By: Darien Jackson
Table of Contents
Chapter 1. INTRODUCTION
1.1. Company Background.
1.2. Vision and Mission.
1.3. Longterm Objectives.
Chapter 2. EXTERNAL ASSESSMENT.
2.1 Michael Porter’s FiveForces Model.
Chapter 3. INTERNAL ASSESSMENT.
3.1 ResourceBased View Analysis.
3.2 Financial Analysis.
Chapter 4. STRATEGIES IN ACTION.
4.1 The Strategies.
4.2 Michael Porter’s 4 Generic Strategies.
Chapter 5. STRATEGY ANALYSIS AND CHOICE.
5.1 The StrengthsWeaknessesOpportunitiesThreats (SWOT) Matrix.
5.2 The Strategic Position and Action Evaluation (SPACE) Matrix.
With sustainability being one of the most important focal points in what they strive to achieve; H&M does not own factories, but instead buys products from independent suppliers that are close longterm partners of H&M. H&M works to bring about longterm improvement for people and the environment, in the supply chain, the garment life cycle, and the communities in which they are active.1
1.2. Vision and Mission
H&M plans to continue to grow in new and existing markets with a focus on quality,
sustainability and continued high profitability. H&M’s expansion target is to increase the number
of stores by 10% 15% every year.2
In 2015 H&M planned to open a total of 400 stores
worldwide, with new flagship openings in New York City, Shanghai, and Puerto Rico.
1.3. Longterm Objectives
At the moment they have more than 3,900 stores in 61 markets across the globe. In the next five years H&M plans on expanding and opening a fourth of their total amount locations across the world.
1 (2013). History About H&M. Retrieved December 17, 2015, from http://about.hm.com/en/About/factsabouthm/peopleandhistory/history.html.
2 (2013). Expansion strategy About H&M. Retrieved December 17, 2015, from
2.1. Michael Porter’s FiveForces Model
Named after Michael E. Porter, this model identifies and analyzes 5 competitive forces that shape every industry, and helps determine an industry's weaknesses and strengths3, while allowing business managers to configure the level of competition within their company’s industry, assets and potential lines of business. The purpose of this analysis is to aid managers set their profitability expectations, since profitability decreases as competition increases. The five forces are as followed:
● Potential of new entrants into industry: if entry is easy there will be a high level of competition. In the retail industry the competition is very high, consisting of businesses such as Zara, Forever 21, Gap, and department store giants such as Macy’s. With so much competition there is little space for new entries in this market but in product markets the space is endless.
● Power of customers: assesses the bargaining position of the customer, if the customer has a strong bargaining position it will drive down the price for the products; therefore eroding profitability. This is why H&M always strive to give the best styled fashion at the lowest price and the longevity of the product’s lifespan to ensure sustainability. This lowers the power of the customers because it caters to what they want.
● Power of suppliers: if suppliers face a scarcity in resources, the resources will rise due to inflation and competition amongst the industry will increase as well. However this will not affect them because they are their own suppliers; they create all of...