Business Management Analysis of H&M and NEXT

The provided report is a business management analysis of two different organizations, H&M and NEXT. The report includes company profiles, SWOT analyses, and CSR activities to elaborate specific terms of those organizations. It also provides recommendations for Caifu Investment Ltd on which organization to invest in based on their requirements. The report concludes by summarizing the key points and referencing relevant sources.

BUSINESS MANAGEMENT

EXECUTIVE SUMMARY
Business management is an organisational activity that includes different elements such
as Planning, Organising, Monitoring, leading and Controlling. This process is basically conduct
to implement all operational and functional activity in effective manner. For a individual person
it is required that they build management activity in their working process to achieving higher
business advantages. As per this report Caifu Investment Ltd is a new investment group based in
Beijing wants to invest their fund in a specific clothing organisation for this they choose two
different firms as H&M and NEXT, for analysing its activity by focus on organisations to
operate business management process effectively.

Table of Contents
INTRODUCTION...........................................................................................................................4
Company Profile.........................................................................................................................5
SWOT analysis............................................................................................................................7
General management function....................................................................................................9
Organisational structure..............................................................................................................9
Code of ethics for support to CSR activity...............................................................................11
RECOMMENDATION.................................................................................................................12
CONCLUSION..............................................................................................................................12
REFERENCES .............................................................................................................................13

INTRODUCTION
For a business organisation, management process includes different kind of activities as
Planning, Organising, Monitoring, leading and Controlling to implementing in their procedure.
All these activities are required to done in appropriate manner to getting effective competitive
advantages easily (Pinto, 2015). This business procedure is needs to be done in properly to
getting desired growth and business objectives. This report is based on a specific business
management term on two different organisations as H&M and NEXT. Main objective of this
research is, Caifu Investment Ltd which is a new investment group in Beijing and they wants to
invest its fund in specific clothing organisation between them. H&M and NEXT are two leading
organisation but they also face various management issues that consider recession in retailing
sector as maintaining competitive position and globalisation that impact on market changes. For
them this report will including Company profile, SWOT analysis and CSR activity that used to
elaborate specific term of those organisations.
TASK
Company Profile
As per this research report there are two different organisation are given below. Company
profile of them are as follows -
H&M
Hennes and Mauritz is a multinational clothing retailer brand. This organisation was
established in year 1947 by Erling Persson. H&M is basically deals in fast fashion clothing for
Men, women and children. This is a well known organisation which have around 4500 stores in
approx 62 countries. In their stores approx. 132,000 employees are working to providing quality
services to their customers in effective manner. This business firms is deals in store and online
selling to build effective customers loyalty and relation for long term period.
History of H&M
H&M is a leading brand which was founded in the year of 1947 by Erling Persson as his
first shop in Sweden. At that time name of this organisation known as Hennes which was only
dealing in women clothings. After some years this company was listed in Stockholm stock
exchanges and build its new store in London. H&M continued expend their business structure

globally and also create online dealing procedure and operate 2,325v store in the year 2011 and
in 2012 number of their stores were 2,629 to connect with new customers directly. This
organisation was expanded their stores yearly wise as in 2013 they have approx. 3000 stores
newly in china and in 2017 around 4500 stores they have easily (
Ball et al 2012). For marketing collaboration, this organisation offer exclusive collection with
well known designer Karl Lagerfeld in 2004 and in 2006 they launch collection of Stella
McCartney. After some years as in 2016 they also collaborate and released a classic designer line
with Kenzo.
Financial statement of this organisation are given below-
NEXT
NEXT is a British multinational brand which was founded in the year 1864 by Joseph
Hepworth. This organisation is dealing in clothing, footwear and home products as a retailer.
This is a public limited company which has around 700 stores in UK and Europe. This is a
largest clothing retailer having 500 stores at in UK and approx. 200 stores in Europe, Asia and
middle East.
History of NEXT
NEXT is multinational brand which was established in the year 1864 by Joseph
Hepworth as a tailor shop name as Joseph Hepworth & sons. This organisation expend their
store quickly in UK and other countries as well as develop a specific supply chain in Britain
easily. In 1981, this organisation start their business as women wear retailer in British high

streets. They took a specific time period to build customers relation specifically. At present they
have approx. 500 stores and 49,033 employees who serve effective services easily.
Financial statement of NEXT is given below -
SWOT analysis
H&M is a big brand in market which gives a lessons to competitors to get engage
customers. Yet, it has low cost expenses on advertising or marketing. However, it leading brand
across world. It's core strategy to get customer back to showroom through its product quality
and design. It has a strong appearance in world.
SWOT analysis of H&M
There is SWOT analysis of H&M are given below-
Strength
 Trending fashion and designs- It is mainly about fashion, so it 's major goal is to
fulfilling customers demand within affordable cost and trendy fashion. Designing is
foremost ability of brand name (Gamble and Thompson, 2014). It lies on team of
designers who understand what it is and psychology of its customers, for what they are
looking for. H&M has market for everyone, for kids, men, women with a huge variety
including party wear, office wear, casuals, any thing, with quality, elegance which
matters to get compliments.
 Strong branding- H&M itself is a brand due to its performance over years because of
justifying pursuant quality. It is recognized by Forbes at 53 rank and boost up to 10.7n
dollars. It is inclining every year with its genuine quality and performance.
Weakness
 Lack of advertising- H&M doesn't expend in marketing or advertising, that leads to low
profit. However it earning very well, but if it also expend in advertising then it surely get
high profit rates. It turnover could be double. Though it is trendy fashion fashion outlet, it
can generate more consumers with advertising.
 Generalized collection- H&M is a one stop destination for all, for every kind of outfits.
It is not specialized in one item like only shirts, or casual or party wear. That might be a

reason to switching consumers to competitors, who is specialized in certain sort of
things.
Opportunities
 Extending sales to online market - H&M can expend online market place along with
physical stores. Online availability will put sales on hikes.
 Catalogue designs – leading brands have their own catalogue designs which is flagship
design for their stores, H&M doesn't have that. It would be best for its selling, one must
sold to stores.
Threats
 Competition – H&M is not one and only brands which is known for its designs. There
are some other well- known brands also present in market, which are producing best
quality products. But somehow, they are little bit higher in cost. H&M offers best
products with affordable prices, which is loved by its consumers.
SWOT of NEXT
There is SWOT analysis of NEXT are given below-
Strength
 Efficient Supply Chain- NEXT is well known for its designs, creation to get it in to
stores, it launches new trends within two weeks whereas competitors holds on for a
long time. On an average, it designs 450 million items in every year. That pushes
customers to visit to showrooms.
 Affordable cost and higher profit - NEXT doesn't need any advertising, because of its
design benefit and fabulous physical grounds, that's why it hardly expenses on advertise
of its products.
Weakness
 Communication - Communication has a most important role to get feedback, one
should take a initiative to get hold in marketplace. NEXT don't follow communication to
get consumers feedback, to overcome issues, that ca be solve by being in touch.
Opportunities

 Enhancing market potential- NEXT is an existing brand, it is becoming more and
more favourite, that resulted to enhancing market potential. It has become a status
symbol for consumers in clothing industry.
Threats
 Change in customer demand, trend and fashion – Customers demands are growing
day by day, demands are not sustainable, they need latest and new fashion treats that they
conceptualize. Acquire market according to customer demand is so crucial to handle.
Creativity is major concern in fashion buzz.
General management function
For a business organisation, it is require that they manage their business activities in
effective manner to getting higher business advantages easily. Through this process they can
implement all activities in effective manner. In this process, manager and leader of a firm build
effective procedure that needs to be done to getting higher business growth and business
objectives effectively. This process includes different key function of management such as -
Planning – This is a first step of organisation that include effective planning and strategic
process. It is conducted by an organisation to implement their business procedure appropriately
and for creating effective objective and goals as well (Storey and Greene, 2010). Example of this
process is H&M create effective planing process before introduce any product in market and in
other hand NEXT plan all their procedure for crate new objectives and goals for their firm.
Organising – H&M is a leading brand and they organise its business policy and
procedure in effective manner according to market and customer demand and NEXT is
implement their business procedure according to proper strategy and planning process.
Leading – H&M offers such trend in fashion and quality products that draws customers
to its stores. This is reason to killing operational cost. It invests savings and profits others
crucial area such as supply chain rather then spending it on advertising. Or in other hand NEXT
runs it own stores, not having shop. It should enhance its scope to reach consumers widely. This
makes competition higher.
Controlling – This process include control on ineffective activities and negative
approaches. H&M always build appropriate strategy to control Cost effective products
manufacturing and provide its services according to customers demand. NEXT is also a leading
brand and they also monitor or control their employees business approaches.

Organisational structure
Organisational structure of each and every organisation is very different that they use to
communicate with each other. There are various organisational structure of H&M and NEXT are
given below that used for communicate -
Organisational structure for communication of H&M-
Downward communication – In this business structure communication is flow from
upper level to lower level. All the management level employees provide their instruction and
direction to lower level employees for getting effective outcomes of their services. These kind of
communication is very effective and appropriate because through this guideline and direction to
employees are given in exact manner.
Upward communication – These kind of communications are flow in Low level to
upper ones. In this process employees of organisation can easily discuss their doubts and
problems to senior employees without any hesitation. This is a effective process in which
employees can easily communicate with upper level employees easily.
Horizontal communication – in this process flow of communication is going in a
specific manner or to employees to other workers. In it employees are easily clear their doubts
and problems with their colleagues and peers.
Organisational structure for communication of NEXT-
NEXT organisation always uses metric structure to build effective communication easily.
There communication process is going through in effective manner because head of department
always analyse issue of their department and division to provide them specific guideline. Flow of
this communication is going through general manager to different level as manager of project,

manufacturing manager, engineering manager, sales manager after them this communication is
flow in different kind of project management term to communicate in effective manner.
Code of ethics for support to CSR activity
These terms are related to government norms and ethical issue that affiliated in an
organisation's context. These things are conduct to solve issues that can arise when organisation
do not follow legal terms. There are some CSR activities of H&M and NEXT are given below -
CSR activity of H&M – Corporate social responsibility is a term that related to social
factor of an organisation to implement their policy for public welfare. In this term H&M start a
initiative to reproduce various cloths for poor children to provide them free facility (Stokes,
Wilson and Wilson,2010). These things are related to recycling process that introduce in 2013 to
provide effective service to each and every one. These are related to dispose cloths in effective
manner to make them appropriate for publicly. All these things are based on governmental issues
and norms to solve them esaily.
CSR activity of NEXT – In this initiative NEXT start their contribution to build health
care facility on the behalf of their product sale. These kind of initiative are build values for
public welfare and for government bodies.
RECOMMENDATION
This research report is based on Caifu Investment Ltd which is a new investment group
based in Beijing wants to invest their fund in a specific clothing organisation . For this procedure
they choose two different firms as H&M and NEXT . So for this there are some other
recommedation are given below as-
 If Caifu Investment Ltd want to invest their money in well growth organisation which
have maximum store and global values then they can invest their amount in H&M.
 If Caifu Investment Ltd wants to invest their amount in a organisation that needs
effective growth them they can easily invest in NEXT organisation which have quality
brands and products.
CONCLUSION
As per the above report it has been summarised that business management is required
activity for an organisation to implement their process in effective manner. This project report is

based on two different organisation such as H&M and NEXT. For them, this report represent
including Company profile, SWOT analysis and CSR activity that used to elaborate specific term
of those organisations.

REFERENCES
Books and Journals
Stokes, D., Wilson, N. and Wilson, N., 2010. Small business management and entrepreneurship.
Cengage Learning EMEA.
Storey, D.J. and Greene, F.J., 2010. Small business and entrepreneurship. Financial
Times/Prentice Hall.
Gamble, J. and Thompson, A.A., 2014. Essentials of strategic management. Irwin Mcgraw-Hill.
Schaper, M.T., Volery, T., Weber, P.C. and Gibson, B., 2014. Entrepreneurship and small
business.
Pinto, J.K., 2015. Project management: achieving competitive advantage. Prentice Hall.
Ball, D., et al 2012. International business. McGraw-Hill Higher Education.
Rohloff, M., 2011. Advances in business process management implementation based on a
maturity assessment and best practice exchange. Information Systems and e-Business
Management. 9(3). pp. 383-403.
Sampaio, A.R., Thomas, R. and Font, X., 2012. Small business management and environmental
engagement. Journal of Sustainable Tourism. 20(2). pp. 179-193.
Hatten, T.S., 2012. Small business management: Entrepreneurship and beyond. Cengage
Learning.
Colombo, M.G., et al 2012. Introduction: Small business and networked innovation:
Organizational and managerial challenges. Journal of Small Business Management.
50(2). pp.181-190.
Online
Financial statement of H&M 2018. [Online]. Available through
<https://seekingalpha.com/article/4111066-h-and-m-already-reached-bottom>