While it undertakes all design activities inhouse, all garment production activities (including the preceding stages of raw material production and fabric processing) are outsourced to independent suppliers. H&M does not own any factories. It views these suppliers as ‘close longterm partners‘. H&M uses third-party logistics providers to transport garments to its stores. In contrast, H&M directly manages retail operations, its interactions with the millions of its customers, whether in-store or online. H&M believes it is best to retain both design and retailing in-house because those operations most affect its ability to provide inspiring fashion. It considers these to be its core competencies, activities that enable it to satisfy its customers and so provide a competitive advantage.
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