H&M in Accounting
Content Page
Questions
Question 1. Using Michael Porter’s five forces model, evaluate the importance of Barriers to Entry to the fast-fashion industry. Support your arguments with evidence from the case study. (20%)
Question 2. Conduct a value chain analysis to assess H&M’s capabilities and derive its core competencies. (35%)
Question 3. Based on these competencies identify the generic competitive strategy which H&M is pursuing. (10%)
Question 4. It is suggested in the case study that the fashion industry is full of companies that have confidently expanded into international markets but later have been forced to retreat. Analyze the international strategy choice being pursued by H&M and assess the extent to which this is appropriate for its future development. (25%)
Appendix
Global FactorsLocal FactorsIntegration Responsiveness Grid
References
Question 1.
Applying Michael Porter’s five forces model, it includes the threat of entrants and substitutes, bargaining power of suppliers and customers and competitive rivalry. Among all, barriers to entry could be an essential factor to the fast-fashion industry. Even so, the threat of entry is affected by several factors. Different sources of barriers to entry can act as a determinant on the height of barriers.
As mentioned in the case study, fast-fashion industries doesn’t require a large capital outlay. Entry to the retail industry is so easy that can be set up with a group of suppliers being chosen from. Therefore, the level of impact of capital requirement to the barriers to entry is low.
Secondly, economies of scale is a barrier to entry as its product unit cost will be lowered for the businesses which already attained a production volume so that it will be hard for the new entrants to compete. H&M’s prices have been undercut by an even cheaper competitor. In this case, economies of scale’s level of impact to the fast-fashion industry is high.
For the absolute cost advantage, for
Questions
Question 1. Using Michael Porter’s five forces model, evaluate the importance of Barriers to Entry to the fast-fashion industry. Support your arguments with evidence from the case study. (20%)
Question 2. Conduct a value chain analysis to assess H&M’s capabilities and derive its core competencies. (35%)
Question 3. Based on these competencies identify the generic competitive strategy which H&M is pursuing. (10%)
Question 4. It is suggested in the case study that the fashion industry is full of companies that have confidently expanded into international markets but later have been forced to retreat. Analyze the international strategy choice being pursued by H&M and assess the extent to which this is appropriate for its future development. (25%)
Appendix
Global FactorsLocal FactorsIntegration Responsiveness Grid
References
Question 1.
Applying Michael Porter’s five forces model, it includes the threat of entrants and substitutes, bargaining power of suppliers and customers and competitive rivalry. Among all, barriers to entry could be an essential factor to the fast-fashion industry. Even so, the threat of entry is affected by several factors. Different sources of barriers to entry can act as a determinant on the height of barriers.
As mentioned in the case study, fast-fashion industries doesn’t require a large capital outlay. Entry to the retail industry is so easy that can be set up with a group of suppliers being chosen from. Therefore, the level of impact of capital requirement to the barriers to entry is low.
Secondly, economies of scale is a barrier to entry as its product unit cost will be lowered for the businesses which already attained a production volume so that it will be hard for the new entrants to compete. H&M’s prices have been undercut by an even cheaper competitor. In this case, economies of scale’s level of impact to the fast-fashion industry is high.
For the absolute cost advantage, for
References: Johnson, G. et al. (2012) Fundamentals of Strategy, 2nd Edition, FT Prentice Hall. Lasserre, P. (2007) “The global integration/local responsiveness grid”, Global Strategic Management, 2nd Edition, Palgrave Macmillan. Regner, P. & Yildiz, H.E. (2014) “H&M in fast fashion: continued success?” Exploring strategy, 9th Edition, FT Prentice Hall.