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 internal strategic capabilities...............................................................................5
Strategic options...........................................................................................................................6
Strategy selection and justification..............................................................................................8
Future recommendations..............................................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES................................................................................................................................1

INTRODUCTION
Strategic management is the process of planning, analysing, monitoring and assessing all
the needs of the organization so, that organizations can achieve the objective. They are having
financial as well as non financial benefits. 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 with more than 5000 stores across the globe.
Company also gives the online shopping facility. As a clothing retailer it is on second position
globally. 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
H&M are putting their efforts and want to acquire large customer base across the globe by
opening many outlets and giving the facility to customers of online shopping and installing
virtual try-ons within stores etc. Company came up with the new strategy and showed interest in
investing in digital platforms because company knows that nowadays digital is on boom so
taking advantage of this. They are even using digital marketing for marketing their products.
Traditional marketing techniques are now use less by the company (Pan, Chen and Zhan, 2019).
They have established e-stores in various countries. On the latest they are focusing on their
previous operating structure and planning related to products and modification of products to
earn higher profits. They are doing research and development about what is the customer
demand for clothing. Company less follow their old branding techniques and switched to new
techniques. They are also fulfilling social responsibility by concerning about environment
because company believes that to gain successful organization they have to think better for the
society. Company carried out certain campaigns related to save environment. They focus on
doing less wastage and pollution. The quality of their clothes are best with low cost as compare
to their competition.
External analysis of the fashion clothing industry
To do the analysis and proper understanding of macro-environment of company PESTLE
analysis is applied and discussed

PESTEL
Political factors- H&M is a multinational company, so they have to face various political factors
and guidelines so that they can operate in different countries. Every country have the set policies
and impose several taxes which company have to follow. For e.g. in one of the gulf countries
company has to accept dealership so that they can operate in that country because they have such
guidelines in which they don't allow any of the foreign company to carry their business
independently. In some area they don't start with their manufacturing units, which is the issue for
the company. So if they want to do business in such regions where they directly can't do business
then they have to consider local and regional business for their help.
Economic factors- Brexit is the main reason for the monetary fluctuations in the organization
because of this, market of the united states increase the charges on trading goods as a result
company's operational costs increased which force them to sell their products on high prices
causing effect on the overall sales. As H&M is the multinational company so fluctuations in rate
of currency can lead to huge loss for the company. Recently the rate of dollar decreases and
company exports material from Asian countries which had done in dollars by which company
incur losses. With the change in time customer's purchasing power has also increased with the
increase in their income now they are purchasing more luxurious products also along with the
basic products. Changing in the economies of scale also can affect business operations. Company
have to follow labour laws of every country which varies from country to country.
Social factors- Consumers are very active and aware nowadays, and they purchase products
from the brands who consider social responsibilities important and also who provide good
quality products. People keep an eye on very company and noticing their moves before spending
their money on purchasing the product. H&M knows this very well and do timely social
activities like environment conservation, water conservation and give pollution free space to the
society. They do research on the demand of customers and their preferences. They do
advertisement on TV and on social media to attract more crowd. They also provide discounts and
coupons to their customers so that they become happy and buy more products.
Technology factors- Company very well know about the importance and benefits of the
technology. So they came up with mobile application and online shopping platforms which allow
the consumers to do online shopping from anywhere in the world. They also maintained there
website in such a way so that they can attract many customers. By doing research company came