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

This document provides an analysis of strategic management in the context of H&M, a Swedish clothing company. It examines H&M's external environment, including political, economic, social, technological, legal, and environmental factors. It also explores the industry sector using Porter's Five Forces analysis and evaluates H&M's resources and capabilities using VRIO analysis. The document offers insights into H&M's strategies for success in a competitive business environment.

Strategic Management

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 refers to the suitable development of the goals and objectives in
terms of surviving within the competitive business environment. It tends to analyse the internal
components of company which is helpful in developing suitable strategies by making sure that
management prominently implement the suitable Strategies for the success (Cescon, Costantini
and Grassetti, 2019). In order to carry forward this study H&M is considered which is a Swedish
company deals in clothing and also popular for the fast fashion in terms of women children and
men and founded in 1947. The report covers the prominent evaluation of both the external and
internal factors of business environment with the help of suitable approaches models and
frameworks.
MAIN BODY
External environment
PESTLE Analysis:
 Political: Undertaken the Global brand operation towards the several store at the global
level considered the prominent monitoring of political risk for H&M. In relation with this
company prominently have franchise stores in the market that become strength in order to
expand their business in various areas like Turkey Egypt and many more (Ketchen Jr and
Craighead, 2020). Besides this company also prominently monitor the political conditions
feasible for the stakeholders of an organisation.
 Economical: Besides from the negative impact of bread sheet it tends to brought that
currencies for the company and undertake the report towards the improvised sales which
is enhanced by 7% for the local currency. In 2016 it also grows around 10% and after that
it is converted into Swedish currency.
 Social: In this, consumers are prominently influenced by the media and advertisements in
terms of selecting their lifestyle and suitable Trends by which the new designs for the
fashion products. In terms of H&M it significantly announces the latest designs which is
useful in order to meet the suitable sales and revenues.
 Technological: H&M tends to consider their own app for the mobile devices in terms of
having effective use of H&M and consider its functioning that permit customers in terms

of collecting the suitable points from there offline and online store in terms of purchasing
commodities with the help of app on the mobile devices.
 Legal: In this H&M significantly undertake several legal disputes undertaking the
infringements for the retail sector. In regard of this the retailers prominently lost their
patent dispute for the UK manufacturers considering the infringing that want effective
Technology that tends to prevent the damage from the image of company (Leiblein and
Reuer, 2019).
 Environmental: The suitable objective of H&M is 100% recyclable products by 2040
that represent the suitable meaning of the commodities which generate from the old
products and significantly become the strength by considering the corporate social
responsibility activities for the sustainable and long-lasting environment.
Industry sector
Porter's Five forces: It depict the effective technique that ensure the suitable capabilities
in terms of considering the competitive market for company and industry that makes all the
prominent strength and expectancy growth. Pita pit the suitable tools which are helpful to
identify the impact of the prominent forces that impact the industry and the market share by
considering the suitable resources for their potential. In regard of this the various ways to analyse
a problem are discussed as:
 Threats of new entrance: It depicts the issue of the competition that occur and faced by
the new arrivals of the market and consider the large organisations who can become
barrier for the entry of new ones. The large organisations become challenge on the
grounds of price discrimination differentiation of products at the pricing strategy size of
venture quality of product and many more (Afanasieva and et. al., 2020). Therefore, the
threat of new entrants is moderate form H&M as it prominently considered their
speciality with the qualitative factor of clothes.
 Bargaining power of suppliers: It suitably depict that the suppliers of raw materials and
inventory is off renowned actor can be developed their bargaining power by charging
there on Cost instead of the market price that leads to generate immense level of
profitability. But in relation with H&M it does not only has one supplier their purchase
product from various suppliers and due to the threat of bargaining power of suppliers is
low considering them growth and success in terms of dealing with company.

 Bargaining power of buyers: It depict that customers want products at the low prices and
their utility power depends on the product which are offered at the low prices and long-
lasting durability. Regard of the product sentence to charge high prices in comparison to
ban who has minimum considering them market price for the customers and by this
customer tends to shift towards the low prices of the product (Pröllochs and Feuerriegel,
2020). It undertakes the risk of bargaining power of customers which is high for H&M
because there are various competitors of H&M prominently offer products at the low
prices considering the preferences and wants of customers by which they prominently
shift the demand to the cost easily.
 Threat of substitute products or services: Customers are demanding in nature and also
has several differences and demands and at any point prominently increased their demand
by getting the substitute of product at the low prices. In terms of clothing sector, the face
amount of threat of substitute products because of the local market and other globalised
competitors including Zara, Marks and Spencer, Next and many more and this company
prominently oriented towards the services by offering benefits towards the customer cost
satisfaction.
 Competitive rivalry: Company prominently maintain its uniqueness considering the
product for the industry by enjoying the competition in the market. For this, competitors
are ready to take focus over the market by offering relative product substitute within the
international market (Adeniran, Jadah and Mohammed, 2020). In terms of H&M they
have highly competitive rivalry and also unique products which are only offered by
H&M that leads to maintain their brand image in the market.
Resources and capabilities
VRIO Analysis:
Resources Valuable Rare Imitable Organised
Products and
services
Yes - - -
Employees Yes Yes - -
Distribution
network
Yes Yes Yes -
Financial Yes Yes Yes Yes

Resources
 Valuable: It undertakes the valuable components which are important for company and
also tends to open door to represent the significance in the market and useful for
company in terms of preventing them from the threat in the market area (Ketchen Jr and
Craighead, 2020). It undertakes several factors that are available for company
considering the financial resources employees distribution Network and production
services.
 Rare: It undertakes several resources which are there considering the assets for the
suitable research on the grounds of suitable development and competence of executives.
It leads to offer effective deal towards the future and arrangement of prominent factors by
considering several resources like financial resources employees and distribution
network.
 Imitable: It considered while several resources that can be emitted by other companies
and in regard of this organisation tends to consider several techniques that should be
followed on the grounds of effective Assets of an organisation (Leiblein and Reuer,
2019). Undertake the financial resources and distribution network.
 Organised: It consider those resources that are developed and suitably identified by the
effect analysis of company on the grounds of prominent resources. It also tends to open
door for the market area by offering prominent details considering the financial
resources.
CONCLUSION
With the assistance of above conversation, it is distinguished that vital administration is
fundamental to recognize the unmistakable state of organization by offering reasonable heading
thinking about the turn of events and development. For this, conspicuous methodologies and
systems are recognized for having compelling bearing to an association. Besides, it is
additionally recognized that current vision and mission of organization line up with the interest
of market and furthermore will in general create conspicuous procedures for the centre business.

REFERENCES
Books and Journals
Adeniran, A., Jadah, H. and Mohammed, N., 2020. Impact of information technology on
strategic management in the banking sector of Iraq. Insights into Regional
Development, 2(2), pp.592-601.
Afanasieva, O and et. al., 2020. Strategic Management Mechanism of Innovative Development
of Industrial Companies. Academy of Strategic Management Journal, 19(4), pp.1-7.
Cescon, F., Costantini, A. and Grassetti, L., 2019. Strategic choices and strategic management
accounting in large manufacturing firms. Journal of Management and
Governance, 23(3), pp.605-636.
Ketchen Jr, D.J. and Craighead, C.W., 2020. Research at the Intersection of Entrepreneurship,
Supply Chain Management, and Strategic Management: Opportunities Highlighted by
COVID-19. Journal of Management, 46(8), pp.1330-1341.
Leiblein, M.J. and Reuer, J., 2019. Foundations and futures of strategic management. Available
at SSRN 3396754.
Pröllochs, N. and Feuerriegel, S., 2020. Business analytics for strategic management: Identifying
and assessing corporate challenges via topic modeling. Information &
Management, 57(1), p.103070.