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H&M SWOT Analysis

By ohwalker Apr 16, 2015 1098 Words

Fashion Promotion
Promotion Objectives and Theme Development Report
SWOT Analysis of H&M

Strengths:

• Low priced trendy clothing.
• Fast fashion all year round.
• Clothing options for the whole family.
• 3,300 stores in 55 countries. ("H&M Worldwide," n.d.)
• Multiple retail channels such as H&M
stores, an app and online stores.
• Strong marketing skills.
• Catchy advertisements.
• Collaborations with well-known designers.
Weakness:

• Lower quality of clothing materials.
• H&M does not oversee the production of
their garments.
• Strong dependency on independent suppliers in Asia and Europe. • Limited number of online stores in all 55
countries. ("Regions," n.d.)
• Lack of customer service.
Opportunities:

• Expanding the number of stores in every
country and opening H&M stores in
Africa.
• Increasing the amount of organic cotton
used in production.
• Increasing the amount of reusable
material during production.
• Expansion of their online stores.
• Growth of H&M’S homeware line
• Sustainability progression.
Threats:

• Competition stores like Zara, Forever 21,
Cotton On and GAP all have similar styles
to H&M with similar prices.
• Rising labor wages in other countries, such as China and India. • Recessions can cause a loss in profit.
• High unemployment rate can affect
consumer spending.
• Negative macroeconomic changes
• Rising costs of raw material.

Key Problems/ Key Opportunities
Key issues as pointed out in the SWOT analysis included a dependency on foreign suppliers, issues with online marketing, and lower quality of materials. Due to H&M’s desire to remain a higher fashion retailer with low cost certain corners must be cut. These costs are saved when it comes to the materials used in their clothing, which are bought overseas at a reduced cost and are not premium quality. In fact H&M does not own any of its own factories and instead operates through independent suppliers. This is a delicate balance of managing their overhead that can result in loss if these independents have fluctuating prices. The combination of these factors could prove to be a challenging obstacle for H&M. H&M has a weakness when it comes to online sales. While we do not notice it here in the states there is a lack of online presence from H&M. The online shop is currently only available in “several European countries and the US ("Sales Markets," n.d.).” These key problems point to various opportunities for H&M to seize. The online shop has proved to be a success for H&M and is an area where improvement can be made. The online shop has an opening to be expanded worldwide and there is a space in the market for it. H&M has a motto for staying organic and sustainable. This policy points to yet another opportunity for them. Garment quality can be improved if it is overseen as well as purchased locally. This in turn can create a larger profit margin if marketed correctly alongside and expanded online market. Other expansion opportunities include opening of more stores in Africa as well as an increase in the amount of organic cotton used to manufacture garments. H&M also has a variety of sub-brands under its umbrella including Cheap Monday and and Monki. H&M can amass a large portion of space in the market if more companies and brands are encompassed under the H&M brand.

Promotion Objectives
General Objective
What we plan to achieve, by the implementation of our promotional program, is to increase sales. Specific Promotion Objective
Our objective is to increase and expand our customer base globally. H&M reaches 55 different markets with 3,300 stores worldwide. ("H&M Worldwide," n.d.). However, despite the fact that H&M expands to 55 different markets, they have a limited presence online. Currently, H&M’s online shopping feature is only offered in 13 countries. ("Regions," n.d.). Some of the countries excluded from the list are Canada, Mexico, Japan, Korea, and Hong Kong. These are all major contributor to the amount of physical stores worldwide. Despite their large presence physically, they are not being catered to electronically. We believe that if we open up this sales medium to more global markets, our clientele will increase and in turn contribute to increased revenue. Target Audience

The audience that we are targeting are online shoppers in the countries that do not currently have an online H&M store that they can shop at. We are specifically targeting millennials, “those consumers aged 18 to 34, remain the key age demographic for online commerce, spending more money online in a given year than any other age group.” (Smith, 2014). Promotion Theme

The only way online sales in all countries can increase is for all countries to have an online store. Until this is done, H&M can make up for the loss sales by pushing consumers to shop in store. In order for H&M to help reach their target market, they can make their central theme for their advertisements “H&M around the world.” The idea behind this theme is to help reach out to those who may not be able to shop online but can still buy from a store. The major selling points that will be shown are top selling pieces in different countries. By showing different pieces from each country, it can help consumers realize that H&M is an influential brand in different countries even though they only have online shopping available for a limited number of them. They can use different celebrities from each country so that when consumers think of those celebrities, they are also thinking of H&M. Selling points for these items will be the low price and will showcase two or three key pieces per advertisement. It is important to only show a limited number of products per advertisement so consumers can remember all pieces as opposed to a few of them. By promoting high selling pieces in countries without online shopping, it can increase spending in store because consumers know they cannot purchase the items anywhere else. The positioning for these promotions will be functional. They will increase brand loyalty through buying benefits such as discounts for avid customers or customer reward cards.

References
H&M worldwide. (n.d.). Retrieved from http://about.hm.com/en/About/facts-about-hm/fashion-for-all/sales-markets/hm-worldwide.html Regions. (n.d.). Retrieved from http://www.hm.com/entrance.ahtml?orguri=/ Sales markets. (n.d.). Retrieved from http://about.hm.com/en/About/facts-about-hm/fashion-for-all/sales-markets.html#cm-menu Smith, C. (2014, November 04). The Surprising Facts About Who Shops Online And On Mobile. Retrieved from http://www.businessinsider.com/the-surprising-demographics-of-who-shops-online-and-on-mobile-2014-6

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