H&M Case Study

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Mälardalen University School of Sustainable Development of Society and Technology International Business and Entrepreneurship Master Thesis, Spring 2008 Leif Linnskog, Supervisor

The International Expansion of a Multinational Company ---A Case Study of H&M

Authors: Jun Li Maja Frydrychowska

Abstract
Date: Level: Authors: June 19, 2008 Master Thesis in International Business and Entrepreneurship, 15 credits Jun Li (1981-11-01), China jli07001@student.mdh.se Maja Frydrychowska (1974-05-29), Poland mfa07001@student.mdh.se Title: The International Expansion of a Multinational Company---A Case Study of H&M Leif Linnskog How did H&M go international and what factors did influence its expansion? The aim of this thesis is to describe the internationalization of H&M and to explain such way of expansion using different theories and theoretical concepts. In our thesis, we mainly used the qualitative method for our case study of H&M. Meanwhile, for the data collection, the documentary approach was applied. As a retailer, H&M does not follow the standard pattern of establishment chain presented in the Uppsala model. Its establishment chain is composed of three stages: franchising, wholly owned sales subsidiaries and production offices. The company has developed strong macro-position within the clothes industry network and strong bonds with its external suppliers. The expansion decisions of H&M have been influenced by the factors included in the psychic distance concept.

Supervisor: Problem:

Purpose:

Method:

Conclusion:

Keywords: H&M, internationalization, retailing, establishment chain, network, psychic distance

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Acknowledgement
We are here very thankful to our thesis supervisor Assistant Professor Leif Linnskog, the coordinator of our program International Business and Entrepreneurship. During the whole process of our thesis writing, he has provided us with many precious suggestions. With them, we know better what a master thesis should be. Thus, we have to say that without his help and guidance, it would be impossible for us to complete such study on the case of H&M. Jun Li Maja Frydrychowska

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Table of Contents
1 INTRODUCTION ....................................................................................................... 6 1.1 1.2 1.3 1.4 1.5 2 Research Problem .......................................................................................... 6 The Aim of the Thesis ...................................................................................... 6 Target Group................................................................................................... 6 Brief Introduction of H&M.............................................................................. 7 Delimitation ..................................................................................................... 7

RESEARCH METHODS ............................................................................................. 9 2.1 2.2 Research Approaches .................................................................................. 9 Methods for Data Collection ..................................................................... 10

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LITERATURE REVIEW............................................................................................... 12 3.1 3.2 The Uppsala Model ...................................................................................... 12 Foreign Entry Modes..................................................................................... 16 Basic Entry Decisions............................................................................. 16 Foreign Entry Modes ............................................................................. 18

3.2.1 3.2.2 3.3

Retailer Internationalization........................................................................ 19 Strategic objectives.............................................................................. 19...
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