HM - Expansion Strategies - Free Essay Example

Sample details Pages: 9 Words: 2782 Downloads: 2 Date added: 2017/06/26 Category Marketing Essay Type Research paper Did you like this example? 1.0 Introduction According to HM annual report 2012, HM is one of the worldà ¢Ã¢â€š ¬Ã¢â€ž ¢s largest fashion companies and an exciting place to pursue a career within the fashion industry. Their business concept is to offer their customers fashion and quality at the best price, and with more stores and new markets added every year the group is constantly growing. This means that theyà ¢Ã¢â€š ¬Ã¢â€ž ¢re always looking for new talents to join the team. The HM Group employs over 104,000 people and there are more than 2,800 stores spread over 48 markets in Europe, North America, Asia, North Africa and the Middle East. Their design team, pattern makers and buyers work together to create a broad band varied range of inspiring fashion. Fashion collections for women, men, teenagers and children are complemented by shoes, accessories, cosmetics and even home textiles. The diversity of the collections means HM has fashion for all. Efficient decision-making and flex ible assortment planning ensure that the product range is always adapted to the latest trends. Next, considerable resources are devoted to increasing sustainability. HM does not own factories, but instead buys products from independent suppliers and works to bring about long-term improvements for people and the environment such as in the supply chain, the garment lifecycle and the communities in which HM is active. Moreover, with a strong offering that appeals to customers around the world, HM is able to grow successfully in all its existing markets as well as in new ones, with growth among all its brands and through new concepts. HM has selected wholly-owned subsidiary and franchising as their mode of entry in current expansion strategy is that HM is financed entirely by HMà ¢Ã¢â€š ¬Ã¢â€ž ¢s own resources. HM using different current expansion strategy in different country such as in a politically stable country, HM has gained competitive advantage of low risk and constant pr ofit margin. 2.0 Current Expansion Strategy HMà ¢Ã¢â€š ¬Ã¢â€ž ¢s current expansion strategy involves opening 10-15% more stores per year. HMà ¢Ã¢â€š ¬Ã¢â€ž ¢s current expansion is mainly increase the number of stores under its brand includes HM as well as COS, Monki, Weekday, Cheap Monday, Other Stories and HM Home. The mode of entry of HM is in form of wholly-owned subsidiary as well as licensing. The image below is current expansion of HM in the world. The world of HM Source: https://www.hm.com/cz/abouthm/theworldofhm__worldofhm.nhtml 2.1 Wholly-Owned Subsidiary HM has selected wholly-owned subsidiary as their mode of entry in current expansion strategy is that HM is financed entirely by HMà ¢Ã¢â€š ¬Ã¢â€ž ¢s own resources. In Singapore and Malaysia, HM has entered in 2011 and 2012 respectively by establishing own stores. The main reason why HM establishing Wholly-owned subsidiary in that particular countries is that they are politically stable. This is be cause in a politically stable country, HM has gained competitive advantage of low risk and constant profit margin in the above countries. It is like a free market system to enter because in such country the relationship between benefit, cost and risk can be balanced well. This is the same goes to United States and Canada. Another reason why HM choose Wholly-owned subsidiary instead of franchising in country like Canada and United states is in order to have a tight control on every store. Its benefits for HM is that such entry mode cannot help a firm reduce the risk of losing control over the competence, but also can make it have tight control over operations different countries that is necessary for engaging in global strategic coordination. On the other hand, the location can be realized, the curve economies can be experienced and the stock of the subsidiary can be shared 100 percent by the firm. However, HM bear the full costs and risks of setting up overseas operations espe cially such as United States, Canada, Malaysia and Singapore. HM, in each market for example United States and Canada has to face kinds of competition from international and local retailers, individual stores and also department stores. Most importantly is wholly owned subsidiary has caused HM to compete with other consumption such as travel, home electronic and so on. All these cost are the downside of wholly owned subsidiary of HM. But, it is just a minor problem since HM is financially strong firm. HM has not used franchising in the country mentioned because franchising is suitable to use only when the country to be entered is politically unstable or higher barrier to entry. This will further discuss in the next part of current expansion. 2.2 Franchising As mentioned above, HM was mainly chooses the wholly subsidiary entry mode and franchising were only suitable to use when the country to be entered is politically unstable or facing barriers to entry. Even though there was some policies that make HM unable to establish wholly owned subsidiaries in Middle East, HM had decided to enter Middle East and partnership with franchisee Alshaya on year 2006. The reason of HM chooses to enter partnership with franchisee Alshaya is because of Alshaya were the biggest retailers in the Middle East region. According to Hill (2007), franchising entry mode means that the franchiser (HM) sells the intangible property like stock to the franchisee (Alshaya) and also has the right to control or run the business in the country. According to Marknadsetablering (2008), the main reason for HM to franchising in cooperation with Alshaya is because of the rules and regulation that set by the country. That is because of Middle East country had set a rules for the foreign companies that wish to invest in their country. The rules and regulation is the foreign companies cannot establish wholly subsidiary entry mode in the country and they need to franchisee with a local partner t hat owner at least 51% of shares in the business. Another reasons for HM chooses to corporate with Alshaya is because of they wish to make Middle East country like Dubai, Kuwait and Qatar be more high economic growth and great purchasing power. Other than that, the political situation is stable in Middle East country. In this situation, HM were able to have 10 franchise stores in Qatar, Dubai, Kuwait and also able to expand into new Middle East countries like Saudi Arabia, Bahrain, Egypt and Oman. Moreover, it is less risk when HM choose to be franchisee with Alshaya. With franchisee with Alshaya, HM can extend its business to the foreign country slowly by get the information from the franchisee. It is benefit to HM because can be better understand about other countriesà ¢Ã¢â€š ¬Ã¢â€ž ¢ rules and regulation before invest in the countries. That is because of different political and legal system that linked to Muslim values, different education system, business environment, ind ustry structure and culture, and the marketing infrastructure for each countries are different. For the example, HM have to provide different range of product to follow the clothing restrictions resulting from Muslim religion when they enter to Middle East markets. 3.0 Future Expansion Strategy HM future expansion strategy involves venturing into new market and focusing on expanding more stores throughout the world. There are many countries like the Eastern Africa and South America. The mode of entry of HM is in form of wholly-owned subsidiary as well as joint venture. 3.1Wholly-Owned Subsidiary HM has selected wholly-owned subsidiary as the mode of entry in future expansion because of HM own resources. In Asian countries HM are concentrating on 80 percent of its manufactures, so HM would like to expand its production with the suppliers to Ethiopia. One of the reasons why HM is establishing wholly-owned subsidiary because of the strong development and there is good job o pportunities. Establishing wholly-owned subsidiary will help to lower down the unemployment rate in the country. Furthermore, HM has done an intensive risk analysis in Ethiopia regarding to the human rights and environmental issue. Besides that, the reason why HM wants to establish wholly-owned subsidiary in Ethiopia because the Sub-Saharan Africaà ¢Ã¢â€š ¬Ã¢â€ž ¢s has possible way to become low-end manufacturing place, especially with the increasing cost in China. Report shows that labor cost in Eastern Africa cheap compare to the labor cost in Asia countries. HM has set 1 billion targets in textile export by 2016. This move will be beneficial to both HM and the economic growth in Ethiopia. Expanding the company is another reason why HM wants to establish wholly-owned subsidiary in Ethiopia. As the numbers of stores worldwide is increasing, HM decided to increase sources through all markets in order to compete with their competitors. HM as growing company must have the abili ty to deliver to all their products to all their stalls in order to have a rapid pace in expansion. In the country capital of Ethiopia, HM has established an office in 2012 which has been engaging test orders with the supplier. Many of the new factories there have started large scale of production. With constant economic growth, HM is planning to spend one million clothing a month from Ethiopia despite the country remains one of the world poorest country. 3.2 Joint Venture Besides using wholly-owned subsidiary, HM is also using joint venture as the entry mode of strategy in their future expansion. A joint venture is a business in which new firms are formed to achieve some specific objectives of a partnership like an agreement between two or more firms for a finite time, a new entity and new assets by contributing equity. The Swedish retailer, HM was touting its ongoing success to implement sustainable initiatives. Across the globe, HM gave its sheer size à ¢Ã¢â€š ¬Ã¢â‚¬Å" now at 2,853 stores and counting in 49 markets. HMà ¢Ã¢â€š ¬Ã¢â€ž ¢s environmental footprint maybe decreasing but the fashion chain is getting ready to break into another market: India. HM can also set up a joint venture with the company in Ethiopia in future expansion for the company as HM are currently venturing into the country Ethiopia. HM, the worlds second-largest apparel retailer after Zara-owner Inditex, the parent company of Zara, has a foray into India with 3 Indian firms which is Textile major Arvind Ltd, Reliance Industries à ¢Ã¢â€š ¬Ã¢â‚¬Å" owned Reliance Brands, and Delhi-based luxury fashion retailer, Genesis Colours. These few retailers actively continuing to push global expansion .HM has been searching for potential retailers in Ethiopia to joint venture to manufacture and sell their clothing for future expansion of the company. HM is applying to open stores in India in order to join a rush of international retailers and looking to expand in Asiaà ¢Ã¢â€š ¬Ã¢â€ ž ¢s third-biggest economy on the back of government liberalization measures. The reason is because of in single brand retail, India allows 100 percent foreign direct investment (FDI), a route with HM would take to enter this market just almost like its Swedish peer furniture retailer IKEA. India represents a significant opportunity for clothing chains and also makes sense for a global player like HM to seek and expand business there. Moreover, there is no reason that the fast-fashion and value-oriented model shouldnà ¢Ã¢â€š ¬Ã¢â€ž ¢t work in India. For our chosen country, Ethiopia is a country with strong development. HM believes that they can sustain their economic growth and also the job opportunities in Ethiopia. Besides, HM is also seen as a fast-fashion retailer with a very high ratio in collection changes and the prices are lower for trendy products as their competition. HMà ¢Ã¢â€š ¬Ã¢â€ž ¢s collections are very adventurous and fashionable. For instance, as a joint ventu re of HM in India, brand attributes are required. For example, constant arriving of new products, stores expanding, new campaign, making constant surprise for customers and so on. As for Ethiopia, HM expand its business to Ethiopia by making Ethiopia one of its suppliers by building factories in the country. Ethiopia has rich and long history in textile and leather production. Therefore, for the future expansion of the HM in Ethiopia, HM can search for some retailers which is going internationally and globally so that they can have a joint venture in order to globalize the products of HM. 3.3 Licensing At the same time, HM is also using licensing in her future international expansion in Ethiopia. A licensing agreement is an agreement where a licensor grants the right to intangible property to another party for a limited period and in return the licensor receives a royalty fee from the licensee. (Hill, 2007, p489). HM can use licensing as one of the strategies to enter Ethiopia by building new factory for HM supplies. In Ethiopia, HM as a licensor to grant the right for its intangible property such as brand, production process to local factory for a specified time to supply its products. There are few evidences that support HM using licensing to build its supplies in Ethiopia. One of them is the economy of Ethiopia has been growing since 2007 at times with double digit grow. The economy will experience annual growth of 7-8 % through 2016. As a result, HM is no need to worry about employment rate of its factory since there is more and more labor supply for the factory. In addition, Ethiopias government is placing priority on the textile industry and by year 2016, the country aims to export more than a billion dollars of apparel. Thus, factories established by HM are welcomed in Ethiopia. (Martin Koch, 2013) Furthermore, another reason is cheaper labor cost. HM is trigger to compete in a cost competitive apparel industry facing competitors such as Zara a nd Gap. But recent increase in social standard among HM existing supplies bases especially China has increased HM production cost, so HM need to start considering its new option in Ethiopia where cheaper and lower than in China in term of labor cost. Besides, there is huge number of labor force with 80 million people living there. The Location is strategic in Ethiopia because its near the sea as well as quick to get to Europe via the Suez Canal. This would result in giving competitive advantage for HM since it shorten delivery time compared to china and furthermore the climate in Ethiopia is suitable for cultivate cotton too. This will giving advantage for HM in term of cost. 4.0 Conclusion As a conclusion, HM a based fashion company which is one of the largest fashion company in the world. We able to observe that HM is keep on improving from time to time. There are two current expansion strategies that HM used in order to make their business more efficient. One of the strateg ies is HM implemented wholly-owned subsidiary which will help them gain competitive advantage of low risk and constant profit margin in the specify country. Besides, HM also expand its business via using franchising when the country to be entered is politically unstable or facing barriers to entry. For example, HM partnership with franchisee (Alshaya) is because of Alshaya were the biggest retailers in Middle East region. In order to expand in the future, joint venture mode is the strategy that usually being used. It is normally used when they entered the international markets. Moreover, HM should make changes from low to higher entry strategies during they make investment. Internalization of entry mode able to aware those from risk, commitment from those resources, evolve with the international knowledge accumulation on investment location. Last but not least, image of a company is very important for every company. This is because it will affect their expansion in the future and communication within those brokers. Till now, HM image is still in every people mind because it is quite strong enough. Everyone also think that HM is a type of Fashion Company. So, a great image of a company will really will bring confident to those buyers. 1 Don’t waste time! Our writers will create an original "HM Expansion Strategies" essay for you Create order

Analysing Mc Donald’s Supply Chain Management - 1742 Words

Supply Chain Management according to Tom Mc Guffog is Maximising added value and reducing total cost across the entire trading process through focusing on speed and certainty of response to the market. Supply chain management is one of the important area which requiring strategic planning in a business enterprise. Planning and decision making are required right from the production of goods till the goods reach the ultimate consumers in the most cost effective and timely manner. If a firm is able to manage its supply chain efficiently, it can increase its customer satisfaction because SCM ensure the deliverance of fast and quality products to customers. Supply chain includes all the activities from the conversion of raw materials, one end†¦show more content†¦8. Variety: supplying all the items listed on the menu is also a challenge, for example some of the items offered by Mc Donald’s is Blueberry Banana Nut Oatmeal but Mc Donald’s in itself is a very big marke t, growing blueberries and keeping the supply large enough to meet the demand of all the stores is not possible at all. Specific and Practicable Recommendation for action so as to improve the efficiency or effectiveness of the Supply Chain After discussing the supply chain issues faced by a restaurant we got to a conclusion that management of inventory plays a key role in the management of supply chain. The management is required not only of finished goods but also of raw material and work in process. Historically it has been proved that companies which are able to generate more cash flows with the help of supply chain have a higher stock price multiples than its competitors even if the earnings per share and growth rates are similar in the companies (CSCO Insights). Here are four strategies which will help organizations manage their inventory: 1. Management of safety stock: most of the companies use simple methods to determine the levels of safety stocks at different stages of supply chain for example use of SKU segmentation or four classification but these are not sufficient for today’s times. The most common of the process improvements is to use many more attributes associated with each SKU to in effect create a much larger number of itemShow MoreRelatedManaging Inventory Of A Supply Chain Management3066 Words   |  13 PagesKRAIHAN 8 HARLEY DAVIDSON_ KOMGROB KRAIHAN 8 CONCLUSION_ TUAN UYEN NGUYEN 8 REFERENCE: 9 Introduction The most important part in supply chain management is managing inventory as company operation tries to minimize cost from supplier, manufacturing, and production. Regarding to inventory, the management accounting must have understand the basic of inventory management. There are a numbers of techniques including: ABC system, EOQ model, TQM, and JIT system. All those several system are relating in

Means of communication on the other hand free essay sample

Communication is the process by which we exchange information between individuals or groups of people. It is a process where we try as clearly and accurately as we can, to convey our thoughts, intentions and objectives. Means of communication on the other hand refer to the agents, instruments, methods or resources used to impart or interchange thoughts, opinions or information. Most well established organizations inUganda today use many types or means of communication to convey information to the audience but the most commonly used include print media which involves the use of books, newspapers, magazines, newsletters, and broachers, broadcast media which involves the use of radio and television channels to convey information, digital media involving the use of internet and mobile media. Other means of communication most well established organizations in Uganda use include recording media that is the use of music, records, and tapes, and film media as well involving the use of cinema, movies among others to convey information to the audience. Much as the above means of communication most well established organizations use in Uganda are good, there is need to improve on them since they are not fully effective. Print media are light weight, portable, disposable publications printed on paper and circulated as physical copies. They hold informative and entertaining content that is of general or special interest. They are published once or daily, weekly, biweekly, monthly, bimonthly or quarterly. Print media in Uganda encompasses newspapers, notices, newsletters, magazines, broachers, and books. Most well established organizations in Uganda use newspapers such as The New Vision, The Daily Monitor, The Observer, Bukedde, and Rupiny among others to convey information to the intended audience. Besides newspapers, they also use books, newsletters, magazines, and broachers where they put information regarding the organization majorly what the organization deals in for example finances, and products. The medium the organization chooses will depend on their objective. In Uganda, the use of newspapers has an advantage since there are a couple of newspapers which are in different local languages for example Rupiny in Luo, and Bukedde in Luganda Additionally, most well established organizations in Uganda use broad cast media. Broadcast and electronic media today are portable sources of entertainment and information distributed by wired and wireless radio and television stations and networks, sounds, and video recordings. Most well established organizations in Uganda use television and radio channels to advertise about the availability of a product or services creating awareness among the customers. Television channels most well established organizations in Uganda use include Uganda Broadcasting Corporation (UBC), Bukedde television, Wavamuno Broadcasting Services (WBS), Urban television, and Nile Broadcasting Services (NBS) among others. Furthermore, radio stations such as Capital FM, K FM, Radio Uganda, Radio West, Radio Rupiny, and X FM are also used by most well established organizations in Uganda to convey information to the audience. These media in most cases are preferred by most well established organizations in Uganda because most people are reached through the radio and television channels. The television is on the other hand more effective since it involves both seeing and listening. Furthermore, most well established organizations in Uganda use digital media which involves the use of internet and mobile media which include electronic mail, websites, downloading, and streaming to cell phones and laptops to pass information to the audience. Electronic mail are nowadays preferred by most organizations because they convey information faster to the intended audience and yet at low or no cost thus reducing operational costs. Also, well established organizations in Uganda use websites from which they post all the information regarding them right from the management, location, and products they deal in which can in most cases be downloaded freely by the intended audience. To emphasize, they also use mobile phones where they orally communicate or send messages to people for example some financial organizations send text messages to their customers to show any transactions that may have taken place. However, all these means of communication most well organizations use in Uganda are not fully efficient, they have weaknesses. These weaknesses can be improved as follows. When using the print media, clear and simple words and illustrations or pictures should be used so that it is also easy for the layman to interpret. Also, print media such as newspapers should be translated in different local languages so as to increase on the audience. Newspaper outlets should be opened country wide so that even the rural areas are able to receive the newspapers in time. These will help collect as much feedback as possible. Other than that, broadcast media such as television and radio stations should extend their reach countrywide so that the message being conveyed is absorbed by a much wider audience so as to obtain as much feedback as possible. Also, radio and television channels in Uganda should balance their programs by introducing programs for both the elderly and the youth so as to increase on the audience. Besides that, the contents of television channels should be regularly revised in order to keep people updated with current information. Radio and television channels should as well migrate from analogue to digital broadcasting so that the audience is able to receive much clearer sounds and videos. Media communication is developing at a meteoric rate in order to ensure clarity and to eliminate any ambiguity. The aforementioned means of communication which well established organizations use, that is, the print media which includes the use of books, newspapers, magazines, newsletters, and broachers, broadcast media which involve the use of radio and television channels, digital media which include internet and mobile media, recording media, and film media have played a vital role and continue to do so, in bridging the gap between people, commerce, education, healthcare, and entertainment. Most well established organizations in Uganda use all these means to convey both written and verbal information to people. However, care should be taken when using print media by using simple and clear words in order to fetch more feedback. REFERENCES Wikipedia http//: [emailprotected]

Dystopian Society in Fahrenheit 451 free essay sample

Fahrenheit 451 is an example of a dystopian society. A dystopian society is futuristic illusion of a perfect society that is controlled by the government. At many occasions in the book it proves that it is a dystopian society that Montag lives in because of the context it consists of. Characteristics such as, Freedom, information, and personal thought is prohibitted, individual personality lost and looked down upon, and propaganda used to control the citizens, is present in the text of the book. â€Å"It doesnt think anything we dont want it to think† (27). This is a quote where Beatty is telling Montag about the mechanical hound. This is an example of how it is a dystopian society because the hound is programmed to have no original thought or memory and is made to do a certain task instead of having its own personality and choosing its motives. The mechanical hound represents a metaphor of Montag and other members of the society being changed because of technology and it results in them not being able to think for themselves and depending soley on what the TV says. We will write a custom essay sample on Dystopian Society in Fahrenheit 451 or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Theyre faking. You threw them off at the river. They cant admit it. They know they can hold their audience only so long. The shows got to have a snap ending, quick So theyre sniffing for a scape-goat to end things with a bang. (148). This quote is when Granger is talking to Montag while Montag is being chased by the government for killing Beatty. It is an example of propaganda because the government uses the television and media to fake Montags death when really he was still alive just running and hiding. So people would not lose their attention or begin to get curious the government chose a poor guy walking along the street and made it look like he was Montag and killed him. Also, the government did that because they did not want to seem weak or defeated by a civilian. Each man the image of every other; then all are happy, for there are no mountains to make them cower, to judge themselves against. (Page 58). This quote is an example of how the government wants everyone to be equal. However, equal isnt always good. Being equal depresses the idea of individuality and freedom to be yourself if equality is forced upon you. Which in this book equality is forced upon citizens of the society by the government. However it also shows that the government might be afraid of its citizens retaining information and using it to rise up and question the government. These are just a few example of how Fahrenheit 451 is an example of a dystopian society. The quotes show how the government does not want the citizens to have freedom, be unique, or have personal thoughts about things. Also, it shows how the government does want complete control over its citizens and even uses propgaganda to gain that control.