Introduction To Business

H&M is a Swedish Brand, whereas ZARA is a Spanish Brand. Both of these companies excel in Fast Fashion Clothing, whereas ZARA has also introduced a few other products as well that include Beauty Products, Colognes, Shoes, Beauty Accessories, and Swimwear. Even though both of these companies were started with just a small store in two separate countries, now they have become one f the leading Multi-national award-winning brands. H&M has also introduced a few other Sub-brands, which were named as Concept stores, and no doubt these sub-brands are equally evolving along with H&M.

 Contents

1 Abstract

2 Background of the Company

3 Customer’s, Hiring, and marketing policies of the Company

4 Model, Theories, and Concepts

5 Conclusions

6 Appendix

7 References

2 Background of the Company

 

H&M Company

Hennes &Mauritz AB is a Swedish multinational clothing –Retail Company. The Company is oriented to growing fast fashion industry clothing for men, women, teenagers, and children. It has a big network covering almost 74 countries with over 5,000 stores working under the various company brands having the initiative of 126,000 full-time equivalent positions.

It is the second-largest most famous clothing retailer company as compared to the parent company known as Zara. The Company has a significant key role-playing strategy in online shopping available in 33 countries. The Company also has five brands based on the concept indicating various aspects of the culture. (WikiLeaks, 2016)

The Company was founded by Erling Persson in 1947 to exhibit the selling of women’s clothes. After the first lead, the Company move on further and launch other trends like men’s wear collection, children’s, teenagers, and kids to highlight the freedom of variety to the customer. The Company named the clothing collection Hennes &Mauritz. The Company has planned to extend the range of stores from 3000 to 8000. H&M has a marketing challenger brand called “Zara.” So, they are working hard to put excellent stuff that can help to compete in the market.

They are working on the strategy of fast fashion ideas that aim to move the large volumes of promotion of ideas from the designer table to the showroom floor.

H&M has designed the marketing team to well- known for the trends of marketing, and the required designs by the customers are their preference. The ultimate backbone policy of fast fashion is low price and labeled as “Cheap chic,” H &M is famous for its disposable quality and easy to manufacture nature just like Zara. (Investopedia, 2016)

H&M is following a distinct business model. They do manufacture its products in–house; they outsource the productions to more than 900 suppliers across the world. They have targeted the Europe and Asia market. H&M also introduces pilot programs for Bangladesh and Cambodian factories in 2013 that have the involvement of the Company purchasing 100% of the factories’ output near to five years span.

 

Five Big Stores of H&M

 

ARKET

H&M opened its first ARKET store in August 2017. The brand has the label “modern-day-market “and houses named “archive,” then each item has a nine-digit code having to handle by the department category, product, and all material. They also introduce the concept of clothing of Children’s clothing and homewares and built an in-store café.

Fabric Scandinavian AB

H&M applied another business model in giving rise to their market. In 2008, they purchased 60 % of shares in the Swedish Company named FaBric Scandinavian AB, then brought the left sharing deals in 2010 with the price rate of SEK552 million($62.3 million). They bring Company three brands, Cheap –Monday, Monki, and Weekday as a concept of separate concepts.

Cheap Monday

It is famous for its skull logo, the fashion brand launched in 2004. The brand gives huge availability for many retailers all over the world, as well as its stores and present platform of an e-commerce site.

Monki

Monki revealed their concept as a wild and crazy international retailer that needs to fight the ordinary fight and give a boosting effect of imagination. The brand is famous for selling young women’s fashion trends with 13 stores and is available online in almost 18 market stores.

Weekday

Weekday launched with the concept of WeekDay style called house presentation. The brand has opened nine market stores and 18 online stores in the market with weekday.com and near to 140 markets as asos.com (WikiLeaks, 2016)

H&M also has laid the non-profit foundation, and they are working for the awards given to the young designers. They are working with various agencies to support various concepts of social aspects to gain importance in the eye of the government sectors. They are also working with the cooperation of Zara for a better society platform.

Background of Zara

Zara is a Spanish retailer-based company based in Arteixo in Galicia. The Company is taking the lead in the fast fashion industry. They have included clothing, accessories, shoes, swimmer, beauty, and perfumes. It is one of the top largest retail companies. There are 2259 stores in 96 countries. (WikiLeaks, 2016)

Zara takes the lead in managing the clothing up to 20 clothing collections in a year in 2017. The main person Amancio Ortega opened the first store, Zara, in 1975. He launched and then proceeded further, opening the stores in various countries like Spain. He then changed the idea of the manufacturing and distribution process and followed the new trend in a quicker aspect called “Instant fashions.” He follows up on the technology trends just like H&M IT infrastructure and uses groups of designers.

Zara is famous for its efficient launching trends. They developed the new products and got them in stores within two weeks while the other takes six months.

Zara brand Inditex is the world’s largest fashion industry, with more than 170,000 employees having stores 7,400 stores in almost 202 markets all over the world, including 49 online stores. The estimated revenue of the Inditex was USD29.4 billion in 2018. The fashion brands owned by the Zara shelter under Inditex are: (WikiLeaks, 2016)

Zara Home

Zara Home has a collection of home goods and decorates objects. Five hundred ninety-six stores are functioning. The concept was launched in 2003.

Massimo Dutti

Clothing and accessories, especially for cosmopolitan men and women. Launched in 1995 and has 760 big stores.

Pull and bear

Experience in casual, laid-back clothing and accessories for the youngster. Launched in 1991 and having975 stores.

 3 Customers, hiring and marketing policies of the Companies

H&M Company

The Company has a policy of delivering fashion and quality at the best price. Customers are our main focus. They have claimed that they are well known for the customer’s needs and provide them the quality based material at affordable prices.

Customers are just like friends for the H&M. When the customer approaches the stores, they directly interact with the customer in the best friendly way and get their feedback. H&M’s priority is to provide an environment to the customer, that is user-friendly and getting more better results by gaining the digital marketing trends in the industry to attract the customers.

Our marketing policies are very straightforward. H&M keeps digital monetization in the market. The main leads are always trying their best to relate a good relationship with the suppliers. They have plans for a successful strategy of converting their suppliers into alliances based on shared risks and shared rewards.

H&M believes in economically, social, and environmental sustainability. They have a team working together with their business partners and promoting sustainable operations throughout their partner with supply chains.

H&M hiring policies are quite simple. The HR department is well organized and knows the best value of the Company. They hire people with innovative changes in customers’ output and generate excellent revenue in the market. They work as a team with the milestone aim of leading their brand in the market. They hunt the creative and young talent with the best qualifications in marketing and business orientation. They also need to handle the IT department to meet up with the latest trendy upgrades in technology and digital marketing.

Motivational Aspects of H&M.

• Believing in people’s power.
• Working as one team.
• Straight forward and open-minded policies.
• Entrepreneurial spirit spreader
• Cost-Conscious
• Keeping Sustainability.

Policies of Zara Company

Zara has turned their stores into more than 6,500 stores along with online stores. The customer is one of the valuable elements for Zara.

Their policy is to keep the customer with a handy approach. They bring the new products within two weeks that attract the customer to be the faster transactions in fashion trends for all ages. Their team is working to make the customer more satisfied by responding to their feedback. The brand has taken the lead in overall sales by around 50% in five years to $17.5 billion by this policy. The hiring policies of the Zara are optimistic. They approach the young talent and hunt them by going through the survey of talented students in universities. They are ready to the youngster force with updates in their knowledge factor and marketing strategies.

Their marketing strategies are quite simple. They worked with the workforce with different expertise in various skills. They have quite a strong digital marketing team that advertises their products in an effective experience. They have a proper advertising agent to mark up the trendiest products to highlight. All the products are properly estimated with a high-quality preference to bring to the market. They follow all the trendy marketing strategies.

Motivational Aspects OF Zara

• Innovation in products.
• Bring advanced level within a two-week strategy.
• Advance formula of marketing trends.
• The highly versatile team of experts.
• Good relationship building with customers.
• Keeping the best countermeasures with the partners.
• Evaluating the methodology of faster fashion.

 4 Model, Theories, and Strategies in Business

 

Porter’s five forces

Competitive Rivalry

Competitive Rivalry depends upon the number of competitors. Both the Company must apply the terminology of competitive aspects. They must go through the product details, their costs detail, and manufacturing parameters. What kind of services are they offering to customers?

The companies can cut off the high prices to gain momentum against each other to attract customers. They should launch a high-quality marketing impact, creating campaigns before launching their new products.

This will give a hit blow to the companies. Set good relationships with the suppliers and your partners so they can get good deals and work more for you. Work on healthy profit-generating schemes. (Rothaermel, 2016)

Supplier Power

It shows that hoe much supplier power a company must have to engage in the market. How unique is the product, as well as the services? Are.? The Company needs to check if they switch the supplier to the other one; what will be the end cost of the products.? Find out the cheaper alternative sources. This brings a good change to the business. (Rothaermel, 2016)

 

Buyer Power

The Company needs to address buyer power. How many buyers are present, and what kind of orders do they have? The Company gets a good privilege if they increase their customers.

Threat of substitution

The threat of substitution is one of the different ways of doing the same work. If you applied the new system that can help to generate more leads is profitable as compared to the manual system. This can also change the mindset of the customer approach. This technique is really useful for implementing digital marketing trends to catch up with the customer line. (Adhaditya, 2016)

The threat of new entry

The threat of new entry is just similar to introducing a sudden product into the market. The new competitor can be more innovative in presenting the product and following the market trends. So, H&M and Zara must keep on working on the policy of bringing innovation to the Company. Zara is famous for launching new products within two weeks a new term introduced in the market to grab the attention of the customer.

H&M also need to capture its market by bringing change in the presentation of their product to hold down the market in a well challenging way. (Adhaditya, 2016)

 5 Conclusion

H&M and Zara are both one of the top best clothing retailers. They have the power of supply chains, and they know how to take leads in the market. H&M is also taking the lead in highlighting the social issues and working as a free foundation to promote the social benefits to society. This is one of the best-measuring factors for H&M to launch their new brands by promoting new ways of introducing trends. This made H&M a superhero in the eyes of the customer.

Zara is an effective brand with the worth of providing new products within the two weeks estimated target. This scheme works and provides the Company with a new customer that causes an increase in their sales. Whereas the other companies need six months to bring the new change products in the market. By following Paster’s five forces business model, the companies can get an effective change in their hiring, marketing, and customer handling policies. These policies can give a high boost to the move on in the journey of fashion trends.

H&M and Zara must need work on the innovation and creativity aspects and generate revenues in the market.

Appendix

Terms used

 

Term	Definition
H&M	The Hennes &Mauritz AB is a Swedish multi-national clothing –Retail Company. The Company is oriented to grow fast fashion industry clothing for men, women, teenagers, and children.
Zara	Zara is a Spanish retailer based company based in Arteixo in Galicia. The Company is taking the lead in the fast fashion industry. They have included clothing, accessories, shoes, swimmer, beauty, and perfumes. It is one of the top largest retailer company.
Zara Home	Zara Home has a collection of home goods and decorates objects
Massimo Dutti	Clothing and accessories especially for cosmopolitan men and women
Pull and bear	Experience of casual, laid back clothing and accessories for the youngster
ARKET	The brand has the label of “modern-day- market “and having houses named as “archive,” then each item has a nine-digit code having to handle by the department category, product, and all material.
Fabric Scandinavian AB	The brand name whose shares are bought by H&M along with three major brand names working separately with some concepts under the shelter of H&M.
Cheap Monday	It is famous for its skull logo, the fashion brand launched in 2004
Monki	Monki revealed their concept as a wild and crazy international retailer that needs to fight the ordinary fight and give a boosting effect of imagination.
Weekday	The clothing brand with the name title of Weekday. Including in house presentations.
Competitive Rivalry	Very well aware of all the marketing factors of the competitors.
Supplier Power	Excellent dealing relationships with the supplier of the Company to work for long term at low prices.
Threat of substitution	Introducing the concept of innovation in upgrading the previous marketing trend to gain potential.
Buyer Power	Well aware of the trends of the buyer along with the reasonable source price.
The threat of new entry	Keep an eye on the new market riser company.

 

6 References

 

Ulkhaq, M. M., Wijayanti, W. R., Dewi, W. R., Prayogo, A., Aulia, F. S., Utami, A. A., & Mustikasari, A. (2018, May). Formulating a marketing strategy of SME through a combination of 9Ps of marketing mix and Porter’s five forces: a case study. In Proceedings of 2018 International Conference on Big Data Technologies (pp. 109-114).

 

Spink, J. W. (2019). Marketing, Competitive Strategy, and Competitive Intelligence. In Food Fraud Prevention (pp. 479-500). Springer, New York, NY.

 

Adhaditya, C., & Sutanto, J. E. (2016). Strategy Analysis Using the Five Forces and SWOT Methods Towards Handmade Products of CAD.

 

Aithal, P. S. (2016). Study on ABCD analysis technique for business models, business strategies, operating concepts & business systems. International Journal in Management and Social Science, 4(1).

 

Githinji, M. N., Mbugua, D., & Chege, P. M. (2019). Application of Marketing Mix Strategies and the Effect on Market Performance of Motor Vehicle Dealers in Kenya.

 

Rothaermel, F. T. (2016). Strategic management: concepts (Vol. 2). McGraw-Hill Education.