Strategic factors - swot

Strategy analysis

In this section, a swot analysis of h&m has been given in the following table. These results are based on the information from annual reports, interviews with h&m staffs and official website.

A SWOT analysis of H&M involving the strengths, weaknesses, opportunities and threats can be shortly shown in table below.

SWOT of H&M (H&M 2009)

Strength

H&M’s strengths include a good brand image and cheap price. H&M has based a strong brand which motivates employees producing unity and attracts professionals. The company has benefit from a good image from the customers and they have a strong fame worldwide thanks to it’s a lot of outlets. Moreover the prices that H&M offers to its customers are very competitive according to the cost saving management of the company. (Alatalo 2011) Its another strength is that it has a wide range and variety of concepts. The concept of chep priced apparel has brought stable customers to H&M for years. The different departments for women, men, teenagers and children are its base. H&M can work with them in various types of buildings, regions and shopping malls with very different characters. (Alatalo 2011)

Weaknesses

Due to the fact that the company wants to save money everywhere as much as its possible, the distribution system is very slow and it takes huge time to deliver a product to the outlet. It might be bad for the reaction time of the company to competitors offer. Moreover the low quality of the product may be reason to lose their customers. By the way, as H&M’s production units inscreased to 2700, the control of it needs more resources and management. If H&M could not control its effective organizational structure, the situation may bring to the failure. (Alatalo 2011)

Opportunities

There exist several opportunities of H&M to enhance its business. The economic crisis was very strong and it may enhance the number of the population for cheap and trendy clothes. In addition, the development of some Asian countries such as Vietnam can give the opportunities to H&M to bring new cheaper suppliers and more quality products and lower time of production. (Alatalo 2011) “There are considerably more opportunities for new openings than the stores that we actually door open,” said Stefan Larsson. “During the establishment process we decide against some potential stores. Only the best business opportunities remain. The aim is to create the best H&M stores through a combination of best location and best possible business conditions, wherever they are in the world.” (Alatalo 2011)

Threats

The main threat is that this market is full of competitors that are rapidly increasing and that are really competitive. That’s why H&M should keep its effort in differentiation in order to stay in this competition.

Morevover, there are another risks they cannot avoid and predict. It relates to fashion, weather conditions, climate changes, trade interventions and exchange rates, but also in connection with expansion into new markets, the launch of new concepts, changes in consumer behavior and handling of the brand. (H&M 2010b.)