H & M In Israel: Modes Of Entry Into The Foreign Market...

Executive Summary

Executive Summary

This report will outline the Modes of entry the retailer H&M used to enter the foreign market Israel, the advantages and disadvantages of this mode, how they entered and how beneficial the entry was for the retailer.
H&M is a fashion retailer who currently operates in 39 foreign countries and is home Country Sweden. And have an estimate of 2200 stores globally and still growing.
H&M entered the middle-eastern countries all though franchising with Israel being one of them. The reason for this is currently not specified however, factors such as government and political restrains maybe the reason for this as well as culture differences. Franchising was the most ideal mode for the firm to enter and the only choice of entry as all of its main competitors have also entered the market in the same way through Franchise.
Israel’s first H&M stores were opened in 2010 and now has 4 stores and is rapidly growing. Israel is a fast moving economy and had an economic growth of 7.7 percent in the last quarter of 2010 aquired within the last 4years.

Table of Contents
Pages
1.0. Introduction.......................................................................................................4
1.1. History/Background...............................................................................4
2.0. The Opportunities offered to H&M by Israel...............................................5 - 6
2.1. Countries attractiveness- Israel.............................................................5
2.2. Porter’s Diamond..............................................................................5 - 6
3.0. Advantages and Disadvantages of Franchising for H&M.............................7 - 8
4.0. Conclusion..................................................................................................9 - 11
4.1. Validity of Entering Israel.......................................................................9
4.2. Validity of entry method: Franchise.............................................10 - 11
5.0. Bibliography..............................................................................................12 - 13
6.0. Appendices...............................................................................................14 - 26
6.1. Appendix 1 – Group meeting Logs...............................................14 – 18
6.2. Appendix 2 – Individual Contribution...........................................19 - 27

1.1. Introduction
1.2. History/Background
Hennes & Mauritz (H&M) is a fashion retailer that originated in Västerås, Sweden. Founded by Erling Persson in 1947, it has grown into a 2,200 stores empire in 39 markets worldwide. H&M retails mainly clothing, for both males and females of all ages, whilst also selling own-brand footwear, cosmetics and accessories. With fashion items at affordable prices, H&M had gained an annual turnover, in 2010, of SEK 126,966 million (Swedish currency).
Like most companies venturing out of their country of origin, H&M expanded because of the hindrances presented by government legislation in Sweden set to discourage monopolies. Within the last 3 years, H&M has entered 10 foreign markets: including Israel in 2010. The mode of entry employed, when entering Israel, was a franchise agreement with Match Retail Ltd: an already existing retailer. As of 28/02/2011, H&M had products in four Retail Match Ltd stores.

2.0. The Opportunities offered to H&M by Israel
2.1. Countries attractiveness – Israel
Israel is a Jewish state that is positioned at the eastern coast of the Mediterranean Sea. This is an advantage for H&M because they are able to import goods. If H&M decides to set up a factory in Israel, it will be beneficiary as H&M will be able exporting goods, via sea, to others countries. These benefits can be long lasting. Alternatively, with a history of natural disasters, such as earthquakes, importing and exporting may

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