Turning	  a	  Global	  Epidemic	  into	  a	       Business	  Opportunity	    Elin	  Larsson,	  	  Cand.	  Merc.	  IMM	  |M...
ExploiJng	  the	  “Plus-­‐Size”	  segment	  ensures	  $63M	  of	  new	  sales	  in	  otherwise	  stagnaJng	  markets	     ...
H&M	  should	  focus	  on	  a	  new	  recruiJng	  strategy	  and	  a	  line	  extension	  for	  achieving	  growth	  targe...
H&M	  can	  uJlize	  their	  core	  competencies	  to	  exploit	  the	                  plus-­‐size	  trend	  	           ...
With	  the	  implementaJon	  of	  the	  line	  extensions	  H&M	  can	  reap	  higher	  margins	  in	  core	  markets	    ...
Expanding	  the	  plus-­‐size	  line	  will	  lead	  to	  posiJve	   revenue	  streams	  Western	  Europe	  popula@on	    ...
Aqer	  exploiJng	  Western	  markets,	  emerging	              economies	  offer	  growth	  potenJal	  	                   ...
To	  overcome	  the	  added	  complexity	  of	  the	  line	  extensions,	  new	  HR	  pracJces	  need	  to	  be	  set	  up...
The	  risks	  that	  could	  occur	  with	  the	  strategy	  implementaJon	  can	  easily	  be	  overcome	      Possible	 ...
Within	  a	  four	  year	  Jme	  horizon	  H&M	  can	  roll	  out	  their	  new	  strategies	  internaJonally	     Ac@vity...
Upcoming SlideShare
Loading in...5
×

Presentation by Larsson, Ögren, Troll and Jäger - Winners of Beat The Elite 2011

7,490

Published on

Presentation by Larsson, Ögren, Troll and Jäger - Winners of Beat The Elite 2011 and all students at Copenhagen Business School. Congratulations to Elin Larsson, Max Josef Jäger, Svenja Troll and Hanna Ögren. Presented on March 4, 2011.

This presentation form part of CBS Case Competition. Views, opinions and suggestions expressed in these presentations are the sole work of the case study writers, and are not neccessarily shared by H&M

Visit www.casecompetition.com to see more.

0 Comments
2 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
7,490
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
285
Comments
0
Likes
2
Embeds 0
No embeds

No notes for slide

Presentation by Larsson, Ögren, Troll and Jäger - Winners of Beat The Elite 2011

  1. 1. Turning  a  Global  Epidemic  into  a   Business  Opportunity   Elin  Larsson,    Cand.  Merc.  IMM  |Max  Josef  Jäger,  Cand.  Merc.  IBS     Svenja  Troll,  Cand.  Merc.  IMM  |Hanna  Ögren,  Cand.  Merc.  AEF     COPENHAGEN  BUSINESS  SCHOOL    
  2. 2. ExploiJng  the  “Plus-­‐Size”  segment  ensures  $63M  of  new  sales  in  otherwise  stagnaJng  markets   • Maintain  annual  sales  growth  target  of  10  to  15%     Challenge   • Keep  the  business  simple     • Western  Europe  (82%  of  sales):  stagnaJng  market     ComplicaJon   • USA  (9%  of  sales):  declining  market     • Changing  consumer  needs  due  to  growing  obesity     How  can  H&M  ensure  for  sustainable  growth  in   QuesJon     their  stagna5ng/  declining  key  markets?   • Exploit  opportuniJes  within  new  segments:     •  Introduce  “plus-­‐size”  product  line  for  men,   women  and  children   Answer     •  Expected  yearly  sales  of  $63M  and  sales   growth  of  0.5%   • Ensure  success  through  improved  HR  funcJon    
  3. 3. H&M  should  focus  on  a  new  recruiJng  strategy  and  a  line  extension  for  achieving  growth  targets   Market   Por;olio   Recrui@ng   Line  extension   expansion   expansion   strategy   PotenJal   revenue   Demand   High  costs  of   implementaJon   High  risks   High   Low    Choice  of  strategies  with  lowest  risk,  lowest  costs,  and  high  expected  returns  -­‐  Current  market  expansion  strategy  is  sufficient  -­‐  Porfolio  expansion  has  proven  to  be  too  costly  and  risky  in  recent  years  -­‐  H&M  is  adding  complexity  to  corporaJon  due  to  internaJonalizaJon  -­‐  Huge  market  potenJal  in  “plus  size”  market  
  4. 4. H&M  can  uJlize  their  core  competencies  to  exploit  the   plus-­‐size  trend     H&Ms  Core   Market  share  by  region     Plus-­‐size  trend     Competences   Americas   Western  Europe   Apparel   Plus-­‐size   Asia  Pacific     Middle  East  &  Africa     %  Total  Growth     Eastern  Europe   %   # Fashion  forward     # Affordable  prices     # Western  core  market     # Can  meet  the  Plus-­‐size   Women   Men   Children   demand     2010E   2005  -­‐  2010   •   Asia  Pacific,  MEA  and  Eastern   •   Key  trend  in  Americas  and   Europe  are  H&Ms  growth   Western  Europe:  Plus-­‐size   markets     demand  increase   •   H&M  faces  declines  in   •   Customer  needs  not  saJsfied:   Americas  and  Western  Europe     Fashionable  low-­‐priced  clothing  Source:    Report  linker,  Euromonitor,  Package  Facts    
  5. 5. With  the  implementaJon  of  the  line  extensions  H&M  can  reap  higher  margins  in  core  markets   MEN   WOMEN   CHILDREN   Big  &  Tall   Big  is  Beau@ful   Bumblebee   Target  Group   • Plus  size  and  tall     • Plus  size     • Plus  size     Demographics   • Age:  20  -­‐  45     • Age:  20  -­‐  45     •  ge:  10  -­‐  15   A PromoJon   Spokesperson:     Spokesperson:  style   Spokesperson:  teen   sports  focus   icon  focus,  e.g.  Beth   star  focus,  e.g.  Hillary   Dimo   Duff   Product   New  collec5on  based  on  H&M  LOGG   Full  range  (50  items)      Fashionable   Price    10%  above  H&M  price    Below  compe5tor’s  “plus-­‐size”  price   Sales  Channel    Internet  sales   Catalogue  sales  
  6. 6. Expanding  the  plus-­‐size  line  will  lead  to  posiJve   revenue  streams  Western  Europe  popula@on   Overweight/obese  %  in  WE   H&M’s  current  market  share   2,3%   1%   0,5%   Best  case  (current)   Most  likely   Worst  case   397,475,574  ppl   93,009,284  ppl   Best  case   Most  likely   Worst  case   Es#mates  pr.  year,  in  tsd.  USD.     Es#mates  pr.  year,  in  tsd.  USD.     Es#mates  pr.  year,  in  tsd.  USD.     Market  share  (2,3%)                       2,139   Market  share  (1%)                                   930   Market  share    (0,5%)                              93   Projected  revenue                         63,430   Projected  revenue                         27,578   Projected  revenue                         2,757   Projected  costs*   31,715   Projected  costs   13,789   Projected  costs   1,378   Profit     31,715   Profit     13,789   Profit     1,378   *  EsJmated  to  50  %  of  revenue   ©  2011  Deloime  
  7. 7. Aqer  exploiJng  Western  markets,  emerging   economies  offer  growth  potenJal     • In  China  obesity   rates  are  25  %   and  growing   •   In  Brazil  48  %  of  all  women  and  50  %  of   all  men  are  overweight  Source:  World  Health  OrganizaJon    
  8. 8. To  overcome  the  added  complexity  of  the  line  extensions,  new  HR  pracJces  need  to  be  set  up   •  SecJon  for  thesis  and  project   wriJng     •  PotenJal  research  topics     Student  zone   •  Download  center  for  H&M   documents     •  Network  Expansion     •  Coca  Cola  benchmark     •  The  right  people  for  the  right   job   •  Academics  with  theorecJcal   Graduate   management  knowledge   Program   •  InternaJonal  rotaJon     •  Vestas  benchmark    
  9. 9. The  risks  that  could  occur  with  the  strategy  implementaJon  can  easily  be  overcome   Possible  risks   Level  of  risk    Deteriora@ng  brand   Risk  of  diluJng  H&M’s  core  segment.  Can  be  avoided  through   image   e.g.  online  channels.     If  the  launch  is  proven  unsuccessful,  H&M  will  not  incur  large   Sunk  costs   sunk  costs  due  to  minimal  fixed  costs.     Many  established  clothing  lines  within  these  categories  will   Heavy  compe@@on   make  it  harder  for  H&M  to  get  a  strong  foothold  in  the  market.     Risk  of  missing  opportuniJes  in  other  markets.  Can  be   Opportunity  costs   overcome  if  H&M  conJnues  their  current  market  strategy,  
  10. 10. Within  a  four  year  Jme  horizon  H&M  can  roll  out  their  new  strategies  internaJonally   Ac@vity   2011   2012   2013   2014   Product  line  extension     New    style  development     Spokesperson  search     Online  Launch    and  sales   Retail  Launch  and  sales   InternaJonal  Launch     Human  Resource  Restructuring   Student  zone     Network  expansion     Graduate  Program    
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×