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Hennes & Mauritz (H&M) SWOT & PESTLE Analysis

ID : 52398253| Oct 2019| 15 pages

COMPANY PROFILE -Hennes & Mauritz (H&M)

Business Sector :Fashion retail, Clothing and accessories

Operating Geography :Sweden, Global

About Hennes & Mauritz (H&M) :

Hennes and Mauritz, better known as H&M is a multinational company which was started in 1947 in Swedish city Vasteras. It serves as a fast- fashion house for men, women and children. It has been in operations for past 70 years and ever since it has grown tremendously. It is the second largest global clothing retailer and has expanded its market across the globe and is a very popular name for quality clothing. It provides a wide range of selection to the consumers. H&M’s business strategy is to offer fashion and quality at the best price in a sustainable way. Another important aspect of H&M’s growth strategy is to develop new brands to meet requirements of new customers. In autumn 2019, the company is looking forward to launch “& Other Stories” in China on Tmall shopping platform, and also on India’s largest ecommerce platform Myntra and in China “& Other Stories” will open on Tmall. The H&M Group includes eight brands viz., H&M, COS, WEEKDAY, MONKL, H&M HOME, & Other Stories, ARKET and AFOUND, together these brands offer men, women, and even babies a board variety of products ranging from fashion, beauty, accessories, and homewares. In 2019 H&M climbed to 2nd place in Retail Week Indicator, up from the 18th place in 2018
The Unique Selling Proposition or USP of H&M lie’s in being the second largest global clothing retailer, just after Inditex. Besides thousands of offline stores in across 72 countries the company also has a strong online presence with online shopping available in 48 markets, as of 2019.
Hennes and Mauritz’s (H&M’s) vision is to “use its size and scale to lead the change towards a circular and renewable fashion industry, all while being a fair and equal company”. H&M's mission is to “offer their customers fashion and quality at the best price.”

Hennes & Mauritz (H&M) Revenue :


SEK 210,400 million - FY ending 30 November 2018 (y-o-y growth of 5%)
SEK 200,004 million - FY ending 30 November 2017 (y-o-y growth of 4%)
SEK 222,865million (including VAT) (FY ending 30 November 2016)

Ownership / Major shareholders :


As of April 2018, the major shareholders of the company are as follows –
1. Stefan Persson & Family (44.5%)
2. Lottie Tham & Family (5.4%)

Competitive Analysis of Hennes & Mauritz (H&M)

SWOT
PESTLE
The clothing retail industry is one of the most progressive industries, it has swiftly changed and observed immense growth over the past few years. Headway in technology has played a vital role in the growth of the industry, most of the retail transmutation is due to online and e-commerce platforms. Hence the progression witnessed by the industry has been a boon to the H&M group too. The world's second-largest clothing retailer enjoys all the benefits of the industry and outstands the market by offering fashion and quality at affordable prices. The SWOT report confers all the pertinent internal strategic factors of H&M that contribute to the trajectory growth of the company. The SWOT Analysis of H&M Company manifests the company's current major strengths and opportunities from its external environment that can be consolidated to further strengthen the company. The report also bestows intelligence on H&M's internal weaknesses and external threats that can cripple its growth.
H&M's is one of the largest clothing retailers due to its excellent internal strengths. The backbone of the company is having a broad array of products ranging from fashion, clothing, accessories to housewares under multiple uniquely classified brands. H&M's brands are solely recognized by targeted customers and the company accomplishes to offer almost everything for all. Additional internal factors like strong and diversified global presence, multiple retail channels (stores and online), designer and quality clothing at affordable prices, robust financial performance, speedy delivery of products, multiple business models to provide flexibility etc., commit to the strengthening of the company.
H&M confronts stress from internal weaknesses like dependency on suppliers, overstocking of products, high maintenance cost etc.,
H&M is focused on strengthening its online presence with the use of e-commerce platforms and is expected to further expand its online stores in China’s Tmall and India’s Myntra. By second half of 2019 Thailand, Indonesia and Egypt are expected to become new H&M online markets via franchise. This is a huge opportunity for revenue growth and profits of the company. Another big opportunity lies in expanding its local stores in various regions like Asia and Latin America.
The apparel industry is highly competitive in both the online and offline sectors. Therefore H&M faces stringent threats from luxury brands, local retailers and new e-commerce entrants. The company also encounters threats from external factors like increasing labor cost, economic downturns lowering the demand for apparel, fluctuating fashion trends, counterfeit brands and products affecting H&M reputation.
The SWOT Analysis of Hennes & Mauritz (H&M) is presented below in a SWOT Matrix followed by detailed analysis:
Strengths
Weaknesses
1. Global presence with strong brand value
2. High customer satisfaction
3. Continuously stable financials
4. Affordability and value for price
1. Easy to replicate design
2. Massive increase in unsold inventory
3. Slow response to changing consumer trends
4. Failing mall strategy in United States
5. Backlash over insensitive promotions
Opportunities
Threats
1. Increasing popularity of online stores
2. Global market presence
3. Increasing purchasing power of consumer
1. Changing global dynamics
2. Threats from competitors and local artisans
3. Continuous need for innovation in line with latest trends
SWOT & PESTLE (combined)
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Detailed SWOT Analysis of Hennes & Mauritz (H&M)

 

Strength

This section is available only in the 'Complete Report' on purchase.

Weakness

1. Easy to replicate designs: H&M can be in competition with other brands as they can easily replicate designs and styles and market them at still lower prices. It is not difficult to create replicas in the fashion industry and thus, it becomes utmost important for the company to keep a close eye on their competitors. They have to be wary of replicas and fake labels that can eat their market very easily.

2. Massive increase in unsold inventory: With the fast changing world of fashion retailing, customers are increasingly moving online and physical stores need to keep inventories in check. H&M has been facing the major problem on increasing unsold inventory over the last two years with the company reporting a massive $4.3 billion of unsold stock as of end FY17. This was an increase of 7% over FY16. Analysts and industry experts blame H&M’s poor inventory management and bland product offerings for the same.

3. Slow response to changing consumer trends: With the change in styles and designs, the products need to continuously move to bring in fresh stock. This could cause tremendous pressure and operations along with need a very efficient supply chain. With a slower supply chain, H&M has not been quick to respond to rapid shifts in fashion and consumer tastes resulting in more markdowns and promotions and low-inspiration collections. H&M’s heavy reliance on its Asian suppliers has resulted in it having its supply chain lead-time 100% longer than of its rival Inditex. While the Asian supplier model has resulted in cost advantage, it has led to lower trend sensibility and higher lead times.H&M needs to adjust as per the market requirements before formulating its strategy ahead.

The remaining section under "Weakness" is available only in the 'Complete Report' on purchase.

Opportunity

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Threat

This section is available only in the 'Complete Report' on purchase.

Major Brands :

  • H&M
  • COS
  • Weekday
  • Cheap Monday
  • Monki
  • H&M HOME
  • ARKET
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WHY BUY THIS REPORT?
TABLE OF CONTENTS
DELIVERY AND FORMAT
WHY CHOOSE US?
• The SWOT and PESTEL analysis report of H&M Group presents the complex internal and external factors affecting the H&M’s brand, its operations, business model, market strategy and growth trajectory.
• The SWOT analysis assesses the strengths and opportunities that H&M group holds and how it strategizes itself to overcome its weaknesses and threats in its operating macro environment.
• The report confers intelligence on the external analysis, comprising the opportunities - low hanging fruits which can be harvested to achieve further growth and expansion and some pertinent threats that threaten to hinder growth of the company.
• The Report covers compelling initiatives that were taken by H&M, to stay ahead of its competitors and adversaries and attain a competitive edge in the industry.
• The PESTLE analysis of the Fashion retail and Clothing Industry helps to distinguish the factors that compel and restrain the retail market.
• The PESTLE/ PESTEL/ STEEPL Analysis for in-depth analysis of all external factors specifically, political, economic, social, technological, legal and environmental, highlighting their consequence on H&M's business model, marketing and growth strategy.
• Abstract information on H&M's business diversification, deriving its key business segments and highlighting its major competitors.
• A concise review of H&M’s founders, its corporate headquarters, owners & stakeholders, and revenue jumps. This is followed by a comprehensive company analysis to obtain perspicacity into company information, company profile, business model, business plans and marketing strategy.
• Analysis of H&M's share price, mergers and acquisitions, strategic partnerships and alliances, that the H&M Group endorsed, and the business aims or synergies that were achieved with them.
• Interpretation of H&M’s USP or unique selling proposition, mission statement, and vision statement. With a peek into the H&M's key performance indicators, core values, success factors, value proposition, and core competencies.
• Discussion on H&M's business model, extending to the analysis of key business segments and business case study.
References used in Hennes & Mauritz (H&M) Analysis Report

1. H& M group Annual Report 2018 - https://about.hm.com/content/dam/hmgroup/groupsite/documents/masterlanguage/Annual%20Report/Annual%20Report%202018.pdf

2. H& M group Annual Report 2017 - https://about.hm.com/content/dam/hmgroup/groupsite/documents/en/cision/2018/01/2110334_en.pdf

3. H& M group | History - https://about.hm.com/en/about-us/history.html

4. H& M group - Five year summary: https://about.hm.com/en/investors/five-year-summary.html

The detailed complete set of references are available on request in the 'Complete report' on purchase.

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SWOT & PESTLE.com (2020). Hennes & Mauritz (H&M) SWOT & PESTLE Analysis - SWOT & PESTLE.com. [online] Available at: https://www.swotandpestle.com/hennes-mauritz-hm/ [Accessed 25 Feb, 2020].

In-text: (SWOT & PESTLE.com, 2020)

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Hennes & Mauritz (H&M) SWOT & PESTLE Analysis
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