Hermes International SWOT and PESTLE Analysis

ID : 52616453| Apr 2023| 15 pages

COMPANY PROFILE -Hermès International

Business Sector :Luxury Goods

Operating Geography :France, Europe, Global

About Hermès International :

Hermès International S.A. or Hermès of Paris or Hermes is a French Premium Luxury good manufacturer headquartered in Paris. It is a global brand and enjoys a distinguished position in the market of high luxury apparels and accessories. The range of products under the trademark includes leather goods and saddlery, men’s and women’s ready-to-wear, footwear, belts, gloves, hats, silks and textiles, jewellery, furniture, furnishing fabrics, wallpaper, tableware, fragrances, watches and petit, wherein the leather goods are the kernel of the company and major revenue drivers. Moreover, this brand is accepted to be the leader in the magnificence bags category especially using the leather from saddles of horses.
Hermès has a dominant position in luxury goods in the world and has one of the strongest brand equity. It has been consistently ranked one of the top luxury brands by various agencies. Interbrand, according to 2018, ranks the brand at 32nd in overall brand equity in the world.
Founded in 1837, the brand has a rich history of continuous innovation and expansion. Thierry Hermès started it as a harness shop in Paris. His intent originally was to provide the noblemen with saddles and leather gears. In the early 20th century, Charles-Émile Hermès, son of Thierry Hermès moved the company to 24 Rue Du Faubourg Saint-Honore in Paris, which is the company’s global headquarters till date. The company went public in 1993, and has 310 stores out of which 219 are directly operated by the company.
The company have had constant innovation in ultra-exclusive category and has shown significant growth under the leadership of Alex Dumas and creative designer Nadège Vanhee-Cybulski. The company constantly manufactures and launches exclusive products that increases the allure of the brand and strengthens its position as an object of momentous desire amongst its ultra-rich customer base. One such initiative was in 2015 when the company collaborated with Apple Inc. to launch exclusive Apple Watch, Hermes edition.
Hermès has been successful in keeping up the family heritage and as of today, Hermès Family members collectively own approximately 70 percent in share capital in Hermès International.
The USP or Unique Selling Proposition of Hermes International sprawls in being the world's third-largest luxury brand with a brand value of $34.6 billion as of 2020. The company is also well renowned for its premium leather products and silk scarfs.
The company's mission and vision statements are as follows; “Our purpose is to make our world more beautiful.” "At Hermes, we are committed to a written set of service values and company philosophies that guide our daily activities, define how we conduct business, and shape our company culture."

Hermès International Revenue :

Total Revenue
€6,883 Million- FY ending March 2019 (y-o-y growth of 15.4%)
€5966.1 Million - FY ending March 2018

Competitive Analysis of Hermès International

SWOT

PESTLE

Hermes is positioned as a high-end luxury brand involved in crafting, manufacturing, and merchandising premium apparel and accessories. The company targets affluent upper-middle-class men and women that opt for premium stylish and luxurious clothing. Flawless craftsmanship, attention to detail, strong legacy, premium status, high levels of professionalism and quality are the core competencies of Hermes, that render competitive advantage and supremacy in the very competitive and ruthless luxury industry. Thus SWOT analysis helps to focus on the internal and external strategic factors that can be utilized by the brand to build on its strengths, eradicate its weaknesses while accomplishing maximum benefit from opportunities and retaliating threats. The main objective of the SWOT analysis is to help in identifying these strategies, its impact on the micro and macro environment and evaluating Hermes' competitive stance.
Hermes is an iconic and one of the most valuable luxury brands due to its internal strengths like Global presence, board range of products, unique branding and marketing strategies, iconic status, high brand value, strong trade network, working with well-reputed designers, rich heritage, etc. To further strengthen the business, Hermes can make the most out of the opportunities like tap new customers with global expansion, utilize social media platforms to build a strong connection with patrons, expand the business online through e-commerce, and launch effective advertising strategies and campaigns to create brand recall. Brand imitation and counterfeiting of high end and premium products is highly trending which poses massive threat to the entire luxury industry and has not spared Hermes from its shadow. Present in a highly competitive industry, Hermes faces stringent competition from its rivals and top luxury brands like Louis Vuitton, Chanel, Christian Dior, Prada, Burberry, Hugo Boss, Giorgio Armani, Calvin Klein, etc. and fast fashion brands like H&M, Forever21, Zara, etc. who are all crossing swords to win market share in the apparel and accessories industry.
The SWOT analysis for Hermès International is presented below in the matrix followed by detailed analysis:

Strengths	Weaknesses
1. Strong brand equity with premium attribution 2. Entrepreneurial spirit across the organization 3. Global Presence with more than 300 stores 4. Diversified revenue by geography and segment 5. Wide and Exclusive Product Range 6. Strong leadership and family commitment 7. Consistent Financial Performance	1. High dependence on leather products
Opportunities	Threats
1. Strengthening Other Product Lines 2. Investing in digitization and e-commerce 3. Catering to Emerging Markets	1. High Competition High competition in the luxury fashion industry 2. Impact of economic instability 3. Backlash from PETA over the use of animal skins 4. Threat from counterfeit products

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Detailed SWOT Analysis of Hermès International

Strength

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Weakness

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Opportunity

1. Strengthening Other Product Lines: The brand already has a well-established name and is globally recognised for its craftmanship and innovation. It can use this strength to energise its other product ranges such as its watches, fragrances among others. Hermès needs to be very selective in its marketing for its various products and should focus more upon the new product lines. It can also come up with ultra-luxury offerings in its other products similar to that exists in its leather and silk ranges.

2. Investing in digitization and e-commerce: Hermès in the past few years has invested significantly in its online store and e-commerce platform and has been successful in leveraging in new customer base. This expenditure has also provided Hermès with more insights in the customer buying behaviours using big data analytics. Also, since there is a rise in e-commerce and online shopping habits, this move is sure to bring in more growth and revenue to the business specially in the Asian Market such as China. In October 2018, the site, Hermes.cn opened in China, adapting to the specificities of this immense market, such as new payment methods, use of traditional sentiment in its product line, helped the company significantly in establishing its strong hold in the country.

3. Catering to Emerging Markets: As the annual report mentions, most of the revenue is generated from the Asian market, which is an emerging market. Catering to the Asian market brings about 36 percent of the overall revenue for the company. Also, the middle east market has shown a good growth and more investment there can produce fruitful results. Hence it is of at most importance for the company to correctly identify and expand to emerging markets.

Threat

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According to research by Forbes, the global luxury industry has more than doubled in 2020, growing from €128 billion to €281 billion with a 4.1% CAGR. However, the luxury market faces many unpredictable challenges that are likely to hit the individual markets differently based on their segments and exposure in the industry. One of the biggest challenges of 2019-2020 has been the devastating outbreak of the novel Corona virus and its rampant spread, leading to a global economic crisis. As luxuries fall into the bucket of non-essential purchases, the industry is likely to be hit most by this factor. Therefore, the PESTLE tool is utilized to draw out the macro-economic factors and external influencers particularly political, economic, social, technological, legal and environmental, impact on the luxury industry and exclusively on Hermes International.
The PESTLE / STEEPL / PEST analysis is a useful technique to study the impact of influencers on Hermes' business model and business case study. Hermes products are available all across the globe through a network of 310 exclusive stores which consequently draws political, economic and legal uncertainties like Political instability, economic crisis, the importance of luxury goods in a country, changing government policies, taxation policies, trade tensions, tariffs, bureaucracy, and corruption, etc. However, the prevailing economic and financial stability of the company allows it to cope up with the popular public health crisis. Hermès, as a responsible employer, will maintain the basic salary of its 15,500 employees worldwide, without any extra support from the government. Hermes being a socially responsible brand aims to donate €20 million to the public hospitals in the Paris region in addition to the donation of over 30 tonnes of hand sanitizer produced by its fragrance manufacturing site in Vaudreuil and more than 31,000 masks by the company’s various entities. The Luxury industry has been growing immensely due to advancements in technology, which helps in offering better products, improvising cost structure, enhancing supply chain with reducing environmental impact, etc. One of the key priorities of all the production units of Hermes is paying precise attention to the consumption of natural resources, such as water and energy, and respecting the environment.
The PESTLE/ STEEPL / PEST Analysis of Hermès International is presented in a nutshell below followed by detailed analysis

Political	Economical
1. Politics and Corruption in a Country 2. Trade Regulations and Taxes	1. Impact of Economic Recession 2. Growth in Emerging Markets
Social	Technological
1. Exclusivity in ultra-luxury segment 2. Changing consumer trends 3. Societal Influence determining purchase trends of luxury products	1. Digital engagement with customers 2. Fast growing e-commerce segment
Legal	Environmental
1. Copyrights, Licensing and Trademarks 2. Takeover Attempt by Market Leaders	1. Focus on environmental sustainability 2. Use of Exotic Animal Skin

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SWOT & PESTLE (combined)
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Detailed Pestle Analysis of Hermès International

Political

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Economic

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Social

1. Exclusivity in ultra-luxury segment: The fashion industry places great importance upon factors like exclusivity and uniqueness as these factors are integral to a person’s personality and way of expression. The exclusiveness of a product in itself is a great marketing approach making it a desirable quality for fashion retailers. Hermès has always followed marketing strategies and brand promotion techniques which fulfil the tradition of “heritage” and “exclusivity” followed by the company. Collaborations with independent artists and designers are frequently formed to help bring its products to the fashion frontline. Not only do such collaborations make the Hermès products more exclusive but also help it develop product portfolios which are marketed using a “limited edition” strategy. In the case of Hermès, limited editions provide a higher exclusive appeal as the company products are already exclusive.

2. Changing consumer trends: There’s slowly a shift in the spending habits of the people around the world, where the customers are looking more towards experiences than material requirements. People are spending more on vacations, hotels and restaurants than ever before. This change is worrisome for luxury brands that depend on rich and nouveau riche for their sales.

3. Societal Influence determining purchase trends of luxury products: The influence of society plays a very important role in determining the purchase trends of luxury products. For market like India, purchase of luxury items is symbol of status and exhibits the wealth and prosperity of the individual, hence this sets a trend to be a part of the elites. This favours the luxury brand as such demand becomes highly inelastic to price changes and hence there is a strong sales volume form such regions.

Technological

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Legal

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Environmental

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Bucol
Le Crin

Sample Complete Report

This is the sample complete report which will give you a glimpse of what your complete report will cover after purchase.

Free Summary Report

This report contains the table contents only. In case you need the complete report please purchase using the buy options displayed.

* By clicking on "Buy Now" you agree to accept our "Terms and Conditions."

SWOT & PESTLE (combined)
Complete Report
USD 12.53

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On purchase the Hermes International SWOT and PESTLE Analysis PDF report will reach you within minutes. At rare times, a slight delay not exceeding 4 hours might be caused.

WHY BUY THIS REPORT?

DELIVERY AND FORMAT

WHY CHOOSE US?

1. The SWOT and PESTLE tools are handy to analysis the impact of internal and external strategic factors on the company's brand, its operations, business model, market strategy and growth trajectory.
2. The SWOT analysis report of Hermes International offers a complete and comprehensive internal and external analysis of the company detailing Hermes' strengths, weaknesses, opportunities, and threats.
3. The SWOT report also presents an understanding of the core competitive advantages of Hermes that it enjoys over its competitors and adversaries
4. The report provides a discussion on Hermes' business case study in detail and a peek into its marketing and business strategy
5. The PESTLE analysis of the luxury fashion Industry highlights the current trends and factors that compel and restrain the entire industry and largely Hermes International.
6. 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 Hermes' business model, marketing, and growth strategy
7. Abstract information on Hermes' business diversification, deriving its key business segments and highlighting its major competitors
8. A comprehensive company analysis to obtain perspicacity into company information, company profile, business model, business plans and marketing strategy with a peek into the Hermes' key performance indicators, core values, success factors, value proposition, and core competencies.
9. Gain knowledge of specific partnerships, mergers and acquisitions, and compelling initiative Hermes' has undertaken to achieve its synergies.
10. Interpretation of Hermes' USP or unique selling proposition, mission statement, and vision statement.

You may also be interested in other analyses of Hermès International:

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Hermès International BCG Analysis
Hermès International Segmentation, Targeting and Positioning (STP) Analysis
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Hermès International

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Hermes International SWOT and PESTLE Analysis

COMPANY PROFILE -Hermès International

Business Sector :Luxury Goods

Operating Geography :France, Europe, Global

About Hermès International :

Hermès International Revenue :

Competitive Analysis of Hermès International

Detailed SWOT Analysis of Hermès International

Strength

Weakness

Opportunity

Threat

Detailed Pestle Analysis of Hermès International

Political

Economic

Social

Technological

Legal

Environmental

Major Brands :

WHY BUY THIS REPORT?

TABLE OF CONTENTS

DELIVERY AND FORMAT

WHY CHOOSE US?

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