H&M Strategic Plan

Strategic plan:

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. 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. 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. H&M has achieved ability to be efficient. As there is low profit margin being cost leader, H&M is very focused on expansion and increase of market share. It is important for H&M to sell more volumes of the product to earn profits. Fixed costs are high and by every product made variable costs are lowering. It has secured suppliers because H&M doesn’t own factories itself but have long term production contracts with factories in Bangladesh, Morocco and Turkey. It is very important buyer to textile sellers as H&M buys large quantities several times per year. H&M has good long term contracts with its producers and suppliers.

Today, H&M has around 73,000 employees in 34 countries. Target growth is 10-15 percent new stores every year. For 2009 this means that between 6,000 and 7,000 new jobs will be created. When H&M opens on a new market, it always recruits locally. During the start-up period, new employees are supported by more experienced co-workers. The first Japanese co-workers, for example, spent some time in stores in Norway and Hong Kong. During the sales-intensive opening phase, colleagues from other countries are then drafted in on a temporary basis....