Strategic Management: Analysis of H&M and Competitors

This study analyzes the strategic management of H&M and its competitors, including an external analysis, competitors analysis, strategic capabilities, strategic options, and strategy selection. Recommendations for H&M's growth and success are also provided.

Strategic Management.

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
External: fast-fashion industry analysis.......................................................................................3
Competitors analysis....................................................................................................................5
Strategic capabilities....................................................................................................................6
Strategic options...........................................................................................................................8
Strategy selection and justification..............................................................................................9
CONCLUSION................................................................................................................................9
RECOMMANDATION...................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
H&M is the fast-fashion company which got continued success at market place by
offering their products and services. Presently company appointed new strategic manager who
undertake review of H&M strategy. Company is second largest clothing retailer and has 2500
stores worldwide in 44 countries. In 2012, company lunches conscious range of clothing making
use of large proportion. The present study is based on the H&M company and its competitors
analysis. The report will include the industry analysis as well as external analysis by using
appropriate model. This will find out the internal strategic capabilities of employees as well as
strategic option for working in better manner. The report will critically evaluate the selected
future strategy for H&M and proper justification. At the end of report will highlight some
recommendations for better opportunity.
MAIN BODY
External: fast-fashion industry analysis.
In order to analyse external environment and industry analysis here is select PESTEL and
Porter's 5 force analysis (Ahmad and et.al., 2017). Both are help to analysis complete work and
its work are as follows:
PESTEL analysis:
Political factor:
The political factor affect to the business of H&M. As per the case study company have
many of the stores at different countries which is importation monitor political risk. Most of the
state monitor the changes and made contingent plan in place to deal with any political instability.
Economical factor:
As per the case study, Corporate social responsibility is also affected to the business in
negative manner because of significant influences on the society (PESTEL Analysis, 2019). This
is the completely agrees by the company to behave ethically and contribute to economic
development.
Social factor:
Social factor another ways to affect H&M business because all the customers have own
taste and style which can affect to business. In that company need to make changes as per
customer.
Technological factor:

In today world, technology is advance day to day because of that company is affected
with lack of knowledge about technology uses. As per the case study, management need to work
with technological changes.
Environmental factor:
H&M have aim to provide 100% quality of product to customer as per case study. In that
management need to generate new products from analysing market as well as old products in
effective manner. Also, management need to recycle and durable material will be used for
products.
Legal factor:
In the past years, company have been involved in a number of legal disputes which are
regard to the clothing retailers (Guan and et.al., 2019). This can affect to business and
manufacturing department.
Industry analysis through Porter's five force analysis:
Threats of new entrants:
New entrants in the market come with unique item which can affect to H&M. As per the
case study company have uniqueness designs of product and best quality of product which is
helpful for H&M to cover up the business and profits.
Bargaining power of suppliers:
Bargaining power of supplier can affect to business because in the market have multiple
suppliers as per different locations and purchase raw materials at lower cost which is the strength
in its supply chain management.
Bargaining power of buyer:
This give higher impact because customer have higher bargaining power in that
management need to maintain their quality of products and services in effective manner (Kim
and Kim, 2017). As per case study, innovation, unique products and good quality of product
always keep interest of customer towards business.
Threats of substitute products:
H&M have great substitute product which is ZARA. In that company have their focus on
good quality of products and services.
Competitive rivalry:

Company have ample competitors at market place which are ZARA, Benethon. In that
management provide good quality of product on affordable price.
Competitors analysis.
A competitive analysis is the model which can use to help shape by giving a structure to
guide the market in effective manner. This creates more effectiveness for the business in
calculative manner. For that here is select 7p's which are help to compare product, price, place,
promotion, place, physical evidence and process of H&M with ZARA, Benethon and M&S
company in an effective manner. Those are three major competitors of H&M. Explanation of that
are as follows:
Basis H&M ZARA
Product Company provide clothing to customer
by good quality and unique design of
cloths as well as company have
footwear product some cosmetic
products as well.
Company have clothes as well as
some footwear and cosmetic
products and services.
Price Company have premium pricing
strategy which to gain profit margin on
each and every product after selling on
affordable prices as compared with
ZARA.
ZARA follows competitive pricing
strategy in this company first
analysis market then sets price of
product (Mola and et.al., 2017).
Place Company have their product stores at
various country as well as company
have their online services from there
customers can easily shop products.
Company layout and online
shopping app through customer
can shop their product and get
services.
Promotion Company provide their advertisement
on TV, YouTube, digital marketing and
make public relations helps to promote
product and company at grand level
(Schwarz, 2019).
Company use promotion strategy
by using online portal only.
People H&M have talent employee and skill ZARA have employee works with

able designers who design product with
complete uniqueness in effective
manner. For that compact time to time
organize training and development
session which give positive impact on
business.
more efforts to produce product.
Process The company manage high customer
relationship and employee is help to
maintain better process of work.
Company also have online portal where
customer easily can give order and
which is track by employees and fulfil
as per need.
Company have layout where
customer go and purchase
products.
Physical
evidence
For physical evidence company give
better quality of product and services to
customer as well as printed bag which
help to customer to find out cloth which
are from H&M.
Quality of product is great
physical evidence which is give by
company to their customers (Silva,
Hassani and Madsen, 2019).
Strategic capabilities.
In order to analyse internal capabilities of company need to analyse complete internal
resource of company in effective manner. This can create more effectiveness for complete
analysis. For analysing internal capabilities of H&M here is select VRIO model. H&M
sustainable competitive advantage which is explored the blue ocean focusing on the fast fashion
business model had been lunched in the year. These are the most valuable for the business and
for its growth prospects. This model is help to look at each of its internal resources one by one to
assess sustained competitive advantage and internal capabilities in effective manner. The
analysis of this model is explained below:
Valuable:

There are various resources which are more valuable for the business H&M in respect to
gathered hire objectives in effective manner (Tyurin, Getmantseva and Andreeva, 2018). The
financial resources are valuable for the business which is help in investing into external
opportunity that arise. As compare with ZARA, company have great Employee, who are more
valuable because they are give their hard contribution for achieve goals and objective of
company. As per the case study, patent is also valuable resources of company which is allowed
to sell its products without any competitive interferences. Other side, distribution network is
valuable that is help to reaching out to more and more customers.
Rare:
Financial resources are rare because strong financial possessed by a few companies into
the industry. Employee are rare because company have highly trained and skilled employee who
gives there hard contribution for achieve goals and objectives (Wang, 2016). Distribution
network is also rare which is identified with VRIO analysis.
Imitable:
The financial resources are costly imitable which is acquired by company for getting
profits in effective manner. Employee is imitable because other company can also train their
employees in order to improve their skill in effective manner.
Organization:
There financial resource are organized in business format which is help to work in proper
manner. On the other side, patent is not well organized that means organization not use patent to
their full potential. There distribution network is organized which is help to reach out to its
customers by ensuring.
VRIO analysis:
Capabilities Valuable Rare Imitable Organization
Finance YES YES YES YES
Employees YES YES YES
Distribution
network
YES YES
Patent YES

This is the effective and valuable for the business and for its growth prospects in effective
manner.
Strategic options.
In order to analyse, strategic option for company here is need to use Ansoff Matrix
which is help to for manage thinks in effective manner. This is effective strategic marketing
planning where it can be applied to look at the opportunity in order to grow revenue for a
business by developing new products and services or tapping into the new market. With the help
of this, management need to analyse the best strategic direction for growth of business at market
place after analysing market (Chernev, 2020). This includes four segmentation like market
penetration, product development, market development and diversification. This creates more
suitable for business in respective manner. This help to analyse complete market trends by using
this model. Explanation of those four are as follows:
Market penetration:
This strategy have their complete focus on increasing sales of existing products to an
existing market. As per the case study H&M try to increase their sales with existing products and
services into the existing market but that is not good for the time.
Product development:
In this company can their focus on introducing new product to an existing market. This
creates more effectiveness for business in respective manner (Ansoff Matrix, 2020). According to
the case study, management have need to develop new product for more growth of company at
market place.
Market development:
This strategy have their complete focus on entering a new market using existing products
and services in effective manner. By analysing case study management already have their great
market development which is helpful for attracting more customers towards company. As
compare with ZARA, company have great market expansion.
Diversification:
This strategy have their complete focus on entering a new market with the introduction of
new product. In this company can set their strategy by making great expansion into both market
or in products. Through company option to attract more customers towards business in respective
manner.

H&M is the great selling company who have wonderful quality of clothes and products
(Wood and Jobber, 2016). As per the case study management have need to analyse work in
market place as well as improve their quality of product by skilled employees or making new
designs of clothes. For that here is selects diversification market strategy which is help to make
hire growth for company in first lot.
Strategy selection and justification.
The strategy here is selected for H&M is diversification strategy which is more helpful
for business and for its growth prospects in an effective manner. This creates more effectiveness
for business by managing both new product and market expansion. This strategy gives positive
impact on the business by capturing new market and customers toward new design of cloth. Like
when, H&M is introduced new design of product at new market place then more customers are
come towards business. That is helps to increase profit margin of company and build higher
customer segmentation. Attraction of customer towards new product is higher and in the new
market is more reliable for H&M.
CONCLUSION
From the above study it had been concluded that the strategic direction has more
important for business in order to create higher profits margin. For that report included some
model which had been help to analyse internal and external capabilities of company. With the
help of PESTEL and Porter five model analyse external factors affected to business from outside.
There has three major competitors of H&M like ZARA, Benethon and M&S. In order to analyse
internal capabilities here is select VRIO model. For analysing strategic option need to work with
Ansoff matrix.
RECOMMANDATION
Here is give recommendations for H&M need to work on it. Use diversification strategy
to produce new product and entering into new market help to increase profit for company in
effective manner. Technology continuously enhance day by day in that management need to get
update about market status in effective manner.

REFERENCES
Books and journals
Ahmad, W.N.K.W. and et.al., 2017. Evaluation of the external forces affecting the sustainability
of oil and gas supply chain using Best Worst Method. Journal of cleaner production.
153. pp.242-252.
Chernev, A., 2020. The marketing plan handbook. Cerebellum Press.
Guan, X. and et.al., 2019. Disclosure Strategy for Combating Supplier Copycatting in the
Fashion Industry. Available at SSRN 3484907.
Kim, S. and Kim, M., 2017. A study on omni-channel strategy in fashion industry. Journal of the
Korean Society of Costume. 67(1). pp.40-55.
Mola, L. and et.al., 2017. Who knows what? Reconfiguring the governance and the capabilities
of the supply chain between physical and digital processes in the fashion industry.
Production Planning & Control. 28(16). pp.1284-1297.
Schwarz, J.O., 2019. Strategy orientation in the fashion industry: short-or long-term?.
Silva, E.S., Hassani, H. and Madsen, D.Ø., 2019. Big Data in fashion: transforming the retail
sector. Journal of Business Strategy.
Tyurin, I.N., Getmantseva, V.V. and Andreeva, E.G., 2018. Analysis of innovative technologies
of thermoregulating textile materials. Fibre Chemistry. 50(1). pp.1-9.
Wang, Y.S., 2016. Dynamic capabilities in fashion apparel industry: emergent conceptual
framework. Baltic Journal of Management.
Wood, M. B. and Jobber, L., 2016. The marketing plan handbook. Pearson.
ONLINE
Ansoff Matrix. 2020. [Online]. Available through:
<https://corporatefinanceinstitute.com/resources/knowledge/strategy/ansoff-matrix/>
PESTEL Analysis. 2019. [Online]. Available through:
<https://www.professionalacademy.com/blogs-and-advice/marketing-theories---pestel-
analysis>