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Marketing strategy of H&M

ASSIGNMENT 1

Executive Summary

This study sheds light on marketing strategy of H&M while developing its business operation in Chinese supermarket. In this respect, PESTLE analysis is very helpful in order to identify the factors that are beneficial for development of successful business plan. In this respect, market segmentation with the help of technical advancement, provide disseminated information to business organisation like H&M to build up comprehensive business strategy to perform better inChinese supermarket.

Introduction

H&M is the second largest retailer in the world that has various branches across 57 countries. Asa giant fashion retail supplier, H&M has now focused on supermarket of China as it is one of the fastest growing markets. This study sheds light on marketing strategy of H&M while developing its business operation in Chinese supermarket. In this respect, PESTLE analysis is very helpful in order to identify the factors that are beneficial for development of successful business plan. Thisstudy has highlighted different strategies in terms with expansion of H&M in Chinese retail market.

Strategic Segmentation

As opined by Liuet al. (2015, p.270), exploring corporate strategy is one of the integral factortowards development of business operation. In this respect, allocation of resources play pivotal role to enhance marketing strategy. It is very important for H&M before developing marketing strategic plan that it must identify consumer’s perceptions while buying products. In this respectidentification of potential customers and quantification of them are the primary task of marketsegmentation. Marketing strategy of H&M while operating in Chinese supermarket should comprise of accelerated sales, product branding, social media marketing and development of comprehensive sales channel.

Marketing strategy in China

Competitor analysis is helpful to device comprehensive business strategy for businessorganisations (Weiet al.2014, p.66). In this respect H&M can take the help of PESTLE factors together disseminated information regarding Chinese retail market. PESTLE analysis is helpful tool to identify challenges faced by H&M within Chinese retail market.

PESTLE Analysis

Political

Chinese political system is an example of communist politics and it makes great contribution towards national stability and sustainable economic growth. As Chinese retail market has witnessed significant change due to deregulated economy and it has now transformed towardsmarket economy (Bai and Chang, 2015, p.522). In recent time, Chinese government has given focus on FDI and it is a good opportunity from the perspective of H&M to enhance its businessperiphery across various parts of China.

Economical

China is one of the valuable countries in terms of sustainable economic development. It has experienced significant GDP growth from 360 billion to 36 trillion, since past 35 years of market development. Supermarket of China has significant growth due to its innovative module of business strategy. As China has one of the largest global population and labour resource is considered as double edged problem that china has witnessed in recent time. However, Renet al. (2015, p.649) cited that disparity in labour wages cause harm towards business operations and in this respect H&M needs to play tactical strategy by understanding demands of labour and maintain workplace environment. Apart from this, fashion retail industry provides huge contribution towards country’s economic development so it might be a great opportunity forH&M to enhance its business operation in china by giving significant contribution towards Chinese economy.

Social

Chinese people prefer to receive implied message and development of relationship with customers of China is an important part of marketing strategy for any business organization (Zhuand Sarkis, 2016, p.290). Hence, H&M needs to identify the demands of stakeholders and deliverproducts as per their requirements. However, development relationship with customers is a complex task but if H&M canpursue in this section, it can easily enrich its customer base and it is beneficial for organisational growth. Beside this, corruption is another issue that gives significant challenge towards sustainable development of Chinese economy. As per Corruption Price Index, China stands 77 positions among 182 countries across the world.

Technological

With the development of technological arena, retail market operation has witnessed significant transformation in its business operation. In recent time, various e-commerce websites offer rangeof products to the customers and they can easily choose from various brands (Liuet al.2016, p.360). As H&M is associated with fashion market and it emphasis to strengthen its marketingstrategy to ensure business growth in china, it must focus on technological intervention. In thisrespect, market segmentation with the help of technical advancement, provide disseminated information to business organisation like H&M to build up comprehensive business strategy to perform better in Chinese supermarket.

Legal

In order to encourage foreign countries to invest in Chinese supermarket, government of china has introduced various laws to support its needs. In this respect, introduction of law regardingChinese-Foreign Equity Joint Ventures, The Income Tax Law of the People's Republic of Chinafor Enterprises with Foreign Investment and Foreign Enterprises, Measures for Enterprises withForeign Investment (Wong and Wickham, 2015, p.450). Such legal rights might be beneficial forH&M to run successful business while operating on Asian subcontinent like China.

Environmental

Recent changes are retail market operation has significant impact over environment of China. It is evident that China is considered as one of the largest emitters of carbon dioxide and othergreenhouse gases that have negative impact over environment. In recent report published by WTO, air quality of China is a serious matter of concern for the inhabitant of China. Some researcher has estimated that pollution costs hold the Chinese economy from 8% to 12% of GDPper year (H&M, 2018). In this respect, H&M has to implement innovative framework regarding business operation to establish its place in Chinese retail market.

Conclusion

Marketing strategy is a complex task and business organisation needs to give it prior attention in developing business plan. This study sheds light on development of marketing strategy of H&Mwhile operating in Chinese retail market. In addition to this, understanding demands of customers is a useful approach towards development of marketing strategy by those businessorganisations can ensure its growth. In order to expansion of business activity in Chinesesupermarket, H&M must consider attenuation of customers and develop product as per their requirement. In this respect, PESTLE analysis is very much helpful to get customizedinformation regarding external environment of Chinese retail market. Hence, it can be concludethat H&M should consider external factors while developing marketing strategy for its business operation.

References

Bai, X. and Chang, J., (2015). Corporate social responsibility and firm performance: The mediating role of marketing competence and the moderating role of market environment. AsiaPacific Journal of Management, 32(2), pp.505-530.

H&M (2018), H&M, Viewed 11 April, 2018, by <http://www2.hm.com/en_gb/index.html> Liu, S., Perry, P., Moore, C. and Warnaby, G., (2016). The standardization-localization dilemmaof brand communications for luxury fashion retailers' internationalization into China. Journal of Business Research, 69(1), pp.357-364.

Liu, Y., Li, H., Peng, G., Lv, B. and Zhang, C., (2015). Online purchaser segmentation and promotion strategy selection: evidence from Chinese E-commerce market.Annals of OperationsResearch, 233(1), pp.263-279.

Ren, S., Eisingerich, A.B. and Tsai, H.T., (2015). How do marketing, research and development capabilities, and degree of internationalization synergistically affect the innovation performanceof small and medium-sized enterprises (SMEs)? A panel data study of ChineseSMEs.International Business Review, 24(4), pp.642-651.

TRANSPARENCY (2018), Transparency International, Viewed 11 April, 2018, by <https://www.transparency.org/country/CHN>

Wei, Y.S., Samiee, S. and Lee, R.P., (2014). The influence of organic organizational cultures,market responsiveness, and product strategy on firm performance in an emergingmarket.Journal of the Academy of Marketing Science, 42(1), pp.49-70.

Wong, T. and Wickham, M., (2015). An examination of Marriott's entry into the Chinese hospitality industry: A Brand Equity perspective.Tourism Management, 48(2), pp.439-454.

Zhu, Q. and Sarkis, J., (2016). Green marketing and consumerism as social change in China:Analyzing the literature.International Journal of Production Economics, 181(1), pp.289-302.

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