Table of Contents INTRODUCTION...........................................................................................................................3 MAIN BODY...................................................................................................................................3 External environment..................................................................................................................3 Industry sector.............................................................................................................................4 Resources and capabilities..........................................................................................................5 CONCLUSION................................................................................................................................6 REFERENCES................................................................................................................................7
INTRODUCTION Strategic management depict the effective development of prominent objectives for the competitive business environment. It also identify the internal features of an organisation which isusefulin developingprominentstrategiesby ensuring thatmanagementexecutethese strategies for the growth(Hitt and Duane Ireland, 2017). To carry forward this report, H&M is considered which is a Swedish multinational clothing retailers and also known for the fast fashion clothing for men, women, children and also founded in 1947 by Erling Persson. The report tends to evaluate the internal and external audit with the help of prominent frameworks and models. MAIN BODY External environment PESTLE Analysis:Political:Considering the global brand operations for the number of stores across the globe it depict the effective monitoring of political risk for H&M. For this, company tends to have franchised outlets in market which become its strengths and also tends to expand its functioning considering Egypt, Turkey and so forth(Certo and et. al., 2016). For this, company tends to closely monitor the political conditions which is feasible for the stakeholders of company.Economical:DespiteformthenegativeimpactofBrexitittendstobroughtthe currenciesand respective company tends to report for its enhanced sales which is increased by 7% for the local currency based and in 2016 it tends to grew around 10% which is converted into Swedish currency.Social:Here, customers are impacted by media and celebrities in terms of opting the materialistic lifestyle and new trends in terms of for the new designs for the fashion products. For this H&M announces its latest designs that helps in meeting effective sales and revenues.Technological:H&M tends to develop their app for the mobile devices in terms of unveiling the usage of H&M and its functioning that tends to allow customers in terms of collecting the reward points from their manual and online store to purchase products with the help of apps on the mobile devices.
Legal:H&Mprominentlyinvolvedinvariouslegaldisputesconsideringthe infringements for the clothing retailer(Trigeorgis and Reuer, 2017). For this, retailers lost their patent dispute against the UK manufactures for infringing the coveted technology that leads to damage the image of company. Environmental:The objective of H&M is the 100% renewable products by 2030 which depict the meaning of the products that tends to generate from the old product and it become strength for company considering the CSR activities which are durable and recycled. Industry sector Porter's Five forces:Itis an appliance to check competencies and ability to stand in the competitivemarket of an industry which ensures its strength and level of high expectancy growth. These appliances are used to check influence of all the forces which affects the industry by its market share and try to acquire available resources to its full potential. There are 5 ways to evaluate the problems an industry can face.Threats of new entrance:The problem of competition arises by facing new entrances in the market who can be a barrier for the existing industry working on adequate level, by challenging them through price discrimination, size of the venture, differentiation of products at low price strategy, better quality product(Aguinis, Edwards and Bradley, 2017). Threat of new entrance is adequate for H&M as it has its own speciality with high quality clothes.Bargaining power of suppliers:The suppliers of raw materials, semi-furnished goods, inventories of renowned industry can set its bargaining powers by charging their own price rather then market price and enjoy immense level of profit but it could not happen with the H&M as it has not only one supplier but many of them are there who is ready to join hands with them so the threat of bargaining power of suppliers is quite less or nil the key of their success are in hands of its dealing company.Bargaining power of buyers:Consumer wants money worth satisfaction. Their utility power is based on products which gives low price and more consumption. For a product one is charging high price as compare to the one charging minimum market price at the same market, consumer will shift its demand for less price product. The risk of bargaining power of buyers Is quite high for H&M as some consumers are not quality
Paraphrase This Document
Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser
settled rather they prefer low price satisfaction until and unless consumer wants its quality and the same flavour they used to get which will not shift their demand at any cost.Threat of substitute products or services:Consumer is demanding and has enormous needs. They can rise their demand as well as fall at some point where they could find their substitute product at less price. In relation with H&M there is high possibility for substitute products as many competitors came up in the global market like M&S, ZARA for which H&M needs to focus on product oriented rather than service oriented, aid on benefits, customer cost satisfaction. Competitive rivalry:when there is high competition in the market, an industry should maintain its uniqueness in their product so that an industry itself enjoy its competition. every huge firms has its competitors which are ready to take market forces into their hands by providing relative product substitutes in the international market(Meyer, Neck and Meeks, 2017). H&M has high competitive rivalry as it has some unique products which can only be sell by H&M and maintains its brand image in the global market. Resources and capabilities VRIO Analysis: ResourcesValuableRareImitableOrganised Products and services Yes--- EmployeesYesYes-- Distribution network YesYesYes- Financial Resources YesYesYesYes Valuable:It tends to depict the valuable factors which are essential for company in terms of opening doors by showing up the importance in market and also helpful for company in terms of joining the dangers outside the market area. It undertake effective factors which are valuable for company including financial resources, products and services, employees and distribution network.
Rare:It depict those resources which are rare for the company including the assets for the effective investigation on the basis of effectively developed the significant ability for the representatives(Baumgartner and Rauter, 2017). It also offer prominent deal for the speculation for the future to arrange the effective factors. It tends to undertake various resources including employees, financial resources and distribution network.Imitable:It include those resources which are copied and imitated by other individuals and organisations and for this, company tends to use various techniques that need to be follow to use the prominent assets for company. It leads to undertake financial resources and distribution network. Organised:It tends to undertake those resources which are composed and effective recognised for the effective examination of company on the basis of suitable sources. It also leads to open doors for the market in terms of offering effective information and include financial resources. CONCLUSION With the help of above discussion, it is identified that strategic management is essential to identify the prominent condition of company by offering suitable direction considering the development and growth. For this, prominent strategies and frameworks are identified for having effective direction to an organisation. Moreover, it is also identified that current vision and mission of company align with the demand of market and also tends to develop prominent strategies for the core business.
REFERENCES Books and Journals Aguinis, H., Edwards, J.R. and Bradley, K.J., 2017. Improving our understanding of moderation andmediationinstrategicmanagementresearch.OrganizationalResearch Methods,20(4), pp.665-685. Baumgartner, R.J. and Rauter, R., 2017. Strategic perspectives of corporate sustainability management to develop a sustainable organization.Journal of Cleaner Production,140, pp.81-92. Certo, S.T and et. al., 2016. Sample selection bias and Heckman models in strategic management research.Strategic Management Journal,37(13), pp.2639-2657. Hitt, M. and Duane Ireland, R., 2017. The intersection of entrepreneurship and strategic management research.The Blackwell handbook of entrepreneurship, pp.45-63. Meyer, G.D., Neck, H.M. and Meeks, M.D., 2017. The entrepreneurship‐strategic management interface.Strategic entrepreneurship: Creating a new mindset, pp.17-44. Trigeorgis, L. and Reuer, J.J., 2017. Real options theory in strategic management.Strategic Management Journal,38(1), pp.42-63.