Strategic Management for H&M

Strategic Management

Table of Contents
Introduction/Background Information.............................................................................................3
External: Fast fashion industry analysis......................................................................................3
Internal: Strategic capabilities.....................................................................................................5
Strategic Options.........................................................................................................................7
Strategy selection and justification............................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

Introduction/Background Information
Strategic management can be defined as a continuous process of planning, monitoring,
analysis and assessment of all necessities an organisation requires in order to meet its strategic
goals. H&M is a Swedish multinational clothing retail company known for its fast fashion
clothing. Currently H&M operates in 74 countries with more than 5000 stores and employs
around 126,376 employees. Founder of H&S founded company in 1947 with its first shop in
Vasteras, Sweden and pioneered concept of fast fashion and since then company has made
incredible growth. Concerned with growth H&SM have made strong emphasis on expansion and
growth of business and focused on increasing stores as well as online channels. This report aims
at discussing external and internal environment of company and strategic options available for
selection of suitable strategic option available for H&M for in future strategic direction.
External: Fast fashion industry analysis
Macro environment analysis by Pestle Analysis
Political
Political factors affecting H&M includes political stability and conditions in different countries
where company operates and function. Political factor involves regulation employed by
government of different countries in which H&M operates and also involve political relations
between Sweden with other countries where H&M operates (Le, 2020).
Economic
Economic factors involve those elements that affect and influence financial aspect of company
and its success. This mainly involves considering GDP, interest rates, employability rate,
unemployment rates and cost of operations. This suggests success of H&M in a country and
because H&M is a fast fashion retailer with low cost it requires to ensure cost is as low as
possible without affecting quality. This also involves taxation and tax policies of countries.
Social

This factor of external environment is concerned with customers and their attitude towards fast
fashion and a given brand. H&M provide fast fashion at low prices and not just H&M but
complete industry has witnessed extreme growth. This further got affected by desire of
customers to follow trends, and this is possible by fast fashion. H&M gets affected by changing
trends and buying behaviour of customers.
Technological
Technology is playing a central role in overall growth and success of businesses operating in
every industry. Technology also affects H&M and online shopping is one of the most important
technology factors because of increasing online purchase. Further technology is also important
for operations of H&M like supply chain management with effective use of technology
(FERNANDES, HONÃ and CRUCHINHO, 2020). Technology has also become very important
for marketing and promotion that H&M can use and this is very important for fast fashion
industry to connect with their target market.
Legal
Legal environment and factor involves different regulations and legislations affecting operations
and functioning of organisation. Every country where H&M operates has different regulatory
policies and H&M to have to conform in order to avoid legal complications. This involve
employment regulations, fair working conditions, equality regulations, environment regulations,
and consumer protection and intellectual property rights.
Environmental
This has become key consideration for several organisations and customers as well and this is
why business organisation and fast fashion industry has to ensure that their activities and
operations have least possible impact on environment. This involve considering carbon emission,
water pollution caused by their operations and should also consider material and inputs being
used by them and their sourcing.
Competitive analysis by Porter’s 5 forces analysis
Threat of new entrants