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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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1 Assigment

by  Manuela Ferreira de Carvalho Neves

B00723762

   INNOVATION IS ALWAYS A CHALLENGE

  ANSOFF'S MATRIX

  STUDY CASE: H&M

E-business

MSc in International Business

University of Ulster

July, 2016

Counting words: 2000

Table of Contents

1. Introduction…………………………………………………………………………3

2. Findings of the Research……………………………………………………………4

3. Analysis of the Findings…………………………………………………………….5

4. Conclusion…………………………………………………………………………..6

5. Bibliography………………………………………………………………………...7

6. References…………………………………………………………………………..8

Introduction

    H&M was founded in 1947 in the city of Västerås, near to Stockholm in Sweden by Erling Persson. His plan was to sell fashion trend clothes at low prices. The business inspiration was a traditional American department stores that he he had been when he stayed in  New York. Firstly he opened a small shop called Hennes, which means "them ", selling clothes just for women, but in 1968 the company incorporated a small network of men's clothing stores and accessories for hunting called Mauritz Widforss and lately called Hennes & Mauritz, to officially being known by just the initials H&M. In two years later started a line of clothes for children. And in few years  years the store network expanded across northern Europe, for example the Nordic countries. Additionaly these days H&M is known as an ethical company aware of human rights which concern raise salaries whom knitting clothing until 2018. Moreover is working for until 2020 became capable of producing sustainable Cotton. And that's why for several years H&M has been named by Ethisphere “as the most ethical company in our industry” however specialist saying that is just a marketing ploy. According to the Ansoff's Matrix  was possible to understand in the case of H&M market, business and product strategies in the sense of sustainability, and inovation for their online and offline sells.

    The  challenge observed here is that the company might resist in the industry-wide trend in transferring the fast fashion production to low-cost countries because of its ethical stance although about the logistics, the H&M is acting as importer and wholesaler, as well as a retailer and have to be a continuous practice, the organization might not handle all of the challenges like the demands coming from the domestic and international market, also online and offline practise consumers.

2. Ansoff's Matrix

    Ansoff's Matrix was founded by Igor Ansoff in 1950 when after the Second World War he realized that the success of a company does not depend just on the administration but what is more important is to spot innovation and competencies to meet the market demand (ANSOFF, 1981). It fits perfectly to talk about the company that was chosen because H&M has been in a comfortable situation in the sense of “Markets Grouth”, as we can see with from this datas,  Revenue: US $ 19.1 billion (2013); Profit: US $ 2.55 billion (2013); Market value: $ 75 billion (July / 2014); Brand value: US $ 18,168 billion (2013); Shops: 2,513; Global presence: 54 countries (Interbrand, 2013). But on the other hand through observing the reasons behind the success of the H&M, there is a need to analyze the organization's production; the business can integrate with the existing supply chain. Through the vertical integration, the distribution network allowing direct control of market and customers. In addition through the continuous and efficient collection of information on demand the organization is allowed towards the cost-efficiency and shortening of lead times. IT development provides support to H&M logistics. While the stock management is primarily handled within the H&M organisation, transport is contracted to third parties. Also, the organization might increase the advertising and promotions to provide the success in the organization (Ghemawat, P., & Nueno, J.L., 2003). In other words, its about “Diversification strategies” and “Product development strategies”. How to give more facilities to the consumers and in addition build up a relashionship making the sells appealing and the simple. Its very important when the company seeks to create products and services, offering them a better and modern version to their usual market. Was in 2013 that H&M launched the online shop and the as more the catalogue sales expand as more the sales increased (H&M 2012b.)

3. The choice reason: H&M

    The main philosophy of the company is to offer fashion and quality at affordable rates, as the slogan says: Fashion available for everybody (Website: www.hm.com). People in general prefer clothes with good design, although is also preferable clothes  with quality, when you can have both sounds even more interesting. And when people start to known that the shop that sells this type of clothes can be easily find in another country if you are abroad whether in Europe or North America, it still give off at one of the chain stores H&M. Also the shop sells online and if you are not sure of your size its possible to have an accurate answer in “size guide” when you will be able to check your measures and find out to receive the perfect size for you. The company have products that apart from clothes include accessories, make up, and offer a large selection of interior design and decorations.

   H&M is an ethical company and some collections have partnership with brands, and brilliant designers for affordable prices.

4. Conclusion

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