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Ähnlich wie Presentation by Larsson, Ögren, Troll and Jäger - Winners of Beat The Elite 2011
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Presentation by Larsson, Ögren, Troll and Jäger - Winners of Beat The Elite 2011
- 1. Turning a Global Epidemic into a Business Opportunity Elin Larsson, Cand. Merc. IMM |Max Josef Jäger, Cand. Merc. IBS Svenja Troll, Cand. Merc. IMM |Hanna Ögren, Cand. Merc. AEF COPENHAGEN BUSINESS SCHOOL
- 2. ExploiJng the “Plus-‐Size” segment ensures $63M of new sales in otherwise stagnaJng markets • Maintain annual sales growth target of 10 to 15% Challenge • Keep the business simple • Western Europe (82% of sales): stagnaJng market ComplicaJon • USA (9% of sales): declining market • Changing consumer needs due to growing obesity How can H&M ensure for sustainable growth in QuesJon their stagna5ng/ declining key markets? • Exploit opportuniJes within new segments: • Introduce “plus-‐size” product line for men, women and children Answer • Expected yearly sales of $63M and sales growth of 0.5% • Ensure success through improved HR funcJon
- 3. H&M should focus on a new recruiJng strategy and a line extension for achieving growth targets Market Por;olio Recrui@ng Line extension expansion expansion strategy PotenJal revenue Demand High costs of implementaJon High risks High Low Choice of strategies with lowest risk, lowest costs, and high expected returns -‐ Current market expansion strategy is sufficient -‐ Porfolio expansion has proven to be too costly and risky in recent years -‐ H&M is adding complexity to corporaJon due to internaJonalizaJon -‐ Huge market potenJal in “plus size” market
- 4. H&M can uJlize their core competencies to exploit the plus-‐size trend H&M's Core Market share by region Plus-‐size trend Competences Americas Western Europe Apparel Plus-‐size Asia Pacific Middle East & Africa % Total Growth Eastern Europe % # Fashion forward # Affordable prices # Western core market # Can meet the Plus-‐size Women Men Children demand 2010E 2005 -‐ 2010 • Asia Pacific, MEA and Eastern • Key trend in Americas and Europe are H&M's growth Western Europe: Plus-‐size markets demand increase • H&M faces declines in • Customer needs not saJsfied: Americas and Western Europe Fashionable low-‐priced clothing Source: Report linker, Euromonitor, Package Facts
- 5. With the implementaJon of the line extensions H&M can reap higher margins in core markets MEN WOMEN CHILDREN Big & Tall Big is Beau@ful Bumblebee Target Group • Plus size and tall • Plus size • Plus size Demographics • Age: 20 -‐ 45 • Age: 20 -‐ 45 • ge: 10 -‐ 15 A PromoJon Spokesperson: Spokesperson: style Spokesperson: teen sports focus icon focus, e.g. Beth star focus, e.g. Hillary Dimo Duff Product New collec5on based on H&M LOGG Full range (50 items) Fashionable Price 10% above H&M price Below compe5tor’s “plus-‐size” price Sales Channel Internet sales Catalogue sales
- 6. Expanding the plus-‐size line will lead to posiJve revenue streams Western Europe popula@on Overweight/obese % in WE H&M’s current market share 2,3% 1% 0,5% Best case (current) Most likely Worst case 397,475,574 ppl 93,009,284 ppl Best case Most likely Worst case Es#mates pr. year, in tsd. USD. Es#mates pr. year, in tsd. USD. Es#mates pr. year, in tsd. USD. Market share (2,3%) 2,139 Market share (1%) 930 Market share (0,5%) 93 Projected revenue 63,430 Projected revenue 27,578 Projected revenue 2,757 Projected costs* 31,715 Projected costs 13,789 Projected costs 1,378 Profit 31,715 Profit 13,789 Profit 1,378 * EsJmated to 50 % of revenue © 2011 Deloime
- 7. Aqer exploiJng Western markets, emerging economies offer growth potenJal • In China obesity rates are 25 % and growing • In Brazil 48 % of all women and 50 % of all men are overweight Source: World Health OrganizaJon
- 8. To overcome the added complexity of the line extensions, new HR pracJces need to be set up • SecJon for thesis and project wriJng • PotenJal research topics Student zone • Download center for H&M documents • Network Expansion • Coca Cola benchmark • The right people for the right job • Academics with theorecJcal Graduate management knowledge Program • InternaJonal rotaJon • Vestas benchmark
- 9. The risks that could occur with the strategy implementaJon can easily be overcome Possible risks Level of risk Deteriora@ng brand Risk of diluJng H&M’s core segment. Can be avoided through image e.g. online channels. If the launch is proven unsuccessful, H&M will not incur large Sunk costs sunk costs due to minimal fixed costs. Many established clothing lines within these categories will Heavy compe@@on make it harder for H&M to get a strong foothold in the market. Risk of missing opportuniJes in other markets. Can be Opportunity costs overcome if H&M conJnues their current market strategy,
- 10. Within a four year Jme horizon H&M can roll out their new strategies internaJonally Ac@vity 2011 2012 2013 2014 Product line extension New style development Spokesperson search Online Launch and sales Retail Launch and sales InternaJonal Launch Human Resource Restructuring Student zone Network expansion Graduate Program