COPORATE STRATEGY: Hennes & Mauritz (H&M) is a 100 billion SEK company, engaged in designing and retailing of fashion apparel
and accessories. H&M is also the third largest clothing retailer in the world( table 1). H&M primarily operates in Europe, North America and Asia, and has a presence in over 33 countries. The company is headquartered in Stockholm, Sweden and employs approximately 53,430 people on a full time basis (Datamonitor, 2009). H&M becomes the “fashion icon” and provide the concept of high fashion but low price.
TABLE 1 Company Name (Flagship Brand) GAP INDITEX (ZARA) H&M Limited Brands NEXT FAST RETAILING (UNIQLO) Polo Ralph Lauren Liz Claiborne Esprit Abercrombie & Fitch Benetton
Country USA Spain Sweden USA UK Japan USA USA Hong Kong America Italy
Fiscal Year End Jan. 2008 Jan. 2008 Nov. 2007 Jan. 2008 Jan. 2008 Aug. 2008 Mar. 2008 Dec. 2007 Jun. 2007 Jan. 2008 Nov. 2007
Sales (¥ Billions) 1723.7 1517.5 1342.1 1108.2 666.2 586.5 533.6 500.5 415.0 410.0 335.4
Source:Compiled from the annual reports of the Uniqlo companies listed above. * Figures calculated in yen using August 31, 2008 foreign exchange rates.
they focus on petite clothing. women. This is.382). fashion. H&M Group sales excluding VAT amounted to SEK 78. being cost-conscious at all levels and maintaining effective distribution procedures (Job advertisement for Buyer on the careers site at ). • Design: Products are designed in-house and production is completely outsourced (AR1 2008. In local currencies the increase was 14 percent and in comparable units sales increased by 4 percent. which is controlled by: limiting the number of middlemen. • Price. this remains their focus.893 m (23. Second. footwear and accessories for men. Their women's fashions tend to focus on a combination of skirts and tops. H&M provides a wide range of clothing for them. p. an increase of 7 percent. Sales including VAT for the third quarter amounted to SEK 31. H&M’s annual report (AR1 2008) emphasizes that “quality” relates to both. an increase of 7 percent. This is great news for a lot of petite women.939). buying the right merchandise from the right production markets. There are many theories about why this is. and also customers being satisfied with the company itself.13).
.174 m (85. However. In local currencies the increase was 21 percent.587). forgoing any real focus on dresses. Though they now produce clothing for both men and children. as they tend to be more expensive and do not fit with their mandate of providing great clothing at a reasonable price. they specialized in women's clothing. and textile industries. an increase of 14 percent.475 m (27. an increase of 14 percent. H&M’s products exceeding customer expectations. but H&M's European origins can be seen here.The company offers a range of apparel. cosmetics. a result of the difference in weight between the average European and the average North American. Sales excluding VAT for the third quarter amounted to SEK 26. North American clothing increasingly is designed for women of different sized.
Sales including VAT for the first nine months of the financial year amounted to SEK 92.772 m (73. but such clothing doesn't necessarily look very good on petite women.545). Sales in comparable units increased by 11 percent.
H&M’s strategy is to offer fashion and quality at the best price . they increasingly focus on two types of clothing. relying on it’s in-depth. Firstly. to some extent. children and teenagers. buying in large volumes. extensive expertise within the design.
hm. H&M. though. why not meet famous fashion design and customer demand for cheap cheap it?
. but most people only have to wait until clearance sale. continuos improvement.• Quality: Central emphasis on quality with extensive testing and ensuring least environment damage (AR1 2008). more than 900 suppliers and 21 production offices worldwide. successfully managing 680 stores. financial report. team spirit. This is why they're so hot right now. this company knows what it takes to make great clothes. the Swedish design company). they go out of their way to make sure their styles are fresh and hip every season. such as Gap and Zara.The cool thing about this brand of clothes. Internal analysis H&M is driven by strong value such as complicity. cost consciousness n entrepreneurship. but that doesn't mean their brand or their sense of style is dated. they craft great fashions and use materials that make them very affordable. and Design Collaborations ( like the collaboration with Mathew Williamson) are adopted (H&M press at ). H&M has cut a swath across the supply chain. One of the things they've been doing the last few years is invite guest designers to come up with a clothing line for their brand.com. Like some of its global competitors. External analysis Since 1947. making sure they're not an old fashioned fashion company. Instead. (Nothing is worse than that. H&M does not own any factories but instead works with independent supplier via local H&M production office in Asia n Europe. the Sweden-based vertical retail chain. is that they don't focus just on the style then slap a hefty price tag on the finished product. "shot in time". they've really been able to inject some life into their clothes and accessories.) H & M noted that no fashionable shoppers do not like the design. H&M clothes have been around a long time. In fact. • Merger and Acquisitions: Acquisitions (like FaBric Scandinavian. 2010. mixing the latest trends with fashion classics. Key success factors Having been in the fashion business since 1947. Product shoule be made under good working conditions and with the least possible impact on environment. the image of luxury designer clothes. With guest designers in the past like Madonna. Source: www. has made its mark on the apparel industry.
but quality ensured and local retailing with hired places." PERFOMANCE In the month of November 2010.97 (6. The success.772 m (73. The growth whici will be entirely self.194 m (10. .18) per share. · The H&M Group’s sales excluding VAT during the first nine months of the financial year amounted to SEK 78.988 on 30 November 2009. As evident from their Annual Report (Ar1 2008). and that's really important. an increase of 7 percent. They have succeeded to manage all components of HRM effectively to ensure that core values are upheld in all parts. · Profit after financial items amounted to SEK 17. H&M’ s growth target is to increase the number of store by 10-15 percent per year. sales including VAT increased by 88% n profit by after tax by 125%
.. The total number of stores amounted to 2. H&M's business concept lays the foundation for the company's success.206 on 30 November 2010 versus 1. corresponding to SEK 7. "Our business concept is really what attracts the H&M customer: Fashion and quality at the best price. local staff and local shop managers empowered to take decisions. an increase of 26 percent.funded. from 2004 to 2009. regardless of country and cultural differences. manufacturing totally outsourced.111). but also increase sales in comparable units. The success of H&M is primarily based on the business model of entire design being done internally and centrally. sales in local currencies including VAT increased by 17 per cent compared to the same month previous year. we allow our customer to address [his or her] personality. Group profit after tax was SEK 13.382). Their strategic and coherent approach in recognizing that the organization’s most valued assets are the people working there is evident from the statement issued by their CEO. Because we do carry all these different lines in our stores. In local currencies. In comparable units sales increased by 8 percent. will proceed with an emphasis on quality n continues high profitability In the past five years.830 m (14. business growth and expansion plans were possible because H&M have formatted their HR strategy in line with the corporate strategy. the increase was 14 percent.230). when they expand into new markets they do not lose sight of their core values.
H&M.34). both from the individual and the organization.13). CEO Rolf Ericsson states that the long term goal is to “Make fashion available to everyone. E-learning has also been initiated for a few subjects (SR 2008). H&M plans to open 225 new stores and recruit 6. H&M’s Head of HR emphasizes that organization can grow only if the individuals grow (AR1 2008. 10 for new sales staff.000 employees. p. p. p. The aim to increase sales in existing stores. while focusing on quality and continued profitability.7). written and produced by H&M staff. control and autonomy and maintained the appropriate balance between them.H&M’s annual report (AR1 2008) and website (Careers website).000 to 7. stores and one to one). H&M has balanced the needs of coordination. but will provide them with tools to go as far as they possibly can on their own. PROSPECTS Long-term strategic goals of H&M In the Annual Report (AR1 2008. H&M usually conducts all training in-house (classroom.104)
. These are critical to the success of any multinational company ( Bartlett & Ghosal (1991) from Armstrong (2006). They have penetrated Singapore market as a first step in South East Asia. which would be funded internally (AR1 2008. H&M won’t make a career plans for it’s employees. To conclude. They also state the goal of a 10-15% increase in the number of stores every year. In 2009. The average numbers of training days per employee in 2008 are. emphasize that working at H&M is about commitment. External training has been considered for some areas like “buying’. give the customer a fashion experience that strengthens H&M brand”. 1 for existing sales staff and 5 for existing management positions. p.