Saturday, March 30, 2019
SWOT Analysis of HM
SWOT synopsis of HMThe paper provides an overview on Hennes Mauritz (HM), analyzing the diligence environment and the position in the sell trade. The paper besides explores the impact of the recess upon the human imaging solicitude activities, found on publicly available details of HM, which has been analyzed and presented within the context of the perspective. inductionThe sell industry is usually a very dynamic, and a fasting changing sector in the market. It represents ace of the main sectors in the UK economy, in terms of employment, transactions and turnover, so that as a consequence, it is a extremely agonistical and a sophisticated industry. Thompson (2002) argues that scotch conditions argon an important fraction in the industry and he states that they may affect the way, weather loose or difficult, a business runs the activity success entirey and profitable .Furthermore he claims that economic conditions may affect both capital availability, constitute and assume. Companies in the spirt sector support to keep all the meter the caution on monitoring the market, and should try to identify whatsoever impudently trends as curtly as possible and, above all, they have to keep up with the customers increasing expectations, needs and changing tastes.As the paper shows above, the analysis pull up stakes be on the HennesMauritz fashion business which is considered angiotensin-converting enzyme of the worlds favourite and preferable arc jibeects of clothes and accessories for man, women, teenagers and babies. In addition, HM its as well known not notwithstanding for the fashion cosmetics and accessories only also because of the quality of the clothes ,using sustainable materials uniform original cotton, wool and organic denim, all being environmental neighbourly (HM website (1), viewed 20 October 2010). correspond to the Datamonitor (2010, p.4) HM is a large clothing retail merchant with its operations primarily set in Europe, North the States, and Asia, owning in 2009 1,988 stores universal and kick ining gross sales of 119 billion Sweden Kronor. (HM website (2), viewed 20 October 2010). The social clubs main office is based in Stockholm, Sweden and employs al approximately 76,000 workers out of which more than 53,476 be on full time employment as of November 2009. HMs strategic approach is to offer designer clothes to general population at affordable charges, the company work with such brand names as Stella McCartney, Karl Lagerfeld, Roberto Cavalli and Lanvin (Capell Beucke 2005, p. 16 Kroll 2004, p. 71 Zimmerman 2009, p. D1 WWD 2010, p. 2). deferral IN RETAIL SECTORNowadays almost all kinds of industries ar willing to maintain their competitive position in the market during the recession period. Most of the challenges that the retail market faces are cerebrate to the economic and the fiscal aspects. The fashion industry faced unfavourable situation due to the drop-off of the m wizardy spent on clothes, but also due to the castrate in consumers behaviour.According to Kambil (2009) recession should last less than 2 years, and managers should go for full advantage of this in identify to rethink and renew their strategies and their competitive positions in the UK retail market.The UK retail market was just one of the industries hit by the globular economic downturn, as shoppers were forced to limit their disbursement and consumer confidence was shaken by the failure of important retail giants equivalent Woolworth. With the retail market getting back on its feet in 2010 peculiarly the online sales segment, where UK web sales grew by 18% in lordly 2010 (BBC website, http//www.bbc.co.uk/news/business-11034030 ), compared with the selfsame(prenominal) month a year earlier one of the most pressing concerns is whether in that location will be long-term set up on consumer confidence or spending.The retail industry has been an excellent ratifier to the UKs economy. A ccording to the British Retail crime syndicate, the retail sector is one of the endorse largest employers in the UK, employing 11% of the UK workforce, some 2.9 million people as of abut 2009.Historical evidences depict that the UKs economic development has been dominantly fuelled by the successes in the fashion industry especially because of the existence of 286,680 retail outlets in the UK (British Retail Consortium website). over all these years, industrial success in textiles and fashion goods grammatical constituent have been world-shaking and can be attributed to the continuous modify and improvements in the lifestyle of the shoppers and the increasing nurture being placed to such products. Consumers perpetually experimented different looks, styles, fabrics and ideas and their interest in fashion accessories has been stimulated by eminent media exposure, which have been causeing over the last few years. This assiduous chuck out in the consumer spending on fashion p roducts led to practically uncontroversial addition in the industry.Despite the crisis in this sector of the economy, some of the organizations managed to work their market share. According to Kambil (2008) companies need to focus their attention on the market share and in addition they had to launch new products and adjust the alive ones in order to improve their relations with the customers. Using HM as a company example, they tried to beat the effects of the downturn, by ledger entry designer clothes in partnership with well-know designers like Jimmy Choo, Roberto Cavalli and Lanvin this November (HM website, viewed 21 October 2010). still the economic recession has alter many HR Processes and they demand to be adapted to the new economic environment and furthermore they had to be ready to face the new touchableity. The impact of the recession is not the same and many HR Processes can continue their regular operation without any adjustment. Even if recession has affected many fashion clearups, closing stores or slashing prices, one of the big retailers operate on the UK market, HM ,was retentiveness quite well, in addition they were opening stores, entering new markets, and adding new brands (Spiegel website, April 9 2008, ).Another major effect of the recession in the retail industry is the staff redundancies. According to The Telegraph website there is an important retrenchment in this sector, which may affect retail organisations in many ways. The condition shows that at the beginning of 2009 economists were announcing massive staff reductions between 100,000 and 135,000 jobs due to the hard knocks of the slowdown. Moreover the Chartered Institute of Personnel and Development predicted at that time more than 600,000 jobs will be lost and many companies will be forced to freeze their workforces pay.Sales have been also suffering by the economic downturn, reporting a volume of retail sales overthrow with 0.1% than October last year (Nation al Statistics Online website, http//www.statistics.gov.uk/cci/nugget.asp?id=256).Among the parts that should be taken into consideration is the current economic growth rate in the nation. This directly refers to an economys rise in value of services or goods produced. According to the Office for National Statistics (ONS) in the brass of United Kingdom, the economic growth rate in 2010 grew by 1.1% in the second quarter of the year (BBC website, National Statistics Online website, http//www.statistics.gov.uk/cci/nugget.asp?id=256 ).Another economic factor that may influence retail business in the fashion industry is the inflation. According to the BBC newspaper, the Consumer Price Index (CPI), inflation accessiond to 3.2% in October from 3.1% per penny in the previous month (BBC newspaper, http//www.bbc.co.uk/news/business-11784775, Appendix A)SWOT Analysis of HMAccording to Armstrong (2004) SWOT is defined as (Strengths, Weaknesses, Opportunities, Threats) and is a touristed fra mework for developing a marketing strategy. SWOT analysis is essentially done to find out if they have sufficient resources to cover their failing and still achieve their objective.StrengthHennes Mauritz AB build its strengths by operating through complementary retail convey stores, Internet, and printed catalogues.According to Datamonitor (2010) one of the portentous strength of HM Company is the request for its products which rise up the breed turnover and enables low price cut. Customer express their preference for HM product especially clothes because of its quality at the best price but also because of the stores which are refreshed and reordered daily with new garments products. Moreover, coaction with designer like Karl Lagerfeld, Stella McCartney, Roberto Cavalli and Lanvin this November, which are very well know worldwide, will improve the desire for their garments ,but also will accelerate sales growth ( Business week website, viewed 19 October 2010) .Another major strength of HM is the presence on different markets such as Europe, North America and Asia with almost 2000 stores (HM website (4), viewed 20 October 2010). This fact is a positive aspect for the company because they can diversify their risk, but also be sustainably- financially, socially and environmentally (CSR Report 2009).WeaknessesOne of the most important and noticeable weakness that HM encounters is the segment that the fashion company targets. HM designs clothes for young customers go them the HM Divided and HM L.O.G.G collections. Second fact that can be taken into consideration as a weaknesses is the shoppers base which is influenced by the macro instruction economic environment in a negative way (Datamonitor 2010).The member claims that HM focus on the young segment of the market, which is one of the shoot hit by the recession, with 21% rate of unemployment for teenagers under age of 25.Opportunities origin of all, one of the most important opportunities that HM face s is the e-commerce. According to Datamonitor (2010) HM online sales grew by 22% with 4.7% of the total retail online sales in Europe. Moreover the online sales within more 17 European Countries (such as France, UK, Germany) are estimated to grow by 11% each year over the doing five years. Even if the recession affected the retail industry, Hennes Mauritz opened in 2009 250 stores worldwide with 25 more than they planned. (HM website (3), viewed 21 October 2010)Second of all, the expansion plans 2010-1011 for HM intend to reach a 10-15 % each year. The Company tries to focus on markets like Asia where the sales double over, China Japan and South Korea. (Financial times website October 20, 2010).Another fortune that HM takes full advantage of is the use of organic cotton which classified the company in the top twelve global brands and retailer using organic cotton.ThreatsThreats of the company are also related to the economic recession because shoppers spend less money on clothe s. Over the year 2010 employment were expected to become worse, peaking towards the end of the year at approximately 10.3% and consumers were expected to apply for benefits. Second major threat for the organisation is the VAT which has been reduced in the UK in 2008 by 15% and in January 2010 has been changed again do 17.5%. Apart of this change the cost for cotton has been change as well with almost 60-75 % by the end of 2009 and with 20-30% during 2010 (Datamonitor 2010 , http//web.ebscohost.com/bsi/pdf?vid=20hid=7sid=4b01c02d-b8cf-414f-b787-7f93a0b69865%40sessionmgr113 ).Human resource Management in a recessionThe retail sector is one of the most hit by the global economic recession, so that managers should worry the effects of recession as professionally as possible in a downturn. But since when human resource management is dealing with the executing of the strategies and policies relating to the management of individuals, the department become one of the most responsible to tally the organisation on the right track during recession time. According to Kambil (2008) there are some important steps that a business should follow in order to maintain their competitive position on the market. rough of these vital steps are the improvement of prices in order to grow margins, the increase of the financial and operational efficiency, but also the concentration on the market share.According to Armstrong (2009, p.5) the purpose of the human resource management is to ground sure that an organisation is able to perform well through its staff, but also to increase the efficiency and the capability of the business. Furthermore, it also helps the business to reach it goals by using the resources available to their best use.One of the first processes affected by a recession is the recruitment selection policies which have been massively affected by the recession. Newell and Shackleton (2000) argues that recruitment and selection process involves fashioning previsi on about what will happen, so that decisions are made about who is the most suitable person for a certain job that can increase the performance of an organisation. Now managers and recruitment agencies are being pleonastic minute who they bring in, and they prefer to rethink and implement new strategies in order to improve their relations with the customers. In addition, companies are even more demanding than before, making sure that they recruit the best candidate that can bring real value to the company.Another significant effect on human resource management which impact an organization in recession time is the cost naked as a jaybird. Retailers are conscious about the situation of the business and try to do everything to maintain their competitive position on the market. They started to cut working hours, holidays, force back costs, and travel expenses and they dont offer long-term benefits anymore. According to Retail Week website (http//www.retail-week.com/cost-cutting-the- lean-machine/1923604.article ) organizations requisite to reduce its cost not only to their store level, but also to their head offices.The course and development process have been also affected by the recession, so that managers offer limited trainings to their staff. Selecting and training employees with great potential, tote up to the increase of the sales and organisations performance. It also leads to a more structured career path which ensures that staff has the necessary skills to improve the quality of services and products of a company.Introducing flexible working arrangements and part-paid sabbaticals is another effect of the recession that has a significant impact on an organisation impact on an organization. Managers prefer to make these changes, rather than implementing tautology programmes, because it allows them to manage every cost. This measure eliminates the need of hiring extra staff for busy periods such as Christmas or Easter holidays.The operations are also suffering due to the recession, because managers develop different channels which imply lower labour costs, such as online sales.A tour of retailers found more innovative ways to deal with cost cutting by introducing 9 day fortnights, reducing daily hours and offering unpaid sabbaticals, so we also saw an uplift in the request for impermanent specialists to renegotiate these new practices.ConclusionThe middle of 2008 saw huge changes for the UK retail industry, with the sector suffering a very intense downturn and several(prenominal) well-known brands were disappearing from the high streets. But on the other render there have been retailers that improved their performance during the recession. As seen above, HM is one of them, reaching a SEK 118,697 million turnover, and about 76,000 employments.The human resource management is one of the sectors that have been also affected by the economic downturn. According to Armstrong (2000) Human resource management is a construct largely invented by academics and popularised by consultants. So that many retailers took decisive actions, like concentrating and simplifying their operations by reducing staff numbers and costs, both through natural wastage and implementing redundancy programmes and flexible working hours.Furthermore, there is now evidence of significant change in the retail sector. In line with the drop-off in demand for goods not being as bad as had initially been feared, retailers are now re-evaluating and rethinking their HR strategies.In conclusion, the paper demonstrates that the current economic conditions have provided the opportunity for the UK retail industry to learn and deal better with HRM structures and recession, adding to what had already been in progress before the economic downturn, which in turn shows an opportunity to make the business stronger, successfully and profitable. Moreover, there is a lack of measuring qualifications across retail sector which is also unfavourable. Governme nt policy in this area is ineffectual and needs to be improved as soon as possible.