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Business Strategy - H&M Assignment

   

Added on  2021-01-02

12 Pages3373 Words242 Views
Business Strategy

Table of ContentsINTRODUCTION ..........................................................................................................................1TASK 1............................................................................................................................................1P1 ...............................................................................................................................................1TASK 2............................................................................................................................................3P2 ................................................................................................................................................3TASK 3............................................................................................................................................4P3 ...............................................................................................................................................4TASK 4 ...........................................................................................................................................6P4 ...............................................................................................................................................6.........................................................................................................................................................8CONCLUSION ...............................................................................................................................8REFERENCES..............................................................................................................................10.......................................................................................................................................................10

INTRODUCTION Business strategy is a course of action or set of decision which help the entrepreneurs inaccomplishing peculiar enterprise objectives. Along with this, it is regarded as master plan whichevery organisation implies to assured competitor position in marketplace, carry on its operation,attract customers and accomplish pre determined goal in an trenchant and prompt manner.Moreover, it enable company to identify business opportunity and make use of availableresources in order to obtain maximisation of profit (Amit and Zott, 2012). This report id based onH&M which is one of the multinational clothing retail company and it is commenced in the yearof 1947. It operates in 62 countries with over 4500 stores and headquartered in Sweden. In thisdocument, it covers impact of macro environment on firm's operation, evaluate the internalcapabilities of company, application of Porter's five force model to examine competitive force.Finally, developing strategic planning for an organisation is also mentioned here. TASK 1P1 Every organization has its own business environment as it is combination of internal andexternal factors which influence the firm in accomplishing its goal or objective. There are twokind of external marketing environment i.e. micro and macro and these environment factors arebeyond the control of marketers ad it directly influence the its decision during creating marketingstrategy (What is PEST Analysis?.2018). Some of the macro environment factors aredemographic, economic, technology, political factors etc. which effect its productivity andprofitability. However, to analyse or examine external factor PESTLE analysis is considered aseffective tool. PESTLE analysis is a tool which is used to determine or evaluate the centraldrivers of change in strategic or business environment (Aithal, 2016). This tool allows H&M tomeasure current environment and potential changes in order to face competitors by implementingproductive strategic decision for attaining high level of proficiency among industry. Thus, H&Mimplies PESTLE analysis to analyse its external or macro factors which is described below: Political factor: It is concerned with government policy, political stability, tax policy,foreign trade policy as well as signifies that how and to what extent government intervenes inbusiness operation or function. However, the major political factor which negatively impactH&M as government put some restriction on import and export as well as in relocation of

production facilities which negatively efficient its profitability ratio. However, H&M tackle thisnegative issue by maintain its profit margin by reducing its cost as well as acquire incentive tofind out production in specific areas. Along with this, they are welfare with political stablenessof UK government which enable them to expand their business operation effectively. Economical factor: This factor is consider economic growth, interest rate, exchange rate,inflation which influence how an organisation does business and also how profitable they areamong market (Bharadwaj, El Sawy and Venkatraman, 2013). Hence, recent economic crise inUK is greatly impacted H&M business function as it decrease consumer spending behaviour orpatterns and created downward pressure on prices. However, H&M adapted effective decision tomeet out this impact on their productivity as they rises the demand of disposable fashion amongcustomers by offering attractive pricing strategy which allows consumers to cut down spendingwithout compromising trendiness. Social factor: This factor is that area which contain shared belief and attitude ofpopulations like age, heath consciousness etc. which influence their proficiency. Moreover, UKpopulation mainly youths and young adults prefer fashion or stylish product and trendy clothes inorder to improve their lifestyle which negatively impact H&M productivity. Therefore, H&Movercome their negative impact by introducing trendy and stylish clothes for both sexes i.e.youths and young adults that enhanced customer satisfaction level as well as add value to firm'sbrand image among industry. Technological factor: It is regarded as one of the key factor for business success orgrowth as it is related with adapting latest or innovative technology in order to enrich theirprofitability ratio. Hence, UK population promote latest technology for trading product orservices which challenged H&M drastically among competitors. Thus, H&M faced theirchallenges effectively as they adapt innovative technology for their business logistics as wellprovided online facility and home delivery option which attract the customers and it leads tohigher sales growth as well as help them to gain competitive advantage (Blackburn, Hart andWainwright, 2013). Legal factor: Under this factor, it involves government laws and legislation regardingequal opportunity, advertising standard, consumer rights etc. which enable firm to examinewhether they adhere to legal compliance or not. Thus, recently UK government announced for amonthly monitor in company to check whether they are maintaining proper working ambiance

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