Value Chain of H&M Essay

(Part 2)


These designers take their inspiration from the street fashion, the movies, travel and other cultures, the media and trend institutes. Moreover, designers are achieving a huge job to find a way to create fashionable clothes at the best price.(H&M, 2012)

* Outbound logistic: This part of the value chain includes information systems, transportation, material handling, communication and packaging. As H&M does not own its suppliers, the logistic system has been developed in a efficient way. To transport its production, H&M sends firstly all the merchandise to the distribution centre (the main centre is in Hamburg, Germany), then the goods are transferred from the distribution centre to the allocated stores where they are being unpacked. Moreover, in agreement with its ethical value, H&M tries to minimise the pollution during the transports and favours ocean, rail and road transportation.(H&M, 2012)

* Marketing and sales: All the cloth retailer company requires a high level of marketing to compete in the markets, and H&M’s marketing can be split in few groups to be analysed:

* Price: As H&M has a huge size, it has a lot of opportunities to decrease its production’s costs: it deals with its contractors buying everything in huge quantity and that is why H&M always control the negotiations.

* Quality and durability: Nowadays, customers pay attention to the design and the price of clothes but also on the quality of it. That is why H&M’s designers are always working on the quality of their garments and H&M is always working hard to find cheap textiles with a good quality.

* Commercials and environment of the shops: H&M is always signing contract with well-knows designers (Karl Lagerfield) and famous people (Lana del Rey, David Beckham…) to attract more customers and increase its sales.(H&M, 2012) Moreover, H&M’s advertisements are often up to date and H&M choose to write the price of the clothes on it to show people that it is a transparency company which would not lie to its customers. Moreover, concerning the environment of the shops, all of them are located in the main streets of the cities or in huge shopping centres in order to be visible. The insides are cozy, simple and well-organised. Moreover, the new collections are always near to the sales in order to conduce the customer to take a look at them.(Haberberg and Rieple, 2007, p. 252)

* Services: H&M proposes the same services at its competitors, that is to say that people can easily exchange their purchases and easily ask advice to the employees in shops.