H&M operates in very price-sensitive markets. Given its growth ambitions, low price is doubly important. Its target is not only to increase the number of stores by 10–15 per cent per year, opening stores in new markets, but also to achieve expansion in existing markets and expand its online shopping offering, and doing all this with continued high profitability. This means that H&M must be cost-conscious at every level of its operations, and must always be seeking improvements in its cost performance to enable it to be competitive and remain profitable. H&M must also continually update its product offering and maintain a unique brand identity. This requires continuous performance improvement not only in cost, but also in design, product and service quality, and in the various aspects of sustainability. As will be clear to all readers of this running case, sustainability is a major concern for H&M, and something that is constantly improved. One achievement in 2015 was the switch to 100 per cent renewable energy in all markets where this is possible. For H&M as a whole, this means that in 2015, around 80 per cent of energy use globally came from renewable sources, up from 27 per cent in 2014. The proportion of cotton coming from sustainable sources in 2015 was 31 per cent of total cotton usage, up from 21 per cent in 2014. The goal is that all cotton will come from sustainable sources by 2020.
Swipe to navigate through the chapters of this book
Please log in to get access to this content
- Operations Improvement
- Macmillan Education UK
- Sequence number
- Chapter number
- Chapter 14