Corporate Strategic Management
CAPSTONE PROJECT
In partial fulfilment of
Masters of Business Administration
Batch (2021-23)
Prepared by
Mansi Nagori
Submitted to
Dr Gaurav Ashesh
H&M
About:
Customers from all over the world can express themselves through fashion and
design and opt for a more sustainable lifestyle thanks to the H&M Group's
family of brands and companies. By providing our customer's needs and by
focusing on sustainable and profitable growth, we add value for individuals and
society at large. [2]
H & M Fast-fashion clothes for men, women, teenagers, and kids is the main
focus of Hennes & Mauritz AB, also known as the H&M Group or just H&M,
an international apparel company with its headquarters in Sweden. As of 23
June 2022, H&M Group operated 4,801 stores under its different company
names in 75 geographic markets, employing 107,375 full-time equivalents.
The parent company of Zara, Inditex, is the largest international clothing
retailer, followed by H&M. Erling Persson created H&M, and Helena
Helmersson is the company's current CEO. [1]
In the first part, H&M shows that the joy and satisfaction of its clients is a
priority in all its stores. That is why the company is organized in an impressive
way to ensure clients have maximum freedom and comfort while choosing their
products. H&M describes its outlets as, not just the clients, and this is what
makes it appealing for the clients. To ensure that the company meets the
individual needs of everyone irrespective of gender or age and impact their
lives, H&M takes great caution in the structuring and display of fashions for
men, women, and kids. Such elegance makes it easy for all clients to shop and
enjoy the aesthetic look they long for.
History:
Erling Persson established the business in 1947 when he launched his first store
in the Swedish town of Västers. Hennes, which is Swedish for "hers," was a
store that only carried clothing for women. In Norway, a new store opened in
1964.When Persson bought the Stockholm-based retailer of hunting apparel,
Mauritz Widforss, in 1968, the company's name was changed to Hennes &
Mauritz and its product line expanded to include menswear. [1]
In 1974, the business went public on the Stockholm Stock Exchange. A short
time later, in 1976, London saw the opening of the first location outside of
Scandinavia. According to information found on Whois, H&M kept growing in
Europe and started selling online in 1998 after registering the domain name
hm.com in 1997. Its expansion outside of Europe began on March 31, 2000,
with the opening of its first U.S. location on Fifth Avenue in New York City.
[1]
MISSON STATEMENT:
H&M mission statement is “to drive long-lasting positive change and
improve living conditions by investing in people, communities and
innovative ideas.” The statement emphasizes on the manner in which this
company offers the world its fashions and designs. [3]
VISION STATEMENT:
H&M vision statement is “to lead the change towards circular and
renewable fashion while being a fair and equal company.” This statement
shows how committed the company is when it comes to maintaining the
trendiness of fashions and their affordability. [3]
ANALYSIS:
This case analysis of H&M reveals that the vision statement underscores the
determination of the company to refine its brand as a pioneer of renewable and
affordable fashions. On the other hand, the mission statement is all about the
unmatched experiences that the company leaves in the lives of its customers
through its products and services. The core values further improve such
achievements by stimulating better attitudes and performances from all the
stakeholders involved with the company.
To satisfy the first part of its vision statement, H&M (Hennes & Mauritz)
remains alert to emerging styles while initiating the creation of new ones. The
company keeps all its wide range of brands updated with what is in demand.
The fairness and equality of H&M are reflected in various forms such as its
welcoming nature as well as the competitive prices that it tags on their products.
H&M IFE MATRIX
INTERNAL FACTOR EVALUATION (IFE) Matrix
Key internal Factors Weight Rating Weighted
Score
Strengths
Effective and fast production 0.08 3 0.24
Global presence in strategic location 0.11 4 0.44
Low price 0.05 3 0.15
Strong brand image and value 0.11 4 0.44
Products variation and innovation 0.09 3 0.27
Adoption of e-commerce 0.05 3 0.15
Effective Inventory management 0.08 3 0.24
Subtotal
Weaknesses
Overdependence on a lot of dependent suppliers 0.15 2 0.30
Controversy and scandal 0.10 2 0.20
Over- rely on fashion trends set by major designer brands 0.08 1 0.08
Poor quality of materials 0.10 2 0.20
Subtotal
Total 2.71
Analysis:
Indeed H&M does not have its own production factories and rely on 800
independent suppliers however production offices that are located all over the
world will be involved in all practical aspects of production to make sure items
are produced at the right price could quality and deliver on time.
Furthermore H&M uses the fast fashion model that can make H and M always
come out with the latest fashion trends when a channel takes only 2 weeks to
design and release new designated products with 100 designers so their
customers will always be solved up-to-date fashion.
The expansion is one of the good strengths that brand has as they have brought
their brand and business globally and become an International brand company
in the apparel industry in addition the brand strategically located all the stores in
the main places where people go shopping such as shopping malls main streets
and downtown therefore a weight of 0.11 would be enough for this factor we
rang this strength as a 4 rating because we think this factor is definitely 1 of
the major strength.
It is known for its affordable price compared to its other computers the brand
strives to share a Passion for fashion design and quality at the best price in a
sustainable way as prices always a factor that matters regardless of product for
that the brand exploited and practice cost effectiveness in order to offer the
customer's best price and partnership with cheap suppliers that produce fast and
cheap therefore we rank this strength as 3 rating with the weight of 0.05 for low
pricing start to lose by H&M.
Indeed H&M does not have its
own production factories and
rely on 800 independent
suppliers. However,
Production Offices that are
located all over the world will
be involved in
all practical aspects of
production to make sure items
are produced at the right price,
good
quality and are delivered on
time. Furthermore, H&M uses
the fast fashion model that can
make H&M always come out
with the latest fashion trends,
where H&M takes only 2
weeks
to design and release new
designated products with 100
designers. So, their customers
will
always be served with up-to-
date fashion.
This increases H&M9s image
as the trendsetter of fashion
business even though the
possibility of being copied is
high in the apparel industry.
Therefore, we decided to give
a
weight of 0.08 for this factor.
As H&M put a high concern
on the production matter
because
it is important, we give H&M
3 ratings.
Indeed H&M does not have its
own production factories and
rely on 800 independent
suppliers. However,
Production Offices that are
located all over the world will
be involved in
all practical aspects of
production to make sure items
are produced at the right price,
good
quality and are delivered on
time. Furthermore, H&M uses
the fast fashion model that can
make H&M always come out
with the latest fashion trends,
where H&M takes only 2
weeks
to design and release new
designated products with 100
designers. So, their customers
will
always be served with up-to-
date fashion.
This increases H&M9s image
as the trendsetter of fashion
business even though the
possibility of being copied is
high in the apparel industry.
Therefore, we decided to give
a
weight of 0.08 for this factor.
As H&M put a high concern
on the production matter
because
it is important, we give H&M
3 ratings.
H&M EFE MATRIX
EXTERNAL FACTOR EVALUATION (EFE) Matrix
Key External Factors Weight Rating Weighted
Score
Opportunities
Fully Exploitation of E-Commerce 0.13 4 0.39
Product Diversification 0.10 3 0.40
Rising environmental issues 0.05 3 0.15
Make use of new technologies 0.12 2 0.24
During the economy’s recovery cycle, after recession 0.04 2 0.08
Subtotal 0.44 1.26
Threats
Huge competition 0.14 4 0.56
Increase of fake products 0.09 2 0.18
Global Covid-19 Pandemic 0.16 3 0.48
High operation costs 0.07 2 0.14
Lacking of workforce 0.1 3 0.3
Subtotal 0.56 1.66
Total 1 2.92
Analysis:
Retailers offering a variation of products to take the opportunity as much as the
retailers can so that the company will earn more the brand can improve their
sales by offering diversification of the product such as not only the brand offer
fashionable patients and fans and also as sports related attire this opportunity
only weighs of 0.10 with the rating 3.
The brand is falling behind with regards to fully utilization of online business
also known as e-commerce compared to other fashion retailers like Zara they
have been using online business for quite some time as more consumers are
familiar with online shopping the company can benefit from the maximum
exploitation of online businesses by selling their product on online platforms on
social media we decide to put the 0.13 as the weight and because this
opportunity received a superior response the rating is 4
ZARA
About:
Amancio Ortega founded Zara in 1975. His original store was located in the
heart of A Corua, Galicia, Spain, where the business is now headquartered.
After realizing that there was a tavern with the same name two blocks away, he
changed the name to Zara from Zorba, after the iconic 1964 movie Zorba the
Greek. The extra an is thought to have come from a different set of letters that
had been created for the corporation. It offered low-cost imitations of well-
liked, higher-end styles in clothes. He expanded his business in Spain. Using
information technology and other methods, he modified the design,
manufacturing, and distribution processes in the 1980s to shorten lead times and
respond more swiftly to emerging trends, which he dubbed "instant fashions."
Products:
Men's, women's, and children's apparel are all available at Zara stores (Zara
Kids). European retailers carry Zara Home designs. Most Zara clients are
between the ages of 18 and roughly 35. It takes products 10 to 15 days to reach
the retailers after they are designed. All of the clothes are processed at the
Spanish distribution facility. Before being loaded into trucks, new things are
examined, sorted, and labelled. The garment is often delivered within 48 hours.
Over 450 million articles are produced by Zara annually.
In addition to clothing and accessories, Zara carries perfumes, shoes, and
swimsuits.
ZARA Beauty, Zara's first cosmetics collection, debuted in May 2021.
Zara launched what is thought to be the first detergent that lessens the abrasion
of textile microfibres during washing under its Zara Home brand. Depending on
the fabric type and washing circumstances, it is claimed that the solution, jointly
developed by Inditex, BASF Home Care, and I&I Solutions Europe in Spain
and Germany, can limit the release of microfibres by up to 80%.
MISSION STATEMENT:
Zara mission statement is to “give customers what they want, and get it to
them faster than anyone else.” Such a simplistic, concise, and straightforward
statement shows why this company has been so fruitful.
VISION STATEMENT:
Zara vision statement is “to contribute to the sustainable development of
society and that of the environment with which we interact.”
ANALYSIS:
The mission and vision statements of Zara Apparel Corporation reveal the
unwavering passion and determination of the company to be the globally. Zara
has been specializing in virtually all types of fashions including shoes, clothing,
perfumes and other beauty wears, and numerous accessories since 1974. The
mission and vision statements of this company have been crucial in the growth
and popularity it has amassed so far.
Through its vision statement, Zara has a future goal that it works for.
Specifically, it falls within the environmental and social development realms.
The company advances through its developmental path due to the strategies laid
out by its mission statement. The focus is to implement a model that meets the
needs of all the customers wherever they are faster. Another critical factor for
Zara is its core values. They are principles that continue to influence the internal
organization and attitudes towards its vision and mission statements.
Zara IFE MATRIX
INTERNAL FACTOR EVALUATION (IFE) Matrix
Key Internal Factors Weight Rating Weighted
Score
Strengths
Effective Supply chain 0.08 4 0.32
Mature MIS system 0.07 4 0.28
Quick demand system 0.07 4 0.28
Augmented products 0.06 3 0.18
Reasonable price 0.05 3 0.15
Strategy for sustainability 0.05 4 0.20
Better inventory turnover 0.04 3 0.12
Environmental friendly raw material 0.04 3 0.12
Good margin of profit 0.05 4 0.20
Subtotal 0.51 1.85
Weaknesses
More attention towards youth 0.08 2 0.16
No exploration to new markets 0.07 2 0.14
No original product design 0.06 2 0.12
Short of cost management 0.07 2 0.14
Not good at marketing 0.05 1 0.05
Lack of after sale service 0.05 1 0.05
Declining asset turnover 0.04 2 0.08
Small market 0.04 2 0.08
No training resources 0.03 2 0.06
Subtotal 0.49 0.88
Total 1 2.73
UNIQLO
About:
Uniqlo Co., Ltd. is a Japanese clothing apparel company. It is focused
on designing, manufacturing and retailing casual wear. It was originally
founded in Yamaguchi, Japan in 1949 as a textiles manufacturer.
With presence in more than 23 countries worldwide, now it is a global
brand with over 1000 stores around the world. which makes it one of the
biggest fashion retailers. The company is a wholly owned subsidiary
of Fast Retailing Co., Ltd.
HISTORY:
Uniqlo’s origins go back in time to 1949, with a Yamaguchi-based
company, Ogori Shōji (which, until then, had been operating men’s
clothing shops called “Men’s Shop OS”) existed in Ube, Yamaguchi.
But it wasn’t until May 1984, when the brand really took off. The
founder opened a unisex casual wear store in Fukuro-machi, Naka-
Ku, Hiroshima under the name “Unique Clothing Warehouse”. Initially,
the brand was going to be registered as a shortened contraction of
“unique clothing”. However, in 1988, during administration work
between Hong Kong in relation to the brand, staff in charge of
registration misread the “C” as “Q”, and that is how the brand name was
born. From then, changed the store name to “Uniqlo” across Japan. In
September 1991, the name of the company was changed from “Ogori
Shōji” to “Fast Retailing”, and by April 1994, there were over 100
Uniqlo stores operating throughout Japan.
MISSION STATEMENT:
Our mission is to deliver clothing that enriches the lives of all our customers
around the world. For over 20 years, we have worked on sustainability
activities with an aim to change the world for the better through our business.
VISION STATEMENT:
Our vision is bold; to become the number 1 clothes retailer in the world. We
truly believe that this dream can be achieved through providing the best
customer service experience on the high street. UNIQLO s business is, and has
always been, customer-driven, and customer-first.
CPM
Bibliography:
1. https://en.wikipedia.org/wiki/H%26M
2. https://iide.co/case-studies/swot-analysis-of-zara/
3. https://hmgroup.com/about-us/
4. https://www.uniqlo.com/eu/en/info/about-uniqlo.html?gclid
5. https://www.edrawmind.com/article/zara-swot-analysis.html
