Strategic Management of H&M: Analysis, Strategies, and Future Recommendations

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1. Strategy of H&M ....................................................................................................................3
2. Strategic tool to analyse external environment .......................................................................4
3. Strategic tool to analyse internal environment ........................................................................5
4. Strategic direction tools ..........................................................................................................6
5. Critical evaluation and justification of future strategy for H&M ...........................................8
6. Future Recommendations .......................................................................................................9
CONCLUSION ...............................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Strategic management refers to the goals and objectives that are achieved by the
organization along with analysis of external and internal environment (Ansoff, Kipley, Lewis
and et.al., 2018). H&M is Swedish multinational clothing — retail company known for its fast
— fashion clothing for men, women, teenagers and children. This report will analyse the
strategies which H&M follows with aid to external and internal environment. It will also analyse
the strategic tools used with proper examination. Critical evaluation along with justification of
future strategy will be explained more appropriately. Last but not least, future recommendations
will be made for the company to run effectively and efficiently.
MAIN BODY
1. Strategy of H&M
H&M follows different ways of strategies which defines company's focus towards growth
and development -
 Collection of style (COS) offers customers a combination of timelessness and distinctive
trends for both men and women. Arket and Afound are two recent additions to the brand
portfolio of the company (Giertz-Mårtenson, 2020). There is consistency provided to
customers by making some products available over long — time which is emphasized as
Arket. Afound is an innovative off — price marketplace that offers selected range of
discounted products from both external brands and the H&M groups own.
 H&M has perused its growth strategy by increasing the number of stores by 10 -15% per
year and also the company has scaled back its physical expansion and closed some of its
existing stores. Digital expansion by H&M has laid more focus on the collaboration with
the Alibaba in order to reach more customers and target market.
 The core strategies which H&M follows is to keep everything simple (Delirium, 2017).
Constant improvement in its products and services leads to innovation and engage
customers more so that the brand popularity is increased and the company is able to
achieve its set objectives and goals. H&M is cost conscious about its products and

services. Because buying process depends on the customers as how much they are likely
to buy the product.
 H&M strategy is to recruit local people wherever it opens a new store. H&M looks for
the people who have right personality and potential to understand and adopt core values
of the organization.
 CSR strategy of H&M has increased the company's importance. CSR takes several
actions throughout its value chain to keep away actual criticism. The company has
formulated seven commitments called H&M conscious actions which adopts ethical
practices and involves other factors for improving working conditions and using natural
resources naturally.
2. Strategic tool to analyse external environment
The external environment of H&M is examined through PESTLE analysis -
Political — As this brand is operating number of stores across the globe political risk is very
important to be measured (Iacovidou, Busch, Hahladakis, and et.al., 2017). The franchised
outlets in number of markets which are politically unstable including Turkey, Lebanon and
Egypt monitor any changes which are closely related to each other dealing with any political
instability which is feasible for both the stakeholders of company. Thus, political factor plays
main role in the company's rules and regulations.
Economic — In 2019, H&M planned addition of 335 new stores of which 240 were H&M
stores. Customers spend more on the items which are luxurious and deliver premium clothing.
Corporate tax norms of H&M vary accordingly therefore they have to follow specific rules and
regulations. H&M is a profit making company which largely focuses on the areas of expansion
of its business and gain customer engagement. Thus, economic factor plays major role in
analysing external environment which H&M holds for its growth.
Social — H&M has diversified its market through social media marketing which enables
promotion of products and services to increase at large rate (Ulubeyli, Kazancı, Kazaz, and et.al.,
2019). For this the company has made pages on Facebook, Twitter, Instagram, Snapchat,
LinkedIn, Pinterest and YouTube. These social media applications promote H&M's collections
and campaigns, finding out what's new, locating stores and making discounted purchases online.