Hennes & Mauritz (H&M) is a Europe’s second-largest clothing retailer. Founded 1946 by Erling Persson in Sweden, H&M initially sold women clothing through “Hennes” stores in Sweden. “Hennes” is Swedish and means “for her”. In 1968 the company acquired the hunting apparel retailer Mauritz Widforss, which also offered collections for men, and changed its name into Hennes & Mauritz.
Today H&M offers clothes, own-brand cosmetics, accessories and footwear in over 1,800 stores in 34 countries around the world. H&M employs around 73,000 people and achieved a turnover of SEK 104,041 million in 2008 (H&M, 2008). H&M’s extensive product line can be broadly categorized into: women, teenagers, men, children, accessories and cosmetics.
H&M strives for constant expansion targeting 10-15% growth of store numbers annually to leverage its core competencies. 214 stores were added in 2008 and 225 new stores are planned to be added globally in 2009. In exceptional cases like the Middle East and Kuwait, H&M has entered through franchise operations. However, wholly-owned subsidiaries are the preferred mode of entry to keep full organizational control of foreign subsidiaries (H&M, 2008).
This study aims to identify a market that suits H&M’s successful business model and offers an attractive opportunity-risk relation. For this purpose we firstly need to understand the business model and core competencies of H&M. Secondly, two alternative markets are selected for a country screening process. Thirdly, risks and opportunities inherent to their economic, political & legal, socio-cultural, and market forces are assessed and finally a recommendation under consideration of key success factors is made.
Table of Contents
- Introduction
- The Business Model
- External Analysis
- Initial Screening
- Financial & Economic Forces
- Japan
- South Korea
- Political & Legal Forces
- Japan
- South Korea
- Socio-cultural Forces
- Japan
- South Korea
- Market Forces
- Japan
- Demand Analysis
- Competitive Analysis
- South Korea
- Demand Analysis
- Competitive Analysis
- Japan
- Final Selection
- Recommendation
Objectives and Key Themes
This study aims to identify a suitable market for H&M's expansion in Asia, considering the company's business model and offering an attractive opportunity-risk profile. The analysis involves understanding H&M's core competencies, screening potential markets (Japan and South Korea), and assessing relevant economic, political, legal, socio-cultural, and market factors.
- H&M's fast-fashion business model and its core competencies.
- Country-specific economic and financial factors influencing market entry.
- Political and legal environments in Japan and South Korea.
- Socio-cultural factors affecting consumer behavior and market potential.
- Market analysis of demand and competition in Japan and South Korea.
Chapter Summaries
Introduction: This chapter introduces H&M, its history, current market position, and expansion strategy. It highlights H&M's fast-fashion model, global reach, and preference for wholly-owned subsidiaries. The chapter establishes the study's objective: identifying an attractive market for H&M's expansion, focusing on understanding its business model and conducting a comparative analysis of potential markets.
The Business Model: This chapter delves into the specifics of H&M's fast-fashion business model, emphasizing its cost leadership strategy. It explains H&M's outsourcing of production to leverage cost advantages, its centralized design and merchandising functions, and its focus on innovation to maintain its market position. The chapter highlights the efficiency gained through short-term supplier contracts and the strategic importance of its global reach, constantly refreshing store inventory and updating store design. The chapter also touches upon H&M's organizational structure, designed to balance functional expertise and country-specific knowledge.
External Analysis: This chapter provides a detailed assessment of the external environment, initially screening potential markets before deeply investigating the economic, political, legal, socio-cultural, and market forces at play in Japan and South Korea. This in-depth comparative analysis, which includes separate sections devoted to demand and competitive landscapes in each market, forms the basis for the final market selection recommendation.
Keywords
H&M, fast fashion, cost leadership, market entry, expansion strategy, Asia, Japan, South Korea, economic analysis, political analysis, socio-cultural analysis, market analysis, competitive analysis, global business operations, opportunity-risk assessment.
H&M Market Entry Strategy: Japan vs. South Korea - FAQ
What is the overall purpose of this document?
This document provides a comprehensive preview of a study analyzing the suitability of the Japanese and South Korean markets for H&M's expansion in Asia. It outlines the study's objectives, key themes, methodology, and findings in a structured format, including a table of contents, chapter summaries, and keywords.
What are the key themes explored in the study?
The study focuses on H&M's fast-fashion business model, its core competencies, and a comparative analysis of the economic, political, legal, socio-cultural, and market factors in Japan and South Korea. The primary goal is to identify the most attractive market for H&M's expansion based on an opportunity-risk assessment.
What is H&M's business model, and how does it influence the market selection process?
H&M employs a fast-fashion cost leadership strategy, outsourcing production, centralizing design and merchandising, and focusing on innovation. Its efficient supply chain, short-term supplier contracts, and global reach are key aspects of its model. Understanding this model is crucial in determining which market best aligns with H&M's strengths and capabilities.
Which countries are being considered for H&M's expansion?
The study specifically analyzes Japan and South Korea as potential markets for H&M's expansion into Asia.
What types of external factors are analyzed in the study?
The external analysis includes a thorough examination of economic, political, legal, socio-cultural, and market forces in both Japan and South Korea. This involves assessing factors such as demand analysis, competitive landscapes, and country-specific regulations.
How is the market analysis conducted for each country?
The market analysis for both Japan and South Korea includes separate sections dedicated to demand analysis and competitive analysis, providing a detailed comparative overview of the market opportunities and challenges in each country.
What is the objective of the study?
The study aims to identify a suitable market for H&M's expansion in Asia, offering an attractive opportunity-risk profile. This involves understanding H&M's core competencies and assessing relevant factors in the potential markets.
What are the key takeaways or recommendations provided by the study?
The study culminates in a recommendation for the most suitable market for H&M's expansion based on the comprehensive analysis of the external factors and H&M's business model. The exact recommendation itself is not provided in this preview.
What keywords describe the study's scope and focus?
Key words include: H&M, fast fashion, cost leadership, market entry, expansion strategy, Asia, Japan, South Korea, economic analysis, political analysis, socio-cultural analysis, market analysis, competitive analysis, global business operations, and opportunity-risk assessment.
What is the structure of the document?
The document includes an introduction, a section detailing H&M's business model, a comprehensive external analysis of the chosen markets, and a concluding recommendation. The preview also includes a table of contents and chapter summaries for better navigation.
- Quote paper
- Bachelor of Science Sebastian Walter (Author), 2009, Expansion Opportunities for H&M in Asia - Market Analysis, Munich, GRIN Verlag, https://www.grin.com/document/140245
