Smart Objectives and Business Strategy

This assignment delves into the significance of setting SMART (Specific, Measurable, Achievable, Relevant, Time-bound) objectives within a strategic business context. It emphasizes how well-defined objectives contribute to achieving desired outcomes and success. The document provides examples of SMART objectives across various business functions, illustrating their practical application. Furthermore, it discusses the role of PESTEL analysis in understanding external factors influencing business strategies and how SWOT analysis can be used to identify internal strengths, weaknesses, opportunities, and threats.

Business Strategy
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Table of Contents
INTRODUCTION .............................................................................................................................3
TASK 1...............................................................................................................................................3
1.1 Mission, vision, objectives, goals and core competencies.......................................................3
1.2 Analyse the factors need to be consider in designing strategic plan........................................4
1.3 Two different strategic planning techniques............................................................................4
TASK 2 ..............................................................................................................................................5
2.1 SWOT analysis and strategic positioning................................................................................5
2.2 PESTEL analysis.....................................................................................................................5
2.3 Definition and assessing the significance of stakeholder analysis..........................................6
2.4 Designing a new strategy for H&M ........................................................................................6
TASK 3...............................................................................................................................................6
3.1 Analyzing the market entry which H&M can adopt for the growth and expansion...............6
3.2 Selecting the suitable market strategy for H&M ....................................................................7
TASK 4...............................................................................................................................................7
4.1 Assessing the roles and responsibilities of personnel who implements the business strategy
.......................................................................................................................................................7
4.2 Stating the resources which are required by H&M for the implementation of new strategy . 8
4.3 Contribution of the SMART target in the achievement of organizational goals ....................8
CONCLUSION .................................................................................................................................8
REFERENCES.................................................................................................................................10
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INTRODUCTION
Business strategy is long-term corporate planning in order to enhance business strength
and operate successfully in present globalized and competitive age. Effective and strategic plan is
the security or prevention from potential threats or difficulties. Present project report is based on
strategic business planning in H&M. It is the largest fashion retailer in Europe who is providing
qualitative products at affordable prices. Present report will focus on H&M future business plans
and its contribution towards accomplishing organizational targets so that firm can operate
effectively and ensure long run survival or growth.
TASK 1
1.1 Mission, vision, objectives, goals and core competencies
Mission: H&M's Mission statement is straightforward and foundational which is providing
“fashion and quality products at the best prices” (Yan, 2014). This statement reflects that H&M
regular pay focus on its cloths quality, fashion and prices as well so that customer can be served
with effective quality at affordable prices.
Vision: H&M's vision is to become a global retailer in the world. Its mission statement is
contributes towards accomplishing this vision so that firm can become a largest retailer around the
global market.
Objectives: H&M aims at offering quality and fashionable products to wide range of
customers at reasonable and cost effective prices. It will make an significant contribution towards
achievement of organization's mission.
Goals: H&M's strategic goals is to increase its turnover and number of stores by 10-15%
each annum (Yan, 2014). So that, it can build strong and powerful position in the market. H&M is
continuously focuses on expand its operations in the international market to accomplish this
organizational goal. Moreover. Its long term goal is to give commendable fashion experience to
each and every customer.
Core Competencies Quality: is the most important factor and it is the key of H&M's success. Design: H&M's designer team produce designer cloths which fulfil customer's fashion
demand.
 Pricing strategy: Efficient logistic and economies of scale helps to sale products at
competent prices.
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1.2 Analyse the factors need to be consider in designing strategic plan
Strategic planning is the process through which organizations set their objectives and plan
accordingly to attain desirable outcomes. It helps to prevent itself from the future threats due to
rapidly changing market behaviour.
Engagement or involvement
H&M can design effective strategic plan by involving all the staff level. It is because staff
involvement will help to gain an insight into future so that management can assess potential issues,
challenges and opportunities as well (Smith, 2012). Moreover, staff engagement helps to motivate
H&M's personnel so that they will fulfil their commitment in real market otherwise, execution of
the plan will not be very affective.
Communication
Effective communication is also very important factor. Thus, H&M has to assure that all
the staff members should be communicated with the strategic plan. They should know that how
they are involved in the H&M's strategic planning process. Henceforth, H&M has to implement
top down communication in the business.
Organizational culture
It refers to employees behaviour, attitude, values and their beliefs (Yan, 2014). H&M has
to create a strong culture in which all the employees make their contribution towards target
achievement.
1.3 Two different strategic planning techniques
BCG Matrix
This matrix has been developed by Bruce Henderson in early 1970s. This matrix
demonstrates that H&M can be classified into 4 categories on the basis of its market share and its
market growth (Qiang, 2014). In this, market share indicates competitive strength and advantage
over its competitors while market growth indicates industry attractiveness. Thus, this matrix will
provide assistance to map position taken into consideration this two aspects of H&M's
profitability.
Profit Impact of Market strategies (PIMS)
This theory helps to assess the relationship between H&M's future actions and derived
results. So that, H&M's senior management will be highly able to critically analyse its market
environment, identify possible threats and design strategies to enhance their corporate position and
sustainable growth as well.
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TASK 2
2.1 SWOT analysis and strategic positioning
Strengths
 Global clothing retailer
 Quality products at affordable prices (H
and M SWOT Analysis, n.d.)
 Quicker delivery
 Large customer base
Weakness
 Overstocking due to large purchase
 Changing business environment
 High capital and maintenance cost in
Machinery
Opportunities
 Online services
 Business expansion
 Well-established to capture apparel
market
Threats
 Fierce competition
 Newly business unit (home-ware) in
Europe (H and M SWOT Analysis, n.d.)
 Changing the regulations and
legislations
Strategic positioning: H&M has a good market position due to its product quality and cost
pricing strategies (Hoskisson and et.al., 2013). It is because H&M is continuously focusing to
maintain a strong position by serving quality products at reasonable prices.
2.2 PESTEL analysis
Political
Different political regulations and legislation in
national and international market is of great
concern for H&M.
Economical
Fluctuation in interest rates, cyclical changes
such as inflation or deflation and Forex risk due
to currency exchange rate, tax rates and foreign
trade regulations (Import-export duties) are
economical risk (Adamkasi, 2015).
Social
Different culture, religion, hygienic working
conditions, better wages, safe and hazard-free
environment are the social factors that affect
H&M.
Technological
Innovations, up gradation and advanced
machinery usage is necessary to manufacture
designer and fashionable cloth as per customer
need.
Environmental Legal
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Reduce garbage, scrap, waste management is
necessary as per environmental laws and
regulatory regime (Adamkasi, 2015).
H&M needs to comply with national as well
international governmental regulations,
legislatory provisions regarding employees,
product quality, minimum wages, financial audit
etc. which is the part of legal factors.
2.3 Definition and assessing the significance of stakeholder analysis
Stakeholders are those who are directly or indirectly affect by H&M's operations and have
some kind of interest in the organization.
Stakeholder analysis for H&M
Shareholders: This are one of the most important stakeholder who invest in shares so as to
obtain high return. H&M has to reflect as a strong profitability in the business so that H&M will
be able to obtain required funds timely.
Customers: They desires to get qualitative, fashionable and designer product at reasonable
prices for different age groups (XUE, SU and SHI, 2015). In order to enlarge customer satisfaction
level, H&M has to ensure its product quality and implement an effective pricing strategy.
Suppliers: They supply raw material on credit so that H&M has to maintain its liquidity
position and earn good profit. So that, H&M will be able to take credit from the suppliers on
desired conditions.
2.4 Designing a new strategy for H&M
Strategy may be defined as a competent plan which is framed by the business unit to
achieve the long term goals and objectives. On the basis external environmental analysis it has
been identifying that taste and preferences of the customers are change with the very high pace.
Further, to compete with the rival firms like ZARA H&M needs to conduct research activity.
Besides this, company needs to get feedback from the customers. By this, business unit is able to
make suitable differentiation in the products. Further, H&M needs to employ cost leadership
strategy. Thus, by offering the designer clothes and other retail products at cost effective prices
business unit can build competitive edge over others.
TASK 3
3.1 Analyzing the market entry which H&M can adopt for the growth and expansion
Market entry strategy is the planned method in which business unit serves new market by
offering the existing or innovative products or services. Thus, offering the exclusive designer
wears business organization can attract the large number of new customers. Further, by enter in
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the similar or another industry business unit can maximize its productivity and profitability.
Besides this, H&M can also adopt market penetration and market development strategy which are
account for the category of limited growth strategies (Shen, 2015). In market penetration business
unit places more emphasis on gaining the large market share by charging the lower prices at the
initial level. Further, by developing the new market segment for the clothes and other designer
wears or accessories H&M can attain success in the strategic business arena. Besides this, H&M
can enhance its profit by reducing their expense and stop to making investment in the non-
profitable products. Thus, substantive and limited growth as well as retrenchment strategies helps
firm in expanding their business operations in an effectual manner.
3.2 Selecting the suitable market strategy for H&M
On the basis of the above mentioned aspect limited growth strategies proves to be more
fruitful for the business unit. According to the cited case scenario ZARA is the major competitor
of H&M who offers fashionable and designer clothes at cost effectual rates. Thus, H&M needs to
adopt market penetration strategy which helps them in building the distinct image in mind of target
market. Presently, H&M offers clothes and other accessories at reasonable prices. Thus, by
adopting the latest technology business unit can cut down the cost to the great extent. It enables
firm to gain high market share by offering the designer clothes at cost as compared to their
competitors (Boyd and Dyhr, 2014). Further, H&M also requires to develop new market segment
by offering the products according top their needs and expectations. Through this, H&M can
expand its business operations and functions in an effectual manner.
TASK 4
4.1 Assessing the roles and responsibilities of personnel who implements the business strategy
In order to develop the new market segment H&M needs to undertake research and
development (R&D) activity. It provides assistance to the firm in evaluating the needs and wants
of the customers in the best possible manner (Klingner, Nalbandian and Llorens, 2015) Further,
H&M requires to adopt latest technology to execute the market penetration strategy in an effectual
manner. In this roles and responsibilities of various departments are enumerated below:
Finance department Role: To arrange the finance for the adoption of machine or other technological aspects and
R&D.
 Responsibility: This department has responsibility to raise finance at low cost.
R&D department Role: Conduct survey to assess the needs, wants and expectations of the target market.
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 Responsibility: To offer the valuable outcomes from R&D activity which aid in the growth
and success of H&M (Snell, Morris and Bohlander, 2015).
Human resource department Role: HR manger has role to encourage the human resources to perform their work in an
effective manner.
 Responsibility: This department is charged with the responsibility to make focus on the
retention skilled and competent workforce.
4.2 Stating the resources which are required by H&M for the implementation of new strategy
There are several resources namely human and financial which are needed by H&M for the
implementation of penetration and market development strategy. Company cannot perform their
activities if they do not have enough amount of resources. H&M requires skilled workforce for
doing research. Besides this, competent personnel are also needed who has ability to deal with the
latest technological instruments. Further, to purchase the machinery and other high-tech
instruments business unit needs financial resources. Thus, business unit needs to make use of
retained profit and issue share for meeting the financial needs (Hsiao and Hsu, 2014). Time is also
one of the main significant factors which H&M keep in mind while implementing the strategy.
Moreover, business unit can take competitive edge over others when they execute strategies within
the suitable time frame.
4.3 Contribution of the SMART target in the achievement of organizational goals
SMART objectives are framed by the business unit to focus their efforts which helps them
in attaining the goals within the suitable time frame. Specific: The main objective of H&M is to increase their market share as compared to
ZARA. Measurable: H&M wishes to increase their market share by 4% in the accounting year
(Mitchell, 2014). Achievable: Company can easily achieve this objective by offering the unique and high
quality products to the customers at low prices. Realistic: Growth rate of market share is neither too high nor too low. Thus, H&M can
easily achieve this by taking into account the market penetration and development strategy.
 Time bound: H&M can achieve this objective within the period of 6 months.
CONCLUSION
From the above report it can be concluded that offering the exclusive clothes and
accessories at affordable prices is one of the main objectives of H&M. Further, it can be inferred
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that by converting the weaknesses into strengths H&M is become able to grab the opportunities
which are present at market place. It can be seen in the in report that penetration and market
development is most suitable strategy which helps H&M in exploring their business areas to the
large extent. Further SMART objectives will also help corporation in getting the desired outcome
or success.
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REFERENCES
Books and Journals
Boyd, B. and Dyhr Ulrich, A.M., 2014. Market entry strategies into the BRIC countries–a
comparison of Danish family and non-family businesses. International Journal of
Globalisation and Small Business. 6(1). pp. 15-36.
Hoskisson, R.E. and et.al., 2013. The evolution and strategic positioning of private equity firms.
The Academy of Management Perspectives. 27(1). pp. 22-38.
Hsiao, T.Y. and Hsu, Y.Y., 2014. Modeling Different Scenarios for Forecasting Human Resources
Requirements in Taiwan's Recreational Farms. International Journal of Business
Administration. 5(6). p. 1.
Klingner, D., Nalbandian, J. and Llorens, J.J., 2015. Public personnel management. Routledge.
Mitchell, C., 2014. Being SMART with NRM performance goals. Australasian Science, 35(5),
p.48.
Qiang, W.A.N.G., 2014. Application of BCG Matrix Method in Transformation to Modern
Vocational Education of Local Undergraduate Colleges. Value Engineering. 32. p. 165.
Shen, Z., 2015. Clustering and interorganizational dynamics in foreign market entry strategies.
Evidence from Chinese MNEs.
Smith, R.D., 2012. Strategic planning for public relations. Routledge.
Snell, S., Morris, S. and Bohlander, G., 2015. Managing human resources. Nelson Education.
XUE, Q., SU, M. and SHI, F., 2015. Stakeholder Analysis on the Quota Payment of Specific
Diseases of New Rural Cooperative Medical System. Chinese Medical Ethics. 6. p. 020.
Online
Adamkasi, 2015. PESTEL Analysis of H&M. [Online]. Available through:
<http://freepestelanalysis.com/pestel-analysis-of-h-m/>. [Accessed on 23rd April, 2016].
H and M SWOT Analysis, n.d. [Online]. Available through:
<http://www.mbaskool.com/brandguide/lifestyle-and-retail/2934-h-and-m.html>.
[Accessed on 23rd April, 2016].
Yan, A., 2014. Hennes and Mauritz business planning. [Pdf]. Available through:
<http://www.sfu.ca/~sheppard/478/syn/1147/Group_2.pdf>. [Accessed on 23rd April,
2016].
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