H&m Retailing Strategy Case Study
Essay by Big SmOke • March 6, 2017 • Case Study • 12,326 Words (50 Pages) • 1,644 Views
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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.
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.
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.
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.
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. “
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