20th Sep. 2020
H&M SWOT Analysis | SWOT Analysis of H&M
Company: H&M – Hennes & Mauritz AB
Founder: Erling Persson, October 4th, 1947
CEO: Helena Helmersson
Head office: Stockholm, Sweden
Type: Public
Present Employees (2020): 177,000
Annual Revenue (2019): US$24.8 Billion
Net income | Profit (2019): $1.5 billion
Products or Services: Outfits | Clothing | Underclothing | Footwear | Makeup Cosmetics | Accessories | Sportswear| Home Textiles
H&M (Hennes & Mauritz AB) is the 2nd famous fashion retailer across the world. It is a Swedish Company and its quick fashion strategy is the biggest advantage for its success. It’s headquarter is located in Stockholm, Sweden. The company started working with a single store and now it is working in 6 continents with thousands of stores and retailers. It’s a big inspiration for small fashion retailers and stores. Today, we will talk about H&M SWOT Analysis | SWOT Analysis of H&M, the strengths, weaknesses, opportunities, and threats of H&M.
H&M SWOT Analysis | SWOT Analysis of H&M
H&M’s Strengths:
1- Successful Merchandising Policy:
It is a fact that the fashion retail business basically relies on successful selling policies. The main reason for the success of H&M is the fast fashion model. It offers the latest designer products and items. It takes only 2 weeks to deliver products from the designer table to the retail area.
2- Worldwide Presence:
Today, H&M has 5076 stores across the world in 74 famous markets. From Europe to Africa, North America, Asia, Australia, and Latin America, the H&M offers quality fashion products and improve stability.
3- Competitive Pricing:
H&M is best known for its quality fashion products at a cheaper price. Sometimes the price varies according to the type of product. The flexibility and cost-effectiveness model is the real reason behind the success.
4- An Array of Products:
H&M offers a variety of products that attract consumer’s attention easily. From clothing to shoes, cosmetics, and many more, H&M’s exceptional brands such as Cheap Monday, H&M Home, and Arket provide an array of products.
5- Precious Brand:
To run a successful brand, it is necessary to adopt a customer-centric model. From its beginning, H&M uses this model and become a valuable brand. H&M was categorized as the 58th world’s most valuable brand in 2019.
6- Powerful Online Channels:
Most of the companies are using the internet for selling and purchasing in this modern age. H&M has a powerful online presence around the globe and the biggest source of income.
7- Competent Supply Chain:
The popular companies require a competent supply chain to keep in touch with contractors and suppliers. H&M has its biggest NextGen supply chain which is extremely helpful.
8- Community-Centered Approach:
It is really significant to understand the community’s need to create a sustainable business. The company stopped its operations in the US in support of campaigners. H&M also focused on aiding communities distressed by deadly diseases in Bangladesh.
H&M SWOT Analysis | SWOT Analysis of H&M
H&M’s Weaknesses:
1- Overconfidence on Outsourcing:
H&M manufactures some products in-house; otherwise, it outsources most of its manufacturing from over 900 self-sufficient contractors. However, this strategy contributed to its achievement, but it sets the brand at the mercy of the dealers.
2- Controversial Products:
H&M faces a massive backlash and people boycotted its products for encouraging racism in 2018. H&M hired a black child model to promote its hoodie containing the expression ‘’coolest monkey in the jungle’’.
3- Boring Fashion:
As we said that, H&M majorly relies on independent suppliers. That’s why they don’t have the latest fashion designs and models. This weakness gives a chance to other competitors to show new trends.
H&M SWOT Analysis | SWOT Analysis of H&M
H&M’s Opportunities:
1- Diversified Products:
Many fashion companies and retailers offer a variety of options to earn more profit and stability. H&M also focus and improve its variety of options by giving sports apparel. This massive opportunity will help H&M to increase its options and reputation.
2- Utilize E-commerce Completely:
H&M should learn from Zara how to exploit online channels. As more people purchase online, this thing will be a game-changer for H&M to expand its online sales. This is the best and easy way to increase brand name and profit.
3- Pay Attention to Rising Markets:
It is a big opportunity for H&M to develop more brand recognition in Africa and Asia. These rising markets have the potential to establish the brand efficiently.
4- Develop Through Acquisition and Unions:
To enter the narrow or difficult market, the best way is to join with other companies and acquisitions. H&M can increase its market value by merging with secondhand marketers through acquisition.
H&M SWOT Analysis | SWOT Analysis of H&M
H&M’s Threats:
1- Imminent Recession:
Though, apparel, footwear, undergarments are essential everyday items. But due to the recent recession in Europe and other regions of the globe, fashion traders such as H&M will face a massive decline in profits and sales.
2- Hard Competition:
There’s a big competition among H&M, Zara, Gap, Boohoo, Macy’s, and many more. They all trying to increase their market share and minimize the demand for H&M’s products.
3- Expand in Counterfeits:
Honestly speaking, there are hundreds of fake brands in the market. But their expanding demand and increasing value can break the image of designer brands like H&M.
4- Growing Operation Costs:
Internationally, earnings for sellers are declining regularly due to an increase in the price of material and laborers. This kind of thing will threaten the operation and creation of H&M.
5- Trade Tax:
H&M outsources most of its products from different regions of the world which leads to a huge amount of tariffs. It also experiences a huge loss due to the Brexit deal.
6- Global Pandemic:
The success of H&M is totally relying on a nonstop stream of material and products. But due to lockdown and quarantine has reduced this flow which tends to interrupt the flow of profits and sales.
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