Strategic Management of H&M

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................................2
Main Body....................................................................................................................................................3
Background Information of H& M...........................................................................................................3
External Analysis......................................................................................................................................4
Internal Strategic Capabilities-.................................................................................................................5
Strategic Option-......................................................................................................................................6
Strategy Selection and Justification-........................................................................................................7
Recommendations-..................................................................................................................................8
CONCLUSION:..............................................................................................................................................9
REFRENCES................................................................................................................................................10

INTRODUCTION
Strategic management is a tool that is used to formulate effective strategies for future
growth and success. It is a framework to determine strategies by analyzing internal as well
external environment of company to attain business goals. It is a process that is undertaken by
managers to make effective for the betterment of organization (Joyce, 2019). In the current report
chosen company is H& M (Hennis & Mauritz) which is a leading fashion brand of Swedish has
presence globally. It provides a range of clothes for all segments of customers. The report consist
various strategies that are being followed by company in order to maintain its existing brand
value. In addition certain tools such as SWOT analysis and PESTLE analysis are applied to
monitors internal and external strategic environment of entity. At the eng some recommendations
have been made to stand out company in competitive market place.
Main Body
Background Information of H& M
H & M stands for Hennis and Mautriz is prominent fashion brands that was founded in
the year of 1947.It offers varieties of fashion clothes for men, women, teenagers, children at
international level Mainly entity is serving to all segments of customers which provides an edge
to it over other rival firms such as Zara, Forever 21. In additions it owns nearly 4000 outlets at
different locations and looking forward to expand business at wide level. It has expanded
operations in almost 55 countries across the globe. Head office in Sweden keep control and make
plans for smooth functioning of business in different nations.
The strategy which differentiates H & M from others is their fast fashion model. In this,
company purchases and makes fashionable clothes available from designers to end users through
its stores in minimum period of time. It is possible due to efficient distribution and supply chain
system of organization (Helfat, 2017). It offers product in affordable price range and offers
ample of discount offers so that customers get attracted towards their offerings. With this, entity
is able to attract more number of buyers. Further, respective organization focuses to eliminate
number of intermediaries in supply chain that make it bale to minimize production cost. Further,
H& M outlets are situated at such a location that are easy to approach due to these feasibility

consumers give preference to it. Therefore, organization is able to maintain higher market share
in fashion industry.
External Analysis
H& M is working in fast fashion industry that is highly affected with external forces.
These forces put a significant impact on overall business operations of company. PESTLE is a
strategic tool which can be used in order to monitor the impact of macro environment. In context
of select company external factors are elaborated below:
Political-H& M is working at global level thus highly affected with political conditions
prevailing in different countries (Kang, 2018) Most of the production process of entity is based
on Turkey, Egypt and Lebanon. Political environment of these counties are highly instable that
affects overall business operations of organization. In addition, Brexit, US & China trade war
affected the whole textile sector by increasing prices of raw material and labor that may increase
production cost at higher level
Economic –Although Brexit brings a lot of uncertainties but company is able to book
nearly 7 % profit margin out of cost. H & M is operating in developing nations too where labor
and other resources are available at cheaper rate thus it is favorable for entity to start production
unit within those countries. Further, tax regime varies in different nations so that significantly
affects existing policies of business unit.
Socials-Nowadays people are highly influences with social media, style statement of
celebrities, models thus H & M is required to monitor recent market trends and act accordingly.
It is analyzed that buying behavior of people are changing at global level so that organization is
required modify its strategies to fulfill the demands arises at market place in an efficient manner.
Technological-Customers are not willing to visit stores to purchase goods rather they
prefer online shopping which provides them convenience and wider choices (Suriyankietkaew
and Petison, 2019). Due to this, H & M has associated with Hermes to improve its logistics
efficiency. In addition, it also needs to adopt artificial intelligence in order to study the recent
trend and design products accordingly.