JESUS NIETO

a) Fast fashion and SUPPLY CHAIN MANAGEMENT:
In 2007, retailers around the world cut prices and closed stores with the credit crisis in
full swing. Inconsistency in fashion brought down many a clothing store, but Swedish fast
fashion giant Hennes & Mauritz (H&M) took advantage of this very quality. H&M’s 2007 annual
report began with a statement that the year was the company’s most exciting year to date. It
was also the year of H&M’s 60th birthday. H&M, the pioneer of cheap but chic fashion
managed to buck the trend. H&M saw the economic slowdown as an opportunity to expand.
In 2007, H&M opened 193 new stores and it topped $12 billion in sales. During the year, H&M
opened new stores1, entered into new markets2, offered its customer’s new range (expanded
footwear collection for women), and even set up a completely new store chain3. H&M
continued with the expansion of its Internet and catalogue sales channels outside the Nordic
region. Collaborations with Italian designer Roberto Cavalli, style icon Madonna5 and superstar
Kylie Minogue6 also did well.
How did H&M manage to succeed in what many reckon is the toughest trading
conditions in decades? Since 1947 (when it set up its first store in Sweden) to 2007 (with its
move into Asia) the key to H&M's success has been its supply chain.
H&M –the world's third-largest retailer by sales - has grown into a profitable force in the global
apparel market by offering clothing that is seen as both fashionable and reasonably priced.
H&M responds quickly to changing fashion trends by renewing its lines. This rapid lead time
has led to it being called the "follower of fashion" or the “king of fast fashion” by many. The
company has an unrelenting focus on costs that stretches from the company's products to its
business model. The average sale prices of H&M products are lower than those of its main
competitors Spain's Zara and the Gap which helps it to increase market share in the current
downturn even as consumers trade down in search of better value.
H&M may face tougher times ahead as competition (that are following in its footsteps)
grows and as it tries to regain its place from Zara as Europe's largest clothing retailer.
The challenge for H&M is to sustain its supply chain advantage, regardless of what
happens to the economy.
b) 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 fascinated by the concept of clothes stores selling trendy
garments at cheap 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. Customers were
instantly attracted to the low prices. Until then overpriced department stores dominated the
Swedish market. He expanded the number of stores in Sweden in the coming years. In 1964,
the company opened a store overseas in Norway.
In 1967, the company expanded further and opened a store in Denmark. The following
year (in 1968), Persson acquired Stockholm-based Mauritz Widfross. The store also sold
hunting guns and gears in addition to men's clothing. Hennes transformed into Hennes &
Mauritz. Persson kept the Mauritz' menswear line and started selling both men and women's
wear. In 1974, H&M went public on the Stockholm exchange. In 1976, H&M entered UK. At
the time, jeans became the trend in Europe and H&M launched jeans within two days of it
being shown on television. H&M's sales doubled in the four years between 1994 and 1998.
H&M entered the U.S. in March 2000 when it opened a New York store. Many major U.S. cities
boast at least one H&M.
LEILA DE SANTIAGO MUÑOZ MBA-SCM MAY 18th, 2015
JESÚS NIETO GONZÁLEZ H&M
6
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"7 and the purveyor of quick-to
market trendy clothing.
In 2000, H&M grossed US$3.4 billion. In 2007, H&M opened 193 new stores and it
topped $12 billion in sales. H&M is the world's fifth-largest apparel-only retailer by revenue,
according to Bloomberg research. In April 2008, H&M was named as the continent’s most
valuable brand, beating rival Zara and British chain Marks and Spencer by brand consultants
Interbrand in their first ever rankings of European retailers. H&M’s brand value was €10.37bn
while the Zara brand was valued at €4.1bn.

We can define this case of study in two concepts: compensations and recognition.
We define compensation as “that which is given or received as an equivalent for
services, debt, want, loss, suffering, etc.” Clearly, compensation is linked to security and safety,
since no one feels completely safe unless they’re sufficiently compensated to meet their needs.
Recognition, on the other hand, is defined as “acknowledgment and approval,
gratitude, etc.” Recognition appeals to the higher levels of Maslow’s hierarchy of needs,
especially social and self-esteem needs. Herzberg’s theory linking satisfaction with the process
and end-result of work probably is an essential component of reaching the highest level on
Maslow’s scale – self-actualization. At that level, people have a self-sustaining motivation that
thrives on continually improving the process of work and its end result.

This work defines the competences of the Offices of Transfer of Research Results (Oficinas de Transferencia de Resultados de Investigación) from the Spanish universities towards the creation and support of Technological Bases Companies (Empresas de Base  tecnológica- EBT). The analysis method is developed through suverys launched on the one hand to the OTRIs and another to the EBTs. On the one hand, the different advisory and training functions carried out by the OTRIs in the relationship with the EBTs are analyzed, especially the environmental aspects, the problems, the rules, legal terms, use of resources ant tools. The analysis emerges from the existence of a direct relationship between the survival of the companies advised and the type of contractual relationship with the OTRI. On the other hand, we have a feedback about the OTRIs from the EBTs.

Este trabajo define el desempeño de las Oficinas de Transferencia de
Resultados de Investigación (OTRI) pertenecientes a las Universidades españolas hacia la creación y sustentación de Empresas de Bases Tecnológicas (EBT). A través de un cuestionario se analizan las diferentes funciones de asesoramiento y formación que realizan las OTRIs en su relación con las EBTs, en especial, aspectos ambientales, estructurales, legales, uso de recursos y herramientas. Del análisis se desprende la existencia de una relación directa entre la supervivencia de las empresas asesoradas y el tipo de relación contractual con la OTRI.