Strategic Management: Analysis of H&M's External Environment, Industry Sector, and Resources

Strategic
Management

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
External Environment analysis(PESTEL)...................................................................................3
Industry sector analysis (Porter’s five forces).............................................................................4
Resources and capabilities analysis (VRIO)...............................................................................5
CONCLUSION................................................................................................................................6
REFRENCES...................................................................................................................................7

INTRODUCTION
Strategic management is the outline of the planning, accessing, monitoring and analysis
of the activities in an organisation in order to maintain the goals and objectives of the company.
External and internal factors which may affect the decisions of the company internally basis than
the continuous access on the strategies for the success growth (Bolland, 2017). For this
assignment the chosen company is H&M which is a multinational clothing - retailer company,
founded in 1947 by Erling Persson, Headquarter in Stockholm, Sweden. In this assignment the
included topics are SWOT analysis based on the External environment (PESTEL), Industry
Sector (Porter's five model), Resource and capabilities(VRIO). These theories help in analysing
the H&M internally and externally basis.
MAIN BODY
External Environment analysis(PESTEL)
PESTEL analysis is the structure which explore the outgrowth of the company on the
macro environment that influence the internal market of the H&M. It is the external environment
theory which affect the internal environment.
• Political Factor: The majority of the sectors are setup in Turkey, Egypt and Lebanon.
These includes tax, acts of legislations and stability of the markets.
Strength: Demand of the workers are increased at the vast level and the availability of
the cheaper labour increase the profitability ratio. This create the opportunity of introducing new
era of market.
Weakness: Economic instability become the major weakness of the H&M, and the
changing leaders in USA cause for the high expenses. This create the threat for the development
of the business.
• Economic Factors: This includes the labour laws and corporate tax policies for the
H&M company which help them to run in the market (Coen and Vannoni, 2020).
Strength: Brexit cause the rise in sale by approx 7% and it is the good sign for their
growth. And become the opportunities for the more employment at a reasonable rate of labour.
Weakness: Changes in economies of scale cause the decrease of the company. And the
disposable income are increased in the new emerging markets.