Strategic Management: H&M - Background, Analysis, and Strategies

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
H&M - Background Information.....................................................................................................3
External: Fast Fashion Industry Analysis...............................................................................4
Internal: Strategic Capabilities...............................................................................................5
Strategic Directions (Options)................................................................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Strategic management is the process by which an organization has been dealing with
various kinds of strategies that has been developed for making an organization
enhanced(Barney, 2017). Further these strategies are required for covering various kinds of
factors that makes impact upon an organization. In this file both internal and external factors are
to be covered with the help of PESTEL and SWOT analysis. In the end recommendation has to
be given upon.
MAIN BODY
H&M - Background Information
Hennes & Mauritz AB is a Swedish multinational clothing-retail company known for its
fast fashion clothing for teenagers, children, women and men. H&M is working across 74
countries with over 5000 stores with various firm brand. It is the second largest retailer of
clothing globally. H&M is founded by Erling Persson and operates by his son Stefan Persson and
Helena Helmersson, the company is doing online business in 33 countries. The company
established by Erling Persson in 1947, Company opened his first shop in Vasteras, Sweden
(Barney, 2020). The shop is exclusively for women's clothing. The company also got listed in
Stockholm Stock Exchange in 1974, Also stared retail online business in 1998. First store was
opened in U.S. OM 31 March 2000. From then to 2020, H&M operates 2325 stores and planned
to close 5% of their worldwide stores in 2021, as a result of COVID-19 pandemic. (Chopra,
Gupta and Chhabra, 2017)
H&M invest maximum time in advertising and promotion. Digital Marketing is also used
in H&M company as a marketing tool. It uses press, celebrities to carry out advertising content to
their potential customer, also make use of videos, social media and print to make the product &
service available and familiar to its users(Berman, Evans and Chatterjee, 2018). H&M uses
premium pricing strategy as it offers exclusive and high quality clothes to their targeted
customer, which includes youths, women, men, high profile people and children. Organisation
includes everything from designer clothes to daily wear and yoga wear(Banihabib, Hashemi-
Madani and Forghani 2017).

External: Fast Fashion Industry Analysis
PESTLE analysis is the tool that is being used to analysed external factors of an
organisation. PESTLE analysis is in the context of H&M .H&M is a Swedish multinational
clothing retail company. It has a headquarter in Sweden. (Bryson and Edwards, 2017)
Political Factor- Political factor externally effects an organisation. In this factor looking
for the government rules intervene the economy that affect an organisation. In this factor
includes the Tax policy, Tariffs, Bureaucracy ,Trade restrictions. Government policies affect to
H&M in positive and negative manner. The Positive impact on H&M is Government policies of
trade restriction may affect the trade of H&M(Bolland, 2020). When the government relies in
restriction and taxes it easy to expand the market. Negative -when government increases the
taxes then the export is costly for company. Due to the taxes the selling rate is decrease.
Economic Factor- In this factor includes economic growth, interest rates, exchange rate.
These factors affect how an organisation operate and make decisions. These factors directly
effect on the business and its profit(Kenny, 2017). Economic factor affects the H&M in positive
manner. H&M needs raw material for production, that’s why when recession is increase in
market they will buy raw material from cheap supplier or seller.
Social Factor- In this factor focus on social trends and styles. Factor include educational
level, changes in lifestyle, cultural levels. This is helps to marketer to understand the
requirements and needs of their customers. This factor is important for marketer when targeting
the market. Social factor affects to an organisation .H&M follow the social factor then it will
expand the own market and increase the sale . It is very important for understand to customers
need and requirement an d social trends for increase the selling rate.
Technological Factor- In technological factor affects an organisation in production dealing
marketing. Technological innovation affect the performance of an organisation . It may affect the
market performance positively or negatively. Due to technological innovation production rate is
increase that is properly full fill the demand of customers. When demand is increase and
production rate is low due to technological factor then the market performance is decrease.
Legal Factor-In this factor various kind of laws are include that are bound to be followed by
an organisation to establish itself within a country. In this laws like trademark, labour law,
industry regulation and permits or license. The factor affects its costs or demand. H&M follow
these laws in a proper manner when it will not follow the laws they will facing legal issues .