H&M Business Strategy: Analysis of Five Forces, PESTLE, Value Chain and Competencies

H&M business strategy 1
H&M BUSINESS STRATEGY
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H&M business strategy 2
H&M business strategy
Introduction
With a corporate framework of offering eminence goods at affordable rates, H&M has
built itself as top international fashion industry. The product has a definite desire for style and is
continuously determined to exceed purchaser expectation with its most reliable prices (H&M,
2015). While the paper concentrates on the company as a single brand, there are other products
contained within the Hennes & Mauritz AB group. The company has 3,261 stores in 55 nations
as well as online shops in 12 states (H&M 2018). The company’s stores have diverse clothing
and fittings for men, children, and women. The constantly developing variety has presented
cosmetics, footwear and a company’s home range that has a broad choice of home decorative
and tiles substances (H&M 2015).
While the H&M is an independent trademark, it is enormously swayed by the fashion
sector. Whatever occurs in the industry and with the international economy, it has a direct
influence on the selection H&M creates. The fashion businesses have $1.5 trillion internationally
and hire a million of individuals, and offer a considerable contribution to the overall universal
economy (Bhasin 2017). Mainly, observing at the high street as fashion vending platforms, there
have been, presently is, and will be a steady development of various styles; influencing how it
acts in its market, the high street is under huge burden as many market trends affects its return on
investment, future relevance, and famous (KMPG 2015). The study displays that more outlets are
departing on the high street than those introducing, with 2013 recording 5,839 shops closed and
only 4852 opened (MBA Skool 2017).

H&M business strategy 3
Five forces analysis
The threat of entry (medium): the UK attire sector does not automatically come with
restriction, and therefore it is a secure business (Harrin and Peplow 2017). Initiating an online
workshop is now more accessible, meaning that H&M faces risk from new competitors. They
would be influenced deeply if effective online brands were to open physical supplies such as
Misguided, Boohoo and ASOS (H&M 2018). H&M can overwhelm the threats of new players
since it is an established brand that has a robust customer with product loyalty. New contestants
are faced with the fact that they are fresh and so they need to design a solid repute (Armstrong
and Taylor 2014, pp. 23).
The threat of substitute (medium): the company is constantly faced with the notions of
users going somewhere else to purchase the similar products (Berman et al. 2015, pp. 13). The
market styles such as economic slump made public to hold on to their cash and expend little.
Therefore, they had no choice but to go for cheaper outlets such as Primark where they could get
comparable goods at a lower rate. However, the first product that H&M presented permits them
to hold some of the marker shares when it comes to low-priced but jovial attires (H&M
GROUP 2017).
The intensity of the rivalry (strong): H&M as fast seller is constantly faced with
competition between contestants but eventually they want to be a leader in the market (Custora
2018). To desist from being majorly impacted by competition, the company has planned aspects
of their product that make them stands out of the rest.
Pestle analysis

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Political: H&M have no option but to conform to the political matters and informed laws.
As the company source from the Far East, then, whatever is being conveyed will have to adhere
to customs obligations (Monaghan 2018). If the regime introduces a new tariff, then the
product has to function under the regulations. Lately, new laws have been brought that shows
that firms need to modify 5P for plastic baggage (H&M 2018). Watching particularly at the
important the issue might bring to the company, is that the brand could be affected by the users
who are annoyed to purchase of bag. The frustration could be transferred to the brand bearing in
the mind it is not an error on their behalf (Pratap 2017).
Economic: H&M have to control the financial environment to predict what one does in
future. Supply and demand, devaluation and inflation are the aspects that organisation wants to
take into contemplation (Armstrong and Taylor 2014, pp. 25). If there was to be an increase in
price, then the company will adjust the price of their products. The buying command of users
would vary as customers may not be capable to afford to indulge in a spending binge and as an
alternative go where they can acquire product cheaply (Entrepreneur 2018).
Social: the features are affected by the populace and are determined by social drifts,
community and demographic methodical. At present, over 50 make up over 35% of the
populace and also have disposable revenue thus making them very lucrative target viewers
(H&M 2018). The fashion influences the way H&M may advertise to touch the old viewer.
Other features comprise the cultural and religious upbringings as the demand of specific goods
and very dependent on what population are demanding in that locality.
Technology: with the announcement of more innovative technology comprising the
tablets and phones, brands have to modify their marketing mix to keep up with the trends. Apps