H&M公司SWOT和PEST分析

SWOT and Macro analysis for H&MCourse: MarketingSupervisor: Miss LinStudent: Ouge Chen(Lylian)ID:21200108Date: 1st October 2014Analysis for H&M companyI. Background informationCurrently, people pay more attention on how to dress themselves, not only young people but also elders. People are willing to pay more for outlooks, which means budgets on clothing are increasing. Here are more brands be created and entered Chinese market, so in in this paper, I’m going to talk about H&M with SWOT and Macro analysis.The full name of H&M company is called Hennes&MauritzAB0. Not only clothes, but also makeups, H&M established its own stores in 54 countries all over the world, it has over 3,300 stores and more than 116,000 staffs. However, the unusual situation is H&M dose not have its own industry to produce, it has cooperation with more than 900 exclusive industries in Asia and Europe.Let us have a look of the development history of H&M. Because of the travel to America, the creator Erling Persson planed to establish a cloth brand to provide cheap, fashion clothes for women in Sweden. The brand was named Hennes, which means “Her” in Swedish. In the 60th century, stores were established in Norway and Denmark. To expand the market, Erling Persson bought a shop for selling guns and hunting tools named Mauritz, from then on, the brand start to produce clothes for male. Also, it is not hard to see, the name H&M were given to the brand. In the following years, H&M designed clothes for kids, youths and babies. Expanding the market to England, Switzerland, Germany in 70th century, Holland, Luxemburg, Belgium and Austria France in 90th, 1999 in Spain and finally in year 2000, H&M established the store in the United States of America.The First H&M store in China was in Shanghai in 2007, which opened the Chinese market. Now there are over hundred stores in China. Not only Beijing and Shanghai, cities, like Qingdao, Nanjing, Xiamen, Wuhan, Dalian and Chengdu all have H&M stores.II. Main bodyII.I. PESTFirst, we are going to use PEST to analyze the H&M Company. Here we are going to distinguish the second topic in to four parts, political factors, economic factors, social factors, technological factors.We often use PEST to analyze the background information of the company, I’m going to talk about these four parts in the rest paragraphs.II.I.I Political factors.To talk about the political factors, it is often about rules, principles, to restrict the company in order to control it under the policy of the country, because there are different commercial laws, tax laws and others in different countries, and when a foreign company wants to import goods in and open a transnational company, the leader of the company must know the rules of the new country before having a prediction.There are some parts need to consider, first, dose this country have a stable political environment? Will the country change the tax policy to increase the taxation of the company? If it is, will it influence the revenue of the company? How much one piece of clothes in H&M can the company earn? Third, what is the economic policy of the company, is it going to be better or worse? Fourth, dose the policy relate to the religion of the country? For example, is there any Muslin in the country? Dose the country need to design more mantillas? Finally, dose the government sign some contracts with other organizations? Like EU(European Union), NAFTA(North America Free Trade Area)(Jiang,2014). For H&M, the current policy of China is booming, the company in China is during a growth time to maximize the market share. Also except the factors above that I mentioned, the company needs to consider the agents choosing in China, under the policy which one is the best, in order to reducethe cost to minimization.II.I.II Economic factors.When talk about the economic factors, we need to consider the GDP(Growth Domestic Product) of the country to evaluate the purchasing power of the people. Second, the inflation of the country, because only the transaction happens, income flows in. So if people’s pockets are always lack of money to purchase, there’s no desire for purchase, I’m sure H&M could not earn as they expect. Third, about the exchange rate and interests, all the factors are deciding the real income and nominal income of the customer. If all the people are trying to save money in the bank because of the high interests, there isn’t much more for consumption, people are not willing to spend money on clothes for make up themselves, or except needs they have no expectation for wants, I guess the clothes company like H&M also could not earn that much as the predicted.II.I.III Social factors.Problems like, first, dose this country has strong believe of the religion? Second, dose the different language problem matters the selling? Third, what is the attitude for people when facing the foreign products? Are they interested in and willing to purchase? Are the target customers have enough purchasing power? All the factors are from the most basic part of the culture to predict how much money that people are willing to spend on purchasing. For H&M company, the target customer groups are young people, so dose the design of the products satisfied their desire? What is the taste of beauty in this young age group? I think H&M need to consider these factors before entering this market, or the company will lose.II.I IV Technology factors.Dose the technology in this country decrease the cost of the cloth while increase the quality of it? How about the technology support in China? Dose technology support the market to let customers have more channels to purchase? How dose technology change the distribution channels in this country? Is it more convenient or complicated? Nowadays, e-commerce develops very fast in China, let us make Alibaba as the example, so is it possible that H&M could have cooperation with Alibaba to open the official e-commerce shop through the internet? So that it is simple for customer to purchase without going to the real shop. A good company always have several ways to earn income, so based on the internet, it is an other wide channel to earn profit.In year 2006, the sale value of H&M reached 800 billion Swedish krona(XHZX, 2014). The success of H&M is not hard to see, the strengths, weaknesses, are the external elements and opportunities, threats, are the internal elements, according to the strategy of enterprise competition, company must consider “ What I’m able to do ” that is the strength and the weakness of the company and “ What I might do” the opportunities of environment and treats. To contrast these elements, the company could be better managed.II.II. SWOTIn year 2006, the sale value of H&M reached 800 billion Swedish krona(XHZX, 2014). The success of H&M is not hard to see, the strengths, weaknesses, are the external elements and opportunities, threats, are the internal elements, according to the strategy of enterprise competition, company must consider “ What I’m able to do ” that is the strength and the weakness of the company and “ What I might do” the opportunities of environment and treats. To contrast these elements, the company could be better managed.II.II.I Strength.Focusing on the Chinese market, starting from strengths and weakness. First, H&M is a well know brand from overseas, we need to admit that, part of Chinese consumer prefer foreign brands rather than local ones. H&M is a brand from Europe, it could be easier accepted by Chinese buyers. Second, it is a cheap brand, easier to afford than ZARA. In China, though H&M import furniture as the new area, the most common products are clothes. Prices of clothes are usually about hundreds RMB, the scattered jewelries, ornaments are dozens of Yuan. H&M makes the target market to young people from 18 to 25, prices of H&M could be easier accepted by people at this age, because normally they do not have savings, a new cloth with cheap price will not make much pressure on finance. Third, H&M is fashionable, it is a fresh taste, different from the common Chinese brands. The style of H&M made people feel simple and easy to match. From my personal, some of the raw colors and styles make me feel comfortable. It’s ridiculous to wear like a parrot on the street, sometimes simple colors and styles bring amazing feelings in an unexpected way. Including myself, some of the friends came back from overseas, often complained have no where to purchase cloth with concise styles they like except stores like H&M, ZARA and C&A. Fourth, H&M had cooperation with other fashion brands or invite celebrities to design the style of clothes. Like in 2004, H&M cooperated with the Karl Lagerfeld the creative director of Chanel, the JimmyChoo, Lanvin in 2010, Versace in 2011and so one. Currently, it joined hands with Alexander Wang. If could use democratic price to purchase clothes designed by the same designer of luxury brands, why not?II.II.II Weakness.To talk about weakness, it seems not that obvious than strength. The most important one is the quality of the cloth. In year 2013, substandard quality of clothes had been tested in H&M in Guangzhou. No matter, it is about the harmful raw material or the unqualified processing, the result of the test could tell everything. When I purchaseproducts from H&M, after washing for several times, clothes became bigger and sometimes sweater will pill. Meanwhile, according to research, I found the foundation management of the store is disordered. In China, comparing H&M to ZARA, you will find, in the store, no matter staffs or items, in ZARA, both of them are well organized. Furthermore in H&M, because it is cheaper, usually it is crowed with consumers, clothes are on the floor, staffs rushed like consumers and arguments are often. Sometimes, ZARA let me feel comfortable to make purchase in the elegant surroundings, but H&M is like a market in the morning, full of people hurry for sales products. Third, the target market of H&M is small. Yes, young age people are more willing and more brave to wear fashion clothes, but consumers who emphasize on characters like middle aged group, will think this brand is not suitable for them. The segmentation of market for H&M is simplex compared with ZARA, focusing on lifestyle, personality and social class to segment, is not enough if H&M wants to have a higher brand orientation. It is a kind of mass marketing sometimes with low loyalty customers, especially it is a kind of shopping product, normally, people will not purchase clothes everyday and only in H&M, except mass marketing, H&M need to expand the market in order to win more customers no matter segment the market from geographic, demographic behaviors or others.II.II.III Opportunity.The opportunities of H&M are quiet obvious. Personally, it is maturity life-cycle for H&M to maximize profit while defending market share. It is time to distribute the segmentation of market for H&M to catch these opportunities. First of all H&M had cooperation with other fashion brands or invite celebrities to design the style of clothes. Like in 2004, H&M cooperated with the Karl Lagerfeld the creative director of Chanel, the JimmyChoo, Lanvin in 2010, Versace in 2011and so one. Previously, it joined hands with Alexander Wang and currently H&M invited Lady GAGA and old Jazz music star Tony Bennett to promote the brand as the holiday activity star. If could use democratic price to purchase clothes designed by the same designer ofluxury brands, why not? Then, let us move eyes on customer groups of H&M. We can distribute the into two main parts: young people and middle income group. If we already know the weakness of this company, why not transform them to opportunities? To cooperate with other luxury brands, H&M could expand the market to customer with higher income. Like haute couture, limited edition and personal tailor. These Niche market sale channels could help H&M increase the orientation and level by optimizing the product mix and developing higher grade products. Based on the customer preferences and expectation of H&M, H&M could not drop the massive market to gain its largest profit source. Because most of the products are not expensive especially when season changes, there are often prices cutting, it is the favorite for students and lower income young people. H&M must put the best effort of the actual products to serve these customers. Like to promote discount card for students, new-style packing, purchase one get one free, on the one hand to illustrate the customer loyalty while on the other hand to perfectly promote the items.II.II.IV Threats.The threats must come from the homologous brands like ZARZ, C&A, Mango, GAP, UNIQLO and so on. For the production styles and prices of these brands are similar, it is hard to keep the brand loyalty. As as the member of GAP, almost every week I get messages to promote the discount season is coming. Though these messages sometimes do really bother me, we can not doubt they make customers feel warm, because we were remembered by others. Currently, there are more foreign brands trying to enter the Chinese market, because of the increasing nominal income and desire to purchase. Except the competition between other brands that had already entered the Chinese market, there are new ones. Also, the policy for quality demand will be more strict.Except SWOT, we also have PEST to analyze the company from the Macro environment part. Here we are going to distinguish the second topic in to four parts, political factors, economic factors, social factors, technological factors. Different from the SWOT analyze, we often use PEST to analyze the background information of the company, I’m going to talk about these four parts in the rest paragraphs.III. Summary.All the elements above are just some simple analysis about the H&M company based on the background of external and internal situations. I guess there are still several factors that I did not consider fully yet, just hope there are other chances to continue the research. To open a transnational company, there are more we need to talk about, these are not enough. H&M company China is during a growing time now, more prediction means more preparation, also means reduce the risk, just hope there are more foreign companies could enter the Chinese market, we need these companies to support the our economy.ReferencesXin,H,Z,X,(2014), The introduction of H&M. Available from: /view/1129547.htm?fr=aladdin Jiang,Z,P,(2014), The introduction of PEST. Available from: /view/630276.htm。