H&M's offrshoring strategy from Bangladesh

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Due to the insurgency in global marketing thought and technological development the business enterprises are now become more and more competitive. In Cloth Retailing Industry (also in most other …

Due to the insurgency in global marketing thought and technological development the business enterprises are now become more and more competitive. In Cloth Retailing Industry (also in most other sectors) the production concept has changed through the global availability of goods and services. Thus a company, located in Europe or somewhere else, is floating around their production units in other parts of World. Due to the availability of cheap and skilled human capital in Asia most western corporations are highly influenced to move their production units or source their products from these countries which enable them to gain competitive advantage over their competitors.

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  • 1. Swajan Das Katarzyna Żabko H&M’s Offrshoring strategy fromBangladesh: a triumph or temptation?
  • 2. Contemporary Marketing Thoughts & Principles : 4 Eras in Thought Development– (Wilkie and Moore, 2003)
  • 3. Contemporary Marketing Thoughts & Principles : Is the world Globalised?
  • 4. Contemporary Marketing Thoughts & Principles :The Triple Bottom Line of 21st Century Business, John Elkington, 1997  These are the parameters to measure a organisation’s success in terms of Social, Eeological and Eeconomical values  These concepts first used by Freer Spreckley in 1981. He argued that an enterprise should measured and report on Social, Environmental and Financial Performance  These principles demand a business organisation’s responsiblity should be pro-stakeholders ‘interest rather than shareholders
  • 5. Global Apparel Industry Overview
  • 6. Global ApparelRetail IndustryGrowth Ratein comparewith IndustrialProductionGrowth Ratein the World
  • 7. offers fashion and quality at the best price
  • 8. 2700 Stores in 48 Markets 2011: Romania, Croatia & Singapore 2010: South Koria & Turkey 2009: Russia 2008: Japan 2007: Hong Kong & China 2000: USA , Spain and other European Market in Subsequent Years 1990: France 1980: Germany & Natherlands 1976: London, UK 1974: Listed in Stockholm Stock Exchange1968: Bought Mauritz Widforss & refromed name Hennes & Mauritz (H&M) 1964: Norway 1952: Stockholm, Sweden 1947: First store opened in Vasteras, Sweden selling womenswear with name ‘Hennes’offers fashion and quality at the best price
  • 9. Business Concept Seven Core Values High volume efficiency Simplicity Ensuring best price through: Straight forward less middlemen Constant improvement thorough knowledge in design Entrepreneurial Spirit fashion and textile Cost Conscioussourcing right product from right market Team work and being cost conscious at every stage Belief in people 10-15% growth target per year in number of stores and comparatble sale unit. And self-financed. offers fashion and quality at the best price
  • 10. offers fashion and quality at the best price
  • 11. H&M’s Offshoring Forms, Motives & Localisation
  • 12. offers fashion and quality at the best price
  • 13. RMG Sector in Bangladesh Industry Attractiveness and H&M
  • 14. Population: 160 MillionLiteracy Rate: 56.8% (age 15 or over)GDP in 2012: USD 282.229 BillionPoverty Level: 31.5% below the Std.Economy: 50% Service and 30%Industrial basedExport in 2011: USD 22.924 billionTrade deficit: USD 6.7 billion
  • 15. H&M and Bangladesh  Partner for more than 30 years  25% of its total Products come from BGD  H&M is the single largest buyer for BGD  8% of the total export goes to H&M - worth USD 1.5 Billion  In next 5 year H&M plans to make it double  H&M has 250 suppliers from BGD  It operates training centre in BGD to educate theworkers  H&M seeks wage hike in BGD . .? mu .? w ry . chHo Sala
  • 16. Do I see it..??Performa nce Analy s is
  • 17. Which one to invest in..?
  • 18. R ) s (O& on ndat i me co m Re a nd ns va tio serOb
  • 19. .? io n.. at m pt r Te o p th mTriu ! .!! ds.. pen It de
  • 20. a b c d e f g h i j k l m n o p qr s t u v w x y z a b c d e f g hi j k l m n o p q r s t u v w x yz a b c d e f g h i j k l m n o pq r s t u v w x y z a b c d e f gh i j k l m n o p q r s t u v w xy z a b c d e f g h i j k l m n op q r s t u v w x y z a b c d e fg h i j k l m n o p q r s t u v wx y z a b c d e f g h i j k l m n