1. Introduction
2. Background Note
3. Exhibit I: H&M’s Growth (1974 – 2007)
4. Exhibit II: H&M’s International Expansion
5. H&M’s Supply Chain
6. Exhibit III: H&M’s Best Price Strategy
7. H&M’s Financial Performance Summary (Revenue and Net Income)
8. Exhibit IV: H&M’s Three Sales Channels – Stores, Internet and Catalogues
9. Exhibit V: Table showing some major retailers with # of stores in Japan
10. Exhibit VI: Comparison with major global specialty clothing retailers
11. H&M Quick Facts – Brief Company profile – Revenues, Industry, Employees, Operations, Total Stores, Sales Channels, Major Competitors, Major Brands/Labels, Business/Growth Strategy, Key Executives
12. H&M’s Entry Strategy into Japan
13. Hurdles when entering the Japanese market
14. Channel Issues – Will H&M’s strategy to go alone work in Japan?
15. Product Quality Issues — Will H&M’s fast fashion work in Japan?
16. Design Collaboration, Designer Brands
17. Understanding the Japanese consumer – group oriented culture, the price factor and the Japanese H&M fan club
18. In conclusion
19. Additional Reading and References

1. Introduction

"It has been H&M’s dream to open in Japan. I am very proud to say that we now have our very first store in Tokyo. Japan is a very strategic and exciting market with great fashion awareness. We hope that we can offer our Tokyo customers added value through fashion and quality at the best price. We’re not in a hurry in Japan but we see huge potential if we succeed. We’ll go step by step."
-Rolf Eriksen, CEO of Hennes and Mauritz at the ceremony to open the Japan flagship store.

"Our business concept is really what attracts the H&M customer: Fashion and quality at the best price. Because we do carry all these different lines in our stores, we allow our customer to address [his or her] personality, and that’s really important."
- Karen Belva, public relations manager and spokesperson of H&M in 2002.

"With H&M’s opening, everybody – the Gap and Zara – will have come to Japan"-
Tadashi Yanai, Chief Executive, Fast Retailing, referring to Inditex’s Zara apparel chain.

In April 2007, Stockholm-based Swedish fashion giant Hennes & Mauritz (H&M) opened its first flagship store in China. About a year later (in September 2008), this strategic move was followed by another first H&M outlet in Tokyo, Japan, the world’s second-largest economy. The H&M store – a four-storey shop was strategically located just a few buildings down from competitors Zara and Gap Inc stores. The new store with a floor space of more than 1,000 square meters was first in a series of stores that H&M planned to open in Japan. The world’s No. 3 clothing retailer had aggressive plans to open stores in Japan, as well as sites in regional shopping centers.

With the European markets saturating, H&M was pursuing a rapid international expansion strategy. But the timing of H&M’s entry strategy into Japan, especially when the economy was struggling with recession and customers were tightening their purse strings was open to discussion. Besides, Japan was regarded as one of the world’s most competitive fashion markets. Market reports also suggested a declining market for clothing and footwear. Some observers called it the toughest trading conditions in decades. However, H&M was confident of differentiating itself and competing with expensive brands like Christian Dior, Giorgio Armani and Chanel, as well as the more reasonably priced Gap and Japan’s hugely popular Uniqlo chain.

Background Note

H&M was founded in 1947 by Erling Persson, a salesman from Västerås – a small town in Sweden. He began his career working for his father delivering cheese to restaurants in Stockholm on a bicycle. He was attracted by the concept of clothes stores selling stylish garments at low prices when he once visited the U.S. He was amazed at the success of retailers like Macy’s in New York. He opened a similar store in Västerås selling clothes for women. He named the store ‘Hennes’ which stood for ‘hers’ in Swedish…

…Today, H&M is the world’s third-largest retailer by sales with around 1,600 stores in 32 countries with 68,000 employees. In the past two decades, H&M grew at an average rate of 20% annually. It managed to grow quickly into the world’s third largest clothing retailer by offering clothing that is seen as both fashionable and reasonably priced. It made its mark on the apparel industry, mixing the latest trends with fashion classics. H&M is popularly known as the king of “fast fashion” and the purveyor of quick-to-market trendy clothing. H&M’s business model is based on "Fashion and quality at the best price."

Will H&M be successful in Japan?

"I believe that the interest in a new change would be big in Japan. It’s one of the biggest countries we have entered. If we succeeded as we have done in all the other countries,[Japan] could be a huge market for H&M."- CEO, H&M

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Case Keywords: Hennes & Mauritz, H&M, Entry Strategy, Japan, Expansion into global markets, International Business, Competitive Strategies, local culture, Japanese apparel market, Fast Fashion, Best Price Strategy, H&M’s Three Sales Channels, Channel Issues, Product Quality Issues, Design Collaboration, Designer Brands, Japanese H&M fan club, Erling Persson, Zara, Uniqlo, Fast Retailing, Supply Chain

Case Updates/Snippets

• H&M in Asia- H&M has over 1,800 shops in more than 30 countries. H&M’s principal markets are in Germany, the United Kingdom and Sweden. In Asia (2009 figures), H&M has four stores in Japan, 15 stores in China and 6 stores in Hong Kong. It plans to set up its first store in Korea, sees potential in Taiwan and wants to up its store count in China by 30% in 2009. H&M’s top management considers Asia to be the newest and biggest market for H&M in future.
• H&M’s business model and focus on low-cost, fast-moving fashions, and geographic spread helped it to weather the economic downturn better than its competitors. During 2009, the Swedish fashion retailer H&M was the top-ranked global fashion retailer.
• In fiscal year 2009, H&M added a total of 250 new stores, 25 more than originally planned.
• H&M in China: In 2007, H&M entered China. By 2011 it had 64 stores in China out of a total of 2,410 world-wide. China has been more profitable to H&M than any other market and it expects to treble its store count by opening stores in smaller cities of China.

This case study/article, titled Hennes & Mauritz (H&M) in Japan – Hit or Mistake?, was originally published at Casestudyinc.com.

1. Introduction
2. eBay – Company Background
3. Pierre Omidyar – The founder of eBay
4. Early Days – From AuctionWeb to eBay
5. Meg Whitman and the growth of eBay
6. eBay – Quick Facts
7. eBay’s International Expansion
8. Exhibit I – eBay’s Net Revenue by Territory
9. eBay and its entry in Japan
10. Exhibit II – Yahoo Japan and eBay comparative data (in 2001)
11. Why eBay failed in Japan?
12. Stiff competition from Yahoo Japan
13. Not adapting to local culture and practices
14. No first-mover advantage
15. Low-key Marketing and Advertising
16. The return of eBay to Japan
17. Questions for Discussion
18. Exhibit III: Selected Financial Data for five years
19. Exhibit IV: eBay stock performance graph

Case Abstract

Issues/Information Covered

• eBay’s entry strategy in Japan
• eBay company background
• Why eBay failed in Japan?

Introduction

“We were late to the market and entered when Yahoo!/Softbank had gained a lot of momentum through its Internet portal. eBay is committed to the Asian market and may return to the Japanese market when economic conditions are better and when they have a strategy that addresses the issues they currently face in Japan.”
– an eBay spokesperson in 2002.

Ever since its entry in Japan in 2000, eBay, the US online auctioneer was struggling. By the end of 2001, many analysts felt that eBay Japan should admit defeat and sell a majority stake in the venture to a bigger local player. But even then, eBay would face an uphill struggle. In February 2002, eBay, announced its decision to exit from the Japanese market after it failed to gain a foothold in Japan lagging behind market leader, Yahoo Japan. The company also announced that its Japanese language site would be closed and 17 jobs would be cut. All its Japanese customers would be directed to its US based auction operations/site. At the time, eBay was the number one auction site in all of the other 18 countries in which it operated and one of the few successful internet companies, having seen its profits soar even amid the dot-com implosion. eBay’s strategy in Japan had failed. Japan was a rare failure for the company.

Japan was critical to eBay’s success because it was the world’s second-largest Internet market. The gap had to be closed soon otherwise Yahoo Inc. could easily beat it in the rest of Asia. Yahoo Japan was the No. 1 or No. 2 portal everywhere except China. In December 2007, Yahoo Japan and eBay made a deal to link their auction sites and make it easier for their respective users to bid on and buy goods available on each other’s sites. A new website by name “Sekaimon” (‘gateway to the world’ or ‘global shopping’ in Japanese) – www.sekaimon.com – was launched in December. The site allowed Yahoo Japan users to bid on items listed on eBay’s US site using their Yahoo Japan ID. The deal made cross-border bidding easier and gave eBay another chance to woo Japanese consumers…

Keywords: eBay, Japan, International Expansion Strategy, Entry Strategy, local culture and practices, Yahoo Japan, Pierre Omidyar, Meg Whitman, first-mover advantage, AuctionWeb, Sekaimon, Internet Auction, Online selling and bidding, Online Marketplaces, PayPal, Skype, Half.com, Rent.com, Shopping.com, StubHub, Alando AG, iBazar S.A., NeoCom Technology Co Ltd., EBay’s international operations, online shopping business, Sanook, TOM Online

This case study/article, titled eBay in Japan, was originally published at Casestudyinc.com.

The focus of this case study is the hurdles faced by retailing giant Wal-Mart in the Japanese market. WalMart’s best practices in retailing like Every Day Low Prices (EDLP) and Rollback to the Japanese market through its joint venture with Seiyu…In December 2005, Wal-Mart acquired a controlling 50.9 percent stake in Seiyu. However, Wal-Mart has since found it difficult to save the company even after investing more than one billion dollars. The company is revamping stores in hopes of drawing new customers. After exiting from Germany and South Korea last year (because it could not adapt to local tastes), Wal-Mart wants to maintain its presence in Japan. Success in Japan is important to Wal-Mart because a strong presence in the world’s No. 2 retail market is a key driver to future business growth.

Introduction – Wal-Mart in US Retail Market

Wal-Mart is the world’s largest retailer with $345 billion in sales for the fiscal year ending Jan. 31, 2007. Wal-Mart Stores, Inc. includes Wal-Mart Supercenters, discount stores, Neighborhood Markets and SAM’S Club warehouses. Wal-Mart employs 1.9 million associates worldwide ….

Case Study Contents

• Introduction – Wal-Mart in US Retail Market
• Wal-Mart – Company Background
• Wal-Mart – Timeline
• Wal-Mart: Quick Facts
• Wal-Mart's turnaround quest: Will Wal-Mart's mass-market formula work in Japan?
• Wal-Mart increases stake in Japan's Seiyu to 95%
• Localization Strategy – WalMart's failure in Germany and South Korea
• Cost-Leadership Strategy- WalMart's core philosophy – EDLP
• Cheap stuff at cheap prices – Japanese consumer mindset
• Is Wal-Mart the only one struggling in Japan?
• Will Seiyu get to U.S.-style EDLP in Japan?
• Store Formats
• Related Reading
• View sample pages of this case study

Case Study Keywords: Walmart, Wal-Mart Stores Inc., Japanese Retail Industry, Every Day Low Prices EDLP, Carrefour, Daeiei, Aeon Co., Sam’s Clubs, Consumer Behavior, Low cost strategies, Localization Strategies, Pricing Strategy, IT systems, Supply Chain and Logistics, supermarkets

This case study/article, titled Wal-Mart in Japan, was originally published at Casestudyinc.com.