OPPORTUNITIES:

Investing in sustainable practices allows H&M to attract environmentally conscious

customers and stand out in the market. As global sustainability concerns grow,
consumers seek brands prioritizing ethical and eco-friendly practices. To capture
broader attention, H&M needs to highlight the distinctive aspects of the collaboration in
their marketing efforts. This involves creating content that is both engaging and
informative. Explore topics such as the project's environmental impact, Joana
Vasconcelos's creative process, and the significance of utilizing recycled materials.
Sharing this content across various platforms like social media, blogs, and in-store
displays, facilitates a clear understanding and appreciation of the project’s unique value
among consumers and could attract more customers.

H&M has a strategic opportunity to expand its presence in new markets, particularly in
countries with a growing middle class. These markets offer a vast customer base
increasingly interested in fashion, looking for affordable yet stylish options. The
success of the H&M, Joana Vasconcelos, and Oceanum Liberandum collaboration
opens up a great opportunity for more projects with local artists worldwide. People love
the mix of sustainability and art, so it's a chance to do similar cool stuff that connects
with different cultures. By teaming up with local artists, H&M can bring in unique
designs that not only reflect the environmental values of the current collaboration but
also showcase diverse artistic styles from different places. It's a way to make the
brand's creative vibe even more exciting and show a commitment to global
sustainability by addressing local environmental concerns through art. Also, by
customizing its products and marketing strategies, H&M can successfully serve these
markets. This helps H&M rely less on their current markets and makes their income
more secure, even when the economy isn't doing well.

THREATS:

The new H&M project is underpinned by a strong commitment to sustainability and a

unique artistic collaboration. However, economic changes, such as recessions or shifts
in consumer spending patterns, have the potential to impact the collaboration by
influencing customer purchasing behavior. Additionally, factors like, inflation, and
disruptions in the supply chain can impact production costs. The project's success
depends on its capability to adjust to economic changes while highlighting both its
artistic and sustainable features in a way that connects with the market and meets
customer expectations.

The collaboration involving H&M, Joana Vasconcelos, and Oceanum Liberandum

confronts an ongoing challenge. Customer preferences and fashion trends change
quickly, making it difficult to predict and meet customer demands accurately. The
fashion industry is well-known for its unpredictability, where what's trendy today might
be outdated tomorrow. To address this, H&M needs to constantly keep an eye on
market trends, and conduct market research to understand how customer preferences
are evolving. Being flexible in their designs, and using social media to understand
customer preferences are essential for the collaboration to respond quickly to these
changes and to stay in sync with evolving trends.
The fashion retail industry is highly competitive, with many players in physical and
online stores all striving for a share of the market. H&M competes directly with popular
fast fashion brands like Zara, Pull&Bear, and Bershka, which are key players in the
fashion industry, particularly concerning sustainability. These brands have gained
recognition for their dedication to eco-friendly materials, ethical sourcing, and
transparent supply chains, aligning closely with shifting consumer values. Their
emphasis on sustainable practices raises a potential challenge for the new
collaborative project involving H&M, Joana Vasconcelos, and Oceanum Liberandum. If
these competitors decide to mimic its initiatives (with similar collaborations) it may
impact the perceived uniqueness and success of the new project. In the evolving
landscape where sustainability holds increasing importance, effective communication
of the collaborative project's sustainability initiatives becomes crucial for maintaining a
distinctive and appealing position in the face of strong competition.

Also, upcoming laws can pose a threat to the new project. If the initiative doesn't align
with evolving environmental regulations, it might face legal challenges and potential
harm to its reputation. Adapting to changing legal requirements is crucial in a market
where sustainability is increasingly regulated.

EXTERNAL ANALYSIS: CONTEXT

H&M is responding to current industry trends by prioritizing sustainability, embracing e-

commerce, and adapting to shifts in fast fashion. The brand is incorporating recycled
materials, enhancing the online shopping experience, and focusing on inclusivity and
diversity. This strategic response aligns with insights gained from both PESTEL
analysis and Porter's Five Forces, ensuring adaptability to broader environmental
factors and specific competitive dynamics.

PESTEL ANALYSIS:

Political Factors:

When companies like H&M expand globally, understanding the rules of each country
becomes crucial. Given the variations in regulations across countries, it's essential to
get to know them, before entering and investing in a new market to avoid potential
violations. This is particularly pertinent when it comes to regulations involving imports,
exports, and social responsibility. While shipping goods might not pose a significant
challenge, altering suppliers for manufacturing and outsourcing can significantly impact
a company's profits and expenditures in different regions. Following the laws related to
minimum wages, child labor, and environmental standards is crucial for the sustained
growth of companies.
Economic Factors:

Global inflation, along with other contributing factors, is affecting manufacturers

worldwide. This results in an increase in production costs, potentially impacting future
profits on a global scale. H&M's sales are significantly influenced by the economic
growth of the countries it operates in, with strong economies boosting consumer
spending on clothing. The international nature of H&M exposes it to fluctuations in
exchange rates, impacting costs and profitability. Unemployment rates play a dual role,
with high unemployment reducing consumer spending but potentially lowering labor
costs.

Social Factors:

Cultures influence fashion preferences differently, some lean towards “fast fashion”,
while others adopt trends more gradually. Changes in the age, gender, income level, or
other demographics in H&M's target markets can affect product demand. For example,
an older population may prefer mature styles, while a younger one might go for trendy,
fast-fashion items. Fashion trends change fast, so H&M needs to keep up to stay
competitive. Preferences for styles, colors, materials, and fits can shift quickly among
consumers, and H&M must be quick to anticipate and respond to these changes.
Moreover, there's a rising global awareness of environmental concerns, driving the
production of eco-friendly and sustainable products to meet the growing demand for
environmentally conscious choices.

Technological Factors:

With advancing technology, consumers are becoming increasingly informed about their
purchasing decisions. In today's digital age, nearly everyone has access to the internet
for information gathering, socializing, and online shopping. H&M goes beyond
improving the shopping experience by investing in advanced technology for smarter
operations. For instance, in Europe, H&M has automated its warehouse to enhance
efficiency and reduce costs. They employ specialized tags, similar to barcodes, to track
inventory in real-time, enabling swift one-day deliveries. This dual focus on customer-
facing and operational technology underscores H&M's commitment to staying
competitive and efficient in the evolving retail landscape.

Environmental Factors:

The growing demand for sustainable practices is driving consumers to become more
conscious of their choices, favoring companies that prioritize environmental friendliness
and social responsibility. H&M's partnership with Renewcell, a Swedish company,
further underscores this commitment to sustainability, aligning with the evolving
preferences of environmentally conscious consumers.

Legal Factors:

H&M follows a range of global laws, including minimum wage, safety, and non-
discrimination. Consumer protection laws guide how products are handled, and
marketed, and how data is protected. Environmental compliance includes managing
waste, emissions, energy use, and production chemicals.

PORTER’S 5 FORCES:

Bargaining Power of Buyers (High)

Buyers hold substantial bargaining power given the abundance of alternatives like
Mango, Forever 21, and Zara. The low switching costs in choosing fashion items
contribute to limited customer loyalty to particular brands. Consumers can easily
transition between various fashion retailers without significant expenses. Moreover,
H&M must consistently monitor consumer needs, as they serve as both end-users and
the primary revenue source for the company. This underscores the necessity for H&M
to remain vigilant about shifting consumer preferences to stay competitive in the
dynamic fashion market.

Bargaining Power of Suppliers (Low)

Suppliers don't hold much power over H&M because there are plenty of them. As
international trade opens up, H&M can be flexible in sourcing to meet its needs. Plus,
with affordable labor markets like China and India, changing suppliers doesn't cost
much. This lets H&M balance low costs with high-quality sourcing options efficiently.

Rivalry Among Existing Competitors (High)

Competition is tough for H&M with a mix of both major and smaller players in the same
business category. Companies are consistently updating their products to secure
market share, so H&M needs to stay flexible. The variety of competitors means H&M
must keep innovating and adapting to stay in the game. Staying ahead requires a keen
focus on what customers want and a commitment to offering fresh and appealing
products.

Threat of Substitutes (High)

The threat of substitutes is high due to diverse choices and evolving consumer
preferences. Factors include the abundance of substitute brands (Uniqlo or Zara are an
example of substitute brands), and the ease of substitution. Also, the high availability of
options makes switching easy and cheap for consumers.

Threat of New Entrants (Low)

Globally, entering the market is challenging for new players due to the substantial initial
investments required, as to be competitive companies need to have economies of
scale. Established giants like Zara, Gap, and H&M, with their extensive experience,
create significant barriers. The potential for retaliation and the difficulty of product
differentiation, coupled with limited access to key distribution channels, make the threat
of new entrants low for H&M. Although a low threat of new entrants, the emergence of
Shein highlights the potential for a newcomer to disrupt the market.
PROMOTIONAL MIX:

Identify Marketing Objectives:

Elevate H&M's brand awareness in innovation and environmental responsibility, foster

positive public perception tied to sustainability, drive exclusive collaboration product
sales, and fundraise for Oceanum Liberandum, emphasizing the commitment to
impactful environmental contributions.

Identify communication targets:

The communication targets are mainly environmentally conscious consumers who are
deeply invested in fashion, passionate about art, social responsibility, and supporting
non-profit causes.

Define the communication objectives:

The communication objectives start by generating interest and engagement among the
target audience for the exclusive collaboration with Joana Vasconcelos and Oceanum
Liberandum. Additionally, the new project aims to drive traffic to H&M's physical stores
and online platforms, enhancing the brand's reputation sustainably by showcasing the
innovative use of recycled plastic to attract an even larger customer base.

Adapt key messages to communication objectives:

Some of the key messages include highlighting H&M's commitment to innovation and
environmental responsibility, emphasizing exclusive collaboration, promoting limited-
edition products made from recycled plastic, and conveying the positive impact of each
purchase on ocean health.

 Wear art, wear sustainability.

 Limited edition products, available in-store and online.
 Support Oceanum Liberandum's mission for a cleaner, healthier ocean.
 Discover the intersection of fashion, art, and environmental responsibility.

Develop the creative idea and execution:

Blend H&M's style with Joana Vasconcelos, creating a visually appealing and cohesive
design. Collateral materials like posters and social media graphics to showcase the
collaboration's environmental impact. An engaging online presence through a
dedicated landing page is complemented by immersive in-store displays highlighting
recycled plastic products. Leveraging social media influencers, and encouraging user-
generated content, to a comprehensive and impactful campaign strategy.
Define media plan:

 Social Media:

o Instagram, Facebook, Twitter, and TikTok for visually rich content.

o Influencer partnerships with eco-conscious and art-focused influencers.
Inês Teixeira from TikTok and Alice Trewinnard from Instagram are
examples of the potential influencer team. Their lifestyles match well
with the collaboration's values and with their diverse audiences and
genuine connection to the project, they could bring a dynamic and
relatable touch to adding authenticity.

 Online Platforms:

o Feature the collaboration on H&M's website with dedicated landing

pages. Collaborate with Joana Vasconcelos' official website and the
NGO Oceanum Liberandum's site, directing visitors seamlessly to the
dedicated pages on H&M's platform to further amplify the initiative.

 In-Store Displays:

o Incorporate an immersive in-store experience by setting up a vibrant

pop-up display that not only showcases exclusive collaboration products
but also educates customers about their origin and the sustainable
practices employed in their creation. Use engaging visuals, interactive
elements, and compelling narratives to convey the journey from recycled
plastic to the final product. Implement informative signage, to online
content for a deeper dive into the collaboration's story. This pop-up can
serve as an educational hub, providing insights into the environmental
impact of plastic waste and the positive contribution made through this
initiative. Ensure that the colors, aesthetics, and messaging align with
the artistic vision of Joana Vasconcelos, creating a cohesive and
memorable brand experience for in-store visitors.

 Events:
o Host a launch event with Joana Vasconcelos and representatives from
Oceanum Liberandum at H&M's flagship stores in Lisbon and Porto,
where creativity converges with sustainability.

Define the communication budget:

Control and measure results:

Leverage analytics tools, and e-commerce trackers to monitor website traffic and user
behavior. Track sales data to understand the collaboration’s impact on product
purchases, and closely monitor social media metrics like engagement and follower
growth. Utilize website analytics to understand user interactions and identify areas for
improvement. Additionally, gather valuable insights through customer surveys and
feedback to gain a qualitative understanding, allowing to make data-driven adjustments
and optimize the strategy for better results.
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