Pestle Analysis Assignment

Management

Table of Contents
INTRODUCTION...........................................................................................................................3
Main Body.......................................................................................................................................3
CONCLUSION ...............................................................................................................................6
REFERENCES ...............................................................................................................................7

INTRODUCTION
In the business organisation, Pestle analysis is considered as effective tool to know the
critical and impacting external force on the business (Ng’ang’a, 2015). This assessment will be
carried on Hennes & Mauritz which is the leading Swedish multinational clothing retail brand
well known for their fast fashion clothing for men, women and kids. This assessment will cover
the entire Pestle analysis along with its implication on the business units. This will also suggest
the manager with the choice of factors to be considered in whole Pestle analysis.
Main Body
H&M which is the leading Swedish multinational fashion brand is required to find and
analyse the force which has recently effects their business at the greater level. In context with an
organisation, complete PESTLE analysis for identifying the external force for the H&M is as
follows:
Political: As the global leading brand, monitoring and preventing the political risk has
increased which is equally important for the H&M. This company has collaborated with typical
countries such as Jordan, Saudi Arabia, Oman, Morocco etc. where fashion enhancement is low
and political pressure is relatively high, in that case expanding the business function and brand
image is not possible. Here, the rate of change in environment factor is dynamic. In addition to
this, H&M has franchised number of outlets in the market and countries that have political
stability namely Germany, New Zealand, Japan etc. Also, here the business complexity is high.
Hence, the H&M is required to negotiate and understanding the political risk, if they want to
expand their business into the Arab countries (Tanaka, 2013).
Economical: Despite of various effects, the Brexit has brought for the optimum
utilisation of currencies across the entire Europe. HRM business has reported that sale of the
products has been rose up by 7 percent on the local currency basis which has raise the value of
Swedish currency Krona by 10 percent more. Such political change is relatively dynamic and
business complexity is relatively low & favourable. Such currency can effects the inflow and
outflow of raw materials of the H&M. Brexit has become an important factor for business
process into the entire Europe which will be further beneficial for H&M.
Social: With the consumer being increasingly influenced by media and advertising to
adopt a luxurious and materialistic lifestyle, in response to this, current trends shows that buyers

are more spending to the fashion designer goods. Along with this, H&M is giving importance to
the demand of their consumer and also focusing on the future development of media influence
and advertising model at the large extent. It has been noticed that transparency is also important
to get direct communication with the customer at the larger extent. Such transparency could be
brought by the higher usage of social media influence and advertising to the customers (Srdjevic,
2012). Such external business force has dynamic change in the influence of the customer and
high business complexity.
Technological: H&M has its own brand mobile Apps and websites with their outstanding
reach to their loyal customer and also new buyers. They also provide reward points on buying
through their mobile Apps and websites using an online platform. The other third party logistics
is also utilized by H&M to create their strong reputation by the optimum usage of technology
advancement and extensive network of supply chain management to track and manage all their
logistic operation and also aiding the other retailers. Here, the business complexity is low
because of adapting technology into the business process.
Legal: In last two years, H&M has been involved in various legal disputes and illegal
obligations by their own retailers. The most prominent case occurred in year 2015, when this
retail giant lost their patent dispute which costs them multi-millions of pounds against UK giant
Marks & Spencer. While, H&M had funds to cover this legal dispute, after this the firm has start
operate into the risk management system to avoid such legal obligation which can effect their
brand image and reputation. This is an effect of strict legal regulation of different countries. In
this case, the business complexity is relatively high and critical. This external force is critical and
requires the legal information and knowledge for handling this.
Environmental: The H&M is continuously focusing on environmental friendly products
and services to benefits their customers at an affordable price and cost. There production process
is full of environment friendly inputs and raw materials which lead to the protection of the legal
and environmental regulations. H&M has strong hand on their logistics, supply chain along with
the effective operational management to generate and raise their profit expectancy. Here, change
of environment force is moderate and business complexity is relatively high because strict rules
and regulation of different countries. Business and brand future expectancy also depends on such
expects (Srdjevic, 2016).

It has been identified that political force is one of the critical factor for the business
activities and operational functioning of the H&M. It has been noticed that political factor has
impact the business and production activities of the firm at the greater and critical level. Arab
countries are not so much inclined towards the fashion because of their traditional outfits along
with their culture. Hence, it is required to control impact and implement appropriate strategies to
counter future impact onto the functioning of the H&M. Along with this, H&M has taken several
steps such as bilateral meeting and task with the official of different countries to have effective
relationship and avoid any future impact on the business.
Manager of the H&M has decided to put more focus on technological and social factors
to raise their business survival and sustainability by analysing their every factor along with the
future impact and benefits to raise the customer satisfaction and rising profitability. To achieve
the maximum customer attention, they should put their focus on advancing their technological
usage and advertisement such as endorsing their products and services. In this, manager of the
H&M needs to be selective towards choosing and analysing the force to avoid the future
uncertainty of the business. The value of Pestle method is suitable to prevent the implication and
analysing the factors to get rid from the loss of the business operations.

CONCLUSION
Form the above assessment, it is concluded that Pestle analysis is considered as one of the
important tools and technique for analysing and identifying the future business force and its
implication on the business of any organisation. Political, legal and economic factor which is
considered as most critical and important force which needs to be taken care of to get higher
business results along with maximum customer satisfaction and profitability. Lastly, it has to be
said that Pestle analysis is the most useful and beneficial tool and technique to get information
and knowledge of the future uncertainty along with the risk management and controlling it to get
the relevant and future business outcome.

REFERENCES
Books & Journals
Srdjevic, Z., Bajcetic, R. and Srdjevic, B., 2012. Identifying the criteria set for multicriteria
decision making based on SWOT/PESTLE analysis: a case study of reconstructing a
water intake structure. Water resources management. 26(12). pp.3379-3393.
Tanaka, H., 2013. A viable system model reinforced by meta program management. Procedia-
Social and Behavioral Sciences. 74. pp.377-387.
Ng’ang’a, S. I., 2015. The PESTLE dynamics in tea trade: Effects on return to the farmer and
sustainability of the smallholder tea enterprise.
Zalengera, C., Blanchard, R. E., Eames, P. C., Juma, A. M., Chitawo, M. L. and Gondwe, K. T.,
2014. Overview of the Malawi energy situation and A PESTLE analysis for sustainable
development of renewable energy. Renewable and Sustainable Energy Reviews. 38.
pp.335-347.
Song, J., Sun, Y. and Jin, L., 2017. PESTEL analysis of the development of the waste-to-energy
incineration industry in China. Renewable and Sustainable Energy Reviews. 80. pp.276-
289.
Bivolaru, E., Andrei, R. and Purcaroiu, G. V., 2009. BRANDING ROMANIA: A PESTEL
FRAMEWORK BASED ON A COMPARATIVE ANALYSIS OF TWO COUNTRY
BRAND INDEXES. Management & Marketing. 4(4).