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Agenda
• Company background• Industry Analysis• Competitor Analysis• Client Analysis• Strategic
Recommendations
COMPANY BACKGROUND
Retail clothing company for men, women, teenagers, and children
Founded by Erling Persson in 1947 as women's clothing store Hennes
Business concept: “Fashion and quality at the best price.”
Acquired Mauritz Widforss in 1968 and began including men's and children's clothing in stores
Company name then became
Hennes & Mauritz (H&M)
H&M was listed on
Stockholm Stock Exchange
in 1974
Expanded into US, Europe, Asia, Africa, and South America
Currently one of the largest
clothing retailers in the
world
INDUSTRY Analysis
The evolution of the industry
Porter’s Five Forces Model
- Intensity of competitive rivalry:
Threat of new entrants:
Threat of substitutes:
Bargaining power of supplier:
Bargaining power of buyer:
• High
• High
• Low
• Low
• High
Critical Drivers for Success Affordable price Better fashionable
design
COMPETITOR ANALYSIS
• Fast distribution network• Distinctive business model (low inventories etc.)• Policy of zero advertising
Strengths
• Outdated operating system• Lack of marketingWeaknesses
Stre
ngth
s Attractive pricesVarious style linesOnline presence
Wea
knes
ses Copyright
infringement Software piracyLawsuits• Copy infringement • Software piracyPoor working conditions
CLIENT ANALYSIS
SWOT ANALYSISST
REN
GTH
Deliver on trend fashions at an affordable priceEfficient supply chain and distribution channelAbility to adapt and influence customer’s shopping behaviorsRestocking store inventories dailyEffective relationship with customersCollaborated with many designers
WEA
KNES
S
A gap between customer behaviors and brand attachmentsThe high cost of maintaining inventory in order to respond to changes in fashionH&M’s largest target market is comprised of 20 to 27 year olds
OPP
ORT
UN
ITY
Developing home related productsH&M has developed an interactive online website
THRE
AT
Does not have absolute control over the quality of the products being madeCost of products may increase due to wage increases around the world
Financial Analysis
2014 2013
Net Sales $18,022,000 $15,302,000
Gross margin % 58.8% 59.1%
Operating margin 16.9% 17.2%
Earnings per share $1.44 $1.23
Current Ratio 2.11 2.94
Financial Analysis
H&M is financially stable with increasing sales
Gross margin and operating margin decreased due to cost of inputs
However, increasing earnings per share is encouraging
Financial growth has allowed for expansions and implementations of new initiatives
STRATEGIC RECCOMENDAT
IONS
•Increase online sales
•Expand Internationally
•Target millennials
• Utilize online platforms in all major markets
• Cater online stores to customers• Fashion Studio
Increase online sales
EXPA
ND
IN
TERN
ATIO
NAL
LY • Increase stores in US and China• Expand into Southern
Hemisphere• Brazil, Argentina, and
Indonesia
Targ
et M
illen
nial
sCelebrity endorsements• David Beckham
commercial during Super Bowl
Event sponsorships• Sponsored an event
at CoachellaIncrease presence on Facebook, Instagram, and Twitter
THANK YOU FOR
LISTENING
Yung Le Julie Pham Vincent Truong
Joe Zhang Vivian Pham