Question Vichuda Business & Management

Changes in H&M's Internationalisation Strategy

Has H&M company made any specific adaptation in the context of the internationalization?

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Answer Internal Staff

Yes, H&M have adapted their product range to cater for different markets as they progress through a period of continued international expansion. One specific adaption that H&M have made is to tailor the clothes they sell in their stores to the conditions of the local market; like culture and regional trends. For example, H&M now operate stores in the Middle East (Bahrain, Oman, Qatar, and Jordan) and also in North Africa (Egypt and Morocco). These countries are predominantly populated by people who are Muslim. H&M has been careful to ensure that the products they sell are not offensive to followers of the religion of Islam in these locations. If the products they sold were offensive to followers of Islam it would be unlikely for the company to succeed.

H&M have also made changes to the locations of some of their production offices due to their internationalisation processes. When the company was predominantly located in Europe the majority of their production offices were located in Europe, with some being in Asia. As H&M’s international expansion continued, combined with a cost leadership approach, most of the production offices were moved to Asia, as the cost of labour was cheaper there. The majority of H&M’s production offices are still located in Europe and Asia, but as the company now operates a lot of stores in North America, and now some in South America, they are moving more of their production offices to locations in South America. This is again to enable them to take advantage of the lower cost of labour in this region when compared to Europe.