Tuesday, May 2, 2017

How H&M Integrate Shared Value into the Company’s Strategy

H&M is a world leading fashion company with a variety of product line including H&M, COS, Weekend and etc. The brand started from a womenswear in Sweden in 1947. After the development of about 70 years, H&M is now famous for its sustainable, good-quality fashion product. Along with the development of H&M, they always follow the strategy that provides fashion and quality with a sustainable way and good price. In clothing manufacturing industry, the labor right and usage of resources are always two most challenging topic. H&M have made a great effort in these areas to create shared value with society.

Labor right
H&M is always engaged in providing a sustainable value chain to share the value with society. All H&M product rely on contract manufacturing rather than produce by manufacturer H&M itself. And most of the manufacturers are located in the developing country where provide a relatively low labor cost. So this situation raises the awareness of H&M management to focus on provide employment opportunity and ensure the comfortable working environment for the workers in the developing regions. For example, H&M actively employs females in India labor market where the female employment rate is always very low. Apart from that, because of the legal restraint, females in India cannot work before 7 AM and after 8 PM. But through the cooperation with local authorities, H&M got the regulatory immunity to make sure female employee can have equal work right in order to get equal promotion opportunity. Apart from the improvement of the welfare of employee of H&M, they also pay attention to provide systemic training about tailor and sewing to improve the productivity. The workers can gain necessary skills to support their livelihood and H&M can also benefit from the increased productivity. This is a perfect example of creating shared value.

Usage of Resource
From 2013, H&M launch the close the loop collection which collects the post-consumer textile waste from collected garments to produce new clothes. Through this method, H&M significantly reduces the amount of textiles going to landfill, the use of virgin raw materials and the amount of chemicals, energy, and water used in material production. And H&M uses renewable energy during its production process.

As a company with a deep comprehension of shared value, H&M have won the reputation of social responsibility. Embedding the impression that you buy more of our product the more effort you do to society is also a good marketing tool to expand the customer base and improve customer loyalty. The whole company is experiencing a record prosperity now. As can be seen from H&M case, creating shared value is a clever way for a company to live in harmony with customers and create a win-win pattern of the whole society.

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