H&M STRATEGY

Bargaining Power of Buyers: The bargaining power of buyers is high in the department store retail industry. The volume of buyers is high, and buyers are very price sensitive in this industry. The products are not highly differentiated, and there are numerous stores that offer the same, or similar, products, giving buyers the opportunity to search for the lowest prices and information. The industry has substitutes available in the form of specialty, differentiated products and stores. This increases the power of buyers,

It is the sector that brings the real barriers. In David Jones' case, the cost to setting up a department store is in itself a high cost activity, with high risk of failure if not correctly located. Add to that the business of luxury items, which suppliers charge a pretty penny for, and the barriers for David Jones sector become very high.

Bargaining power of buyers is medium-high because of the low switching costs and wider spectrum of similar products selling at competitive prices due to the influence of developing countries

Bargaining power of customers: Buyer power in this market has proved to be high considering the focus groups wanted the product to be 50 dollars cheaper than what IwaL had in mind.

This report examines the internal, external and capability of Arcadia Group with several recommendations are provided. Apparel market constantly growth in sales revealed £41,943.9 million in 2015. (Passport 2016) The Group stated the revenue £2.7 billion in 2014 (Mintel, 2015), performed a strong power on its supply chain and marketing innovation. However, the company is experiencing a challengeable time as it showed a fluctuation on the sales and growth during the recent years. Arcadia Group is also facing the obstacle on the ethical issues on environmental and social and the weak performance of several brands in the group.

According to Mann & Byun (2011), the intensity of rivalry within the apparel and clothing industry is perceived by industry growth, product differentiation, industry concentration and diversity of competition. The existence of high rivalry within an industry poses a strong threat to profitability and make the industry less attractive in the long run. Therefore, in order for the nature of competition to be in a positive direction, new entrants may avoid competing in the same market with the incumbent and concentrate on a different market segment, geographical location, offering unique products, services, and brand name. For example, Chloe and Hermes are operating internationally, with 8 luxury product, while Small & Tidmas, Camkids group PLC are operating domestically with different product standard (refer table 4). In summary, as a result of fast growing industry, new players may decide to enter the market in order to take advantage of rapid growth, however, they may face huge rivalry due to exiting firms’ large size, brand identities, huge distribution networks and competitive prices (Mann & Byun

We think H&M’s financial results are the most interesting one to compare with Inditex’s. H&M is the most important and largest competitor of Inditex and due to their similar background, both being large international European apparel brands and offers fashionable clothing with in season style.

It was recommended that BBC pursue the agreement with Hi-Valu. The deal was some sort of “A Good Deal on a Bad Deal”. It would be much better if BBC could re-negotiate an even shorter deal with Hi-Valu for a more favorable credit terms. This was a case of special order basis. Suppliers could consider entering into special order basis for retailers provided that it would not eat into their current market or would not after their market share in the industry. It is advantageous as long as it is still profitable even if retailers would negotiate the least among of price for the products. The retailers would carry a different label or perhaps a different packaging so as not to confuse consumers with regards with the prices of the products. In that way, the brand is still protected but they still generate incremental incomes. Another examples are the generic brands of products, it’s just a matter of comparing the quality of generic as against the branded. I give the group a grade of 4.0 for a very concise and direct approach on the

• For new brands careful consideration of the environmental analysis should be used to inform the launch position • For established brands there may be a requirement to change the positioning. The smaller the changes the better and it is best to see this as a process of evolution that will take time and resource

Porter five forces analysis is widely regarded as an essential tool in analyzing an industry and the clothing industry is no exception. As seen in Appendix A the company operates in a highly competitive industry, primarily fuelled by low barriers to entry, low switching costs and a large volume of substitute products. Moreover, as clothes are a hybrid of non-discretionary and discretionary spending, the industry has seen minimal growth of 1.4% in 2009 . 20% of consumers however plan to spend a greater portion of their disposable income on clothing in 2010 after having held back throughout the recession . Despite this, M&S, as discussed in the following paragraph, will not necessarily be the benefactor of such increased business due to their unwillingness to sacrifice costs for quality and ultimately

LVMH is a group of premium brands all around the world, including Louis Vuitton, Fendi, Givenchy, make up and perfume giant Sephora but also Veuve Cliquot champagne to only cite a few, who generated thirty-five billion euros last year, which could lead us to think they are a successful firm. Their substitutes are rare and less qualitative, their suppliers have a limited negotiation opportunity because of LVMH’s choice to operate in mass distribution scheme, which restricts discussions. Within this company, LVMH has a great negotiation power, because their assertion is anchored within the market they operate in. (321 words)

This means, H&M, Zara can actually focus all their efforts on clothing whereas, M&S could not do this. You may think that offering a huge variety of products is a strength and a good thing, but if you actually think about it, it is not. This allows other companies like H&M to focus on the clothing which makes better fashion industry wise. A threat Mark and Spencer faces is that other fast fashion companies are able to focus on clothing whereas, M&S cannot which is quite a

The Power Of Buyer: “This industry is highly competitive buyers have huge power of choice and van choose to switch to other offerings if there are not satisfied with companies product” (Badhai 2014).

"PESTEL is an important tool used for market and environmental analysis and to support strategic decision-making" (Narayanan and Fahey, 1986). The purpose of this research is to present IKEA influences through PESTEL analysis.

The PESTEL analysis shown in the appendix portrays some of the issues in the external environment that a firm manufacturing and supplying luxury men’s clothing may experience. In all six sections; political, economic, social, technological, environmental and legal there are issues that the firm would face. However, some have more significance to others. Although political, technological and environmental factors would have a big affect on the firm, when looking at the three most important issues facing the firm; social, economic and legal come out on top.