Strategic Options for H&M: An Analysis

STRATEGIC
MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Background information of the company ...................................................................................3
External analysis of the company................................................................................................3
Internal analysis of the company.................................................................................................5
H & M Strategic options..............................................................................................................7
CONCLUSION AND RECOMMENDATIONS............................................................................9
REFERENCES................................................................................................................................1

INTRODUCTION
In the competitive business world, every company wants to achieve the height in the
competitive environment. The company who follow the strategic options may do it in less time.
In this regard, managers play a vital role in assessing and applying the options for the company's
growth and success. This report is based on the H&M company who offers the fashion and
quality product at best price. This report will be based on the study of internal analysis i.e.
SWOT and VRIO model as well as external analysis i.e. PESTLE and Porter' five forces model.
This report will provide deeper insight about strategic options which H&M should undertake in
order to gain competitive advantages through the applicability of Ansoff matrix.(Ansoff and
et.al., 2018) This report will also provide the implementation of porter's generic strategies in the
H&M company to expand its business to next level.
MAIN BODY
Background information of the company
H&M is a swedish multinational company offers fast fashion clothing for men, women,
teenagers and children. H&M is founded in the year 1947 i.e. 74 years ago. Founder of the
company is Erling Persson. The company is operates in 74 countries with over 5000 stores under
the various company brand. The company is having around 126000 employees working with
them in order to expand the business. H&M company offer the fashioned and quality clothes and
accessories in the best suitable price to their customers. The company began to retail online in
1998 in order to grow the business to the next level. The company makes its online shopping
available in 33 countries, so that the more customer will attract towards the brand of the
company. The company is the second largest global clothing retail company. H&M as a retail
industry is serving worldwide in order increased their net income and collaborating with
different brands.
External analysis of the company
External analysis means examining the external environment of the company by applying
PESTLE and Porter's five forces model.(Schilling and Shankar, 2019) The purpose of external
analysis is to determine the opportunities and threat in an industry.
The PESTLE analysis of H&M company are:

 Political: Despite brexit situation, the sales of the H&M company is increased by 7%
indicate that such big political changes didn't affect the profit making rate of the
company. These changes become opportunity for the company.
 Economical: Due to this pandemic, government announced to completely shut down the
business create more difficulty for the company to operate in. The inflation rate of the
economy increases because of temporary closure of whole country which may affect the
prices of the product of H&M company.
 Social: As H&M company offer clothes and accessories product to their customer which
are the basic requirement of the customer. This requirement even can't change in this
pandemic situation which indicate that the sales revenue is increased. This factor is also
become the opportunity for the company.
 Technological: Because of the technological advancement, customer are more interested
to buy the products via mobile from anywhere. In this context, H&M company makes it
online shopping available in order to increase the customer base. The company grab this
opportunity in the best way.
 Legal: The policies and procedure of every country affect its local businesses. If any
changes makes in the policies of the country for example changes in labour law and
labour law etc. affect the business environment. If any product is manufactured by the
company against the policies of the country may vanish the whole reputation of the
company.
 Environmental: Environmental include all those factors that influence and determined
by its surrounding environment for example changes in climate, whether, location etc.
H&M company use this factor as opportunity by using recycled cloth material for its
production.
The Porter's five forces model of H&M company are:
 Rivalry within the industry: H&M company is in retail industry offering clothes
product to their customer. There are high active competitors are present in the market
who offers the similar product like H&M.(Trigeorgis and Reuer, 2017) Despite high
competition, H&M is one of the leader in retail industry.