Philippine Christian University

Sampaloc 1, Dasmariñas City, Cavite

Graduate School of Business and Management

In Partial Fulfilment of the requirements in Strategic Management II

THE STRATEGIC MANAGEMENT PAPER

Submitted by:

DIMAANO, RIAN JAY P.

MBA ESPINAR 3B2

July 25, 2022

I. INTRODUCTION

H & M Hennes & Mauritz AB (H&M) is a Swedish multinational clothing company

headquartered in Stockholm. Its focus is fast-fashion clothing for men, women,
teenagers, and children. As of November 2019, H&M operates in 74 countries with over
5,000 stores under the various company brands, with 126,000 full-time equivalent
positions. H&M operates under the strategy of "Fashion and quality at the best price."
H&M stores are closely guided from the company's Stockholm headquarters to achieve
a uniform concept--it is said that a sweater featured in a window display in London will
be featured in exactly the same way in Reykjavik and all other H&M stores. Such control
over its image has enabled H&M to build a consistent brand appeal throughout the
wholly company-owned chain. H&M's low-debt, cash-rich position enables it to respond
quickly to developing trends. New clothing products are introduced on a near-daily
basis--breaking the traditional seasonal stock rotation found in the retail clothing
industry. Clothing items rarely remain on H&M's shelves for more than a month; this
rotation encourages repeat shopping.
With more than 550 stores in 12 countries across Europe, Hennes & Mauritz AB
(H&M) has quickly become one of the world's most successful clothing retailers. Each
year, the Sweden-based retail chain sells more than 300 million primarily company-
designed garments and accessories, including cosmetics, worth some SKr 26.6 billion
(US$3.15 billion). The company has been so successful at exporting its low-price, high-
quality clothing fashions that more than 80 percent of its sales are realized outside of
Sweden; in fact, since the mid-1990s, the company's largest single market has been
Germany, where the company's 150 stores represent some 30 percent of total sales.
H&M has also been expanding beyond Sweden with its catalog sales, operated under
the name H&M Rowells, which remains limited to the Scandinavian market in the 1990s.

The pandemic has accelerated the already ongoing transformation of the

industry, with increased digitalisation that has rapidly changed customers’ behaviour.
The current situation has changed the preconditions for, among other things, rental
terms for stores. The H&M group is continuing to renegotiate a large number of leases
as part of the company’s intensified store optimisation, which also involves rebuilds and
adjustment of the number of stores and of store space to ensure the best store portfolio
in each market. The H&M group’s contracts allow around a third of leases to be
renegotiated or exited each year. Most of the openings will be in growth markets, while
the closures will mainly be in established markets. In September the first H&M store in
Panama opened successfully via franchise and Monki was launched on the e-
commerce platform Zalora in the Philippines. In the fourth quarter H&M was also
launched online in Chile, and & Other Stories was launched with its first store in Israel
via franchise, on The Yes and on Nordstrom online in the US. In addition, Weekday was
launched on Thread in the UK and Arket at The Hyundai in Korea. In December 2021
Arket opened its first store in Russia, & Other Stories launched on Yoox.com and COS
launched online in Saudi Arabia via franchise. In 2022 H&M will launch in six new
markets: the first stores will open in Ecuador, Kosovo and North Macedonia, and via
franchise in Costa Rica, Guatemala and Cambodia. Other Stores will launch in
Singapore and Arket will open its first store in France in the second half of 2022. The
rollout of H&M online continues in 2022 with Belarus, Colombia, Kazakhstan, Peru and
Ukraine. COS will launch online in Australia, and via Zalora in the Philippines. Monki will
be launched on About You, and on Zalora in Singapore and Malaysia.
In 2021, H&M had an average of 107,375 employees worldwide. The company
operates over 5,000 stores worldwide. Germany is H&M's largest market. In 2019, 3.5
billion U.S. dollars were generated from that country alone. H&M was considered to be
the fourth most valuable apparel brand in the world; behind Nike, ZARA and adidas as
of 2019.

II. RESEARCH DESIGN AND METHODOLOGY

Identify the following:

 Data and information sources

The following data and information cited on this paper all come from trusted
websites of the H&M. That we can assure the reliability of all the data being presented
on this paper. Information was obtained through the use of secondary data. Collection
of data coming from articles and acts about the organization.

In conclusion, we can therefore say that H&M is a world famous apparel

company. The success of H&M will be a reference example for any organization. In
addition, the societal trends affecting the company were presented along with SWOT
analysis of the company’s operations. The definition of the current situation at H&M also
included strategic factors and problems of immediate and long-term. The strategic
analysis of H&M entailed all aspects of environmental scanning. These included
environmental analysis showing how the company is affected by external factors as well
as how the company deals with them. In addition, environmental scanning also included
the internal analysis showing aspects of the organization and its economy. The strategic
analysis would not be complete without strategy formulation and implementation.

III. COMPANY’S VISION AND MISSION

The vision statement of H&M is to “lead the transition to circular and renewable
fashion while being a good and equal business.”

The mission statement of H&M is to “invest in people, communities, and innovative

ideas to drive long-lasting positive change and improve living conditions.”

The objectives of H&M

●Increase website traffic by 20% via QR code starting with the spring collection 2021
measured through website traffic by September 2021.

●List the 3 major steps within the supply chain of sustainable, recycled, and innovative
clothing for enhancing transparency within April 2021.

●Enhance communication of H&M sustainable, recycled, and innovative clothing on

Social Media (Instagram, Facebook, Twitter) by posting sustainability content every third
day by the end of 2021.

●Contribute at World Forest Day and World Oceans Day in the year 2021 by planting
trees and donating to one NPO.
●Provide shopping bags made of recycled material in 100% of all physical stores
starting from July while stocks last.

The following are the criteria of David’s framework in terms of the H&M vision and
mission:
1) Customers - Who are the firm’s customers?
H&M was able to address their target market on their vision and mission. In
which they where able to identify who will they target. And this is the people who are
fashion savvy.
2) Products or services - What are the firm’s major products or services?
The main product offering of H&M are in the form of the fashion clothing line.
They was able to emphasize on how they will build their product offerings.
3) Markets - Geographically, where does the firm compete?
The firm is competing internationally and have been able to keep up with the
competition in the industry. As they have been successful in most of the location that
they operates.
4) Technology - Is the firm technologically current?
In terms of technology, H&M is currently adapting to the advancement that are
happening. For instance the rise of online sites and incorporation to the social media
are the things that shows how the firm is coping up with the technological advancement
that are happening.
5) Concern for Survival, Growth, and Profitability - Is the firm committed to growth and
financial soundness?
Definitely the firm is growing as the year pass by as seen on their financial
performance. Also, with the constant plan for expansion and international ventures, we
can therefore say the growth and survival of the firm.
6) Philosophy - What are the basic beliefs, values, aspirations, and ethical priorities of
the firm?
The values, beliefs and ethical priorities of the firm, pertains to how they protect
the people as it is translating to their offerings. That the firm are offering quality products
with an affordable price and an innovation in terms of how they produce them. As they
are using recycled products and they are always contributing to energy conservation.
7) Self-Concept - What is the firm’s distinctive competence or major competitive
advantage?
 From how they formulate their vision and mission, we can therefore say that the
competitive advantage of H&M is on how the position themselves in the industry that
they are into. Their branding is exceptional, as they were able to build how they want
their customer to foresee them as a business in the clothing line industry.
8) Concern for Public Image - Is the firm responsive to social, community, and
environmental concerns?
The advocate of the firm to create products based from renewable resources and
recycled products are testament to their concern towards the society, community as well
as to the environment.
9) Concern for Employees - Are employees a valuable asset of the firm?
The firm are committed to their employees. As they have been valuable to the
organization and treated as the firm’s assets. By the looks of the growth in terms of the
number of employees that they have, we can say that the firm have build good
relationship towards their employees.
Communication of vision and mission to the employees and other stakeholders is
must to each and every organization. They should always know the direction that the
firm wants to be in the future, likewise they should also know how to get there.
Communicating your vision and mission is crucial, because it have a greater impact on
the organization’s performances. That if the vision and mission was communicated
properly it will always lead to positive performance of the firm. And how are we going to
do it, simply to incorporate them on the formation and enhancement of the company’s
vision and mission. Through incorporating them, you and instill to their minds that they
are really part of the organization and that you care as well to their point of view as well
to their perspective. This will lead to motivation and becoming enthusiastic of the
employees and other stakeholders.