H&M is a Swedish multinational clothing retailer known for its fast fashion model. It has over 5000 stores globally and sources from over 900 suppliers around the world. Key aspects of H&M's business model include quick response time through vertical integration, affordable prices made possible by outsourcing production to low-cost countries, and an increasing focus on sustainability through initiatives like sustainable sourcing and clothing collection programs. However, the company has also faced criticism over working conditions and wages in its supply chain following disasters like the Rana Plaza factory collapse in Bangladesh.

1. MGT-OM-713

2. Course Code MGT-OM-713
Program MBA Evening
Term 6
Submitted To Prof. Nilay Gosavi
NAME RAVEENA VENU
REG. NUMBER 1712014
date 19/02/2019
EMAIL ID raveena_venurejitha1@dxb.manipal.edu

3. Hennes & Mauritz

4. SHORT LIFE CYCLES AND
SHORT SELLING SEASONS
CONSUMERS TASTES CHANGE
QUICKLY AND VARY
MANY COMPANIES MOVED
PRODUCTION TO DEVELOPING
NATIONS TO CUT COSTS

5.  Quickly interprets recently runway trends into affordable
low priced items available at the mass market
 Affordable prices with quick response
 Emphasizes on making fashion trends quickly and cheaply
available to consumers
 Optimizing certain aspects of the supply chain
 This philosophy of quick manufacturing at an affordable
price is used in large retailers.
 Consumers are typically under 40

6. A Swedish Multinational Clothing-
retail Company
Second-largest global clothing retailer,
(behind spain-based Inditex) + 2nd
most valuable apparel brand in the
world (behind Nike)
Headquarters in Stockholm, Sweden
Known for its fast-fashion

7. Trendy
and classy,
but high
rates
01
You have
to search
a bit, but
it’s fine
02
Only if there is
some offers its
good, otherwise
unnecessarily
expensive
03
ZARA has
better
clothes
04
Not bad,
but rates
are high
05
Its not my
type
06
I didn’t
like it
07
Have
never
been to
H&M
08
No idea
about
H&M
09

8. 1947
 A single womenswear store in
Sweden
Now
 43 online markets and more than
5000 stores in 69 markets.
This Photo by Unknown Author is licensed under CC BY-ND

9. DIFFERENTIATOR
VALUES:
A new reality where you
can wear a designer
brand at an affordable
price.
BRAND ATTRIBUTE:
Status, Luxury And
Affordability

10. Men Women Teenagers Children

11. Womenswear, Menswear, Children’s
wear,
Footwear, Accessories, Cosmetics Home
Furnishing
s.

12. 30%
70%
Product
Fast fashion
Basic clothing
 Represents 30% of the clothing
 Less lead times
 More trendy
 More expensive
 Represents 70%
 More cost effective
 Brings higher profit margin

13. Vision : To lead the change towards a circular
and renewable fashion industry, all while being
a fair and equal company.
Mission: To drive long-lasting positive change
and improve living conditions by investing in
people, communities and innovative ideas.
Values: "We believe in people, We are one
team, Constant improvement, Straightforward and
open-minded, Entrepreneurial spirit, and in all we
do, sustainability is a natural part“
Business Concept: “Fashion and quality at the
best price”

14. H&M group aims to source 100%
sustainable cotton
2020
H&M group aims for 100% recycled
or other sustainably sourced
materials.
2030
H&M group aims to have a
climate positive value chain
2040

15.  The ambition to serve our
customers in a sustainable
way.

16.  According CEO Karl-Johan Persson
 Mission for 2019:- To adjust to the new market dynamics through targeted
investments.
 Investment in 3 key enablers:-
 Supply chain: proximity sourcing + automated warehouses = faster + flexible +
efficient SC
 Advanced analytics: Better data and artificial intelligence = improved trend
detection+ quantification & allocation + price management & personalization
 Technology foundation: RFID to 1,800 stores in 2019 + experiment with
omnichannel programs + new-format stores = better reach customers

19. Germany = 4.4
billion U.S.D (2017)
LARGEST
MARKET ?

20. Quick Turnaround
Time
160+ designers,
400+ product
developers
900+ suppliers

21. High impulse purchasing
High volatility
H&M forecasts, but they put less focus on it due to
variability in demand such as:-
Short selling seasons
High level of uncertainty
Lack of historical data for trendy produtcs
Demand forecasting companies such as Worth Global Style
Network Ltd.

22. BANGLADESH,
BULGARIA,
CAMBODIA,
CHINA,
CZECH REPUBLIC,
DENMARK,
ESTONIA,
ETHIOPIA
• 20% = strategic partners.
• Roughly 180 to 200 out of
900 suppliers.
• 20% suppliers = 50% goods
• Transparency
• Audits roughly twice a year

23. Idea &
design
Range
planning
Buying &
production
Logistics &
distribution
Warehouses Stores Customer

24. Design
Raw
materials
Fabric
production
Garment
production
Transport
Warehouse Store
Customer

25. IDEA &
DESIGN
Central design and buying
department
160+ in-house designers,
100+ pattern makers.
An additional 400+ people
involved in other aspects
of product development

26. RANGE
PLANNI
NG
Each concept (women’s, men’s
etc.) is allocated a product with
right mix between fashion and
comfort.
Stores and countries are
allocated products based on
what the customers there
‘want’.
Some products are allocated
based in limited quantities
while rest can be re-ordered.

27. BUYING
/
PRODU
CTION
 Focused on a trade-off between price,
time and quality
 All manufacturing outsourced to 900+
suppliers
 Lead time varies:
 2 to 3 weeks = high fashion items
 6 months = basic products

28. Local
Production
offices
Manages
suppliers
Places orders
Manages
quality
assurance

29. LOGISTI
CS &
DISTRIB
UTION
 Outsource transportation needs
 Mainly shipping and rail
 Transported by sea and rail 90%
 Occasionally by road and air.
 Uses trucking companies
 Trained drivers and no old trucks
 CO2 reduction plan
 Currently operates more than a dozen
DCs and call-off centres
Suppliers Transportation Warehouses

30.  Centralised warehouse
 Goods that do not go to the stores go to a centralised stockroom.
 Goal of centralised stockroom ? To replenish item levels in stores according to
selling trends
 The ERP system delivers rapid replenishment

31. H&m in Burjman, Dubai. As of Valentine’s day 2019.

46.  Uniform layout
 EPOS (Electronic Point Of Sale) system connects store floor to the stockroom.

47.  Customers can hand in unwanted clothing
 Program: collect, re-use and turn into something new
 20% of their specific clothing line are made entirely from recyclables.
 https://www.youtube.com/watch?v=41htZRvz9Gg

49.  Quick response
 Effective in the constantly changing
industry
 Avoid stockouts
 Avoid high exposure to excess inventory
 Ability to create, manufacture and
deliver products in 2 to 6 weeks

50. Ability to do this:-
Technology
Production offices
Vertical integration

51. High focus
on
sustainabilit
y
01
Fashion and
design at an
outstanding
value — but not
at any price.
02
consider the
needs of
present and
future
generations
03
entire business
must be conducted
in a way that is
economically,
socially and
environmentally
sustainable.
04

52. Transition from a
linear production
model
To one that reuses
old products, as
the resource for
new desirable
fashion.
Short term = this
will help keep
textiles from
ending up in
landfills.
Long run = this
can change the
way fashion is
made and used,
Benefit =
massively
reducing the need
for extracting
natural resources
from our planet
while promoting
conscious
resources for our
designs.

53. ANNA GEDDA, HEAD OF SUSTAINABILITY

55. 59 % of the cotton
used in 2017 was
sustainably
sourced. Goal is
100% by 2020
In 2017,
customers handed
in 17,771 tonnes
of old textiles to
the program for
reuse or recycling
Supplier factories
representing 53%
of total production
volume have
workplace
dialogue training
96% renewable
electricity in their
own operations in
2017
reduced
greenhouse gas
emissions by 47%
in 2016.

57. The Rana Plaza Factory
Collapse in Dhaka,
Bangladesh, on April 24,
2013. Photo: Zakir Hossain,

58.  One of the worst CSR crisis of corporate history
 Deadliest garment factory disaster in world history
 1129 workers killed. Around 2500 injured.
 birth of the Fashion Revolution movement
 The first company to sign up to the Bangladesh accord
on fire and building safety
 November 2013, announced that 850,000 workers in its
supply chain would be paid a fair living wage by 2018.
 No increase in salary in the pay slips of the poor workers
 most of the factories used by H&M were still unsafe
 Clean clothes campaign.
 The exploitation of workers in the Third World factories
 Misleading