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Analysis of company: H&M

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  1. Introduction
  2. Position of the L'Oreal and Henkel on the market for cosmetics
  3. History of the two groups
    1. Time axis of Henkel
    2. Time axis of L'Oreal
  4. Determination of the core businesses of both companies
  5. Areas of strategic activities of the two groups
  6. Determination of the target of L'Oreal and Henkel
  7. Determination of the need satisfied by the products of L'Oreal and Henkel
  8. Type of technology used in the SBU studied
  9. The competitive forces of Porter
  10. Threats and Opportunities in the cosmetics market
  11. The key success factors
  12. Map of strategic groups
  13. Strategic analysis of L'Oreal and Henkel
  14. Strengths and weaknesses of L'Oreal
  15. Strengths and weaknesses of Henkel
  16. SWOT Analysis - L'Oreal, Henkel
  17. The value chains of the two groups
  18. The BCG Matrix for L'Oreal and Henkel
  19. Financial Comparison
  20. Revenue breakdown by business
  21. Evolution of profitability
  22. Evolution of the share value
  23. Comparative analysis of strategies
  24. Global Strategy of L'Oreal
    1. Strategy of constant innovation
    2. An intensive communication strategy
    3. The concentration of its activities
    4. Internationalization strategy
  25. Global Strategy of the Group Henkel
    1. Innovation Strategy
    2. Communication strategy for the "Citizen"
    3. Diversification strategy
    4. Internationalization strategy
  26. The future of Henkel
  27. The future of L'Oreal
  28. The cosmetics market
  29. Justification of the hexagon sector of Porter
  30. The threat of new entrants
  31. The threat of substitute products
  32. The bargaining power of customers
  33. The bargaining power of suppliers
  34. The threat of firms in the sector
  35. The power of the state
  36. Analysis of key companies
  37. Breakdown of the couples Opportunities / Threats and Strengths / Weaknesses
    1. L'Oreal
    2. Henkel
  38. Conclusion

Large companies and major groups have a more enhanced transparent business strategy than small and medium sized ones. Some elements are present in our daily life, such as marketing campaigns, communications, advertising etc. They make us dream and we are passionate because they seem out of reach for people. Yet, they do face some difficulties and vulnerabilities as any existing business does. Addressing a large group such as H & M is a challenge.

However, H & M makes a repositioning and tries to leave its image to enter into a new market and image to achieve a more rewarding image in the eyes of its customers. This is obvious from the launch of its latest collection, "M by Madonna". While some items are priced to reflect the spirit of H & M, other products have surprisingly excessive prices (such as dresses at 50 euros, leather coats around 152 euros).

H & M wants to move closer to its direct competitor Zara. For this new collection, H & M once again used pop star, Madonna, as its icon. After Karl Lagerfeld, Stella McCartney and Victor and Rolf, H & M continues to associate its brand and the creation of its clothes to stars with high status. It is known for carrying high-end clothing, and fashion designers luxury.

H & M uses the same star and the same designers for their collections, which are still distributed to the international markets. Is this a good strategy to communicate without a standard way to adapt to cultural specificities of each country? While stars like Madonna have international recognition, stars like Emmanuelle Beart (who did the lingerie campaign for H & M in 2006) did not have the same reputation in the world, and not even yet known in the United States.

Is it then wise to continue to operate in a standard communication in all respects? Also, with the expansion in the Middle East and Asia, it will be harder for H & M to continue in this niche. Our problem is thus based on this question: Should we not revisit the concept of the communication standard in favor of an appropriate communication to better reach customers through advertisements?

2006 was a good year for the Nordic countries. However, Germany remains the largest market for H & M and one of the most profitable. The reasons for this success lie in the large resident population, the large number of major cities and also in the strong purchasing power of the Germans. The UK continues its momentum and took second place in Sweden.

Most stores that have opened in 2006 are the United States, Spain, Germany, France and Canada.

In September 2006, H & M opened a franchise in the Middle East, Dubai and Kuwait. Indeed, a franchise agreement was signed with Alshaya. It operates over 900 franchise stores in eleven countries. And H & M sells and delivers its products in Alshaya, who sells to end customers.

This has allowed H & M to locate in an area where it is impossible to create private subsidiaries. Also in this geographical area, the economy is constantly growing and customers have a high purchasing power.

Tags: H&M; strategy of H&M; H&M competition

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