Business Case

Submitted by:

Boquiren, Hershey Kate

Carlos, Jasmine

Dayata, Clarissa

Dillena, Samantha Rose

Reyes, Sherry Mae

Tacluyan, Laurice Anne

Submitted to:

Prof. Richmond Cruz

Introduction

Hennes & Mauritz AB is clothes, accessories, footwear, cosmetics, and home textiles
retailer. The H&M Home collection includes towels, bed linen, curtains, and other home textiles
for every room in the house. Erling Persson created the company in 1947, and the headquarters
was located in Stockholm, Sweden.

The mass market is genuinely where the fashion business generates millions of dollars in
annual profit. Apart from the luxury sector, selling daily clothing to everyday people is every bit
as difficult as selling haute couture to wealthy persons. While the average customer may not buy
a Chanel or Prada outfit, they still want to look attractive within their price range. Fortunately,
H&M is a name consumers can trust, as they offer great apparel at affordable prices. H&M is a
worldwide Swedish retail brand that keeps its finger on the pulse of fashion’s pounding heart to
source trends and styles that are affordable to even the most fashionable people on a budget. The
company’s line spans all age groups and includes high-quality clothing and accessories for
ladies, men, teenagers, and children. Apart from their core product lines, H&M shows goods
such as home furnishings and beauty cosmetics to let shoppers broaden their product offerings.
Their dedication to affordable yet fashionable fast fashion has enabled them to amass a huge
international following and establish themselves as a significant player in the fashion industry.

H&M’s History

Erling Persson, a 30-year-old Swedish entrepreneur, embarks on a road journey

throughout the United States of America in 1946. The concept of selling women’s fashion was
different born in New York. Persson launches his first womenswear boutique in Västers,
Sweden, the following year, 1947. Hennes, Swedish for “Hers,” is the name he gives it. Hennes’s
creator created the soon-to-be-famous Hennes logotype. In 1952, the company opened its first
store in the Swedish city of Stockholm. By 1954, when a second Stockholm location opened, the
store’s popularity had reached a fever pitch. That same year, Hennes placed a full-page color
advertisement in Sweden’s major daily, demonstrating an early trust in marketing’s potential.

Hennes purchased Stockholm-based store Mauritz Widforss in 1968, changing the

company’s name to Hennes & Mauritz. It marks the beginning of the company’s offering of
men’s and kids’ clothes, which eventually expanded to include clothing for the entire family.
Hennes & Mauritz expanded quickly: by 1969, it had 42 locations. The Stockholm Stock
Exchange-listed Hennes & Mauritz in 1974. The stores were rebranded with the acronym
“H&M” the following year.

Throughout the 1990s, enormous city billboards generally displaced traditional

newspaper advertising. Sweden is the world’s first e-commerce market. By the decade’s
conclusion, H&M stores had opened in some European nations, including France, where the first
H&M store opened in 1998 in Paris.

In 2013, The H&M Group introduced a new brand, & Other Stories, with design offices
in Stockholm, Paris, and Los Angeles. H&M’s quick expansion has resulted in stores opening in
Europe, North America, Asia, the Middle East, Africa, South America, and Australia.

The H&M Foundation announces the establishment of The Global Change Award in the
year 2015. The GCA is a competition aiming to foster solutions to speed the fashion industry’s
transition from a linear to a circular model. By 2018, Afound, a new company, opens its first
stores and website in Sweden. Afound is a unique marketplace that sells discounted fashion and
leisure products from the H&M Group’s brands and other prominent brands.

As of the year 2019, H&M was the first major fashion company in the world to give
complete information about the materials and supply chain used in its products. H&M Group is
now the majority shareholder because of the extended e-commerce platform for used goods.
Treadler was being launched to leveraging the H&M Group’s industry-leading supply chain in
such a way to accelerate the transition to a more sustainable textile sector while providing an
additional long-term growth avenue.

Mission

“To drive long-lasting positive change and improve living conditions by investing in people,
communities, and innovative ideas.”

The mission statement of H&M demonstrates how well the company promotes its fashion
and designs to the world by enhancing the shopping experience and improving people's lives. All
H&M stores are committed to ensuring the pleasure and satisfaction of their customers; as a
result, the company is structured to provide maximum flexibility and convenience for consumers
when making buying decisions.

Vision

“Our vision is to lead the change towards the circular and climate positive fashion while being a
fair and equal company”

H&M's vision statement demonstrates the company's dedication to keeping clothing

fashionable while maintaining it affordable. It is made up of the following components:
1. Lead the change
- Promote and scale innovation
- Drive transparency
- Reward sustainable actions
2. Circular and climate positive
- A climate positive value chain
- A circular approach to how products are made and used
- Use only recycled or other sustainably sourced materials.
3. Fair and equal
- Fair jobs for all
- Inclusion and diversity

To achieve the first aspect of its vision statement, H&M (Hennes & Mauritz) strictly
adheres to evolving styles while also planning the production of new ones. The corporation
maintains all of its diverse brands up to date on what is popular. It may show H&M's justice and
equality in various ways, including its welcoming demeanor, commitment to sustainability, and
competitive pricing on its items.
Key Marketing Strategies
Product Strategy

The company is known for its "Fast-fashion clothing stores," which implies that
they never fail to give us high-quality clothes and attractive accessories that are appreciated
according to fashion trends. Moreover, they are always ready to launch new and innovative
products on time and sell European-influenced fashion in the International market, promoting
inter-cultural styles in such demographics.

H&M's product strategy aims to provide high-quality clothing in the latest fashion
at the lowest feasible price. The corporation maintains four product stages: introduction, growth,
maturation, and decline, in which the product manager evaluates the demand and supply of
H&M products and works on these four phases of product life to bring an effective marketing
strategy on the new product to remain competitive in the market.

Price Strategy

H&M's pricing strategy focuses on their customers' needs, who prefer low prices and
excellent fashion. H&M maintains a substantial brand value for its pricing despite offering
comparatively low costs. As a result, the company guarantees outstanding quality at reasonable
prices, giving its consumers the best purchasing experience possible.

Promotion Strategy

H&M established a multi-channel marketing strategy that includes advertising, product

promotion, and digital advertising, exposing the brand globally. Furthermore, the corporation
persuades consumers by increasing brand awareness by selling products at reasonable costs.

Place Strategy

By owning outlets in various geographical locations worldwide, H&M established

a trustworthy relationship between customers and the company. H&M manufactures essential
goods in Asia, whereas high-end goods are manufactured in Turkey, and these are offered in
their 5000+ stores in 73 countries.
 Core Values

 We are One Team

 We Believe in People
 Entrepreneurial Spirit
 Constant Improvement
 Cost-Conscious
 Straightforward and Open-Minded
 Keep It Simple

The company believes that its values are at the foundation of what they call "the H&M
way." Along with H&M's policies and guidelines, these values drive their behaviors in their
everyday work. These values establish a workplace wherein decision processes are concise,
everyone works together efficiently, and everyone can rely on each other's knowledge and
abilities. Individually, these values may appear self-evident. However, they establish a culture
that we believe is distinct and distinct from many other firms. These ideals, or "the H&M spirit,"
should be viewed as a source of strength and inspiration in their everyday work.

Economic: Environmental status and Economic indicators

Environmental Status

 A Supply Chain Storm Brewing

For H&M, a major fast fashion retailer, a comprehensive approach to environmental

sustainability is a core pillar of its business. The rationale for this model is well founded; the
apparel industry has complex supply and production chains that contain many environmental
touch points, all of which are at risk to be meaningfully impacted by climate change. An
overview of an apparel production chain is shown below:
 The impact of climate change on the fashion industry is exceedingly relevant to the long-
term profitability of apparel companies: Greenhouse gas emissions are expected to double in 50
years and the average surface temperature of the earth is expected to increase, potentially
affecting cotton-growing and textile manufacturing. Agriculture uses more than 70% of global
freshwater, and growing cotton, a core element of many textiles requires a water-intensive
process. In fact, producing one pair of jeans uses ~3,000 liters of water. Water withdrawals
around the world, however have tripled over the last 50 years, and it’s expected that the cost of
water will increase as it becomes a scarcer resource.

H&M may have already begun to experience the impact of doing business in a world
affected by climate change; its average cost of goods sold has steadily increased as gross margins
have decreased over the last five years. As resources become scarce and increasingly expensive,
it’s critical that apparel retailers like H&M prepare for and mitigate the effects of climate change.
Economic Indicators

 GROSS DOMESTIC PRODUCT (GDP)

The global giants of fashion avoid the quicksand of the international situation. The latest
forecasts of the International Monetary Fund (IMF) are a jug of cold water for companies in any
sector but the hit is even worse for those most exposed to countries that slow down their growth.
In the case of the three largest fashion retailers in the world, Inditex, Uniqlo, and H&M, for now,
the worst places are avoided: only 13% of the store network of these companies are in Germany,
Italy, Mexico and India, the worst performing countries in the last update of the organization.
Germany, the largest market for the fashion sector in the Eurozone, is the country that
concentrates the largest network of stores of the three global giants of fashion retail. In
particular, Inditex, H&M and Uniqlo have 601 stores in the country, the equivalent of 4.6% of
the global network of these companies. By far, the group most exposed to the fluctuations of the
German economy is H&M, which concentrates a total of 468 stores in the country. Germany is,
in fact, the largest market for the Swedish group, whose local market occupies the sixth position
by revenue.

 LABOR FORCE

We welcome everyone. Our culture is united by common values. We know that we achieve
our best results when people feel free to be themselves. We recognise the contribution every
individual can make to our shared success. Add your unique voice to H&M — together we can
make magic. At H&M we encourage you to be yourself and respect others for who they are. Our
diversity makes us strong and creates an inclusive and welcoming workplace where everyone’s
individuality is highly valued. When a great mix of people come together and share their
knowledge, experience and ideas, we can inspire and attract customers all over the world. H&M
is a fair and equal employer. We are committed to providing a safe and attractive workplace
where all employees are recognised, feel appreciated and are treated with respect. Our social
policies act as complements to the company values and clarify the rights and obligations of all
employees in matters such as mutual respect, equal rights, discrimination and harassment.
  INFLATION

Budget fashion chain H&M has said profits fell again in the second quarter of the year as
both cotton prices and wages rose. Even so, Hennes and Mauritz, the world's second-largest
fashion retailer, said its gross profit margin fell from 65.9% a year ago to 61.7%.

Profits at the Swedish company fell 18% to 4.3bn kronor ($673m, £415.4m).The figures
contrast with rival Zara, which has escaped the problem of Asian wage inflation. Its parent
company, Inditex, last week reported quarterly profit up by 10%. It makes more of its clothes in
North Africa and Spain, so is less exposed to rising costs in Asia. H&M also said it had put aside
a 248m Swedish crowns related to an incentive programme for employees. Most of the
company's shops are in Europe, where economies are largely stagnant. H&M said it had not
raised prices throughout the three-month period.

H&M’s Corporate Governance Structure

 The corporate governance structure of H&M includes shareholders, the board of
directors, the auditing committee, the CEO, the nominating committee, auditors, the executive
management team, business areas organized by brand, employees, and employee organizations.
The diagram illustrates the corporate governance structure of the company.

Political stability or political status

It is no secret that H&M is a global brandoperating in a lot of countries. On the one hand,
this is a massive gain for the brand; on the other, it also is a gateway to political tensions around
the world; countries like Turkey, Egypt, and Lebanon, etc. where H&M has franchises have very
unstable and unpredictable political climates.

Another change in strategy that the brand introduced was franchising; they now have
franchises in many countries, some of which have political instability, thereby keeping the brand
on its toes. Franchising was not a part of H&M’s growth strategies in the past.
They got into franchising to curb regulatory disputes of different countries. Every country
has its own set of rules and requirements that international businesses must adhere to, such as
trade legislations and consumer protection policies. So as long as the world politics remain stable
(which is wishful thinking) H&M has their work cut out for them.
On  1st October of 2020, H&M was fined€35,258,707.95 which is approximately US
$41.2 million by the Hamburg Commissioner for Data Protection and Freedom of Information.
This fine was directed towards their subsidiary in Hamburg, Germany because it was revealed
that a huge chunk of their employee data was leaked to the general public. Sensitive information
consisting of their personal and private details was dealt with carelessly. The employees were
regularly interrogated on their whereabouts and activities in order to collect this information.
Recently the brand came under fire with allegations of discrimination against ethnic
minorities in certain stores in Sweden. Hidden camera footage which was popularized by a local
news channel made it seem that the salespeople were very different in their treatment against
people of different ethnicities especially ones who were returning some products such as asking
for unnecessary documentation from them which was not being asked of other people. The
matter was inquired in detail.
 H&M has been tied to racial discrimination quite a few times in the past, such as when a
manager and a few employees were fired because they changed the name of a product in the
store to include a racial slur. Appropriate legal action was also taken against them.

It’s not all bad with the brand though; H&M adheres strictly to world laws especially in
regards to the countries they operate in. They don’t allow underage employment, the suppliers
they work with also are law-abiding, they ensure safe working conditions for their employees all
around the world, they promote equality against discrimination of any form; racial, gender,
ethnic, religious, etc. The brand also believes in being transparent; they develop and produce
many financial and other performance reports to the public.

SWOT Analysis
Strengths
- A wide range of products: H&M has a wide range of product offerings including
apparels, cosmetics, shoes, and accessories for a wide range of customers.
- Unique identity for all brands: H&M sells its product portfolio through many different
brands such as H&M, COS, Weekday, Monki etc.
- Diversified global presence: H&M has a strong and diversified presence geographically
across the globe.
- Strong financial performance: H&M has reflected strong financial performance in the
previous financial years. In FY 2015, H&M showed a growth in revenue of 19.4% over
the FY 2014.

Weaknesses
- Dependence on third party suppliers: H&M is excessively dependent on third party
suppliers for its merchandises. H&M outsources product manufacturing to about 800
independent suppliers and hence it has lower control over production.
- Following after trends: H&M produces affordable clothing and is dependent on many
independent suppliers and pick up after trends from luxury brands.
- Affordable pricing affects quality: H&M is popular for making affordable clothing, but
that sometimes affects the quality of the clothes and other products of H&M.

Opportunities
- Focus on expansion to improve profitability: H&M has been focusing constantly on
expanding its store base across the globe. The company added 400 new stores in FY
 2016. Such expansion plans can help H&M improve its bottom-line as well as the top-
line.
- E-commerce as a platform: H&M is also present on E-commerce in various countries.
H&M needs to expand in the E-commerce platform as well to serve to a larger market.
- Expand in emerging markets: The emerging markets in the world possess a great
potential as far as the apparel industry is concerned.
- Improving lifestyle: The purchasing power and the lifestyle of people are improving
across the globe. People are more brand-conscious and thus it provides an opportunity for
brands like H&M to capitalize on the need generated.

Threats
- Evolving fashion trends: Apparel industry is subject to quick changes as trends keep
changing quickly. Social media has also played a part in quickening the process of
changing trends. H&M has to deliver according to the new trends in the market or else it
can lag behind in the industry.
- E-commerce allows new entrants: E-commerce is an advantage as well as a threat for
the popular brands as E-commerce allows newer brands to be present on the same
platform as the popular brands and hence such new entrants could affect the business of
brands like H&M.
- Intense competition: The apparel industry is subject to intense competition from local as
well as global brands.
- Rising labor costs in developed countries: Rising labor costs affect the cost of
production for the industry. Such increasing costs affect profitability for the company.
- A risk of foreign exchange fluctuations: H&M’s group’s reporting currency is Swedish
Krona but most of its sales come from developed economies such as Europe and the US.
The threat of foreign exchange rate with respect to the powerful currencies can affect the
profitability.

Background of the Project

H&M is multinational clothing firm and it is known for its fast clothing fashion for
women, children, men and teenagers. It provides latest designs to its consumers with different
range. As of November 2019, it conducts its business operations in around 74 countries with
more than 5000 stores. Its main focus is on taking its business at large scale and enhance its
market share. This company offers quality and fashion at best cost. Its main aim is to enhance as
well as expand its stores through 10 to 15% each year. H&M organization has been enabled to be
integrate economically in the global market.
Globalization becomes a way which work is enchantingly interconnected as result of
cultural exchange and enhanced trade. It is helpful in maximizing production of services and
products in better manner. In addition to this, globalization is assessing to develop more wealth
in the developing countries and reduce gap among them.
Aim: "To introduce and present new shoe in London fashion week to compete with other big
brands and maximise own profitability". A case study on H&M.
Objectives:
 To analyze the idea of introducing new product in international market.
 To identify the usefulness of newly introduced services for target audiences and for
business competitors.
 To analyze the challenges faced by organization while introducing new product in
international market.

Time Frame
Start Finish
Research 20 days October 20,2021 November 8, 2021
Design 14 days November 9, 2021 November 22, 2021
Production 14 days November 23, 2021 December 6, 2021
Sales Techniques 16 days December 7, 2021 December 22, 2021
Launch 3 days December 23, 2021 December 25, 2021

Project Management Plan

 Project initiation- It is a first stage in project management and under this idea for project
in elaborated and explored. The main aim of this phase is to analyze project feasibility in
a proper manner. Under this, it is necessary that team of H&M should give priority to
project, determine schedule, necessary resources and calculate budget.

 Planning phrase- Under this stage, manager of H&M company will develop the project
management plan by consisting cost, communication, quality, risk, time and resources. In
addition to this, plan for managing unidentified as well as identified risks is identified as
it may impact aspects of project. Project plan also consists measurement of performance
as well as establishing baselines.

 Project execution phrase- At this phrase in project, deliverables are completed as well
as developed. At the time of this phrase, capture the project metrics by tasks such as
update project status, meetings, performance reports, human resource needs etc.

 Project monitoring and control phrase- It deals with analyzing project progression
well as performance on the basis of project plan. It is necessary for manager to monitor
the performance and control activities of project. In addition to this, project manager of
H&M company uses information for maintain control over direction of project through
 comparing progress reports with project plan. It is helpful in measuring performance of
project related activities and take the corrective actions.

 Closing phrase. It is a final stage and intensity on releasing final deliverables to

consumers, terminating contracts of suppliers, handling the project documentation to
business and then communicating closure of project to all the stakeholders.

REFERENCES

H&M Group. (2021) Retrieved from https://hmgroup.com/sustainability/leading-the-change/

https://desklib.com/document/managing-a-successful-business-project-jfei/