Human blood cell production is maintained by hematopoietic stem cells (HSC) which give rise to all types of mature blood cells. Experimental observation of HSC in their physiologic bone-marrow microenvironment, the so-called stem cell niche, is challenging. Therefore, the details of HSC dynamics and the cellular interactions in the stem cell niche remain elusive. Mutations that lead to a competitive advantage are the cause of clinical challenges when treating HSC-derived malignancies such as acute myeloid leukemia or the myeloproliferative neoplasms (MPNs). To investigate the significance of the interaction between the HSC and the stem cell niche in these malignancies, we propose and analyse a mechanism-based mathematical model of HSC dynamics within the bone-marrow microenvironment. The model is based on the central hypothesis that HSC self-renewal depends on the niche. In the model, the interaction of HSC with specific niches located in the bone marrow are key to the indefinite HSC renewal necessary for long-term maintenance of blood cell production. We formulate a general model of distinct clones that differ with respect to cell properties. We identify an attractive trapping region and compute and classify all steady states. A concept of HSC fitness naturally arises from the model analysis. HSC fitness is found to determine the asymptotic behaviour of the model, as the HSC clone with the highest fitness is related to the unique locally stable steady state. Based on biological assumptions about HSC, we propose two reduced models of different complexity. A thorough mathematical analysis reveals that both reduced models have the same asymptotic behaviour as the full model. We compare the simpler of the two models, a logistic equation of the disease burden, to clinical data of MPN-patients. The reduced model is found to agree well with data and suggests a simple interpretation and possible prediction of patient prognosis. The proposed mathematical model and the reduced forms have the potential to provide insights into the regulation of HSC dynamics and blood cell formation, and ultimately for future advances in treatment of hematologic malignancies.