International Business

International Business

When doing business on international level, a firm must employ appropriate strategies to remain competitive and to achieve its objectives.  Strategy is the game plan that guides a company in its operations.  A business without a strategy is equated to a journey that has no destination as it lacks mission and goals. This discussion delineates on various aspects concerning Hennes & Mauritz AB also operating as H & M.

In its business, H & M has used various strategies to ensure that it remains competitive.  H & M is a Swedish retail clothing company that deals and offer fashions for men, women and children (H & M, 2012). The company operates around 2200 stores in more than 38 countries employing around 87,000 people (H & M, 2012). The company also operates in Bangladesh.

The market that the company operates varies in size and in the location.  As stated earlier, it operates in many countries and this is a clear indication of its diversity and receptive to the needs and tastes of its clients and is one of the core competencies that have made the company to expand in more markets. The markets include Germany, Norway, UK, Netherlands, Austria, Denmark, Bangladesh and Finland among many others (H & M, 2012). It also outsources its production in many factories in Asia as well as Europe. This has allowed it to have constant supply of materials that has enabled it to continue in its production or manufacture of clothing products. Furthermore, the core competencies of the company are captured in its mission statement that reads, “Fashion and quality at the best price”. The company offer quality products at low prices, which has made it a preference for many customers in various locations.

Different companies use different entry modes to enter in foreign markets.  The reason for this is the different characteristics that are inherent in the markets and the nature of the company itself.  H & M used various modes when entering Bangladesh market (Sjolander, 2004). One of the modes the company used was based on strategic alliances where the companies made agreements with the Bangladesh textile companies. It also used contractors. These contractors were given the responsibility of supplying materials to the company. The contractors come from the local suppliers in Bangladesh.  This entry mode helped the company to receive good reception by the locals because of using its own locals.

The entry modes met its goals and objectives it had set. The company goals were to intensify its sales in the existing stores and increase the number of stores by 10 to 15 percent every year (H & M, 2012). It also aimed at maintaining and expanding its financial stability to achieve its objectives.  The company was able to get positive support from Bangladesh textile industry making reducing production costs leading to increased productivity leading to increase in sale.  Increased sales culminated to increase in number of stores across various countries. Apart from its marketing designers, the company has had a number of collaborations with various guest designers that has enabled it to produce quality products attracting many customers. The company provided or offered exclusive collections by renowned fashion designers such as Karl Lagerfeld contributing to its success and attainment of its goals and aims.

H & M is faced with competition from other local companies dealing in the same industry products.  Most of these companies are local and compete with H & M in material source and in   manufacturing. The market is therefore competitive. Examples of the local competitors that compete with H & M include expo dressmaking, Maximo Ltd, Tanin enterprise, fashion Mart Fmasud and Taseen Corporation among many others (Alibaba.com, 2013). Because of this competition, the company is resorting to become sole client of two factories in Bangladesh (Gustafsson, 2013). The factories will be the sole supplier to the H & M Company. This strategy aimed at ensuring that there is constant supply to ensure the company remains competitive. The company prefers this model because it allows it to meet its objectives as opposed to owning a factory.

The company works with local partners to achieve its objectives in Bangladesh. Some of the major partners include production companies that provide the company with its raw materials, its suppliers who ensure that there is constant supply of materials in various production plants and stores. Others include the government that provides an oversight and regulatory functions to ensure that there is conducive climate for the company to carry out its activities in Bangladesh (Mottaleb & Sonobe, 2011).

Other companies adapted to different strategies and business practices to enter and operate successfully in Bangladesh. Most of the companies took an advantage of the low production cost to lower their products which helped them to get more customers (Sjolander, 2004). They also abided by the government regulations, which aided them to engage in their business. Some of the companies entered into agreement with the manufacturing companies that helped them to share the costs and profits making them to work well with the locals (Yunus & Yamagata, 2012). Some still developed positive mutual relationships with the local suppliers and this helped them to adapt to the market.

In conclusion, it is prudent for any business to adapt to appropriate strategies to be in a position to achieve its objectives. There are various challenges in the markets such as competition, which can be addressed through employment of appropriate strategies. H & M has managed to succeed in its business in Bangladesh through its selective strategies that conform to its goals and objectives.  If other businesses follow this suit, they stand a chance to succeed in their endeavors.

 

 

References

Alibaba.com. (2013). Competition in Bangladesh. Retrieved from: http://www.alibaba.com/countrysearch/BD/h%2526m-competition-supplier.html

Gustafsson, K. (2013). H &M grabs more control of factories amid Bangladesh unrest. Retrieved             from: http://www.bloomberg.com/news/2013-11-12/h-m-grabs-more-control-of-asia-       factories-amid-bangladesh-unrest.html

H & M. (2012). H & M. Retrieved from:       http://venus.unive.it/matdid.php?utente=mircven&base=Int.Cons.Ing.-            Ita.2ITES%2F21.4.11H%26M.pdf&cmd=file

Mottaleb, K., & Sonobe, T. (2011). An inquiry into the rapid growth of the garment industry in    Bangladesh. GRIPS discussion paper.

Sjolander, R. (2004). Market entry strategies. Retrieved from:         http://uwf.edu/rsjoland/12%20Market%20Entry%20Strategies%20as%20Used%2004%2     01.pdf

Yunus, M., & Yamagata, T. (2012). The garment industry n Bangladesh, Dynamics of the             garment industry in low-income countries; Experience of Asia and Africa (Interim     report), 1-28.

http://www.ide.go.jp/English/Publish/Download/Report/2011/pdf/410_ch6.pdf

 

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