provides a moderate degree of control over local operations due to the complexity of operational monitoring and compliance control, reducing investment requirements and political risk. Although the company generally rejects this option in its Global Expansion Strategy (HMG Group, 2019), for a variety of reasons, this choice may be more appropriate for H&M than for wholly owned subsidiaries.
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