The main concern of this report is to discuss the level of competition between these two companies. The report also looks at the market structure that each of the two businesses operates in. for instance, earlier we saw that H&M operate in a monopolistic competition (Busse, Aboneh, & Tefera, 2014). The goals of this company are mainly to understand the state of the competition that each of two businesses operates in. another goal of carrying out this research is to understand how the management works to realize business growth in the two companies. This report also aims at researching and by applying the knowledge learned in class to identify the methods that the businesses can apply in their daily operations to realize business growth to a better level. Another goal why I carried out this research is to understand the manner in which the two companies price their products and the strategies that are used in finding the final price of a product. This also involves the strategies that are used in order to attract customers to purchase the products. In this case, we will look at the usage of non-price price strategies for attracting customers. Finally, after observing and looking at the nature of pricing and non-pricing customer attraction strategies, the recommendation on the improvement of certain areas that need the application of new technology to attract customers to buy the products will be discussed (Ranade, 2016).
Previously, studies have been done analyzing how the two businesses do business in the market. The fact that the two companies do their businesses globally makes them compete not only in manly Sidney but across the whole. Therefore, researches indicate that the manner in which they communicate with their customer portrays their mission consistently in every country. Also as the two companies go on with their competition, each and every company is supposed to think about the markets for other branches globally while focusing on the local market for its products.
Researches done before have shown that the two companies have common similarities in terms how they target, mission and also the product features that they produce. This similarity brings is a source of competition between the two and that’s the reason they have to keep on competing between themselves to maintain their market share globally. Also, each company has been having some challenges throughout its operational processes. For instance, the quality of the products for some time was seen being questioned and therefore they have to deal with it to create good customer working relationship.
The market structure in which the two businesses operate in is known as the competitive market structure. A competitive industry is a growing industry and it is the kind of market structure that the two businesses Cotton On Company and H&M Company operate in (Brazier, Ratcliffe, Saloman, & Tsuchiya, 2017). A competitive market structure is a kind of market structure where there are a large number of businesses or producers to compete with one another for the purposes of satisfying the great needs of a large group of consumers in the market. In a competitive market structure, there is no single producer or a group of producers or a single consumer and also no a group of consumers who can control the operation of the market. This is the kind of market that we find the two businesses operating in. There are various characteristics that define a competitive market structure. For instance, we have the following.
The existence of many buyers and sellers in the market; in a competitive market structure, one of the fundamental characteristics of the structure is the number of buyers and sellers in the market (Sørensen et al, 2015). The bargaining power of the sellers and the buyers decreases with the increase in the number of buyers and sellers. For instance, consider a seller of wheat who decides to increase his profits by increasing the price of wheat, what the buyers in the market do is just moving to the next seller who hasn’t increased the price of their wheat.
The character that defines this type of market structure is the lack of barrier for entry and exiting the market. The barriers for entering any industry are the conditions that make a hard for one to enter or leave the market (Brownson, 2017). For instance, we have a barrier or for exiting the market which can be compared to as the railroad company which it would have when it wants to leave the equipment and the railroad tracks industry. There is the creation of a difficulty when the money tied up in the railroad tracks is not utilized in other industries. Also,a limited number of liquor licenses in a certain city can also be termed as an entry barrier. Having a few barrier factors to entry in the market is one of the reasons there are many competitors in this type of market.
This type of market structure has a large number of products. The competitive market structure has a large variety of products and this is evident in the manner the two companies possess a large variety of products. When I visited Cotton On Company I witnessed the many varieties of products that were being produced to be supplied to the market. The same way, I witnessed a large variety of produced too that were being produced and being taken out for sale. The existence of different varieties of products in the market rises as a result of high competition among the businesses operating in the market (Nash et al, 2015). And therefore in order to counter the effects of competition; the sellers come up with differentiated products with the purpose of a consumer application.
Another characteristic of the competitive market structure is that the marginal cost of a product is the same as the marginal revenue cost. What product marginal cost means is the one extra production cost of that product. Similarly, the marginal revenue of a product is the revenue generated from the sale of one extra unit (Arrigo, 2018). As the cost of production increases, the marginal cost increases too and the same way, as the marginal revenue decreases as production decreases. The operation of companies in a competitive market is at the point where the marginal cost and the marginal revenue are equal or where they break on the last unit produced.
The findings that I learned concerning both H&M and Cotton On brands are global thus the communication towards the customers portrays their consistency, approach in every country. The reports I received from both the companies have it that the two global companies always have confrontations and address differences in their culture so that they can be able to know what the customer is saying and also fulfilling all his needs (Chevreul et al, 2015). Just as the way the wind does company encouragement in terms of thinking globally and acting locally, the same way, enterprises ought to have a world wide web that is standardized because of the goods that have been produced. Also expects to adapt it into the local market. For instance, sometimes back when H&M made entry into Dubai, there was photoshopping of the advertisers of the super Gisele Bundchen model in order to cover up her harms together with the chest because of Saudi Arabia’s public dress code for women. During the research period I found out that Cotton on and H&M are two brands that are quite similar in terms of the audience that they target, the mission and the feature, I also found out that both the two companies have the desire to in delivering of fashionable clothes that are priced and a consumer-friendly pocket price (Bowling, 2014). However, while Cotton On is in the process of finding something that has stability and slower in moving the trends of the customers, H&M famous for the updating of the trends constantly from the luxury brands. In addition to this, the H&M Corporation together with many other designers that are known very well such as the Karl Lagerfeld, Roberto Cavalli, Jimmy Choo, Matthew Williamson, Versace Kenzo, Balmain, has strengthened all the H&M propositions together with its position in the world of fashion. On the other hand, I go to learn that Cotton On causing the visibility of their thorough engagement together with the society and the community through the Cotton On foundation’s strong promotions which represents a responsible and ethical brand to customers (Matsushima & Khanna, 2018).
The act of growing to the extent of being world class businesses has not been a smooth path for the two companies. The two companies have encountered a number of crises that by the end of the day have taught them a lesson and through that have been able to improve to higher standards. To the company of H&M, there have been a lot of complaints about the brand’s ethnicity towards the conditions of workers in their factories (Jennings, Sahan, & Maitland, 2018). A report given by Preston from Clean Clothes Campaign said that ‘when the best is far from the good enough’ about the conditions of the place of work and also Cambodia’s labor for H&M (Chen et al, 2018). A large number of articles as at now ask the promise of sustainability from them which has a high likelihood of affecting the feelings. Therefore, changing the problem by H&M can be realized by first changing of the problem, what they can do is changing the image brand, making the surrounding community trust them more and also their customers. Cotton On on the other hand as well for a long time had been facing a crisis because of the offensive language that was being used about their products. First of all the shirts that were designed for babies raised social media debate with a slogan “Living Proof My Mum Is Easy” or a slogan like “It’s a tits man’ (Li et al, 2017). Then thereafter there came other multiple slogan crises that Cotton On could not explain itself (Real Estate and Finance 2016). However, the companies have put an end to such situations through censoring. Therefore, if such a case arises in the future, consideration should put in place for the purposes of aiming at production and avoiding destruction from such problems (Wang, Xie, Jagpal, &Yeniyurt, 2016).
The two companies Cotton-On and H&M have plans for growing their businesses in future. For example, Cotton On Company sees the next big thing that it will do is investing in America. Cotton On Company recently has made success wildly and just reported its $1billion year revenue. Apart from that, the company has made an investment in more than 17 countries and now the plans that are underway is rapid investments in the United States. Over the past six years, the company launched a 121 US store with a corporate hub based in Los Angeles. The company’s expansion is aggressive. The company has plans of opening up hundreds of more stores in the United States most probably in the next three to five years. Currently, there are ten stores on track to open this year. The company believes that despite the existence of high competition expected from other fashion companies, the focus of the company is on the customer rather than competition. According to statements made by John, the company prefers to use value fashion of what they produce. H&M Company, on the other hand, being a fashion seller has plans for opening a new store in Western Australia this year. The proposed opening of the new store at Mandurah Forum comes directly after the opening of the retailers Perth store in March. By opening new stores in the country it is evident that the company has plans for opening a new store in various parts of Australia. Having entered the country of Australia back in the year 2014, the company has opened 23 new stores nationwide including the stores in VIC; Melbourne’s GPO, the Eastlands Shopping Center, Chadstone, and Pacific Werribee.
The Cotton On Company has an opportunity for getting the greatest share in the market due to the fact that it is a global brand with a lot of accessibility. This means that the company has the privileges of selling its products globally because of the wider acceptance internationally (Aldrich, Alkhaledi, Pelland, & Toomey, 2017). The company could also grow its business better by the producing diverse products. These referrers to the situation where the company will be making the production of their products by designing different models for the purposes of acquiring a broad market for the products produced. This as result leads to expansion of the business and increased profit earned from the sales. Another opportunity for the business is having Society contribution towards better performance of the company. Cotton On has also another opportunity cost and that is highly promotional (Epifanova et al, 2015).
H&M Company also has various opportunity costs that are available and can be used for better performance and for the growth of the company. The Company has the opportunity of collaborating with other companies that produce luxury products and be able to produce products that are luxurious like them. Because of the emerging international market, this creates an opportunity for the company to market and sell its products in the international market (Ekberg et al, 2016).Another emerging opportunity for companies in the marketing of their products over the internet. This is very helpful because the company can greatly increase its sales by offering online shopping capability.
When it comes to the issue of determining the price to be set for the products produced by the company, various pricing strategies are applied. Each of the companies has its own way of determining the prices for its products different from the other. For instance, when I visited Cotton On Company, I enquired about how the prices of their products are set. They said that one of the means which they use in setting the prices of products is known as the geographic Pricing (Usenko et al, 2017). Under this pricing strategy, the prices of the products are set depending on the location where the product is being sold and that was the reason different branches belonging to Cotton On Company sold had their products price defer from one branch to the other.
Making an inquiry about the pricing strategy for H&M, on the other hand, I learned that they used penetration pricing. This pricing strategy operates by reducing the prices of commodities in order to get a market share in the field of competition (Wang, 2018). The reason H&M mostly used this kind of pricing strategy is that they want to get more customers into their company.
The research for this paper basically intended to understand the competition that exists between the two companies H&M and Cotton On. The research was effective because I understood the nature of competition that exists between the two companies as seen above. I found that they operate under a duopolistic market structure because they are the main big companies that are dominating the market. The research in this paper has indicated that the two companies are always engaging in a competitive market structure with the aim of maintaining personal large market share in the market.
The paper reveals various opportunities that exist and that each of the company can choose to venture in. It is evident that there are still available opportunities for the companies that might lead to the creation of more income for both the two. An example of opportunities for Cotton On that has been discussed is designing new product models which will see the business realize greater markets for their products. H&M, on the other hand, has its opportunities too like collaborating with other companies that produce luxury goods and see them produce luxurious products as well for the company.
Conclusion
To conclude, it is evident that the two businesses are thriving well in terms of their production activities. It is also evident that the two companies are under constant competition aiming at getting the largest market share and therefore each of them is trying to sustain itself in the market. It is also clear that the industry is not easy to enter because the two companies Cotton On and H&M are the only companies operating in Manly because they have dominated the market. When it comes to pricing strategies it was found that the two companies have each its own way of pricing its products in order to compete fairly in the market (Shi, Qian, & Dong, 2017). However, the future of the business is uncertain because in the days to come new businesses might arise that might use new technological mechanisms to market their products and thus the future of the two businesses can’t be known. The market analysis conducted in this report could be extended in the future to include these newer businesses to derive a better picture of what can happen soon in this very dynamic industry in Manly.
References
Aldrich, B. R., Alkhaledi, F., Pelland, G., & Toomey, J. T. (2017).Developing a Sustainable Pricing Strategy for the Worcester Regional Food Hub.
Arrigo, E. (2018). The key role of retail stores in fast fashion companies: The H&M case study. In Contemporary Case Studies on Fashion Production, Marketing and Operations (pp. 121-137). Springer, Singapore.
Blank, R., Burau, V., &Kuhlmann, E. (2017). Comparative health policy.Macmillan International Higher Education.
Bowling, A. (2014). Research methods in health: investigating health and health services. McGraw-Hill Education (UK).
Brazier, J., Ratcliffe, J., Saloman, J., & Tsuchiya, A. (2017). Measuring and valuing health benefits for economic evaluation. OXFORD university press.
Brownson, R. C. (2017). Dissemination and implementation research in health: translating science to practice. Oxford University Press.
Busse, H., Aboneh, E. A., & Tefera, G. (2014). Learning from developing countries in strengthening health systems: an evaluation of personal and professional impact among global health volunteers at Addis Ababa University’s TikurAnbessa Specialized Hospital (Ethiopia). Globalization and health, 10(1), 64.
Chen, D., Ignatius, J., Sun, D., Zhan, S., Zhou, C., Marra, M., &Demirbag, M. (2018). Reverse logistics pricing strategy for a green supply chain: A view of customers’ environmental awareness. International Journal of Production Economics.
Chevreul, K., Brigham, B., Durand-Zaleski, I., & Hernández-Quevedo, C. (2015). France: health system review 2015. Health systems in transition, 17(3), 1-218.
Drummond, M. F., Sculpher, M. J., Claxton, K., Stoddart, G. L., & Torrance, G. W. (2015). Methods for the economic evaluation of health care programmes.Oxford university press.
Ekberg, K., Pransky, G. S., Besen, E., Fassier, J. B., Feuerstein, M., Munir, F., &Blanck, P. (2016). New business structures creating organizational opportunities and challenges for work disability prevention. Journal of occupational rehabilitation, 26(4), 480-489.
Epifanova, T., Romanenko, N., Mosienko, T., Skvortsova, T., &Kupchinskiy, A. (2015). Modernization of institutional environment of entrepreneurship in Russia for the development of innovation initiative in small business structures. European Research Studies, 18(3), 137.
Jennings, S., Sahan, E., & Maitland, A. (2018). Fair Value: Case studies of business structures for a more equitable distribution of value in food supply chains.
Li, H., Ota, K., Dong, M., Vasilakos, A., & Nagano, K. (2017). Multimedia processing pricing strategy in GPU-accelerated cloud computing. IEEE Transactions on Cloud Computing.
Matsushima, H., & Khanna, M. (2018). Revealing Auto-Manufacturers’ Implicit Pricing Strategy under the Reformed CAFE Standard: A Reduced Form Approach (No. 274421). Agricultural and Applied Economics Association.
Nash, D. B., Reifsnyder, J., Fabius, R. J., Clarke, J. L., &Skoufalos, A. (2015). Population health.Jones & Bartlett Publishers.
Ranade, W. (2016). Markets and health care: a comparative analysis. Routledge.
Shi, X., Qian, Y., & Dong, C. (2017). Economic and environmental performance of fashion supply chain: The joint effect of the power structure and sustainable investment. Sustainability, 9(6), 961.
Sørensen, K., Pelikan, J. M., Röthlin, F., Ganahl, K., Slonska, Z., Doyle, G., …& Falcon, M. (2015). Health literacy in Europe: comparative results of the European health literacy survey (HLS-EU). European journal of public health, 25(6), 1053-1058.
Usenko, L. N., Chernysheva, Y. G., Usenko, A. M., Guzey, V. A., & Todorova, O. M. (2017). Problems and perspectives of cluster formation in view of the sustainability of development of regional business structures of the Russian Federation. International Journal of Trade and Global Markets, 10(2-3), 160-167.
Wang, S. (2018, September).Brief Analysis of Closed-loop Ecosystem of Textile and Clothing Recycling. In IOP Conference Series: Earth and Environmental Science (Vol. 186, No. 4, p. 012058). IOP Publishing.
Wang, X. S., Xie, Y., Jagpal, H. S., &Yeniyurt, S. (2016). Coordinating R&D, product positioning, and pricing strategy: A duopoly model. Customer Needs and Solutions, 3(2), 104-114.
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download