Macro Environment Analysis of H&M Using PESTLE Model

This assignment focuses on the impact of macro environmental factors on H&M's business operations. The PESTLE model is used to analyze these factors. Swot analysis is effective in understanding the impact of macro environment on growth. Hybrid and high-tech technologies are preferred by managers within their organizational framework. References from various books, journals, and articles are provided.

Business and business
environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different types of organizations and the growth of the international business environment 1
P2. The size and scope of the organization; their vision, mission and business objectives; the
organization and legal structure; and information about their stakeholders...............................1
TASK 2............................................................................................................................................1
TASK 2............................................................................................................................................3
P.4 Analyzing the positive and negative impact on the macro environment on business
operations....................................................................................................................................3
P.5 Conducting internal and external analysis to identify H&M strengths and weaknesses......4
P.6 SWOT analyses of organisation............................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
Customers have certain set of expectations that are needed to be considered by companies
so that they are able to raise their sales and profitability. There are many organizations that have
come up and are focused on delivering high quality services. For some of them, ultimate may to
gain maximum profit but there are few that aim at betterment of the society. In order to conduct
the research in appropriate manner, Hennes and Mauritz is taken in to consideration. This is an
organization and focus on delivering their customers with high quality services. This report
covers, different organizational functions and their link to company’s objectives and structure.
Further, it covers positive and negative impacts that macro environment has upon the business
operations.
TASK 1
P1 Different types of organisations and the growth of the international business environment
COVERED IN PPT
P2. The size and scope of the organisation; their vision, mission and business objectives; the
organisational and legal structure; and information about their stakeholders
COVERED IN PPT
TASK 2
P3 Different organizational function and linking to the organization objective and their structure
Organization structure is important for the development process because they are creating
a different strategies and can be approaches a new technology helpful for the organizational
growth and development (Fleischmann, 2014). In this way, they increased their production value
and the quality of product. Hennes and Mauritz is the popular organization that can be control
the whole department and it can be managing the different task performed by the department.
They are achieving some for the growth. There are function that perform a different task in the
organization as following:
Marketing process: The marketing department is very important because they are main
the sales of product. They are creating a different plan for the promotion of product in effective
manner. The Hennes and Mauritz are developing a new plan for the product selling. The sales
team maintain the detail of product such as purchased item detail and selling prize this are
important things of every product. They can be represented an effective manner to provide the
information to the customer. This organization is important to create an effective sales pitching.
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Finance process: Finance department will control and manage the whole financial
functions such as income, cost, loss, profit etc. Financial department manage the whole budget of
income and the new product lunched details. This is the important department that are very
useful for Hennes and Mautitz.
Production process: Every firm has their own separate department that mange the whole
manufacturing team (Jennings, 2014). This department will manage the new product details and
their quality of product. It provides a good quality of services to customer. First of all, they
understand the need of customer and then modified their product according to the client. The
manufacture manager can manage the whole production process. They are directly interacted
with the production department that provide the full details of product.
Human resources: The HR department is play important role for the Hennes and
Mauritz. They are hiring the best talented people that enhances their skills for the growth of
organization. They are following some steps to select the employee. HR department is very
important for the organization because they will manage the detail of employee and providing
the income related information.
Hennes and Maurtiz is the most popular company to performing a different task in step
by step. They are achieved their goal for the business process. In this firm, All department are
performing different task in an effectively. This department can be build a relationship with the
other department. They are managed the coordination between the employee. All department are
connected to each other and performing operation in separately. Finance department is very
important to control their cost, annual budget etc. other hand production department is useful the
manufacturing a product.
It is stores the detail of raw material are used for the manufacture. They are promoting a
new product in market with the help of marketing team. They can explore their product in the
market. Digital marketing is a new approach to share the detail on the internet because most of
the customer are directly interacted to the e-commerce site. This website is collected the
information regarding and product (Bocken, 2014). It is the way to represent their product on the
internet. In this way, they are identified that each department has some specific role to perform
some operation in accurately. All the department are inter-related to each other and they are
making a strong relationship between departments.
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TASK 2
P.4 Analysing the positive and negative impact on the macro environment on business operations
Macro environment refers to the external eternal environmental factors that affects the
growth and development of the organisation. In order to assess the impact of macro environment
of business operations of H&M, PESTLE model will be used. PESTLE model is effective and
efficient tool that helps in analysing the impact of macro environment on growth and
development of the organisation. In this context, the PESTLE analysis is described below: Political Factors: Political factors refers to the governmental policies and norms which
affects the business operations of organisations (Sun and et.al., 2014). The policies and
reforms changes according to needs and circumstances and it can affects the operations of
business organisations from minimum to maximum. The current political condition of
Untied Kingdom destabilised due to BREXIT. Government have transformed some of the
provisions and trade policies which could affect the business operations of H&M. Economic Factors: Economic factors includes the inflation rates, interest rates,
unemployment rates, exchange rates and all other economic factors that affects the
performance of the organisation. In order to enhance the productivity and profitability of
the organisation it is essential for the management to analyse the economic conditions of
the country. The economic condition of United Kingdom is robust but volatile (Ivy,
2018). It affects the daily business operations of H&M. Economic factors greatly
influences business growth and development. Stable economic conditions foster
organisational growth and unstable economic conditions in the country hinders the
growth and development of organisation. Social Factors: Social factors includes societal tastes and preferences. Customers
preferences are dynamic in nature. They always expect from organisations to provide
new and innovative products to them. Those organisations which fails to stand on
expectations of customers fails to sustain the competitive scenario. The customers in
United Kingdom are advance who prefers to use advance digital technologies and online
mode of shopping. H&M have use friendly online shopping site which provides all types
of products company manufactures in order to retain and attract customers of United
Kingdom.
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 Technological Factors: Technological advancements and growth influences the business
managers and organisations greatly. Evolution in digital technologies, internet of things,
computer systems, cloud computing, act as a catalyst which helps in reducing the manual
efforts of the organisation and assists in saving time and cost of the companies. H&M
management has implemented precise and high tech systems within their organisation
that helps in enhancing the profitability and productivity of organisation. Companies
those fails to install advance technologies remains in competitive disadvantages. Thus,
technological factors greatly influence the business operations of organisations. Legal Factors: Legal factors includes the legislations, laws and regulations formulated
by the government of country. In order to sustain in competitive environment it is
essential and important for the business managers to follow all the laws and legislations
(Kotabe and Helsen, 2014). In this context, management of H&M follows all the laws
and provisions mandates in Company Act of United Kingdom. Furthermore, management
follows laws and regulations related with Data Protection, Consumer Health and Safety,
Environmental Protection, etc. This helps in enhancing the reputation and goodwill of the
organisation and management can prevent legal uncertainties.
 Environmental Factors: Environmental factors impacts on business operations. In
present era, the level of pollution is increasing rapidly and substantially. The emission of
greenhouse gases during supply chain and production process negatively impact on the
atmospheric layers that protects Earth. Furthermore, the glaciers are melting at rapid pace
which raising the sea level tremendously. In order to sustain in competitive environment
it is essential and important for management of H&M to follow all the environmental
protection law and limits its CO2 emission to prescribed level so that the enhancement of
organisational growth and development can be made.
P.5 Conducting internal and external analysis to identify H&M strengths and weaknesses
The internal and external analysis of H&M is described below:
Internal Analysis
Internal environment includes organisational structure, operations of various departments,
work culture, work environment, etc. It influences the organisational growth and development.
H&M have robust organisational structure which is hierarchical and systematic. The work
culture of the organisations is optimum which fosters employee's motivation and satisfaction.
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The departments of organisation have been classified into various heads which helps in
appropriate organisation and delegation of work (Lonkar and Zafar, 2016). There is positive
work culture floats within the environment due to its agile employee policies and practices. From
the analysis of internal environment it was identified that the supply chain and procurement
process of the organisation is not optimum. It hinders organisational growth and developmental
process. The financial position of the company is robust which helps in providing information
regarding budgetary position of the organisation. Management of operations and production is
appropriate and managers prefers to use hybrid and high tech technologies and systems within
their organisational framework (Wang and et.al., 2018). From the analysis of internal
environment it was identified the human resource management of H&M is not efficient. The
policies formulated by HR department of the organisation does not helps in enhancing the
motivation of employees. New employees finds it difficult to adjust in the work environment and
thus they leave within short period of serving.
External factor
In external factor organisation is Scribe the core strength as the ethical factors which
show the client contentment of known as its core strength and the failing which has been known
are the rapid alteration in the application to which the establishment has to respond and keep the
industry news. This is to be focus on all such kind of factor, which is give negative impact of
organisation. There are some changes is made for long term prospective. In the same way,
political, economical, technological, legal and environmental factor is part of external factor.
Analysis of economic factors whether there is any change in interest rate, inflation rate and
inflation rate (Ferraro, 2017). Investigation of scientific factors entertainment alteration needful
in the existing engineering by change them or replacement them with fresh one. Logical thinking
of legal surroundings helps in characteristic occurrent in legal regularize related with any
specific act, occurrence in duties and revenue policies. Ethical and social reasoning assistance in
distinguishing circulating trends, lifestyles, fashions and other component of appreciation. On the
other hand, Large and most crucial property of an arrangement is lucidity in its imagination
which is earning net income and satisfies customized irrespective of the marketplace conditions.
Company can measuring its property by applying key carrying into action index.
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P.6 SWOT analyses of organisation
There are some factor, which is play most important part of organisation, which is help to
increase the profit and growth rate. Property and imperfection of the business organisation are
concomitant with large and small environment constituent. Governing body compares capability
of the troupe with frequent macro situation factors like economical, governmental, application,
social and taste and then explicate strategical and work policies (Savrul, 2014). An abrupt change
in biology factors affects the determination taken by pull off. With the help of such kind of factor
is help to increase the current market network. Interrelation betwixt large state of affairs factors
and arrangement property and failing are as follows :
 Economic Factors: Economical component include alteration in involvement rate,
inflation rate conversation rate in the marketplace (Bovée, 2013). If concern agreement is
financially feasible it has adequate financial origin than ever-changing in these charge per
unit will not feel the evaluation and selling plan of action of the arrangement. Institution
should always at the ready to face the situation arises due to alteration in social science
component. There are regular changes in different rate is help to improve current market
place.
 Political and lawful factors:Political and lawful elements incorporates lawful principles
and controls and strategies. Changes in these legitimate arrangements influence the
organization to confront these lawful difficulties' organization ought to have aptitude and
particular staff.
 Social : To confront the test of changing social and social variables. A business
association ought to have great staff, reasonable money related assets and common assets.
Organization ought to have quality of satisfying buyer taste and inclinations according to
their requests which depend on their convictions and esteem (Virglerová, 2016).
 Innovative Factors:If organization have quality that it can overhaul its current
innovation with innovation than organization can embrace changes in which comes in
mechanical variables (Niemann-Struweg, 2014). For this organization ought to have great
monetary assets.
 Ecological Factors: Every business association utilize common assets for giving item
and administrations. For instance if organization fabricates wooden furniture then it needs
to take after ecological laws and don't abuse the regular assets. So administration of the
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organization ought to get ready methodologies for this and take after every one of the
behaviours.
All such kind of factor is most important and increase the market share of the organisation.
Property and failing and macro situation factors are related to with each different and impact
each some other (Thill, 2013). If institution fails to place its strength and weaknesses than it
cannot study macro geographical area factors then it fails to conjecture plan of action plans and
tactical arrangement.
CONCLUSION
Form the above report is focus on impact of macro environment of business operations of
H&M, PESTLE model will be used. Swot model is effective and efficient tool that helps in
analysing the impact of macro environment on growth. As per the above report is focus on
operations and production is appropriate and managers prefers to use hybrid and high tech
technologies and systems within their organisational framework.
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REFERENCES
Books and Journals
Sun, Y., and et.al., 2014, November. UK-based external business environment analysis of
outdoor adventure clothing using the PESTEL tool and its future outlook. In Information
Technology Systems and Innovation (ICITSI), 2014 International Conference on (pp. 306-
309). IEEE.
Ivy, P.R., 2018. “An Analysis of Employees’ Performance Appraisal System: A Study on Hennes
& Mauritz AB (H&M)(Doctoral dissertation, Daffodil International University).
Kotabe, M. and Helsen, K., 2014. Global marketing management.
Lonkar, A. And Zafar, T., 2016. Analysis of fast fashion industry with respect to sustainability.
Wang, S.K., and et.al., 2018. Rapid analysis of carboxylic acids and esters with direct analysis in
real time ion source. Rapid Communications in Mass Spectrometry.
Wheelen, T.L. and Hunger, J.D., 2017. Strategic management and business policy. Pearson.
Ferraro, G.P 2017. The cultural dimension of global business. Taylor & Francis.
Savrul, M 2014. The potential of e-commerce for SMEs in a globalizing business
environment. Procedia-Social and Behavioral Sciences. 150. pp.35-45.
Bovée, C.L 2013. Business communication essentials. Pearson Higher Ed.
Virglerová, Z 2016. The perception of the state's influence on its business environment in the
SMEs from Czech Republic. Administratie si Management Public, (26). p.78.
Niemann-Struweg, I 2014. An integrated communication implementation model for the post-
2000 business environment. Public Relations Review. 40(2). pp.184-192.
Thill, J.V 2013. Excellence in business communication. Pearson.
Fleischmann,J.J 2014. Subject-oriented business process management. Springer Publishing
Company, Incorporated.
Jennings, M.M., 2014. Business: Its legal, ethical, and global environment. Nelson Education.
Bocken, N.M.P 2014. A literature and practice review to develop sustainable business model
archetypes. Journal of cleaner production.65. pp.42-56.
Chang, J.F 2016. Business process management systems: strategy and implementation. CRC
Press.
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Weiss, J.W., 2014. Business ethics: A stakeholder and issues management approach. Berrett-
Koehler Publishers.
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