H&M's offrshoring strategy from Bangladesh
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H&M’s Offrshoring strategy from Bangladesh: a triumph or temptation? Swajan Das Katarzyna Żabko
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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 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.
Transcript of H&M's offrshoring strategy from Bangladesh
H&M’s Offrshoring strategy from Bangladesh: a triumph or temptation?
Swajan DasKatarzyna Żabko
Contemporary Marketing Thoughts & Principles : 4 Eras in Thought Development– (Wilkie and Moore, 2003)
Contemporary Marketing Thoughts & Principles : Is the world Globalised?
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
Global Apparel Industry Overview
Global Apparel
Retail Industry
Growth Rate
in compare
with Industrial
Production
Growth Rate
in the World
offers fashion and quality at the best price
2700 Stores in 48 Markets2011: 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 Exchange
1968: 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
offers fashion and quality at the best price
10-15% growth target per year in number of stores and comparatble sale unit. And self-financed.
Business ConceptHigh volume efficiency
Ensuring best price through: less middlemen
thorough knowledge in designfashion and textile
sourcing right product from right marketand being cost conscious at every stage
Seven Core ValuesSimplicity
Straight forwardConstant improvement
Entrepreneurial SpiritCost Conscious
Team workBelief in people
offers fashion and quality at the best price
H&M’s Offshoring Forms, Motives & Localisation
offers fashion and quality at the best price
RMG Sector in Bangladesh Industry Attractiveness
and H&M
Population: 160 Million
Literacy Rate: 56.8% (age 15 or over)
GDP in 2012: USD 282.229 Billion
Poverty Level: 31.5% below the Std.
Economy: 50% Service and 30%
Industrial based
Export in 2011: USD 22.924 billion
Trade deficit: USD 6.7 billion
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
Sala
ry..?
How
muc
h..?
Do I see it..??
Performance Analysis
Which one to invest in..?
Observations and Recommendations (O&R)
Triumpth or T
emptation...?
It depends...
!!!
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