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Hermes International SWOT & PESTLE Analysis

ID : 52616453| Sep 2020| 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

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:
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
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



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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, 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.


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SWOT & PESTLE (combined)
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Check Out Analysis of Other Relevant Companies


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.
References used in Hermès International Analysis Report

1. Hermès International Annual Report 2018 -

2. Hermès International Annual Report 2017 -

3. Interbrand Best Global Brands Ranking 2018 -

4. Hermès International Company Profile -

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

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Hermès International SWOT and PESTLE analysis has been conducted by Bhavya Garg and reviewed by senior analysts from Barakaat Consulting.

Copyright of Hermès International SWOT and PESTLE Analysis is the property of Barakaat Consulting. Please refer to the Terms and Conditions and Disclaimer for usage guidelines.

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