1840 Fashion Retail Industry Stores Marketing Essay

Long term objectives are strategic plans company make for future five years. These objectives are set in seven key areas- productivity, profitability, competition, employee development, employee relations, technological leadership and public responsibility and show were company wants to be when they are achieved. Long term objectives have to be motivating, flexible, measurable, suitable, understandable, realistic and acceptable by employees.

Three main strategic goals for H&M for the next five years would be linked with profitability, competition and technological leadership. H&M has reported a rise in sales and profits and sales for the three months to 31 August. Net profit for the third quarter of 2009 rose 4.1% to 3.46bn Swedish crowns from 3.33bn crowns last year. Sales, excluding sales tax, increased by 13% to 23.6bn crowns. So first LTO is to maintain financial stability H&M has achieved. H&M plans to increase sales revenues by 20% and earnings per share by 30% till 2015.

Secondly as main strategy of H&M is expansion, LTO in competition is to increase number of stores by 10% to 15% every year. Today H&M has as 1840 stores up from 1618 at the same time last year. New stores will be open in the cities H&M already has stores and also in completely new markets.

H&M is following all the latest innovations in the clothing manufacturing. It is important to increase efficiency, cut costs and keep prices low while raising quality. Third LTO in the technological leadership for H&M is to lower maintenance costs by 15% and decrease waste by 10% till the year 2015.

Porter’s four generic strategies are cost leadership, differentiation, low cost to narrow market strategy and niche strategy. H&M has cost leadership strategy. H&M offers fashionable clothing for cheap prices selling to broad markets. This strategy is also very suitable for the current economical situation. In the financial crisis people have less disposable income and they think more carefully...