H&M SWOT Analysis

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H&M Analysis
H&M is a Swedish company founded in 1947. It is a family owned company controlled by Stefan Persson and family. H&M act in the fashion industry and are one of the really big global players with 2078 stores in more than 30 countries. In 2009 they launched H&M Home which sells interior textiles through internet. Recently H&M have launched several new store concepts. Other than the H&M stores there are now also Weekday, Monki, COS and Cheap Monday stores. H&M’s new concept stores and their success will probably play a greater role in the future if H&M wish to continue their fantastic growth figures. There are also uncertainties of H&M’s future since they are in the middle of a shift of expansion focus from the European and North American markets to China, Japan and Russia. H&M’s first years on these new markets seem to have been good and these markets will grow ever more important in the future. Another very important aspect for H&M is the future direction the global economy will take. Since H&M is based in Sweden but they do a lot of their trading in foreign currency the exchange rates has a very big impact on the profit. The economic development in China and other markets where H&M has a lot of their fabrication will also have an impact on the future profit margins. All in all H&M have been and still are a great achieving company but the future poses great new challenges that H&M has to conquer in order to live up to their great history. H&M’s environment and business

Business areas
H&M's business concept is: to offer fashion and quality at the best price. H&M offers a wide range for women, men, teens and children. H&M also sell cosmetics and home textiles. H&M has since their launch in 1947 stayed very true to their core concept. They have competed through maintaining a cost leadership strategy. Since 2004 they have started to branch out and create new concepts in order to expand further in markets where they are very well expanded and to maintain an edge over competitors with a similar competitive strategy. In 2004 they began with designer collaborations and in 2007 they launched COS, a new store concept which is also meant to offer quality at the best price but targets a higher price segment. In 2008 they acquired FaBric Scandinavien AB and the brands Cheap Monday, Weekday and Monki which are aimed at a younger clientele. The latest addition is H&M home which was launched in 2009. While the H&M concept is still the core of the company accounting for over 95% of the stores the other concepts are growing rapidly and will probably have a big impact on the future success of H&M. Geography

H&M have stores in 35 markets. They are well established in Western Europe which is by far the largest market for H&M, with Germany accounting for 25% of the total sales. USA is another big market with sales of more than 7 billion SEK (including VAT) in 2009. H&M have recently opened franchise stores in the Middle East but so far these account for less than 1% of the total sales. The most important new markets are Russia, Japan and China. These markets currently account for 2,5% of the total sales but this is a number that will probably grow rapidly in the future. Another important geographical aspect is the manufacturing locations. 40% of H&M’s manufacturing is located in Europe while the remaining 60% is located in Asia. The future economic development in emerging Asian markets will probably play a great impact on future manufacturing costs and profit margins. Currencies

As one can discern when looking at the geography section the US dollar and the euro are both important currencies to H&M. Since the parent company is based in Sweden the exchange rate of the Swedish krona compared to these currencies is very important for H&M’s result. The Chinese, Japanese and Russian currencies will also come to play a bigger role in the future when H&M expand further on these markets. To protect against some of the currency...
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