COMPARISION BETWEEN H&M AND L’Oreal

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COMPARISION BETWEEN H&M AND L’Oreal
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12/17/2019

COMPARISION BETWEEN H&M AND L’Oreal
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Hennes & Mauritz AB is a Swedish international clothing-retail business known for
its fast-fashion clothing for men, women, teenagers and children. H&M and its
relatedbusinessesfunction in 62 countries.The corporate governance structure of the business
H&M, includes, According to the law and recommendations, the board work of the comp any
is regulated by the plan of work which also includes distribution and the rules of the work
among the members of the board which includes the committee and the CEO, financial
reporting, savings as well as bankrolling. The work strategy of the company comprises help
of auditing group, which is recognized once in a year. Rendering to various trainings of the
company. The board of the company mainly consists of 3 and more members who are chosen
by the AGM and not more the same amount of assistants. The annual overallconference helps
in determine the thorough number of the board members (Parnell, 2010).
The auditing group of H&M is chosenyearly through the board of directors and the
reviewing committee contains of Christian Sievert (chairman) along with Anders Dahlvig and
Erica WikingHäger (members). The committee of auditing helps in monitoring the financial
reporting of the company, which also includes the effectiveness and the monitoring of the
company and its internal control as well as risk management. The work under this includes
the handling of auditing subjects and the financial intelligences which are printed by the
company
L’Oreal is a French personal care business headquartered in Clichy, with a listed
office in Paris. It is the world's leading makeups company and has industrialized activities in
the field intent on skin care, hair colour, sun protection, make-up, perfume, and hair
care.Moving ahead the corporate governance of the company L’Oreal includes, the
composition of the board reflects L’Oreal’s construction of shareholding and also guarantees
the interests of all the shareholders. Along with the CEO and the chairman there are mainly

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five managements who represent the company’s main shareholders, seven self-
governingmanagements and 2 of the directors who represent the workers. The Executive
Committee members are in responsibility of the workingSeparations and usefulSections, as
well as the physical Zones. They gadget the plannedstrategies and directdoings of L’Oreal all
over the world(Hong &Doz, 2013).
The company H&M is affected by various environmental factors and this thing
highly affects the performance as well as the conclusion making of the business. Firstly some
of the internal environment factors of the company include, the swot analysis of the company
H&M states that the major strengths and opportunities of the company from its environment,
the company is one of the biggest retail industry and it has various strengths such as, it
consists of broad array of products which range from clothing, fashion and accessories,
further the company also have a strong global presence, has multiple channels of retailing,
has affordable pricing and robust financial performance further some of the weakness of the
company includes dependency on the suppliers, high cost of maintenance and lastly the over
stalking of the products (Meskendahl, 2010).
The opportunities of the company includes , it is trying to build a strong presence
online with the help of E-commerce platforms and it is also planning to expand the stores in
china and this is one of the most huge opportunity for the company in order to grow its
revenues and the profits. Lastly the threats of the company includes the highly competitive
market both offline as well as online and thus it faces challenges from the luxury brands,
some of the other threats includes cost of Labor downturn of economy and change in the
trends of fashion (Akhtar, Siddiqi, Ashraf, & Latif, 2016).
Moving ahead the external environmental challenges faced by the company H&M
includes, first of all the political impact includes the De- globalization surge present across

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the world, instability of economy because of the trade restrictions in the North America and
lastly the change in the leader of Asia, USA and Europe.
Some of the technological issues include new technologies like the data analytics and
AI which the company needs to adapt in order to become more effective and the second
thing is the importance of online channels, which the company really needs to focus on, in
order to stay in the competitive market (Giertz-Mårtenson, 2012).
Moving ahead to the company L’Oreal, According to the SWOT analysis of the
company the strengths of the company includes the it strong research and development, the
universalization of the company which is one of their development strategy, the products of
the company are of high quality and are safe products the last and the most important strength
of the company is that it serves diverse markets and is the market leader. There are only two
weaknesses of the company which are that the company has various multiple acquisitions and
is highly depended on the suppliers.
The opportunities of the company are that it is trying to focus on a new market in
Middle East and Africa; it wants to expand its retail in the travel industry. It is also trying to
expand the range of products in order to grow fast in the BRIC country markets. Lastly the
threats of the company includes the competition from other high-end brands, emergence of
various new models of business and most importantly the recessionary trends and the
restraining spending of the consumer (Dasgupta, Gupta, & Sahay, 2011).
Moving ahead the external environment analysis of the company shows that
political and technology impacts the company the most, under the political impact is that
the consumers of the brand are very conscious of the affiliations and the value of the brand
and on the other hand the technological impact includes that the company needs align its
activities with the new and emerging innovations and in order to stay in the market, the

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company needs to focus on its research and innovation in order to have a competitive edge
and also in order to maintain its leadership position.’
Further moving ahead the 3 top risks of the company H&M are, that it is not the
cheapest, does not have a fashionable store and it is not of the best quality and because of this
reason the company is being left behind, next the core problem of the company is the
offering, Erik a account manager at the H&M shareholder, who sold of substantial amount of
the stake in the business told business insider in Feb (Panchenko&Kiriakova, 2016).
The next thing is that the trendy online stores like Boohoo and Asos have beaten
H&M in the matter of speed and the price, these online store cut down there supply chains
among one and eight weeks which allows them to stay on the top and on the other hand H&M
lags behind with Six month reversal time (Schaltegger, Lüdeke-Freund, & Hansen, 2012) .
And the last issue is the crisis of inventory in the company; fashion-conscious
customers have controlled to other brands for the latest designs as clearance sales have
become a common feature for the company and its stores. The company is having week sales
which is mainly produced by the inequities in the assortments for the brand which results into
substantial for a clearance sales (Vij & Bedi, 2012)
Risks faced by the company L’Oreal includes sustainability issues company L’Oreal
uses amounts of plastic, resources and chemicals in order to keep its huge wheels turning, it is
not the only company to do But like many others, it is coming under augmented inspection to
reduce its reliance on use of plastic, and become a more sustainable sector. The next issue is
the changing face of the retail industry it’s an outlandish period for beauty retail. Among all
the high street collapses and store ends, western Europe has seen more health and beauty
shops open that any other type of retailer, according to CRBE. The last issue is re-
PRESENTING OLDER WOMEN; it proved somewhat correct, as cosmetics lines and their

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shade palettes caters to a more gender-fluid audience. However, one section endures to be
melodramatically under-represented, when it comes to media symbol, women over the age of
40 still feel unnoticed by chief beauty companies.
Following are some of the recommendation for the 2 companies in
order to maintain good business practices. Social media is one of the
most used by the people today. One of the best media campaigns today is
to revolve around influencers. Influencers are the individualsinside the
manufacturing and they have large fan following. When an influencer
posts something the people follow it. For instance, one of the best ways to
endorseclothing line is to get an influencer to Tweet pictures of them
wearing some of the brand’s clothes. (Dasgupta, Gupta, & Sahay, 2011).
The next recommendation for the company is from the midst of the
technological revelation and there are rapid advancement in the
technologies like AI, for example chatbots act for 24/7 and it helps in
improving the customer service that guides the customer as soon they
come on the site. Both the companies H&M and L’Oreal should follow the
recommendations in order to improve its business practices.
From the essay some of the conclusion and findings are Hennes & Mauritz AB is a
Swedish international clothing-retail business known for its fast-fashion clothing for men,
women, teenagers and children. H&M and its related businesses function in 62 countries on
the other hand L’Oreal is a French personal care business headquartered in Clichy, with a
listed office in Paris. It is the world's leading makeup’s company and has industrialized
activities in the field intent on skin care, hair colour, sun protection, make-up, perfume, and
hair care. The essay discusses the corporate governance of both the companies along with

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impact of internal and external sources of the company at last the essay discusses the
recommendation for the company which will help them in improving the performance.
References
Vij, S. & Bedi, H.S., (2012). Relationship between entrepreneurial orientation and business
performance: A review of literature. The IUP Journal of Business Strategy, 9(3),
pp.17-31. DOI: 10.17010/ijom/2018/v48/i12/139555
Dasgupta, M., Gupta, R. K., & Sahay, A. (2011). Linking technological innovation,
technology strategy and organizational factors: A review. Global Business
Review, 12(2), 257-277. DOI: 10.1177/097215091101200206
Meskendahl, S. (2010). The influence of business strategy on project portfolio management
and its success—a conceptual framework. International Journal of Project
Management, 28(8), 807-817. https://doi.org/10.1016/j.ijproman.2010.06.007
Parnell, J. A. (2010). Strategic clarity, business strategy and performance. Journal of Strategy
and Management, 3(4), 304-324. DOI: 10.1108/17554251011092683
Schaltegger, S., Lüdeke-Freund, F., & Hansen, E. G. (2012). Business cases for
sustainability: the role of business model innovation for corporate
sustainability. International Journal of Innovation and Sustainable
Development, 6(2), 95-119. DOI:10.1504/IJISD.2012.046944
Giertz-Mårtenson, I. (2012). H&M–documenting the story of one of the world's largest
fashion retailers. Business history, 54(1), 108-115.
http://dx.doi.org/10.1080/00076791.2011.617203.

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Akhtar, N., Siddiqi, U. I., Ashraf, A., &Latif, M. (2016). Impact of a Brand Equity on
Consumer Purchase Decision in L'Oreal Skincare Products. International Review of
Management and Business Research, 5(3), 808.
http://www.irmbrjournal.com/papers/1467435148.pdf