Strategic Management: H&M Analysis

Strategic management

Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1 Background information of H&M.......................................................................................3
2 Pestle analysis of H&M.......................................................................................................3
3 Vrio analysis of H&M.........................................................................................................5
4 . Ansoff Matrix Strategy......................................................................................................6
5.Stretegy Selection and Justification.....................................................................................8
CONNCLUSION.............................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Strategic management means the use of resources to achieve certain goals and objectives.
Strategies are changed according to changes in business environment. To achieve success proper
strategies are to be made constantly with proper planning (Ansoff and et. al, 2019). Whether the
business is small or its a large organisation strategies should be made with proper planning. It
includes setting the goals of the organisation, evaluating the strategies of competitors and then
making startegies for the company after proper planning (Côté, Vézina and Sabourin., 2017).
The below analysis is based on H&M. It is the clothing retailer Hennes and Mauritz which is the
most recognized and famous brand in fashion industry. It outsource the production mainly in
Europe and Asia and also introduced the pilot program through which company purchased
factories outputs.
MAIN BODY
1Background information of H&M
H&M business provides fashion at the best. It offers latest fashion and at the price which is
affordable by middle class people too. It provides best quality goods and has maintained
standards. To ensure that all goods are of best quality the manufacturing is done without the use
of any chemical and under better conditions (Hilorme and et .al ., 2019). It has become the
world's most famous and successful fashion retailer. It has sold more than 300 million garments
and has always sold clothes of good quality. In 1998 company entered France with 6 stores in
Paris. The strategy of H&M has always been same that is providing fashion and quality at best
possible price. The company is being the most consistent brand over all other fashion brands. It
was founded by Hennes who was salesman of another company. Hennes enhanced its clothing
beyond women's fashion and goals were achieved by the purchase of Mauritz which was a gun
shop (Gans, Stern and Wu, 2019). So, the name of the brand became Hennes & Mauritz. This
brand is still the most loved brand in comparison to all other brands. H&M expanded
internationally and enhanced the image in the existing market also. It became successful because
it provided good quality garments at a reasonable price.

2Pestle analysis of H&M Political factors: It means how the government policies may affect the organisation. It
includes political stablity as well as instability, tax policies and so on. In case of H&M, as
it is operating across the world so there will be high politcal risks for them. As there are
many unstable countries in which brand is operating like Egypt and Turkey. So, to deal
with them company makes various plans. Political instability will affect both company as
well as goals of the organistion. H&M also avoided some risks like it did not collaborate
with partners in Egypt, Thailand and so on (Key and Popkin,., 2016). There was an
incident happened in Bangladesh because of fire cases which led to decrease in their
sales. So, it made them belived that it is ruining their brand image. So, they started work
with those industries who does everything with proper safety measures. Economic Factors: It includes interest rates, inflation rates, unemployment as well as the
income of consumers. Due to these factors company may get affected in a major way. In
case of H&M , it got affected by Brexit. Due to this the prices got really high and as the
company were acquiring raw materials from asian suppliers due to which their profits
were decreasing. The brand also got affected by interest rates. As various laws changed
and changes occurred in taxes too so it became difficult for the company to have stabllity
in the prices. So, for this they decided to buy all the raw materials in bulk quantity from
those suppliers who are offering it at best rates. Social Factors: There are many factors like lifestyle, health issues, cultural barriers and
so on. The fashion industry is the only field which gets affected easily by social media.
As various celebrities promotes the brand which enhances their business as for every
brand promotion is very much necessary. In today's world everyone wants to have
designer clothes only so promoting the clothes on social media has increased the brand
success (Montanari and Bracker, 2018). For every company analyzing customers demand
is very much important so that strategies can be made according to that. The young
generation is active on social media so they should be targeted well enough and the
trends should be properly analyzed so that promotion is to be done according to that. Technological factors: Any change in the technology may affect the organisation in both
positive as well as negative way. It affects the decisions of the company that whether they
should launch the particular product or not. Most of the customers wants to purchase