Strategic Management of H&M: Analysis, Options, and Recommendations

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................3
Strategic background of H&M....................................................................................................3
External analysis of the fashion clothing industry.......................................................................3
Understanding organisations internal capabilities.......................................................................6
Strategic options..........................................................................................................................8
Strategy selection and justification............................................................................................10
Future recommendations-..........................................................................................................11
CONCLUSION..............................................................................................................................11
REFERENCES................................................................................................................................1

INTRODUCTION
Strategic management is the process of strategy creation, formulation, implementation,
strategy analysis, monitoring and evaluation decisions so that organizations can achieve the
objective. It includes setting the objective, analysing environment, competition etc. H&M is a
multinational clothing retail company. It is founded in 1947 by Erling Persson. It is famous for
the fast fashion clothing for men, women and kids. Company has its presence in 74 countries
This report will discuss the background of the company and the external and internal strategic
tools used by the company. Further it will evaluate strategic options and strategy selection and
justification with recommendations.
Strategic background of H&M
The H&M group is directing their functions and efforts towards acquiring a large
percentage of customer base around the world through establishing various outlets and facilitate
customers with online shopping and installing virtual try-ons within stores etc. Company have
adapted a new strategy and recently re-arrange their focus on investing in digital platforms. They
have successfully set up their e-stores in various nations. Their latest tactic involves emphasising
on their former operating structure and products planning and re-invent and modify them to
attain higher profit margins (Lynch, 2018). The establishment is determined towards developing
apparels in accordance with customers recent demand by breaking their standard manufacturing
and branding techniques and they also started new initiative to be responsible towards the
environment because the administration beliefs that it would be best combination and success
strategy for organisation to be a brand which provide best fashionable quality clothing with
affordable cost and sustainability.
External analysis of the fashion clothing industry
To conduct a detailed analysis and understanding of the macro-environment of the
company PESTEL synthesis will be applied and discussed below
PESTEL

Political: H&M is a multinational company dealing throughout the world , so they have to face
various political guidelines and norms in order to operate in different countries. Every nation has
their set of rules and policies and several taxes which they have to comply with. For example in
UAE, company have to adapt dealership in order to function there, as they have strict regulations
in regard with that as they don't allow foreign company to operate their business activities
independently in their region (Matovic, 2020). Establishment also doesn't have their own
manufacturing units, they tend to outsource their production process, which also one of the
concern for the industry. They have to deliver their product in foreign countries so to
manufacture apparels and garments they alliance with local or regional production factories
which operates on assorted tariffs and rules and this varied from nation to nations.
Economical: Brexit is one and the foremost reason for the monetary fluctuations happening in
the organisation. Due to this the market of United States increase the trading goods charges, this
results in companies increased their operational cost which compel them to sell their products on
high pricing, this causes a direct effect on their overall profit. The currency exchange prices of $
is decreased in past as all their transaction of unprocessed goods and materials take place from
their Asian provider are done in US currency, which cause them huge loss. As time changes the
Illustration 1: PESTEL analysis
Source: How to do a PESTEL
analysis. 2016