Research Paper on H&M's International Expansion

This research paper analyzes H&M's business expansion across borders, including its current financial performance, international competitive strategy, organizational design structure, entry strategy, operational control, production and distribution, human resources across borders, key issues and opportunities, recommendations, and conclusion.

RESEARCH PAPER

Cover Content
 Introduction
 Overview of company
 Current Financial Performance
 Review of company's international competitive strategy
 Organisational Design Structure
 Entry strategy
 Operational control, production and distribution
 Human Resources across borders
 Key issues and opportunities of H&M management
 Recommendations
 Conclusion
 References

INTRODUCTION
 In this research paper, organisation which has been chosen i.e. H&M for
conducting analysis on business expansion across borders.
 A multinational clothing brand operating its business in around 62
countries with more that 4,400 stores.
 China, United States and Germany are some of main markets in which this
firm has gained good reputation.

Overview of company
 Hennes & Mauritz AB, a Swedish international clothing-retail business
organisation known for fast-fashion clothing segment for teenagers, men,
women, and for children as well.
 Company is famous in all over the world named as H&M, it was found in
the year of 1947 as Hennes by Erling Persson.

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 H&M is being considered as the second largest clothing retailer just after
Inditex, as this took place because company has kept its focus on offering
right fashion to its targeted customers considering new trends.

Current Financial Performance
 On the basis of current financial reports of H&M, which shows that
company's current operating position is strong enough which is helping
them in expanding its operations in countries where it is not doing
business.
 Sales of the company got expanded by 4 percent from AUD 36026.96 to
34642.59.

Review of company's international competitive
strategy
 H&M is performing at international level, company goes through a heavy
range of competition from many small, medium and large level of rivals in
different countries that are doing business in clothing sector.
 It can be said that competition level is increasing continuously and H&M
has started facing really very heavy rivalry from companies that are doing
business in same sector.

Organisational Design Structure
 H&M basically follows functional organisational
design structure in the company and this help them
in keeping things simple even in complex
situations. Since the company has kept its focus on
business expansion.
 It cannot use a complex organisational structure
like matrix as this would lead H&M to go through a
number of problems where employees may deliver
information to others

Entry strategy
 There are ample number of entry level strategies through
which an organisation could directly start running its
business in a whole new country.
 Some of these are: direct exporting, licensing,
partnership, collaboration, green field investment and
many more.

Operational control, production and distribution
 It is being analysed that in order to reduce the risk of facing issues at
marketplace.
 H&M basically uses risk analysis regularly for operational control.
 It is necessary for every company that is dealing in clothing sector at the
time of business expansion.
 This could basically reduce operational risks to minimal.

Human Resources across borders
 HR strategies depends on organisational strategies so that growth and
profitability can be achieved.
 Recruitments are carried out every year so that new stores can be opened.
 In China within H&M, planning and recruitment is based on policies
designed by HR to recruit local employees when stores are opened.

Key issues and opportunities of H&M
management
 As H&M is dealing in more than 63 countries, it requires to have a huge
range stock to offer customers with right fashion.
 This has been one of the basic issue for the company because the target
which organisation sets, its response never Comes nearby at the time of
performing business at a whole new place.

Recommendations
 With the help of above mentioned report, it is recommended that, H&M
requires to continue innovating in making clothing which can make them
be well known around the world.
 H&M should improve their brand level.
 As China has got a high subscribers rate of internet, H&M needs to open
its own online shop in China.

Conclusion
 With the help of above mentioned PPT it is being concluded that Chinese
business market is not an easy place for a business organisation to operate
business in a successful manner.
 The culture of the country is totally different from any other nation, this
ultimately impacts upon strategy is made by the organisation to run the
business successfully.

References
 Swoboda, B., Elsner, S. and Morschett, D., 2014. Preferences and
performance of international strategies in retail sectors: an empirical study.
Long Range Planning. 47(6). pp.319-336.
 Mohr, A. And et. al., 2014. Testing the regional performance of
multinational enterprises in the retail sector: The moderating effects of
timing, speed and experience. British Journal of Management. 25.
pp.S100-S115.