H&m Retailing Strategy Case Study

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List of Content

List of Content        2

1        Introduction        4        

1.1        Background        4

1.2        Purpose        4

1.3        Method        4

2        Overall Company Profile        5

2.1        Company Presentation        5

2.2        Existing Retailing Strategy        5

2.2.1        Target Customer        6

2.2.2        Market Positioning        6

2.2.3        Retail Format        6

2.2.4        Competitive Advantage        7

2.3        Merchandise        7

2.4        Pricing Strategy        8

2.5        Retail Location        9

2.6        Information System        10

2.7        Supply Chain Management        11

2.8        Store Management        11

2.9        Expansion Strategy        12

2.9.1        H&M expansion and market selection        12

2.9.2        Entry mode        13

3        Further expansion of H&M        14

3.1        Evaluation of Potential Markets        14

3.2        Micro and Macro Analysis of the Selected Country        16

3.2.1        Argentina        16

        3.2.1.1        Micro environment        16

        3.2.1.2        Macro environment        17

3.2.2        Brazil        18

        3.2.2.1        Micro environment        18

        3.2.2.2        Macro environment        18

3.2.3        Uruguay        19

        3.2.3.1        Micro environment        19

        3.2.3.2        Macro environment        19

3.3        Decision of Markets        20

3.4        Expansion Entering Format        20

4        Globalization/Localization        22

4.1        Retailing Strategy        22

4.2        Merchandise        23

4.3        Pricing Strategy        23

4.4        Retail Location        24

4.5        Supply Chain Management        25

4.6        Store Management        26

References        27

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1         Introduction

The introduction of the report consists of a brief background, purpose and method, which are all used to give an understanding of the presumptions of this report about H&M.

1. Background

In business environments, a strategy is a way to clarify, make plans and state key success factors. It is a tool that helps organisations to act in a coherent way and a way to clarify goals and make a plan of how to reach them. H&M is a company that during the years have had several strategic plans to reach their goals but what they all have in common is that they are all striving to make H&M able to keep low prices, reasonable quality and be present in as many wardrobes as possible around the globe.

1. Purpose

The purpose of this report is to describe and later analyse the strategy of H&M when it comes to retailing strategy, merchandise, pricing, retail location, information system, supply chain management, store management and expansion strategy. These parts and analyses are further used to find an appropriate new market for H&M to expand to. Furthermore entry modes for this market as well as a decision whether to use a globalized or localized strategy are discussed.

1. Method

For this report different methods and models have been used together with multiple reliable sources in order to get realistic conclusions and a reasonable strategy. The process applied in the report is visualized in figure 1, below.

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Figure 1: Schematic description of the process used to write the report.

2        Overall Company Profile

In this chapter H&M and their strategic components are described from different perspectives like retailing strategy, merchandise, retail location, pricing strategy, information systems, supply chain management, store management and expansion strategy.

1. Company Presentation

H&M has a unique history which stretches over several decades. The first H&M store was opened by founder Erling Persson under the name “Hennes” in Västerås, Sweden in 1947. Due to an acquisition the name was later changed to “Hennes & Mauritz” and in the following rebranded to “H&M”. In 1969, H&M started its international expansion and due to that is today one of the world’s leading fashion companies with a total of 3924 stores (all brands in the group counted) in 61 markets and 23 online markets.  

H&M is organized in the H&M Group and a continuing growth can be seen since the last 40 years. In 2015 H&M Group’s sales including VAT amounted to SEK 210 billion, sales rose by 19 percent and profit after tax increased to SEK 20.9 billion (in 2015). In the same year 16,000 new employees were hired resulting in a total team of 148,000 employees. The company today is led by the founder’s son, Stefan Persson as the President and Erling’s grand son, Karl-Johan Persson as the CEO.

H&M focuses on their customers which can be seen in the vision: “We are driven by a desire to always create the best customer offering and the best experience for our customers – in a sustainable way. “