Hennes & Mauritz (H&M) is a company that originated from Sweden venturing in the retail clothing business. Mr. Erlig Persson came up with the company in 1947, but he developed the idea back in 1946. The name Hennes & Mauritz was derived from the "Hennes" a Swedish name meaning "her" or hers." Another part of the name came from his partner Mauritz Widforss how he partnered with in 1968.
Use of celebrities for advertisements was adopted by H&M to sell their brand all over the world celebrities such as football superstar David Beckham and R&B star Beyoncé among others were the brand ambassadors. The company has grown to have 5,133,200 stores in 54 countries worldwide with more than 116,000 employees. Currently, H&M is placed second after ‘Inditex' a Spain based company.
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Hennes & Mauritz started as a green field venture where they started building their roots from scratch. Mr. Erling Persson began the clothing company in his small town called Vasteras in Sweden. Initially, he began by only offering ladies fashionable clothing. At his starting level, he was not able to have a joint venture with other organizations (Siegle, 2012). To reach his customers, he had to lower his prices than other firms. Again as a starting business, it was close to impossible to have joint venture as much as people did not know the advantages of having joint ventures with other firms.
As years passed, Hennes & Mauritz did create its own bigger brand name that was known by many people. That's where they started to prefer joint ventures with other firms. In the early 21st Century, there was a notion in the business community that more prominent firms were to allow joint ventures with minor organizations. These other partners could help with a lot of important issues such as knowing the ground and market better and even sharing the liability of the company. H&M as a fashion company they partnered with other 900 different factories around the world. These factories produce products suitable for consumers in, but H&M Company designs the products.
As a company, there are several risks that it might experience while going for joint ventures. Other partners will want to have the most shares during the partnership. H&M will require to access contributions by the other partner before signing of the relevant contract with them. Risk management on the side of the other partner can directly affect the whole partnership. H&M does not own a company but only designs (Hill, 2013). These designs are sent to the factory to produce the product before they are ready for sale. In case of any fault during the outcome, it affects both parties. Therefore H&M will need to deploy supervisors in all of the factories to monitor the process of production.
Hennes & Mauritz has built a good brand name over a long time, and this is time for them to reap the fruits of hard work. At the moment every organization will want to partner with Hennes & Mauritz due to their great success. During the discussion on the partnership, H&M have a higher bargaining power, therefore, helping its development. There is a chance that H&M might take advantage of another partner as they work together. This might lead to the start of the organization as other partners will start losing trust in their partnership with the H&M.
We all know that Hennes & Mauritz is a well-known company which has a good partnership deal with other organizations (Petro, 2012). It brings on board a brand name which is already known in the market. This brand is one of the most significant assets a company can build for a long time for it to thrive and that is what Hennes & Mauritz have.
References
L. Siegle, (April 7, 2012). “Is H&M The New Home of Ethical Fashion?,” The Observer.
G. Petro (Nov 5, 2012). “The Future of Fashion Retailing the H&M Approach,” Forbes.
Charles W. L. Hill, (2013) “International Business: Competing in The Global,” University of Washington.
