Analyzing H&M's International Market Strategies and CSR Practices

This report provides a comprehensive analysis of Hennes & Mauritz (H&M)'s international market strategy, focusing on its operations in the United Kingdom. The report begins with an overview of H&M, its market type (monopolistic competition in the clothing industry), and the role of internationalizati...Read More

Running head: CROSS CULTURE ENVIRONMENT
Hennes & Mauritz
Cross Culture Environment
2/28/2019

CROSS CULTURE ENVIRONMENT 1
Table of Contents
Introduction................................................................................................................................2
Overview of Hennes & Mauritz.............................................................................................2
Type of Market.......................................................................................................................3
Role of Internationalization in building H&M Profile in the United Kingdom.....................3
Largest fashion market.......................................................................................................3
Employment.......................................................................................................................4
H&M’s average number of staff worldwide......................................................................4
Fashion...............................................................................................................................5
H&M developing brands for different market type...............................................................5
Segmentation Strategy.......................................................................................................5
Targeting Strategy..............................................................................................................6
Positioning Strategy...........................................................................................................7
Corporate Social Responsibilities of H&M...........................................................................7
About Sustainable strategy of H&M..................................................................................7
Improving relationship with stakeholders through sustainable practices..............................8
Engaging with Stakeholders...............................................................................................9
Conclusion................................................................................................................................11
References................................................................................................................................13

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Introduction
Global marketing is the procedure of regulating the strategies of marketing of the business in
order to get familiar with the market situations of other nation. Global marketing is not just
about vending the service or product worldwide. It is comprised of a complete procedure of
planning, framing, positioning, and promoting the products in the international market.
Global marketing supports companies in establishing their brand in the international market
(Farrell, 2015). Marketing globally enhance the effectiveness of the product and services
offered by the company. Since the business learns and grows, it becomes more effective at
continuing improved and new products or services. This also results in creating strong
competitive advantage for the company in comparison to its competitors. Besides this,
offering products in the international market support company in increasing the customer
awareness, which eventually results in increased sales of the business. The intent of this paper
is to review how Hennes & Mauritz (H&M) has secured its position in the international
market. The paper will be comprised of detailed information related to strategies and
approaches adopted by Hennes & Mauritz in the global market such as the type of market in
which it operates. The role performed in internationalization in establishing business globally
and its principles of corporate social responsibilities. The paper will be based on analyzing a
company's position in the United Kingdom market.
Overview of Hennes & Mauritz
Hennes & Mauritz is Swedish clothing retailing business offering a wide range of options for
teenagers, children, women, and men. The company is known in the market for its fast
fashion. H&M has its operations in 62 nations with around 4,500 stores. In the world,
company is considered as the second largest retailer in the fashion industry. Inditex Company
has occupied the first position in the retailing industry. It has a strong presence on online

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platform by offering services in 33 countries (Shen, 2014). Erling Persson established
company in 1947. In the starting years, company was only involved in selling women
clothing. In 1968, the owner of the company acquired the chasing retailer of the apparel that
is Mauritz Widforss, which supported in including the collection of menswear in the product
portfolio.
Type of Market
H&M operates its business in the industry of clothing. This industry is involved in selling,
footwear, accessories, and clothing for all the genders and age group. The moneymaking
sector of the clothing industry is women's clothing, which is making around 53% of the total
industry’s profit. H&M works in monopolistic competition, which is said to be the imperfect
competition categorized by a number of businesses that vend the same type of products but
are not identical (Chui, 2019).
Fast-fashion brands have attained pace in the United Kingdom market during 2017 with key
businesses like Inditex, Primark Stores, and H&M, developing well and enduring to win new
customers from their competitors. It is due to their capability to quickly react to the changing
trends and promote newly developed products in limited time at reasonable prices
(EuroMonitor International, 2018).
Role of Internationalization in building H&M Profile in the United Kingdom
Largest fashion market
The United Kingdom is considered the biggest market for fashion retailers to expand their
operations. H&M has expanded its operations in this region in order to cover the increasing
demand as well as to become the largest retailer in the entire industry. According to the
reports, H&M has become the second largest fashion retailer by expanding around 425 stores

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in the United Kingdom in 2016. The company is been focusing on opening big stores with an
average of 16,000 sq ft to incorporate new and fresh categories of products like beauty and
sportswear (Todd, 2016).
Employment
The increasing level of employment in the fashion industry of the United Kingdom is another
role performed by internationalization to establish the brand H&M in the overseas market.
Around 555,000 people are employed in the fashion industry and mostly in the retailing
sector of the United Kingdom. This industry hires 75% with around 414,000 people operating
in the clothing retail areas. In addition, the retail sale of leather products and footwear offer a
fair number of jobs, about 11% that is near around 59,000 employees work in this section
(Fashion United, 2019).
H&M’s average number of staff worldwide
Source [(Statista, 2018)]

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This above image reflects the alteration in the number of personnel at H&M globally from
the year 2005 to 2018. Offering jobs to people support in reducing the unemployment rate
and establish the brand in the overseas market.
Fashion
Fashion has always been the essential portion in the way people define themselves and
others. A powerful tool could be used to influence others. It can be noted that most of the
people obey and trust those individuals who are dressed up properly in uniforms or suits.
Influence of fashion can be secondary and establish a form of soft power. From the boots of
Wellington to shawl of Gandhi and ‘Mao-suit’ of Mao, from I’s ruffs of Elizabeth to dresses
of Diana, famed individuals become linked with some clothes that they mostly deliberately
utilize to project their own image or their nation. In the United Kingdom, clothing is
considered as the largest business. Now the industry of fashion in the UK is valued at £26
billion & offers around 800,000 jobs, which makes it the biggest creative industry (British
Council, 2016). This has been achieved due to the presence of big retailers in the industry
such as Marks & Spencer, Next, H&M, Burberry, etc. The major contribution of H&M has
supported it in establishing in the overseas market as the key brand.
H&M developing brands for different market type
Segmentation Strategy
Segmentation is dividing the market or population into different groups or segments with
similar characteristics (Wedel and Kamakura, 2012). Psychographic and demographics
segmentation is utilized by H&M to target its consumers. The company has is operating its
activities globally. This reflects that it targets different culture, lifestyle, and religions.
Based on Class/home - The major segment which is aimed by the company is women lie
under the age group of 15 to 30 years, either student, homemaker, or living in urban area.

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Based on class – The strategy of H&M is to offer high quality fashion at reasonable prices,
majorly targeting students, working class, and lower middle class.
Based on age – The key segment is women belonging to the age group of 15 to 30 years
generally called as Y generation, ambitious with good purchasing power. (Bhasin, 2018)
Influences
Psychological, social, personal, and cultural influences result in a personality and lifestyle,
this cluster generally searches for reasonable fashion and characteristically shop from more
than one shop or store. They are considered very fashionable customers that look at shopping
as the social activity offering pleasure to their day-to-day lives.
Decision Making
A customer complies with the buying behavior procedure, in which the first step is to identify
the requirement, and then search external and internal information related to the product.
After gathering, the information customer evaluates new information in order to make
purchasing decision. In the case of H&M, the customers are following; a similar procedure of
decision making that is "routine response behavior,” which reflects that customer is mostly
purchasing products at low-cost.
Targeting Strategy
Targeting is the selection of the consumer at which the marketing activities of the business
will be aimed (Weinstein, 2013). H&M’s target consumers belong to a trendy and
fashionable group who consider shopping as the social activity that follows trends deprived
of investing a huge amount. The company targets its marketing efforts towards young people.
However, H&M provides accessories and clothing for every age group. The key target
market of H&M is women. Women generally do shopping for themselves but also shop for

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their kids and husbands (H&M Group, 2019b). With the low price segment, H&M targets
women belonging from working and middle class that is considered as the concentrated
targeting strategy because the key priority of the company is to sell the fashionable products
at low prices.
Positioning Strategy
Positioning is the place occupied by the brand in the mind of the customers in comparison to
its competitors (Chowdhury, 2013). H&M is the retailer focusing on offering customers high
quality and fashionable clothing at reasonable prices. Additionally, H&M offers its
fashionable clothes in different classes comprising children’s wear, accessories, footwear,
business wear of men, and casual wear of women. The company is the second main retailer
across the world, with active operations in E-retailing. H&M is environmental, socially, and
economically sustainable (H&M Group, 2019b).
Corporate Social Responsibilities of H&M
The H&M is dedicated towards sustainability and is very proud of whatever it has achieved
so far. It has been essential for the company to perform in a manner that could offer a chance
to not only the present generation but also to the future generation to enjoy the fashion. With
the increasing scarcity of resources and population, the industry of fashion has to be
transformed (H&M, 2015).
About Sustainable strategy of H&M
The vision of H&M’s sustainability strategy is to result in a change in the renewable and
circular fashion by existing as equal and fair company. The strategy of the company offers a
enduring outlines of the entire H&M Group and be the main constituent of every brand to
attain long-term success. The sustainable strategy on which company is focusing on is to
develop and improve its relationships with its stakeholders. The three sustainable approaches

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that are followed by the company are 100% leading the change, 100% renewable and
circular, and 100% equal and fair (H&M, 2019).
100% leading the change – H&M have an ambition, scale, and size in order to lead the
change towards sustainability. The motive of the company is to increase the level of
development and take the industry in the direction of systemic change in the way fashion is
made and utilized. The company desire to lead the change by testing new and innovative
ideas that have not been attempted by anyone else in the industry (Solidaridad, 2015).
100% renewable and circular – In order to be 100% circular, company is adopting a
circular approach to the way their goods are produced and utilized and identifying methods to
only make use of sustainable and reprocessed sourced resources. This means structuring
circularity in the value chain, which comprises the products manufactured and material used
by the company in their operations. Eventually, the company desire to make a closed loop for
fashion in which used textiles and garments are recycled, reprocessed, and transformed into
new fashion (Industrial Fabric Association International, 2013).
100% Fair and Equal – H&M has an enduring pledge to respect the rights of a human. The
has been followed by the company by offering fair jobs to everyone operating in the fashion
supply chain. The company is also focused on promoting diversity and comprehensiveness in
the entire value chain and society in which they operate their activities (Siegle, 2012).
Improving relationship with stakeholders through sustainable practices
H&M has framed different strategies to develop its businesses at a global level. But, to
improve its relationships with its key stakeholders such as employees, customers, business
partners, and others it has developed three approaches of sustainability that is 100% leading
the change, 100% renewable and circular, and 100% Fair and Equal. The policy of the
company offers a long-term outline for the entire group and is the key constituent of every

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brand to attain long-term success. In order to achieve the objective company has interacted
and collaborated with its key stakeholders. The company is dealing with numerous challenges
that are industry-wide and systemic, so to deal with that it needs to work with others.
Company’s collaboration with different stakeholders like NGOs, business partners, other
brands, and scientists, and civil society, from discussion to execution of creativities.
Engaging with Stakeholders
Stakeholders Overview How H&M engages
Customers H&M is said to be the
customer-focused
organization. The core
activity of the company is to
understand and fulfil their
demands
Marker Research
Consumer organization
In-store customer interaction
Social media
Communities H&M is linked with the
communities across the
world where its stores are
placed (H&M Sustainability,
2019)
NGO interaction
Interviews with the workers
in the factories
Community partner
Interaction with government
and IGOs
Investors Being a publicly listed
Organization, H&M is
responsible for its
investors
Monthly sales records
General meetings
Telephonic conference
Employees H&M wants its personnel to European Works Council

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Be the promoters of the
brand because satisfied
employees interact in a
proper way with the
customers and are productive
at the workplace
Surveys
Performance Review
Annual meetings
IGOs and NGOs NGOs are considered as
expert advisers related to the
practices and standards
throughout the value chain.
The company is dependent
on their expertise to ensure
that
they meet the standards at the
maximum level and get
aware of all the concerns.
Community Investments
Programs at the global level
Wage advisory board
Direct partnerships
Industry peers H&M works with the
businesses working in the
same sector and industry
peers to determine the
standards of the industry and
common reactions to the
common challenges
Sector roundtables
Fair Labour Association
Pre-competitive collaboration

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Throughout the year, the company has regular dialogues with its stakeholders like
communities, industry peers, customers, employees, community, etc. Regular interaction with
the stakeholders is done by the company on the regular basis on the global level in which it
focuses on the reviews of the stakeholders, dedicated surveys, and strategy consultations
(H&M Group, 2019a). This helps the company in understanding the opinions of its
stakeholders and adopting them in their operations, which also support in improving the
relationship with them. The sustainable practices adopted by the company are executed with
the collaboration and support of the stakeholders without which it would have not been
possible.
Conclusion
The above report has provided a detailed analysis of the positioning attained by H&M in the
overseas market. The report has discussed the market analysis of the United Kingdom market
and the type of market in which it operates its activities. The paper has discussed in detail
about the role of internationalization in building the profile of the company in the United
Kingdom market. From the analysis, it has been analyzed that meeting the demand of the UK
customers, offering employment opportunities, and contributing to the latest fashion has
supported the company in establishing its position in the international market. Besides this,
H&M has adopted segmentation, targeting, and positioning strategies in order to develop its
brand in different market type. The analysis highlights that the company is majorly
concentrating on women as their target market because they are the one who is responsible
for the shopping of their own, kids, and husband. In a major discussion in this report is based
on the corporate social responsibility fulfilled by H&M. The company has framed three
approaches that are 100% leading the change, 100% renewable and circular, and 100% Fair
and Equal in order to eliminate the wastage and save the environment. The company also

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adopts these strategies in order to improve its relationships with the key stakeholders through
their collaboration in decision-making and sustainable practices.

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References
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https://www.marketing91.com/marketing-strategy-h-m/ [accessed 28 February 2019]
British Council (2016) The power of fashion [online]. Available from
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[accessed 28 February 2019]
Chowdhury, P.P. (2013) Key strategies and issues of positioning: A review of past studies.
American Academic & Scholarly Research Journal, 5(1), 55-66.
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https://hmmarketstructure.weebly.com/industry-and-marketplace.html [accessed 28 February
2019]
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U.K: SAGE.
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H&M (2015) Sustainability Report [online]. Available from
https://about.hm.com/content/dam/hmgroup/groupsite/documents/masterlanguage/CSR/

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reports/2015%20Sustainability%20report/
HM_SustainabilityReport_2015_final_FullReport.pdf [accessed 28 February 2019]
H&M (2019) Corporate Social Responsibility (CSR) [online]. Available from
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responsibility-csr-policy.html [accessed 28 February 2019]
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[accessed 28 February 2019]
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February 2019]

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28 February 2019]
Statista (2018) Average number of employees at H&M worldwide from 2005 to 2018 [online].
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