H&M Apparel Chains
Apart from Spain’s Zara, the Swedish retailer Hennes & Mauritz (H&M) differentiates itself from most apparel chains for its idiom “treat fashion as if it were perishable produce.” In Europe, H&M is considered to be an industry leader because it offers the “on-trend” look at an extremely lower price. In 2000, it decided to begin to establish a predatory marketing strategy of expansion within the US. The strengths of H&M are that it is a well-known company worldwide; it responds quickly to trends, particularly in its similarities to haute couture and the catwalk within a turnaround cycle speed of 3 weeks; and it is recognized for its incredibly low prices on trendy, seasonal apparel. The weaknesses of H&M are that it is relatively unknown in the States; it has yet to distinguish and set itself apart from inexpensive American apparel chains; and its goods are not high-quality.
Primary Problem: Flawed Marketing Research
The absence of a definitive marketing strategy is of primary concern. With benefit of hindsight, some deficiencies in H&M’s research design merited attention. It was geared towards the simple idea of expansion rather than establishing genuine market presence. Because it tried to expand too quickly, it imprudently purchased outlets too big and in poor locations, instead of building up its presence more slowly and carefully. H&M believed no competition could ever be more on-trend and more fashionable than they. However, H&M showed the fallacy of attempting growth beyond immediate capabilities in a growth-at-any-cost mindset. The rationale for embracing great growth is that it needed to run with the ball if it were to ever get that rare opportunity to suddenly double or triple sales. But there are times when a slower, more controlled growth is prudent.
Secondary Problem: External Factors
Apparently, it did not learn from Benetton’s past mistakes. For example, it too had tried to establish a strong presence in the US and had failed.
Primary Problem: Flawed Marketing Research
The absence of a definitive marketing strategy is of primary concern. With benefit of hindsight, some deficiencies in H&M’s research design merited attention. It was geared towards the simple idea of expansion rather than establishing genuine market presence. Because it tried to expand too quickly, it imprudently purchased outlets too big and in poor locations, instead of building up its presence more slowly and carefully. H&M believed no competition could ever be more on-trend and more fashionable than they. However, H&M showed the fallacy of attempting growth beyond immediate capabilities in a growth-at-any-cost mindset. The rationale for embracing great growth is that it needed to run with the ball if it were to ever get that rare opportunity to suddenly double or triple sales. But there are times when a slower, more controlled growth is prudent.
Secondary Problem: External Factors
Apparently, it did not learn from Benetton’s past mistakes. For example, it too had tried to establish a strong presence in the US and had failed.