H&M is a Swedish fashion retailer operating around 2,000 stores in 37 countries worldwide. Based on their internationalization strategy, that provides to open 10% - 15% new stores each year, they are always looking for new expansion opportunities. Our research and data analysis have shown that the Australian apparel market offers a constant growth in the next years.
Besides the market is highly fragmented and no current player is offering a broad product line for all ages and genders. For that reason it seems to be a promising opportunity for H&M to enter the Australian market, as it offers a broad range of clothes for all fashion-conscious people under the same roof. Furthermore the risk of failure is reduced as Swedish products have a good reputation in Australia what results from the success of other Swedish firms who have already expanded to the country.
Table of Contents
- Introduction
- Description of H&M
- Company Profile
- Environmental Justification for the Australian market
- Market Analysis and Competitor Identification
- Market Analysis
- Competitor Identification
- Five-Year-Forecast
- Market Entry and Expansion
- Market Entry Strategy and Justification of the Choice
- Five-Year-Expansion strategy
- Consumer Behaviour
- Country-of-Origin
- Consumer Animosity
- Consumer Ethnocentrism
- Market Segmentation, Target Market and Positioning
- Market Segmentation
- Target Market and Positioning
- International Marketing Mix
- Product
- Price
- Place
- Promotion
Objectives and Key Themes
This report aims to analyze the Australian apparel market and recommend a market entry strategy for H&M. It assesses the market's potential, identifies key competitors, and explores consumer behavior in the context of H&M's brand and offerings.
- Assessment of the Australian apparel market's growth potential and competitive landscape.
- Analysis of H&M's brand positioning and suitability for the Australian market.
- Evaluation of consumer behavior and preferences relevant to H&M's products.
- Recommendation of a suitable market entry strategy for H&M in Australia.
- Development of a potential marketing mix tailored to the Australian market.
Chapter Summaries
Introduction: This introductory chapter sets the stage for the report, outlining its purpose – to analyze the feasibility of H&M entering the Australian apparel market – and providing a brief overview of the subsequent sections. The report promises a detailed examination of market conditions, competitor analysis, consumer behavior, and a proposed market entry strategy. It sets a clear framework for a comprehensive assessment of H&M's potential success in Australia.
Description of H&M: This chapter provides a detailed profile of H&M, including its company history, business model ("offering fashion and quality at the best price"), product range (clothing, cosmetics, accessories, footwear), and global presence. It emphasizes H&M's broad appeal across age groups and genders. The section on environmental justification highlights the cultural similarities between Sweden and Australia, high Australian incomes and spending on clothing, and positive consumer sentiment towards H&M as evidence supporting market entry.
Market Analysis and Competitor Identification: This chapter delves into a comprehensive analysis of the Australian clothing retail industry. It highlights the market's significant size and revenue, characterizing it as highly fragmented with intense competition among existing players like Portmans, Supré, Sportsgirl, and Cotton On. The analysis identifies the lack of a broad-range retailer catering to all segments as a key opportunity for H&M. A five-year forecast predicts continued, albeit declining, market growth, anticipating increased competition from international entrants.
Market Entry and Expansion: This chapter focuses on the recommended market entry strategy for H&M – establishing a wholly owned subsidiary. It weighs the advantages (control, potential for high returns) against the disadvantages (high capital expenditure, risk of loss). The choice is justified by the desire to maximize market power and proactively respond to competitors such as Zara's planned expansion into Australia. The chapter sets the groundwork for a detailed expansion strategy.
Keywords
H&M, Australian apparel market, market entry strategy, market analysis, competitor analysis, consumer behavior, market segmentation, international marketing mix, wholly owned subsidiary, five-year forecast, cultural similarities, market fragmentation.
H&M Market Entry Strategy in Australia: FAQ
What is the purpose of this report?
This report analyzes the feasibility of H&M entering the Australian apparel market. It assesses market potential, identifies key competitors, explores consumer behavior, and recommends a market entry strategy, including a detailed marketing mix.
What are the key themes explored in the report?
The report examines the Australian apparel market's growth potential and competitive landscape, analyzes H&M's brand suitability for the Australian market, evaluates Australian consumer behavior and preferences, recommends a market entry strategy for H&M in Australia, and develops a potential marketing mix tailored to the Australian market.
What is H&M's business model and product range?
H&M's business model focuses on offering fashion and quality at the best price. Their product range includes clothing, cosmetics, accessories, and footwear, appealing to a broad range of age groups and genders.
What is the current state of the Australian apparel market?
The Australian clothing retail industry is significant in size and revenue but highly fragmented with intense competition from brands like Portmans, Supré, Sportsgirl, and Cotton On. The market shows continued, albeit declining, growth and anticipates increased competition from international entrants.
What market entry strategy is recommended for H&M in Australia?
The report recommends establishing a wholly-owned subsidiary for H&M in Australia. This is justified by the desire to maximize market power and proactively respond to competitors like Zara. While this involves high capital expenditure and risk, it offers greater control and potential for higher returns.
What are the key advantages and disadvantages of a wholly-owned subsidiary?
A wholly-owned subsidiary offers H&M greater control and potential for higher returns. However, it also entails high capital expenditure and a greater risk of loss compared to other market entry strategies.
How does the report address consumer behavior in the Australian market?
The report analyzes consumer behavior relevant to H&M's products, including factors such as country-of-origin effects, consumer animosity, and consumer ethnocentrism. This analysis informs the recommended market entry and marketing strategies.
What is the proposed marketing mix for H&M in Australia?
The report outlines a potential marketing mix, encompassing product adaptation, pricing strategy, distribution channels ("place"), and promotional activities ("promotion"), all tailored to the specific characteristics of the Australian market.
What is the five-year forecast for the Australian apparel market?
The five-year forecast predicts continued, albeit declining, market growth in the Australian apparel market, anticipating increased competition from international brands.
What are the cultural similarities highlighted between Sweden (H&M's origin) and Australia?
The report highlights cultural similarities between Sweden and Australia as a factor supporting H&M's market entry. Further justification is based on high Australian incomes and spending on clothing, and positive consumer sentiment toward the H&M brand.
- Quote paper
- Marcel Bieg (Author), 2010, H&M's Opportunity for Entering the Australian Apparel Market, Munich, GRIN Verlag, https://www.grin.com/document/283914
