Strategic Management

Strategic Management

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY ..................................................................................................................................3
Background information ...........................................................................................................3
External analysis ........................................................................................................................4
Internal analysis .........................................................................................................................5
Strategic options .........................................................................................................................7
Justification of strategy ..............................................................................................................9
Conclusion and recommendation................................................................................................9
REFERENCES .............................................................................................................................11

INTRODUCTION
Strategic management is defined as goal setting, examining competitive environment so
as to lead business opportunities. Strategic management is providing proper understanding
regarding vision or the company by which appropriate strategies can be adopted and the same
can be used for obtaining competitive edge (Wheelen and et. al., 2017). This report is prepared in
order to understand basic concepts of strategic management and their role for business
development. The report is based on H&M which is a Swedish multinational clothing company
and highly known as fashion clothing and accessories for men, women and kids. The company
was founded in 1947 and as of 2019 H&M is managing 5000 stores across 74 countries in global
periphery. This report consists of internal and external analysis of H&M and justification for
their selected strategy for business development.
MAIN BODY
Background information
H&M is a Swedish multinational brand which is renowned for their fashionable clothing and
accessories for men, women and kids. The company is having global presence in 74 countries
along with 5000 retail stores. In the current time company is using strategy to expand in varied
international market in order to intensify their business and to access global markets. CEO of the
organisation is planning to develop long term perspective in which they are trying to establish
new retail stores in emerging market so that to enhance their reach to customer and to deal with
needs of them as well. H&M is having capacity to introduce a new design to their store within
time gap of 2 weeks this proves their power to deal with market needs and response to customer
needs. Besides this company is very much active on using sustainable practices which adds value
for their customer and gives them reason to stick on this brand (Papulova and Gazova, 2016).
H&M uses varied resources in order to maintain quality within their products and in this way the
company is keeping higher customer base. H&M is using strategy to deliver quality products in
lower prices which enable them to explore new segment of market along with attaining success
opportunities. The company is managing huge competitors list such as M&S, ZARA,
BURBERRY and many more but at the same time H&M is having robust portfolio of products

and customers as well. H&M uses value based pricing in which prices of products are set by
value perceived by customers. On the other hand target market for H&M is women so the
company is using various promotional tools in manner that to attract them.
External analysis
External analysis is defined as examination of external environmental factors those may
provide implication to business operations in negative or positive way (Lasserre, 2017). As this
is being analysed that there are numerous external factors through which profitability or
operational efficacy of the business get higher impact and for every business this is necessary
that they examine these factors effectively so that to align their organisational objective in such a
way that market prominence can be attained. With the PESTLE analysis external analysis can be
done and all those essential factors can be analysed those are providing impact to the business.
Political factors: These factors are defined as political instability or stability. H&M is a global
brand so political factors are drawing high impact on their business operations. H&M has faced
various controversies regarding hurting sentiments of Africans which adversely impacted
business of H&M. On the other side as the company is having an international operation so trade
war between US and China is major concern for H&M. Besides this due to Brexit implications,
high political instability is being faced by UK and this creates difficulties for business to operate
and specifically for fashion retail industry as this industry is driven by customers.
Economic factors: These factors are related with economic growth, inflation rate, employment
rate and many other factors those are related with economic condition of nation. As current
strategy of H&M is to expand their business in various international market and for this sound
economic situation is required. Besides this labour cost at every nation are varying due to which
change in profitability can be seen by H&M. Economic factors are varying from nation to nation
such as fluctuations in currency rate, interest rate and these are giving high influence to H&M in
operating their business at global level (Qin, Liu and Tian, 2020).
Social factors: These factors are associated with taste and preferences of customers. H&M is
focused over women segment so they are providing high value to their customers. On the other
hand the company is taking care of market trend and needs of their customer. H&M can
introduce a new design or clothing style within their store in just 2 weeks which is a very less