Free Essay

Management Practices of H&M

In: Business and Management

Submitted By amahidayat
Words 1044
Pages 5
1. Introduction
Basically, business cannot run efficiently and effectively without any management practices. This report will cover about the analysis and development towards practice of management. The author considers there are so many variations of management practices, it depend on the countries that may have different cultures and situation in which business can be accepted.

2. Background to Company
Erling Persson established H&M in 1947, in Vasteras, Sweden with only provide women’s clothes and called Hennes. Hennes refers to Swedish word means hers. In 1968, Persson bought the hunting and fishing tools named Mauritz Widforss in Stockholm and the availability of men’s clothing began, so the firm started to offer both women’s and men’s clothes and the name Hennes became Hennes and Mauritz, abbreviated to H&M. After that, the company has continued to expand their business through rapid expansion.

H&M is top fashion retailer in Europe and it is built with a strong corporate culture, which is explains how we work to achieve our goals and objectives. There are over 94,000 employees who work for H&M and today approximately 2,700 stores are extending across 48 markets in Europe, North America, North Africa, Asia, and the Middle East.

1. Product Our company provides fashion collection for all gender starts from kids until adult. Those collections include clothes, shoes, bags, accessories, and other fashionable things. The company also has a group called H&M Group, which includes H&M Home and COS, Monki, Weekday and Cheap Monday. Those brands are actually independent brands that have their own fashion signature.

2. Corporate Responsibility and Competency The basic business concept of the company is to provide our costumers fashion and quality at the best price or in other words H&M offers fashionable clothing for cheap prices. At H&M, quality means the products have to be manufactured under good conditions in order to meet our costumers’ expectation.

3. Environmental Factors Affecting the Company

1. Technological Innovations Nowadays, technology has made something that impossible become possible. All of people around the world have a chance to shop at H&M through hm.com with only a few simple clicks.

The website is designed for society, the media, people who looking for jobs, and shareholders. All of the information on the H&M website, such as collections, campaigns, and location of the store is always updated so the costumers can always find out brand new information from H&M through hm.com. Basically, the website is mainly aimed at costumers who loves to open up and shopping for H&M collection directly from their home.

The advantage in communication and technology of transportation makes H&M easier to running of its operation like shipping the products to our costumers worldwide. The company always keeps the product’s quality in a good condition until it received by the costumers.

Another technological advance is H&M able to advertise their products through a huge billboard that usually displayed on the road.

2. Global Consumer Preferences The distribution of H&M’s products may different in one country to another, a major cause is due to dissimilar costumers tastes and preferences of fashion.

One instance of this is that the company does not distribute winter outfits such as coat in Singapore as much as in Europe. The costumers in Singapore would prefer outfits like shorts and t-shirts because obviously there is no winter season and consequently the winter outfits may not sold.

The stores size, the location of the store whether it is located in a big city or in a smaller town are taken as consideration as well as costumer preferences, but still H&M will always choose the best business locations. High fashion attire will be produced more in big cities while modern basics are distribute to smaller towns which usually costumers demanding simpler fashion.

3. Economic Environment Economic environment means those economic factors, which can affect the working process of the business. The following economic factors are affecting the company:

a. Inflation Inflation is the condition where prices of goods or services sharply increased and consequently the costumers are may not able to buy goods that offered by our company. Due to this problem, our company tries to figure it out by giving alternative strategies.

Discount is one of the strategies that may be effective. Perhaps there will be more costumers who attracted to shopping at our company because of discount.

The term ‘Buy one, get one’ is another tactic to magnetize the costumers during inflation. This line of attack also leads the increasing of costumers.

b. Currency Exchange Rate Each country has different currency and it is affecting the company’s business.

Exporting becomes relatively expensive and sometimes makes the company a loss. This situation is brought about by the domestic currency goes up against other countries.

In order to deal with this problem, we should decide whether take a profit cut or increase the prices but as a result, it makes lower demand from the costumers.

4.

4. Analysis of Current Practices of the Company
The following structure is used to explain our current practices to be more efficient and effective in running our business.

1. Leadership Role Basically, leader has a role to energizing, inspiring, motivating, and guiding their employee in order to give them a spirit to do their job and the company’s objectives can be reached.

Energizing, inspiring, and motivating means the leader

Training program for our employees is the most important key to our success. H&M is convinced that by providing training to our new employees they can learn our concept and culture to know how we run our business also how to achieve our objectives in the future. From training, we hope that our employees are able to grow and evolve.

Whenever we employ new employees to work in our company, we always have to ensure that they are signed into our company in a consistent, efficient, and have high quality manner. Those things are requirements due to our rapid expansion and also to compete with other organizations. The approach of training is blended between two things, whereby classroom sessions and e-learning are mixed to form methodology of teaching that is simple to duplicate internationally.…...

Similar Documents

Premium Essay

H&M Analysis

...Communication and Organization October 2012 Strategic analysis of H&M keystrokes: 33.556 1 Executive summary This document is written to provide the reader with a knowledge of the structure of H&M. The purpose is to give a clear strategic analysis. It contains information about how H&M is structured. H&M is a company which is famous for many years. It is known for its fashionable dynamic amount of products for a cheap price. The brand is constantly developing and since competition is increasing, satisfying the customer is not enough. It has to stay ahead of the increasing competition. H&M is expanding by products for home edition and on-line selling. The brand is divers and it provides the customer with quality clothing and a great variety of choice. H&M is developed in Sweden and it has recently become well known worldwide. There are stores in the United Stated of America and even in the Middle East. However such a large operation requires good management. There is a head office in Stockholm which is in charge of the sub levels. In Stockholm the most important decisions are made. Furthermore the brand is expanding and using celebrities to promote the band. Recently H&M has suffered with bad communication and promotion from the media. The company had to adjust itself to gain trust from the customers. Future proposals for the company are to get new trustful suppliers and improve the working conditions of some manufactures. The company is responsible to have a...

Words: 5339 - Pages: 22

Premium Essay

H&M Motivational Factors

...Personal development and methodology The motivation within H&M 08-10-2012 Picture 1 (www.facebook.com) Tabel of content Tabel of content 2 1.1 Introduction 3 2.1 Problem statement 3 2.2Delimitation/interpretation: 3 3.1 Methodology section 4 3.2 Reviewing theories and models: 5 4.1 Analysis 6 4.2 Motivation to reach the financial goals within H&M 6 4.3 Motivation within the CSR and the environment 8 4.4 Structure 10 5.1 Discussion 12 6.1 Conclusion 13 Appendix A - organization 14 Appendix B - Ownership structure 16 Appendix C - social Contract 17 Appendix D - logbook 18 Appendix E – e-mails 19 Appendix F – Bibliography 21 Executive summary The purpose of this assignment is to carefully analyse the major goal of H&M, how motivation, communication, structure of the organization, culture, authority affects reaching their major goal. The following theories are being used to show the advantages and the disadvantages of the company: Maslow’s hierarchy of needs, Human Relations Movement (Hawthorne), scientific management (Taylorism), Herzberger’s Two-Factor Theory and Style theories. It will be discussed how H&M encourages their employees to be self-motivated, makes sure to educate and share the knowledge and pass on the “spirit of H&M”. It seems that H&M is focused on treating people with respect and their desire is that the employees would involve in everyday`s activity. Social factors had a far greater impact on output that......

Words: 4767 - Pages: 20

Premium Essay

H&M Case Study

...Case study on H&M Introduction In recent years, H&M has marked the retail clothing industry by the phenomenal pace at which it has expanded the number of its stores across a diverse range of countries and markets spanning Europe, the United States and recently Asia. H&M distinguishes itself from its competitors notably by offering clothes that are trendy, fashionable yet accessible in terms of price. So how does H&M manage to combine these seemingly divergent characteristics, especially in such a fast-moving and fiercely competitive industry as the retail clothing business?  In the following report, I attempt to cast some light on some of the approaches that account for the success and reputation of the company and that have enabled it to remain competitive over the years and across markets in which it operates. I also seek to raise some of the drawbacks related to those approaches in terms of risk for the business. Practice of Market Orientation The practice of market driven marketing rests upon the core idea of generating and offering value to a particular target market better than competitors, which in turn will enable the company to grow and be successful.[1] Generally a market oriented strategy involves focusing on the buyer’s needs and determining the best means by which the consumer will be satisfied. As we will see in the next section, a market oriented strategy begins with identifying a particular target group within a segment and then focusing efforts in......

Words: 3484 - Pages: 14

Free Essay

Globalization, Zara and H&M

...effect of globalization will be studied is the garment industry, and the two companies which we will study in this regard are Zara and H&M. All the top garment industries notability Zara and H&M are doing a fine job in the garments industry as they have adopted well-defined quality standards. There is a diverse research made on the garments and fabric business as they do change with respect to the trends and fashion. Both H&M and Zara are strategically safe players and they have all what it takes to be the front runner in the market. Their stores are in the different areas of the world and most specifically in the main and posh markets. Globalization brings about your extension associated with overseas ethnical, financial, along with political actions (Boudreaux, 2008). As folks, concepts, understanding, along with merchandise proceed more readily around the globe, your experiences of men and women worldwide be related. Demographics, Trends, Technology, Risk Management and Quality regarding these two chosen companies will be discussed further on. Considering all these factors, we will analyze its impact on clothing industry and will see how globalization affects the industry and these two companies. Then the conclusion will be presented at the end concluding the impact of globalization on the clothing industry as well as on Zara and H&M. Demographics Garments industry is also related to a fact that they are produced where they are required by the customers.......

Words: 2684 - Pages: 11

Premium Essay

H&M - Sustainability

...sustainable value to our products is one of the keys to strengthen customer offering” Which social and environmental impacts are addressed (e.g. CO2 emissions, health improvement) and what targets does (or might) the firm have? How does the business measure performance? Cotton - raw material used most by H&M. Aim- for all cotton in their range to come from more sustainable sources by 2020 - organic cotton(without pesticides/fertilisers), better cotton(good farm practices – less water, chemicals, care for natural environment, good working conditions), recycled cotton (old garments). World’s no.1 for organic cotton – surpassed Walmart. Water – key resource in H&M products’ lifecycle. Strive to minimize the risk in production, protect the environment and secure access to safe water for present and future generations. Partnership with WWF.  Improve internal water efficiency, minimise suppliers’ impact on water, educate all 104,000 employees globally on water issues, work to inspire customers to use water responsibly. Working conditions - choose and reward responsible partners who share values and are willing to work with H&M to improve social and environmental practices. Goal - for H&M's strategic suppliers to have pay structures in place to pay a fair living wage by 2018. Education - Flagship Program - focuses on the most vulnerable children, enabling equal opportunities for development and levelling out disadvantages. Climate change - new target set to reduce absolute......

Words: 300 - Pages: 2

Premium Essay

H&M, Marketing Oriented

...1. To what extent is H&M marketing orientated? What evidence is there in the case to support your view? [40%] As defined by (Narver.J.C. & Slater, 1990) market orientation is an organisational culture that most effective and efficient in creating necessary behaviours for superior value offering it has for buyers and, thus, resulting in continuous superior performance for business. Market orientation is when a company organizes its activities, products and services around the wants and needs of its customers. From the case study, there are evidence that H&M follows marketing orientation strategies and embodies the market oriented characteristics of a company. In the case of H&M it can be seen that the organization follows the market orientation philosophy as it focuses on the needs and wants of the customers before making its products. A market oriented company such as H&M prides itself with high fashion at cheaper prices. This as seen in H&M to changing its strategies from being “all about price” in 1972 to “adding quality fashion to the equation…” Stefan Persson, Chairman of Hennes & Maurite (Jobber, 2010). To support this strategy, H&M has also channelled 4% of its revenues to marketing and branding to suit the changing tastes and maintain interest of its young consumers and maintain market share. Recognising lowered levels of disposable income on its consumers in the backdrop of the economic slump leaving consumers look for cheaper......

Words: 4444 - Pages: 18

Free Essay

H&M Analysis

...total emissions of major pollutants have reduced10% comparing with 2000. (Bloomberg, 2010) In this aspect, H&M set an example for many Chinese Companies. H&M promotes environmental awareness between their suppliers and employees. They adopted new technologies to use the resources as efficient as possible that could minimize waste. H&M respect the decisions which be made by nature. H&M adhere to use organic cotton, which grow in the traditional environment without any chemical (H&M, 2007b). Therefore H&M has adopted a sustainable cotton strategy that consists of three components: improving conventional cotton production, engaging in organic cotton production, and recycling cotton. Firstly H&M developed a newly Improving conventional production. H&M contributes to improvements in conventional cotton production through its participation in the Better Cotton Initiative (BCI). Its argument for this engagement is that nearly all cotton worldwide continues to be produced conventionally and that large-scale transition to organic production is therefore unlikely to happen quickly.BCI is a voluntary programmer, founded in 2005, with the aim of enabling millions of farmers around the world to grow cotton in a way that is healthier for their   Communities and the environment while not costing more. BCI thus promotes the adoption of better management practices in cotton cultivation. In a first phase of its work, BCI has developed production principles. In......

Words: 857 - Pages: 4

Free Essay

H&M Case

...Hennes & Mauritz (H&M) was the second-largest specialty apparel retailer in the world. Sales for fiscal 2012 were $18.1 billion, up 11% from the previous year, and operating profits were $3.3 billion, up 8.3%. H&M operated 2,776 stores, 93% of them outside its home base of Sweden. Over the previous decade, revenues had grown 15% per year and operating profits, 18%. Although Gap, Inc. (Gap) began the millennium as the clear global leader in the apparel retail market with sales more than four times larger than those of H&M, H&M had grown quickly and passed Gap in 2009. However, Spain’s Inditex, with its fast-fashion chain, Zara, had done even better. It passed H&M in sales in 2005 and, by 2011, had also become more profitable. H&M had also lagged behind Inditex in supply pipeline speed, brand diversification, online retail presence, and expansion into China. Meanwhile, the world’s leading hypermarket chains, including Wal-Mart and Tesco, were making significant headway in apparel. In 2012, CEO Karl-Johan Persson, grandson of the company’s founder Erling Persson, promised increased expansion into underdeveloped markets, a stronger push to online retailing, and the launch of a major new retail brand. He noted, “We are looking forward to an exciting 2013 full of new opportunities. We have great respect for the macroeconomic climate and how it may affect consumption in many of our markets, but we believe strongly in our offering and are convinced that H&M will......

Words: 8569 - Pages: 35

Premium Essay

International Marketing - H&M

...been an especially successful market, becoming H&M’s most important market in 1995. Although H&M’s share of the German market is small, the low-priced, well-designed, value-for-money fashion lines are nevertheless popular and a store expansion programme is still underway. Sales outside Sweden generate 90% of turnover and that figure is likely to rise as more stores are added. In 2005, around 150 new stores were opened, mainly in Germany, France, Spain, Poland Italy and the USA, all following the same retail format. H&M normally opens its first store in a country in the largest population centre and then expands out to smaller centres. (http://www.hm.com) Some fashion retailers such as H&M and Zara attempt to achieve a competitive advantage by cutting the lead times involved in getting garments from the drawing board to the retail outlets. Some pioneers of this so called ‘fast fashion’ can get lead time down to as little as 14 days. This can be achieved through a high degree of vertical integration and the adoption of relationship marketing principles within the sourcing, design, production and distribution process. (One of Zara’s sister companies produces 40% of its fabric needs and between 50% and 60% of its manufacturing is done in house). Fabric can be held in stock and then cut and dyed at the last minute to suit a fresh design. For a company producing some 11,000 new products per year (competing companies such as H&M and Gap produce up to 4,000 products per......

Words: 4043 - Pages: 17

Premium Essay

H & M Market Analysis

...Analyse the market of H & M and how well the company aligns its operations with its market. H M market can be analysed by using the following dimensions as described by D A Aaker. a) Market size & Market growth: Despite the fierce competition and being in the mature market, H & M has gained reputation of one of the biggest fashion retailer in Europe. The company has been able to maintain and expand its market share/size in the international market by focusing on price, quality and fashion/ market trends. Company’s operations alignment: a) Since establishment, H & M has used cost leadership strategy (Porter 1980) by producing and selling stylish garments at low prices. b) In 1987, the quality was added to this business strategy to offer the customer added value to have gain further competitive advantage against its competitors. The company has various quality tests are carried out at the suppliers factories to ensure they adhere to the company’s quality standards. c) H & M has been able to market development strategy (Ansoff) making its market presence in 16 countries through 1,345 stores. The company operates in Europe, North America, Asia and Middleast (through franchise). d) A wide geographical market presence has enabled the company to diversity its business risk. e) Company’s close review of the store performance has enabled the management to act efficiently resulting in closure of non profit or loss making stores and opening of new stores at more......

Words: 1602 - Pages: 7

Premium Essay

H&M Marketing Strategy

...clothes and which he called “Mauritz”. The new company “Hennes & Mauritz” (H&M), which is Swedish for “Hers & His”, was born. Today H&M is one of the most successful clothing retailers in Europe. It sells around 400 million garments a year and has 620 stores in 14 countries. In April 2000 H&M started going global by successfully expanding to the United States, with its first shop on the Fifth Avenue in New York. The company does not manufacture itself but works together with approximately 900 suppliers in Europe and Asia. To supervise this production H&M maintains twenty production offices around the world. Around 26500 employees are working for H&M in these days, most of them in one of the shops. The overall turnover of the group has been SEK 32977 million in 1999, which equals approximately £ 563,614 million. H&M employs 70 designers who along with pattern designers and buyers create the collections for women, men, youngsters and children. The overall business concept is “Fashion and quality at the best price” (www.hm.com). Germany is H&M’s biggest market with 32% of the group’s turnover. The first shop in Germany opened in 1980 but today you’ll find the company in each big city, and since the fall of the Berlin Wall especially in the eastern regions. H&M sells its clothes and accessories in 167 stores all over the country, and the shop now belongs to each good shopping centre or Highstreet. The market of H&M is very complex, and the accessible data severely limited. Therefore......

Words: 3921 - Pages: 16

Premium Essay

H and M Five Forces

...Competition; H&M’s current competitors in Brazil are Zara, Lojas Renner and C&A, Marisa and Riachuelo. The key similarities for comparison between Zara and H&M are that they are European based companies, are fashion forward at lower price retailers, and have a strong international expansion strategy. 1. Zara offers clothing and accessories for men, women, maternity, children, and baby. Zara offers trendy clothing choices designed based on international apparel tastes. In Brazil, Zara has 28 stores out of which 9 are in São Paulo. About 80% of Zara’s clothing is produced in the perimeter of Spain and its headquarters. 2. Lojas Renner is a Brazilian clothing and apparel department store chain that operates with 129 stores in 17 states of Brazil and 18 stores in the city if São Paulo. The target customer segment for Lojas Renner is women between 18 and 39 years old. Their stores are always located in strategic points where there is a great flow of the public such as shopping malls. They focus to compete with local, national and international retailers in offering fashionable products. About 6% of the clothing sold is imported from China, Pakistan, India, Argentina and Uruguay. Lojas Renner has three distribution centers in Brazil; one in Palhoça (Santa Catarina), another in São Bernardo do Campo (Grande São Paulo) and another in Jaboatão dos Guararapes (Pernambuco). The transportation is done by road to the different stores. 3. C&A is an international clothing and apparel......

Words: 896 - Pages: 4

Premium Essay

H & M Report 2008

...PAGE 27 OUR PRODUCTS PAGE 37 OUR COLLEAGUES PAGE 44 OUR COMMUNITY INVESTMENTS PAGE 51 OUR BUSINESS H&M’s business concept is to offer our customers fashion and quality at the best price. At H&M, quality is more than making sure that products meet or exceed our customers’ expectations – it also means that these products should be manufactured under good working conditions and with limited impact on the environment. Taking responsibility for how our operations affect people and the environment is key for H&M’s continued profitability and growth. We are committed to integrating social and environmental concerns into all our business operations and investing in the communities where we work. Our 2008 sustainability report covers our activities in relation to our business operations, our supply chain, our products and how they are produced, our employees and the communities around us. This section provides an overview of our business and its impact, and how we go about integrating Corporate Social Responsibility (CSR) into it. GLOBAL BRAND GLOBAL IMPACT AND REACH H&M was established in Sweden in 1947 and today sells clothes, accessories, footwear and cosmetics in more than 1,700 stores in 33 countries and via internet and catalogue sales in Scandinavia, the Netherlands, Germany and Austria. Here, we will also sell home textiles through online and catalogue sales from 2009. H&M also stands behind the brand COS and acquired the majority of shares of FaBric Scandinavien AB......

Words: 23803 - Pages: 96

Premium Essay

H&M Operation

...Operations management focuses on the tools and techniques a manufacturing firm uses to ensure a smooth, effective production process. If the company provides services, operations administration indicates to top leadership the factors that can prop up customer loyalty and sales. The discipline offers various benefits, including better profitability tracking, manufacturing expertise and regulatory compliance http://www.icmrindia.org/casestudies/catalogue/Operations/H&M%20Supply%20Chain%20Management%20Practices.htm   Production H&M design the garments centrally in Sweden then send to the manufactories to produce. H&M do not have their own factories, but they have more than 500 contract factories in Europe, Asia and China. H&M have different production office near by the existing factoies countries. It is easier for their merchandiser often visit and communicate with the factroy. It can reduce the lead time to solve the problems. Also H&M centralize place their order on their IT system with the supplier. It may reduce the lead time to catch up the seasonal products. They have a huge transit hub in Europe for receive all cargo from supplier then ship to their different area. The hub can split the orders for different country before delivery, as per their centralize ordering organization.   Logistics H&M have transit hubs in Germany, Bangladesh, Cambodia and China etc. The supplier should delivery the cargos to the hubs wait for export to H&M different markets through......

Words: 404 - Pages: 2

Premium Essay

H&M Strategic Management

...SAVONIA UNIVERSITY OF APPLIED SCIENCES UNIT OF BUSINESS AND ADMINISTRATION, KUOPIO THE IMPORTANCE OF STRATEGIC MANAGEMENT A case study of H&M Ding Huiru Business Administration Bachelor’s thesis International Business April 2011 2 SAVONIA UNIVERSITY OF APPLIED SCIENCES SAVONIA BUSINESS Degree Programme, option International Business Author(s) Ding Huiru Title of study The importance of strategic management, Case study of H&M Type of project Date Pages Thesis 27.4.2011 59+12 Supervisor(s) of study 1st Antti Iire 2nd Anneli Juutilainen Executive organization H&M in Kuopio,Finland Abstract Hennes & Mauritz (H&M) is a 100 billion Sweden company, engaged in designing and retailing of fashion apparel and accessories. The company offers a range of apparel, cosmetics, footwear and accessories for men, women, children and teenagers. H&M primarily operates in Europe, North America and Asia, and has a presence in over 38 countries. The company is headquartered in Stockholm, Sweden and employs approximately 87,000 people on a full-time basis. This thesis focused on the strategic management of H&M company. The main research problem was to make an in-depth analysis of its marketing strategy and how to implement it. The main research method was a qualitative research by analyzing their company data, annual reports and making interviews with the manager, staffs and customers in Kuopio shop. The thesis starts with a general......

Words: 14602 - Pages: 59