H&M SWOT Analysis
H&M has constantly been focusing on expanding its store base across the globe. The SWOT Analysis of H&M by EdrawMax manifests the company's current major strengths and opportunities.
1. Lead-in
H&M is one of the world's largest apparel retail brands, and its high-quality clothing has helped the firm to garner a massive customer base. The brand depends primarily on fast fashion and is popular among the young generations. SWOT analysis is a tool that helps a brand identify the internal factors that have worked on their conditions.
H&M SWOT analysis can identify its strengths and weaknesses. The opportunities for growth and threats can be pointed out using H&M SWOT analysis. In this SWOT analysis guide, we will create a SWOT analysis diagram using the free templates, symbols, and customization options offered by EdrawMax Online. As a registered EdrawMax user, you get the feasibility of downloading and customizing such SWOT analysis templates in just a couple of steps.
2. About H&M
2.1 Introduction of H&M
H&M is a Sweden-based retail brand that has customers all over the world. The brand has expanded its business on six continents. They are the second-largest apparel shop in the world, with 4800 stores. Besides their physical stores, they also have online websites for selling their items. Their high-quality apparel designed on the latest trends has helped them get a loyal customer base.
H&M has turned into a global presence from a single-store shop over six decades. H&M's SWOT analysis can identify the reasons for its success. It is significant to know the basic information about the company to do a detailed H&M SWOT analysis:
2.2 Overview of H&M
| Name | Hennes and Mauritz AB. |
| Founded | 4th October 1947. |
| Industries served: | Retail |
| Geographical areas served: | Worldwide |
| Headquarters: | Stockholm, Sweden |
| Current CEO: | Stockholm, Sweden |
| Revenue (US$): | 24.8 million (in 2019) |
| Profit (US$): | 1.5 billion (in 2019) |
| Employees: | 107,375 (in 2021) |
| Main competitors: | Zara, GAP, Forever 21, Macy's |
2.3 History of H&M
| 1947 | First Hennes store opened in Sweden, dealing in women's apparel |
| 1964 | Store opened in Norway, first outside Sweden |
| 1968 | H&M was formed |
| 1997 | Company releases its first code of conduct |
| 2000 | They opened its first US store. |
| 2002 | H&M published its first public CSR Report. |
| 2010 | They launched its first collection made out of sustainable materials. |
| 2011 | They became the top user of organic cotton. |
| 2013 | H&M designer studios in Stockholm, Los Angeles, and Paris. |
| 2017 | The brand ARKET is introduced with a range of essential items. |
| 2019 | H&M launched Treadler and gets ownership of Sellpy. |
| 2020 | H&M announced that it was planning to close 5 percent of its worldwide stores following COVID-19 pandemic. |
| 2021 | Irish designer Simone Rocha, daughter of designer John Rocha, was announced as a collaborative partner. |
| 2022 | H&M resumed sales in China. |
3. SWOT Analysis of H&M
Strengths
- Global brand: H&M has profitably earned the top position in the market as a retail brand in the apparel industry. They have penetrated some of the biggest markets. Moreover, they operate in 74 markets on six continents. They have more than 4800 stores (in 2021) worldwide. Their global presence has helped them generate good revenue and earn brand recognition.
- Affordable Pricing: H&M is a fast fashion brand. It brings in luxury collections following the latest trends. Their affordable apparels are very popular with the millennials and Gen Z. They sell supreme quality outfits at a cheaper rate, and their cost-effectiveness works as a magnet for many customers.
- Online Market: H&M has invested resources in developing an online market for its customers. They can reach many customers beyond geographical barriers with the help of the internet. They have successfully captured the online market, which reflects in their revenue. Their e-commerce service works hard to ensure customer satisfaction.
- Brand Value: H&M has emerged as one of the most valuable brands. They got the 58th position in the list of the world's most valuable brands in 2019. They have adopted a business model that is effective and efficient. It helps to generate good revenue. They have various products and brands, including Cheap Monday, H&M Home, and more, which attracts many customers.
Weaknesses
- Outsourcing: H&M is immensely dependent on outsourcing. Hence, this is one of its primary drawbacks. Instead of producing their goods in-house, they have more than 900 suppliers in Asia and Europe. They are responsible for manufacturing their products. It makes them vulnerable to the conditions of the suppliers.
- Trendy designs: H&M's clothing line is modeled on fast fashion concepts. Hence, most of their apparel is designed based on the latest trends. They are often an almost similar copy designed by another luxury brand. H&M does not have its designs, and this lack of uniqueness is one of its biggest weaknesses.
- Work ethics: It is not new for fashion brands to 'copy' designs from luxury brands or renowned dress designers. Mass production harms the business of the original designer as the brands barely credit them for their creative works. Fast fashion brands are known to follow the trend but copying others' designs is unethical. It can destroy the customers' reliability.
- Promoting racism: People criticize the brand for its racist promotion. They made an African-American child wear a hoodie with the lines "Coolest monkey in the jungle." Following this promotion in 2018, many customers decided to boycott the brand.
Opportunities
- Automation of production: H&M is a leading brand that has customers all over the globe. They can invest their resources in product automation to avoid sole dependence on suppliers. It will decrease their cost and wastage at the same time. They will also have control over their products and their quality.
- Unique designs: Though H&M is identified primarily as a fast fashion brand, they can work on their exclusive creative artworks instead of entirely copying from other luxury brands. It will interest more customers towards their apparels. They can work with talented designers to create their signature style and unique designs.
- Innovation: To avoid getting trapped in monotony, H&M must use an innovative approach to plan and design its products. They can do market research to find out the preferences of their target audience. Once they know their choices, the brand can use innovative ideas to plan their business.
- Creative marketing: Since H&M is a big retail brand, it can use its robust presence to send positive messages through its marketing. They can include social texts in their campaigns. It will allow them to fulfill their social responsibilities and improve their brand image. Their positive image will interest more customers to interact with them.
Threats
- Rising production cost: The cost of labor and raw materials is rapidly going up. It can result in a surge in production cost for H&M. They may end up with a lower profit margin.
- High competition: Fast fashion is a competitive market. The fashion trends change at a fast pace, which makes the fast fashion brands experience a loss due to wastage. At the same time, the high competition in the market and a cheap replica of the original brand can negatively impact the business of H&M.
- Recession: The economic condition in some countries is still in a reclining position. Economic conditions like recessions can reflect upon people's buying habits. H&M sells luxury items, and people might prefer to choose the necessities over luxury due to their limited income.
- Pandemic: Retail businesses depend much on the supply chain and logistics. But the pandemic condition and lockdown disrupted the supply chain, and the performance of the production unit slowed down due to government regulations. It resulted in the decreased sales of H&M.
H&M SWOT Analysis Diagram
As you have seen here, the organization's SWOT analysis helps us understand its multiple opportunities and threats and how it can utilize its strengths and overcome its weaknesses. In order to understand the SWOT analysis better, we will create an H&M SWOT analysis diagram using the free templates and components offered by EdrawMax.
4. Free SWOT Analysis Diagram Creator
EdrawMax is one such tool that offers a wide range of diagramming options. Unlike other SWOT analysis creators, EdrawMax comes with free templates and symbols and has a rich online community. With the in-built templates and customization options, you do not require any technical expertise. All you need is the basic creativity and the data availability, and this diagramming tool will do the rest! Some of the major features of this free SWOT analysis diagram software are:
- With this free SWOT analysis creator, you can share your diagrams on social media platforms like Facebook, Twitter, Pinterest, and Line.
- EdrawMax lets you create 280+ diagrams, 3x times more than what Microsoft Visio offers.
- In EdrawMax, all information and file transfers are safeguarded with the highest level of SSL encryption.
- This free SWOT analysis creator now supports the frosted glass effect, where the user can also adjust the transparency.
- EdrawMax Online lets you easily export and share your visual plans publicly or privately.
- EdrawMax has the drag and drops features that make it easy to start with software design.
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5. Key Takeaways
H&M is one of the leading retail brands that offer luxury items like apparel, shoes, and accessories. Their quality product has attracted customers all over the world. H&M has reached a massive number of customers with the help of technology. Their brand image and resources can help them expand their business. They can work on bringing unique designs to suit the choice of their target audience to increase their sales. They can consider expanding in countries with emerging economies to stabilize their position in the highly competitive market.
EdrawMax is an all-in-one diagramming tool that offers a wide range of customization options. This free SWOT analysis creator gives you an option to export your file to different file formats, helping you to have better collaboration options. So, what are you waiting for? Download EdrawMax today and create some wonderful SWOT analysis diagrams for your organization.
Reference
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Parker, B., 2022. H&M SWOT Analysis., [online]. Business Strategy Hub. Available at: https://bstrategyhub.com/hm-swot-analysis/ (Accessed 8 September 2022).
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Preceden.com. 2022. H& M Timeline | Preceden., [online] Available at: https://www.preceden.com/timelines/68290-h-m-timeline- (Accessed 8 September 2022).
