H&M in Fast Fashion: Continued Success? Market Entry Strategies

This report provides an analysis of H&M's success in the fast fashion industry, focusing on its strategies, strengths, and weaknesses. The report examines the company's use of the VRIN framework to achieve a competitive advantage, evaluating its value, rarity, inimitability, and non-substitutability. It assesses the attractiveness of the Indian market for H&M, considering macro and micro variables such as the large population, growing middle class, and availability of resources. Various market entry strategies are discussed, including collaboration, licensing, and franchising. The report also identifies local competitors in the Indian market, such as Peter England, and analyzes how H&M can compete effectively. Overall, the report offers insights into H&M's global expansion and its potential for continued success in the fast fashion industry, particularly within the Indian market. The report concludes by highlighting H&M's strengths, weaknesses, and its global readiness for future expansion.

H&M in fast fashion:
continued success?

Table of Contents
INTRODUCTION...........................................................................................................................1
Overview of the Company ..............................................................................................................1
VRIN Framework ...........................................................................................................................2
H&M’s strengths/weaknesses and its global readiness..........................................................5
Attractiveness of Indian market ......................................................................................................6
Macro variables .....................................................................................................................6
Micro Variables .....................................................................................................................6
Various strategies H&M can use to enter into Indian market................................................6
Local competitors in Indian market.................................................................................................7
Conclusion.......................................................................................................................................8
REFERENCES................................................................................................................................8

INTRODUCTION
The business environment is changing with time, there are various elements in the local
as well as global environment that are affecting functions, performance and profitability of a
business or organisation. There are various area of an organisation such as Human resources'
management is one of the most important part and focus on internal working environment. On
the other hand, market condition and financial factor is one of the most important part in working
environment. This report is in context to H&M(Hennes & Mauritz) organisation. This company
basically located in United kingdom. In this report is to be focus on business environment and
market expansion. Furthermore, it will determine the best entry mode strategy for the target
country and develop a market entry. The report will analyse attractiveness of the Indian market
to H&M by using micro and macro level variables.
Overview of the Company
H&M was established in Sweden as a retail clothing company, it is presently a leading
and most popular company due to its wide range of clothing collections designed ion the basis of
the most recent fashion trends in the marketplace both locally and globally. H&M is currently
operating more that 2200 stores in 38 countries all round the world such as United Kingdom,
Russia, Austria, Germany and so on. The company also has a huge and effective workforce
which consist more than 87000 employees. H&M has gained success in the present fashion
oriented market due to its organisation goal of offering products with current trends and high
quality at a reasonable price. Considering the major objective of the company it is logical that it
needs to expand its business in various other countries in the world. The company should
increase its number of stores in the global market in order to increase its sales and profit all
around the world. H&M's current expansion strategy includes establishing 10 to 15% stores
every year (Choi and et.al, 2015).
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The company has already expanded in many countries in the world with an aim of
increasing its market share and profit. Increasing market share and profit also brings many
competitors for a business. H&M also faces a lot of competition while operating its business in
the global market. The main competitor for the company is Peter England, which is also a big
name in the industry, the other competitors includes names such as Gap, Uniqlo etc.
VRIN Framework
In order to sustain in the highly competitive market H&M focus on developing
competitive advantages in the business environment. H&M sustainable competitive advantage
started in the year 1947, when it started considering fast fashion business (Shen and et.al, 2014).
In order to analyse strengths and weaknesses of the company VRIO framework can be applied.
The VRIN framework has four main parts – Value, Rarity, Inimitability and Non-substitutable.
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Illustration
1: World of H&M
(Source: The world of H&M, 2017)

 Value – The core value of the company are as described below :
1. Keep it simple – H&M has a strong business culture in simplicity, the value in humble,
demographic fashion, The management of company is more informal and the
management style is non-hierarchical.
2. Constant improvement – It is possible to maintain continuous improvement due to
organisation's network with its customers through strong social media relationships
which assist the company to identify potential threat and opportunities in the market.
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Illustration 2: Summary of VRIN framewor

3. Open minded and straight forward – H&M focus on trying new and innovative things as
well as accept the risks involves in various new experiments. It helps company to develop
new strategies, innovative products and effective services which can assist in developing
competitive advantages in the market (Jeacle, 2015).
4. Organisation structure – The company focuses on decentralised decision making, it
provides its employees a power to take decisions which helps in motivating them.
Motivated employees supports increased performance and profitability of the business.
5. Cost conscious – This element of value is considered by H&M since they started their
journey in the industry. Fast fashion at best price is the agenda of the company, therefore
this value help it to gain competitive advantage in the market. The competitors such as
Peter England offers products at relatively high prices which assist H&M to attract more
customers as compared to other rivals.
 Rarity – The rarity factor identified by H&M since a long time, it shows a lot of effort in
designing and developing new designs or products in the market. The low cost of
production and a wide range of stores helps company to achieve high level of sales as
compared to other brands or organisations. H&M also focus on targeting each and every
segment or types of customers in the market whereas competitors such as Peter England
targets rich customers or consumers.
 Inimitability – The strong brand image linked with stylish collection and value is a
unique thing H&M possesses while running its business in different countries of the
world. The company has in house fashion designers which collaborate with popular
designers to develop a most attractive designs for their apparel. The company predicts
new fashion trends all around the world in different ways which help it to meet raising
demands related to the fashion trend within the global market. It maintains a good
balance between the basics and latest trend in the market. Competitors are not able to
copy this approach of H&M which assist it to maintain a unique and own personality in
globally (Chow and et.al, 2017).
 Non-substitutable– It refers to the resource or products of an organisation which can not
be copied easily. H&M has products which can be easily copied or imitated by any other
brands such as Peter England. Therefore, it does not provide a high competitive
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advantage to the company. The H&M can design and develop new designs at low cost in
order to create a unique brand image in the market.
Sustainability competitive advantage
 Global dissemination arrange – No, only an impermanent advantage in light of the fact
that H&M can impersonate effectively. Be that as it may, troublesome for some other
adversary than H&M to copy.
 Large item run – No, only a transitory preferred standpoint in light of the fact that H&M
can mirror effectively. Be that as it may, no opponent separated from H&M bargains in
such an expansive item run.
 Skilled HR – (aggressive equality), in view of comprise overwhelming consumption.
Notwithstanding, not hard for H&M to emulate due to its money related quality.
The H&M has sustained competitive advantages by its unique style, effective
management system, low cost of production, strong workforce and a large existence in the
market globally. The major competitor of H&M is Peter England which also operates a huge of
stores in various countries of the world. But due to effective strategies and brand image H&M is
achieving success higher than compared to its competitors. On the other hand, H&M also have
major weaknesses such as substitutes products, Local competitors etc (Ceccagno, 2017).
H&M’s strengths/weaknesses and its global readiness.
 A potential strength of entering this market is that H&M as of now utilize providers from
this piece of the world, thus with somewhat more research and changes in outline, they
will have the capacity to create merchandise which meet the prerequisite of the Indian
market.
 As circumstances go, infiltrating the Indian market will give an awesome chance to
H&M, the nation has a high GDP and a vast populace. Individuals are the bases of a
business and with a substantial number of individuals accessible in India it is just ideal to
state that there is a business opportunity for the products and ventures that H&M needs to
give, all things considered, this market extremely just should be tapped right
 The significant weakness that H&M will look in this market is that it will enter this
market as a fledgling thus it will confront a great deal of rivalry from other existing retail
organizations in the zone.
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Attractiveness of Indian market
H&M company is highly focused in achieving growth and development of its business
both locally and in the global market. The company focuses on maximising its sales and financial
capabilities in order to achieve these targets it develops various strategies to enter into
developing markets such as India. Indian economy is a developing and emerging economies in
the world, its market conditions and situations are improving with a high rate. H&M can enter
into such market for increasing its global presence as well as customer base. There are various
factors or elements that can attract or be beneficial for companies such as H&M who desires to
maximise growth and development of the business (Zamani and et.al, 2017).
Macro variables
 Domestic market – Around 17% of the total populace lives in India with a normal middle
age of 26.7 years building up a genuinely youthful country. India holds a tremendous
white collar class populace, which is relied upon to achieve 1 billion by 2040. As
indicated by NSSO, National example association presumed that India is watching is
seeing an immense reduction in beneath destitution line populace supporting a more great
socio-economics.
 Geographical advantage in terms of resources and location – H&M may strategies to use
India as a main region or assistance to enter and access some other regional markets such
as South Asian, Middle east etc.
Micro Variables
 Huge workforce and outsourcing support – India is rich in human resources, around 65%
of Indian population is in the age group 15 to 65 years. The Indian labour forced has
strong knowledge base with high level of education sporting a wide range of talent.
 Cheap resources – As compared to other countries India is also rich in various resources
such as raw materials, infrastructure etc. It can help H&M to produce low cost products
and increase its revenue in the market (Amatulli and et.al, 2016).
Various strategies H&M can use to enter into Indian market
 Collaboration - It is another fundamental market section methodology for H&M through
which it can without a lot of a stretch, enter and build up its business in the Indian
market. This is a specific sort of affiliation that joins the formation of an outsider
regulated affiliation. Under this structure, two affiliation consent to team up in a
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particular market, either geographic or thing and try this. In direct words word any kind
of cooperation which prescribes encouraged endeavors for in excess of a concise period
is known as the joint wander (Mehrjoo and Pasek, 2016).
 Licensing - Licensing is a sort of consent or offer of exchange the rights to the use of
thing and association to another affiliation. It is an official consent or allows doing or
utilize something. A License might be allowed by a gathering to another social affair as a
portion of a perception between those units.
 Franchising - Franchising is an exhibition of rights to utilize an affiliation's plan of action
and brand for a recommended time apportioning. It is the best market section approach
and process for quick market progression yet it is snatching balance atom particular parts
of the world. It is a sort of upgrade and it works magnificently for the firm that has a
repeatable course of action of movement. In this structure, franchiser is a provider who
enables a regulator or franchisee to utilize the provider's trademark and appropriates the
provider's uncommon
Local competitors in Indian market
There are many competitors for H&M in India such as Spykar, Peter England, Allen
Solly etc which are established in India itself. In order to analyse how local companies compete
with international brands Peter England can be taken under consideration, Peter England is one
of the most popular Indian clothing brand. In order to sustain its position and market share it
needs to develop various strategies so that international brand such as H&M can not be a threat
within the local market. There are various factors which can help Peter England while competing
with H&M in Indian market as mentioned below - Pricing strategies – The most important or significant approach Peter England can use to
compete with international brands is effective pricing strategies. According to Indian
market it can offer price at cheap price which can help in gaining competitive advantages. Marketing strategies – Peter England can also improve its marketing strategies which are
effective and accepted by Indian people(Remy and et.al, 2016).
 Suppliers – Relations with the local suppliers and companies are stronger than compared
to international brand. Peter England can use this relationship for producing products at
low cost which can assist in increasing revenue of the company.
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Conclusion
Form the above report is based on market condition and financial factor is one of the
most important part in working environment. This report is based on H&M organisation. As per
the above report is focus on internal and external working environment and use new strategies to
increase market in international level. This report is focus on use effective communication skills
is help to increase the market growth and make some changes in internal and external working
environment.
REFERENCES
Books and Journals
Remy, N and et.al 2016. Style that’s sustainable: A new fast-fashion formula. McKinsey &
Company, Sustainability & Resource Productivity http://www. mckinsey. com/business-
functions/sustainability-and-resource-productivity/our-insights/style-thats-sustainable-a-
new-fast-fashion-formula.
Su, J. and Chang, A., 2018. Factors affecting college students’ brand loyalty toward fast fashion:
A consumer-based brand equity approach. International Journal of Retail & Distribution
Management.46(1). pp.90-107.
Amatulli, C and et.al 2016. The Relationship between Fast Fashion and Luxury Brands: An
Exploratory Study in the UK Market. Global Marketing Strategies for the Promotion of
Luxury Goods, pp.244-265.
Zamani, B and et.al 2017. Life cycle assessment of clothing libraries: can collaborative
consumption reduce the environmental impact of fast fashion?. Journal of cleaner
production.162. pp.1368-1375.
Ceccagno, A., 2017. The Global Low-End Fast Fashion Center. In City Making and Global
Labor Regimes (pp. 121-146). Palgrave Macmillan, Cham.
Chow, P.S and et.al 2017. Contemporary Case Studies on Fashion Production, Marketing and
Operations. Springer.
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Jeacle, I., 2015. Fast fashion: Calculative technologies and the governance of everyday
dress. European Accounting Review, 24(2), pp.305-328.
Choi, T.M and et.al 2015. Effects of used garment collection programs in fast-fashion brands.
In Sustainable fashion supply chain management(pp. 183-197). Springer, Cham.
Shen, B and et.al 2014. Co-branding in fast fashion: The impact of consumers’ need for
uniqueness on purchase perception. In Fashion branding and consumer behaviors (pp.
101-112). Springer, New York, NY.
Mehrjoo, M. and Pasek, Z.J., 2016. Risk assessment for the supply chain of fast fashion apparel
industry: a system dynamics framework. International Journal of Production
Research, 54(1), pp.28-48.
Online
The world of H&M, 2017 [Online]. Available through :<
http://www.hm.com/cz/abouthm/theworldofhm__worldofhm.nhtml>
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