Research Project: H&M's Strategies for Emerging Markets Entry

This research project investigates the strategies employed by businesses, specifically H&M, to enter emerging markets within the context of globalization. The study begins with an introduction to globalization, highlighting its impact on businesses and the blurring of geographical boundaries. It then outlines the research aim, objectives, and questions, focusing on identifying H&M's international market strategies and the challenges it faces. The literature review explores globalization, its types, benefits, and challenges, followed by an analysis of various market entry strategies such as exporting, licensing, franchising, and joint ventures. The research methodology is briefly mentioned, and data analysis and interpretation, along with reflection, recommendations, and conclusions, are included to provide a comprehensive understanding of H&M's approach to international expansion. The project aims to enhance academic knowledge, improve analytical skills, and provide insights into H&M's global market strategies.

Research Project

TOPIC........................................................................................................................................................3
INTRODUCTION.....................................................................................................................................3
Research Aim.........................................................................................................................................3
Research Objective................................................................................................................................4
Research Question.................................................................................................................................4
Rationale of Research............................................................................................................................4
LITERATURE REVIEW.........................................................................................................................4
RESEACH METHODOLOGY................................................................................................................8
DATA ANALYSIS AND INTERPRETATION....................................................................................11
REFLECTION, RECOMMDATION AND ANALYSIS OF RESERCH...........................................15
CONCLUSION........................................................................................................................................16
REFERNCES...........................................................................................................................................17

TOPIC
“The different strategies employed by businesses to enter emerging markets” – Case
Study on H&M
INTRODUCTION
Globalisation is process by which the world is coming together at one platform where
there are no cultural, social, economic, political and life styles boundaries. It is making world a
global village by blurring geographical boundaries and barriers of cultural to an end. It is also
expanding communication and transportation in result of which distances are reduced
geographically. It has most important impact on economy of nation by making it strong and
competitive in global market. Hennes and Mauritz (H & M) is Swedish clothing retails
multinational company operating at international level. It has clothing range for kids, teenagers,
adults and senior individuals offering wide variety to meet consumer specifications. There are
many different strategies which provide opportunities to enter into new market. Some of them
are as exporting, licensing, franchising, joint venture and Greenfield. Organisation will prepare
detailed plan so that extensive research is carried out so that growth can be achieved. There is
market analysis which research on factors like feasibility study, risk management, resources,
competition and scope of growth. These strategies helps business to study all factors related to
operations and manage risk elements so that success can be achieved. The first and foremost step
in entering into new emerging markets is conducting extensive market research so that best
divisions can be chosen so that success is guaranteed. This research will examine different
concepts and factors of globalisation which will impact business and its operations. This research
will conduct study on identifying different strategies by which H & M and its operations can
process in international market. It will also analyse major challenges that will impact H & M at
the time of entering into international markets and aim at growth and developments for company.
In last it will include business strategies that will helps businesses to overcome challenges while
entering into new segments of international markets (Lebedev, Peng, Xie and Stevens, 2015).

Research Aim
“To evaluate different strategies employed by businesses to enter emerging markets. A
case study on H & M”.
Research Objective
 To determine the concept of globalisation.
 To identify different strategies by which H & M can lead international market.
 To analyse major challenges that will be faced by H & M at the time of global expansion.
Research Question
 What is the concept of globalisation?
 What are the different strategies by which H&M can lead international markets?
 Which are the major challenges that will be faced by H&M at the time of global
expansion?
Rationale of Research
This main purpose of selecting this research project is to improve academic knowledge
on Globalisation and identify its benefits so that businesses can take its advantage. This will also
improve communication and analytical skill of researcher that will help them in conducting more
effective and worthy research in future. This topic has been selected by researcher as they have
learnt about the same topic in some past course which has raised interest for it. This has
motivated them to choose topic on Globalisation. Further by conducting research on this topic,
H&M can gain knowledge about the key aspects associated with globalisation and easily enter
the emerging markets with lesser possibility of failure (Hohenthal, Johanson and Johanson,
2015).
LITERATURE REVIEW
Concept of globalization.
In the views of Tejvan Pettinger,2017, Globalisation is the process in which individuals,
trade and goods or services are spread widely throughout world, ensuring better interaction and
integration between world's governments, cultures and economy. There are different types of
globalisation like economic, political and cultural which connect different countries together and

end respective barriers so that there is free and fair businesses between nations. There are
different benefits of globalisation like Improved Living Standards which is main benefits of
globalization is sudden rise in living standards of individuals in developing and under developed
nation. Another one is increased Creativity and Innovation in international competition that can
enhance creativity and innovation, ensuring companies to have competitive advantage. This
benefits works toward quality and value is improved in products and keeping costs low as
possible. The free movement of employees and investment means that ideas from developing
countries can achieve innovation around world. There are many challenges of globalisation
which a company needs to overcome so that it impacts is minimum. One is, Loss of Cultural
Identity while globalization has ensures that foreign cultures is easier to access, it has also made
that cultures to meld together. The success of certain cultures reforms and lifestyle in the world
have caused other nations to adapt their lifestyles and cultures. When cultures begin to lose their
differentiated features, there is decrease in global diversity. Job Mobility is one of most common
challenges of global trade system is how it manage shipments of jobs especially in
manufacturing industry, from less developed nations to developing countries. Lower-skilled
workforce which loses their manufacturing jobs in developed regions faces difficulties in finding
new one, comparably compensated work. Language is one of the most effective barriers to
effectiveness of globalisations. The problem involves not only in trading with different countries
but of different languages in same country, it also involves linguistic and emotions, literacy rate,
idioms and dialects etc. Literacy for example, limits the populations of people in a country who
can be targeted through print media of advertising like newspapers, magazines, etc. Many
countries are multilingual such as Canada, Switzerland, etc. with different advertising media for
communicating in different languages (Costs and benefits of globalization, 2017). This language
pattern in nations grows serious problems in effective advertising communication. Despite in the
global there are some common languages which are as follows like Spanish, English, Arabic and
Chinese which is creating big hurdles for international trade and business. The way of
advertising message in promotional tools is perceived differently by individuals even if they
speak same language in common. Advertising is big key for international businesses to survive
and grow in markets so that they are competitive enough to sustain in global markets for longer
period of time.

There are different challenges and benefits of globalisation and there is need that organisations
conduct research so that they can survive and compete in new markets and grow further so that
globalisations creates positive impacts o operations. There are various strategies which will
assists businesses for entering into new emerging market due to globalisation process which is
making this world a global village.
Different strategies by which H & M can lead international market.
According to the view of Peter J. Buckley,1998, In current scenario of world, the concept of
emerging markets represent a significant portion and are growing at much faster rates. However,
Emerging markets have played a great role in exciting global economic growth, especially after
the 1997 currency crisis - which required a refurbishment of many emerging market economies
to become more erudite. Therefore emerging market is refer as economies of countries which are
in the advancement of becoming a developed country and typically are moving toward mixed or
free markets in order to acquire best brand position within competing marketplace (Analyzing
Foreign Market Entry Strategies: Extending the Internalization Approach, 1998). Henceforth
there are several methods to enter into an international market are licensing, exporting,
franchising, joint venture, partnership and son on which lead an organization to improve its
overall performance within competing market in an effective and efficient manner. Therefore,
taking corrective course of action enable an establishments to cope up with its current or
upcoming challenges in a better manner. Some of these are explained below”
Exporting: Under this phase, it is concern with exporting factor which is considered as
one of the ways to enter a new market. In this, concerned parties or companies set up an
export company or use a local distributor in order to trade their product or service from one
region to another. However, founding own export company as well as using a local
distributor are not mutually élite. Apart from this, agents and distributors work closely with
an aim of representing each other interests for attaining increased level of profitability in a
better manner. However, they become the face of an establishments and thus it is important
that the choice of agents and distributors is handled in much the same way as hire a key staff
person. In addition to this, exporting permits an H&M to enter many markets at the same
time without much capital investment that help firm to enlarge its market growth in an

improved way. On the contrary, its downside, however, is that it limits the control over local
market on which firm decided for exporting to – as they wholly depend on distributors and
local buyers.
Licensing: Licensing is a relatively another productive arrangement in which firm
handovers the rights to the use of a product or service to another well-founded. Moreover, it
is a particularly useful strategy if the purchaser of the license has a moderately large market
share in the industry in which a particular company desires or want to enter. Furthermore,
Licenses can be for marketing or production functional areas that impose a huge impact
product or service in an improved way. Although one of the profligate and most profitable
ways to expand a business to foreign markets is to use licensing market entry strategy, it also
has its risks. For example, if a specific establishment brand image might be damaged when
superior don’t have a strict control over the company that purchased the license. However,
with a prudently prepared license agreement, licensing can be a pronounced method for
bigger companies to enlarge their markets. Especially for companies with stronger brands or
for businesses with a unique technology that local players need access to.
Franchising: Franchising is a typical North American process for hasty market
expansion but it is gaining traction in other parts of the world. Franchising works well for
firms that have a repeatable business model (eg. food outlets) that can be easily relocated into
other markets for obtaining maximization of profit with an optimal utilization of resources in
an improved mode. Two caveats are required when considering using the franchise model.
The paramount is that business model should either be very unique or have strong brand
recognition which can be utilized internationally and secondly generate future competition in
particular franchisee for acquiring best position within competitive marketplace. Henceforth,
Franchising is considered as one of the element of business strategy that aid another party to
control a business under brand name. For example, if the franchiser grants franchisee the
right to use brand name and operating system and also they are allowed to use the same
marketing campaigns as well. In addition to this, Franchising is also a good way for bigger
brands to expand, although it demands slightly more investment than licensing. However, it
is still less capital-demanding than setting up a new legal entity.

Joint venture: In this component, Joint ventures are a precise form of partnership that
comprises the conception of a third independently managed company. The another benefit in
this are both the authorized companies or parties agrees to share roles, responsibilities and
many more that help them to maintain an impressive style of coordination or collaboration
among companies as well as help them to achieve its pre-determined goal. Furthermore, not
only responsibilities but in joint venture companies share its profit and loss ratio in an equal
manner which strengthen the relationship of each individual and also it lead them to gain
targeted objectives within stipulated period of time-frame.
Therefore, implication of appropriate strategies enable an organization to obtain profit
maximization and can also expand their market in an impressive and productive style without
any hindrances.
Challenges that will be faced by H & M at the time of global expansion.
As per the views of Pierre De Senarclens,2008, In this present scenario of industry, the
term globalization plays a vital role as it relate with integration and interaction of companies,
governments, economies across the globe. Although, it impose various benefits over organization
yet there are some challenges which H&M faces while operating their function at international
level. The foremost threat which it render is that language barrier and then cultural hurdle which
directly impact negatively over company’s ability in decision making procedure. This is because,
each geographical region has its own beliefs, language, culture that create a possibility of arising
misconception and miscommunication among team member (International Organisations and
the Challenges of Globalisation, 2008). Apart from this, the issue which globalization provides
to organization is that acquiring highly skilled personnel for accomplishing business goal or
objective in a better way. However, less potential or capable individuals brings various problems
within H&M functional areas as they will be less cooperative in terms of adopting novel ideas or
innovative technologies that decreases the firm’s productivity. Additionally, there are several
others which influence company’s decision making process in a negative manner. However,
implementing best strategies help H&M to cope up with all current or emerging trend in an
innovative and creative style within prescribed time limit.

RESEACH METHODOLOGY
Research Philosophy: There are basically two types of research philosophies used in
conducting research (Chittoor, Kale and Puranam, P., 2015). One is pragmatist research
philosophy is based on rationale facts but constructed on social responsibilities which can yield
better results. Another one is Interpretivist research philosophy which is also known as positive
research philosophy focused on identifying solutions of issues using theories and concepts. In
this research Interpretivist research philosophy will be used so that solutions can be find out and
objectives of research can be address. This philosophy used different philosophies to conduct
which fits the requirements of research study and achieve its objectives effectively.
Research Approach: The research approaches are majorly of two types which assist in research
philosophy. First one is deductive research approach which provides complete understanding of
issues with the help of empirical data. Another one is inductive research approach is based on
objectivity in assessing observations by evaluating so that results can be supported. To conduct
this research inductive research approach because it relies on evaluating and observations so that
objectives of research are achieved (Vellas, 2016). This will also helps in assessment of
observations which provides understanding in addressing research issues effectively.
Research Strategy: this is approach to understand the case and issues of research aims so that
objectives can be achieved. For this structured questionnaire will be used so that it focus on
research and put efforts to address issues and its impacts on organisation. Questionnaire will
provides stronger and relevant applications of results on overall research aim. The strategy
behind using questionnaire for survey is to have general approach as there is no specific case for
organisation. This will also assist in researching about case and focus on how observations can
be relates to organisations settings and current situations. This is more generalised approach than
any other research strategy.
Time Horizon: This refers to span of time within which research is intended to complete. There
are two types of time horizons in conducting research. First is cross-sectional time horizon where
there is a pre determined time set to collect data. Another one is longitudinal time horizon stating
that data collection is extended over period of time. In this research cross-sectional time horizon
is used to that focus in on current situations so that objectives can be achieved. This will ensure

that research has more in depth evaluations of results so that it can relate to present issues in
organisation (Marquis and Raynard, 2015).
Research Design: It is defined as framework of techniques which are selected by researcher so
that different components so that research issues are effectively handled. There are broadly two
types of research design that are qualitative research and quantitative research. Qualitative
research design is concerned with addressing issues relating to why. On the other hand
Quantitative research is concerned with statistical tool to have perspective of decisions. In this
quantitative research design is used so that researcher has effective conclusions reached after
analysing numbers so that research objectives are achieved effectively. Another research design
that will be used is descriptive which is responsible in describing situations or case of research
study.
Data Collection: The main aspects in conducting research and achieving objectives depends on
collecting relevant data through apt techniques and processes. There are two ways by which data
can be collected, primary and secondary data. Primary data is that information which is collected
for first time with the help of questionnaire, personal interview, observations, etc. secondary
source of data collection is that information which is already collected by researcher and
published. In this research both sources are used so that objectives can be achieved with the help
of questionnaire so that valid data is collected and secondary data for difficult topics to assist in
research completion (Manikandan and Ramachandran, 2015).
Research sampling: this is the way of selecting respondents for primary data collection by
recording their responses in questionnaire. There are two types of sampling Probable and non-
probable sampling. Probable sampling is technique which uses various methods to select
respondents based on probability. Non-probable sampling is most convenient way of doing
sampling without any method. In this research Random Probable Sampling is used so that is
equal chances for every respondents to get selected in sample. This creates fair chances of each
individual from population to be in sampling.
Research Ethics: As this research study involves primary collection of data so that observations
are relevant. The ethics and principles of research includes that respondents should be informed
about study and have consent to participate. Another is anonymity which states that personal
details of respondents will not be disclosed and linked in outcomes. Last is confidentiality which

states that research results are shares only with those who are interested and stakeholders (Story,
Boso and Cadogan, 2015).
.
Research limitations: The main limitation of research is time given for completing study and
ability to include larger sample size in data collection (Marano, Tashman and Kostova, 2017).
DATA ANALYSIS AND INTERPRETATION
Q1) Are you aware about the concept of globalization?
a) Yes
b) No
Q2) What are the various benefits of globalization which help H&M to operate its business
function at international level?
a)
b)
c)
Q3) What are the different strategies which H&M can imply within its functional areas in
order to enter into emerging market?
a)
b)
c)
Q4) What are the various challenges of globalization which H&M undergoes while enlarging
its market size at global level?
a)
b)
c)
Q5) What are the various ways to overcome the challenges of international business in terms
of global expansion?
a)
b)
c)

Q6) In your opinion, Is the idea of emerging market helpful for H&M in terms of increasing its
productivity ratio?
a) Agree
b) Disagree
Q7) Provide suitable recommendation for H&M in enhancing its market share at international
level?
Theme 1: Concept of globalization
Q1) Are you aware about the concept of globalization? Frequency
a) Yes 15
b) No 5
Interpretation: The above drawn graph is wholly based upon awareness among population about
the aspect of globalization. However, it has been analyzed that out of 20 respondents, 15
personnel says that adopting the aspect of globalization help H&M to improve its overall
performance n an improved manner. On the other hand, remaining 5 people refuses the same that
influence organization decision making ability in terms of accomplishing the global objective
within stipulated period of time.
Theme 2: Benefits of globalization
Q2) What are the various benefits of globalization which help H&M to
operate its business function at international level?
Frequency
a) Free international trade 8
b) Acquire talented workforce 8
c) Market expansion 4
Interpretation: The above depicted graph states the advantages of globalization over
establishment in operating the functions at global pace in an amended way. Hence, out of 20
population, 8 individuals believes that with an adoption of global business environment enable
H&M to gain free international trade without any barriers. With the help of such formulation, it