Strategic Management of H&M: Analysis and Future Growth Options

Strategic Management

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
1. Background information of H&M...........................................................................................1
2. External analysis of H&M.......................................................................................................2
3. Competitor analysis of H&M..................................................................................................3
4. Internal analysis of H&M........................................................................................................4
5. Strategic options for future development of H&M..................................................................5
6. Strategy selection and justification..........................................................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Strategic management is a ongoing process and activity of planning, determining, evaluating
and assessment of all that is required for a company to accomplish its goals and objectives. It can
be a process of making administration in the strategic tools and techniques of the venture so that
by implementing them in effective manner, the firm can accomplish is business goals
successfully (Ansoff & et. al., 2018). This report is based in H&M which is a Swedish
international clothing retail company which is known as fast fashion clothing for men, women,
youngsters and children. This document will cover information about external, internal and
competitor analysis of company. Further, will define about future growth option and their
evaluation.
MAIN BODY
1. Background information of H&M
H&M is the world’s second largest clothing retail company which operate its business
globally with the help of its 2500 stores in more than 44 nations cross wise the world. This
corporation was incorporates in 1947 by Erling Persson and is headquartered in Stockholm,
Sweden. The company is employing 126,376 and they make contribution in running its business
through its products like clothing and accessories. For long term sustainability and running its
business in market the company offer quality products and services. So that it can retain its target
audiences till long term. Apart from this the management of this venture use effective strategic
tools and techniques for the long term sustainability of it.
2. External analysis of H&M
PESTEAL analysis
It is a strategic tool which is utilised by a firm to determine the impact of macro and
external environmental factors over the business of an organisation (Ginter, Duncan & Swayne,
2018). The brief examination of this analysis towards H&M is mentioned as under:
Political- this factor consist different factors like government policies, taxation changes,
foreign trade regulations, political risks from foreign markets and changes in trade block etc. in
H&M, majority of the production of the company setup in Turkey, Egypt and Lebanon. So the
political instability of these nations negatively affects the business of respective firm.
1

Economical- This factor include different factor of external environment like business cycle,
interest rate, personal disposal income, exchange rate and inflation & deflation etc. The business
respective company exposed to economic shocks cause of Brexit and due to which interest rates,
inflation and currency rates are fluctuates that make it difficult to H&M to operate while
maintaining a stable pricing scheme (Moutinho & Vargas-Sanchez, 2018). Taxes, import duties
and other import laws are changes in several nations that make it hard to source at the catalogue
price.
Social- It is another factor of this external environment analysis and it consider diverse
components like changing culture and demographics, income distribution, living standard
changes and needs or preference changes. Clothing is an area where individual are instantly
influenced by social media and celebrities and changes are occurred in their needs and demands.
They prefer designer clothes which are in trend in these days and thus the need for the same is
arising more than ever before.
Technological- It involves several elements like internet, research and development,
advance technology, artificial intelligence and technological innovation etc. In H&M, the
management of the company use effective tools and techniques to create awareness about the
products and services in form of promotional channels like social media, interment and others.
By adopting online shopping technology through mobile application and company websites, the
firm can make development in its business in form of sales and customer base.
Environmental- This factor consist different elements like climate, weather, environmental
act like pollution and others. Textile sector is the second most polluting industry after oil and
petroleum industry. The high amount of water waste which is generated pollutes the water bodies
which can negatively affect the business of respective company. Because each business establish
and survive in society so this pollution can create deadly disease. Apart from this production of
clothes also generate air pollution which negatively affect environment. H&M has a goal which
is to be use totally recycled clothes material for its manufacturing.
Legal- This factor consist different laws and legislation that are devised and formulated by the
national authority (Okumus & et. al., 2019)). It consist different factors like health & safety laws,
employment law, consumer protection law and others. For instant, H&M has to collaborate with
franchising partners in UAE, Kuwait, Oman and other even when franchising was not the part of
expansion plan of action. If the management of this company manufactured an innovative design
2