Analysis of H&M: UK Fashion Retail, Strategies, and Tactics

This report delves into the retail strategies of Hennes & Mauritz (H&M) within the UK fashion market. It begins with an introduction to the concepts of retail and fashion retail, followed by an overview of H&M, its market position, and key changes in the UK fashion retail landscape. The analysis incorporates a PESTLE analysis to examine the macro-environmental factors influencing H&M, as well as a SWOT analysis to evaluate its internal strengths, weaknesses, opportunities, and threats. The report then explores various strategies and tactics, such as the Wheel of Retailing, conflict theory, and the Ansoff Matrix, that H&M could employ to navigate the challenges and capitalize on opportunities within the competitive market. Finally, the report provides recommendations based on the analysis and concludes with a summary of the key findings and their implications for H&M's future success.

Retail theory and
practise

Table of Contents
INTRODUCTION...........................................................................................................................3
Introduction to Company...........................................................................................................3
Key changes in the UK Fashion retail.........................................................................................4
Relevant changes taking place in the micro environment...........................................................6
Various strategies and tactics which can be used........................................................................7
Recommendations.......................................................................................................................9
CONCLUSION..............................................................................................................................11
Reference.......................................................................................................................................12

INTRODUCTION
Retailing is a process which is used for selling of various services and goods to
consumers with the help of multiple channels related to distribution which are used to earn
profits by companies Retailers try to satisfy demand of customers with the help of their supply
chain. Fashion Retail is also a market which is dealing with fashion industry(Tjärnemo and
Södahl, 2015). There are various category of retailers who are dealing in various sectors such as
grocery stores, supermarkets, warehouse, convenience stores, warehouse retailers, e-commerce
companies etc. They are having a major objective of earning high profits to satisfy the need of
their customers. Hennes & Mauritz is a multinational clothing company which is known for
fashion clothing for women, men, children and teenagers. This company is associated and is
having operations in 62 countries and approx 4,500 stores across world.
Introduction to Company
Henens & Mauritz AB is a multinational company which is a part of fashion and retail
industry. This company is manufacturing of clothes in fashion industry for men and women. This
brand was established in the year 1947 and was founded by Erliong Persson. They have their
headquarters in Stockholm, Sweden and are having presence across many countries in world. H
& M is manufacturing fashion accessories, clothes and other related products. Major objective of
this company is to develop products according to requirements of their customers. They are
offering sustainable products to make a positive impact on their customer in comparison with
their competitors. They are having a short term goal which is to have a substantial impact on
society as a whole. Long term objective of this brand is to provide valuable products to their

customers. This will help them in creation of required modifications in the existing products of
company to attract more customers.
Mission: H & M has a mission to have a substantial impact on their customer and have
customer loyalty. They also want to affect the living conditions and lifestyle of people in society
and various communities(Tang, Lai and Cheng, , 2016).
Vision: H & M has a vision in which they are willing to focus on having changes towards
renewable and ethical changes in the fashion industry and have fair business practises.
Key changes in the UK Fashion retail
There have been lot of changes which are taking place in the external environment which
can be analysed with the help of PESTLE analysis which includes some factors which can be
considered for understanding the impact of macro environment factors is having on a company.
Political Political factors refers to those which have a
effect on overall functioning of a company.
They are factors which are concerned with
political environment of any country such as in
case of H & M this brand is having presence in
Egypt, Turkey and Lebanon. The overall
political nature of this company is going to
effect stability of operations in company.
These are have many political changes such as
US vs China trade War has been a major
concern for this industry. If this brand is
willing to enter in a country which is
developing and they are having changes in
labour laws related to minimum wages then it
will lead to increase in overall cost of
production which will lead to reduction in
profit margin.
Economical This factor is related to the economic
performance if a country such as it includes

factors like inflation rate, exchange rate etc.
Developing countries have a lower labour rates
and then setting up such units in countries
where they can be profitable. Also, the
changing tax norms of a country has a impact
on economic ability of a organisation.
Social Fashion retail sector is a industry in which
people are directly affected by social media.
Promotion of products with the help of social
media platforms is growing very fast this has
lead to a situation of growing demand for
clothes and customers are preferring designer
clothes and there is no social group which has
not been targeted.
Technological Technological factors also posses a huge
impact on changing trends where now
customers all over world have developed a
preference for online shopping with the help of
various mobile applications. Hence, H & M
has also adopted a strategy in which they are
attracting more customers by various offers
Legal Every country has their own regulatory
policies which means they have to abide to
various rules which can help them in
successfully operating their business. Laws of
a country are having impact on activities and
functions of H & M, Such as laws related to
intellectual property rights is a major concern
as this helps in protecting of innovative designs
being manufactured by this brand.

Environmental Environmental factors are those which are
present in the external environment of a
country. H & M is a brand which is having
concern for environment they rae using
materials of recycled clothes in their
production activities. This is helping them in
giving contribution towards saving of
environment.
Relevant changes taking place in the micro environment
The most vital factor for H&M is to analyse the factors which are linked with the macro
environment. There are different factors which are affecting business activities. The SWOT
model will be beneficial for firms in order to determine the internal factors by analysing the
strong and weak areas and also opportunities and threats(Schmidt, Foerstl. and Schaltenbrand,
2017).
Strengths: The company named as H&M is a well-established firm and they are having
strong brand image at the market place. They are providing high range of customer goods to all
their valuable customers. The biggest strength of firm is that they are offering unique products to
their consumers. The firm is having their presence globally and they have achieved success in
their operations by distributing products across globe. H&M are also offering fashionable and
trendy clothes to their clients.
Weakness: The firm is not strong in supply and demand forecasting of products and services.
The forecasting is not effective which results in lacking business opportunity at market place.
The major weak point of firm is that they are producing products in bulk quantity which results
in overstocking. This leads to have negative impact on business as the products which are stored
in bulk have to be sold at low cost this will direct affect profit shares of firm. The costing is also
executed on different types of machinery and also their overall maintenance.
Opportunity: There are different opportunity for firm at market place by which they can
easily gain high market share thus enhancement of their profitability ratios. They can easily
expand their business activity in new market by offering unique and valuable products to their
customers(Kumar, Anand and Song, 2017). The firm can focus on using innovative and up to

date technology in order to achieve competitive gains. The marketing and promotional technique
can be improved by using digital advertisement technique. This result in attracting large number
of customers towards the firm who will buy their products.
Threat: The firm is very weak in analysing the competitive factor at the market area. This is
termed as the major threat as it will result in having negative impact on the business activity. The
main threat is from the rivalry firm which are dealing in the similar sector as to which they had
to face higher competition. The new entrants and high competition is the major threat for the
firm. If there are changes in the fashion trends, then this will directly affect their operations.
Various strategies and tactics which can be used
There are various techniques and tools which can be used by Companies in case where
firms have to form various strategies which can enhance the quality of their overall decisions.
This is helpful in expanding of business in a effective manner. Brexit has created issues and
uncertainties in the fashion industry(Köseoglu, Ross and Okumus, 2016). It has become
essential that there are plans which can help in making effective policies in organisations to
make products which are affordable and good in quality for end users. Some theories which can
be used by H & M in making various strategies are discussed below:
Wheel of Retailing
This is a theory which is very useful for companies in understanding various changes
which is taking place in business. This is helpful in providing better services to target customers
by business. Also, this is very useful in making of efficacious plans to survive with various
competitors in market. There are four basic steps in this model:
Establishing & penetrating in market: This is first step in this model in which preference is
given to new retailers of market. They are willing to enter by keeping the prices of their products
low in comparison to established competitors. This leads to low profit margin but is useful for
establishing a position in market and attracting more customers.
Expanding in market: This is a method which is helpful for firms in expansion of their business
to enter a new market. This strategy can also be used by H & M so that they are able to inacrse
their sales to attain higher margins of profits. They want to attain a significant share in this
countries which they are presently not operating this will help them in increasing of sales to get
higher share of markets and higher profits(Foust, 2017).

Stabilized business model in having high margins of profit: In this, a company is already
having a established position in market which will help them in earning of higher profits by
using a high pricing strategy. In H & M company will be using a stabilized model to increase
their profit percentage.
Entry of another retail competitor: This is last step of this theory in which there are many
competitors have entered the market and this leads to a situation of high competition in market.
H & M this situation may lead to reduction in profits margin of company.
Conflict theory: This is a perspective which is related to social philosophy which is
emphasizing on having a materialist interpretations. This theory is used to draw differentials such
as dominant ideology and class conflicts. This is helpful in making a understanding of
revolution structure, competitors, understanding structural inequality and war. This theory is
useful for companies in making an analysis of present scenario of competition in market and
finding solutions of various issues prevailing in market. There are limited resources which leads
to arise of conflicts and issues in the course of functioning of H & M. This theory can be used
by the company in developing a understanding of various conflicts which arise and negatively
ANS off Matrix:
Ans off matrix is also a tool which has been developed which can be used by company in
making various strategic decisions, which is very helpful in making a marketing plan which will
help the company in enhancing their overall growth of sales and profits(Fernie and Sparks,
2018). H & M will also be using this tool as discussed below:

Marketing penetration: This is a strategy of company which they are using in selling of their
products in existing market. This strategy will lead to increase in overall share of market, for
this there is a requirement to develop effective marketing strategies which will help in attracting
more customers. Market penetration will be helpful in this case.
Market development: This is a strategy in which product is existing but market is new. For this
various strategies will be development of effective strategies which will help in increasing sale of
products in which company is dealing presently. This strategy will help in development of a new
target market.
Product development: This is also a strategy which can be used by Companies when they are
planning to launch a new product in exiting market. This strategy can be used in improvement or
making positive changes in products of company. In this needs of exiting customers are focussed
by lunching of new products which is according to requirements of customers. This strategy can
lead to having a competitive advantage in market(Cox and Dannehl, 2017) .
Diversification: In this strategy the market is new and product which is being offered is also new
which means that there are strategies which can be used in selling completely new and
innovative product in a new market. This will help in having focus on both the new product and
marketplace. This strategy is a little risky but is very effective in expansion of a business and its
various operations.
In case of H & M diversification is a very suitable strategy which can be used by them in
enhancing their growth. In the present context, there is a proper research which has to be done
by company so that they are able to target a new segment of customers to promote their products
and services in which they are dealing into.
Recommendations
From above report it can be said that there are various factors which are affecting H & M
and this has to be improved to get a understanding of growth in business(Chkanikova and Mont,
2015). This company is possessing positive brand image because of high quality of products and
services which they are offering to their customers. There are some recommendations which are
discussed below which is beneficial for H & M:

 H & M is responsible for conducting effective research to improvement of their products
which can help in development of products which can lead to increase in present
satisfaction level of customers.
 Company can use various advanced technologies such as innovation tools to forecast
demands of their target customers. With changing trends customers taste and preferences
are also changing which leads to modification being made by H & M which will help in
increasing profit margin of company.
 There is a requirement to have workforce which is more innovative or creative in their
promotional and marketing activities. This will lead to influencing their customers by H
& M in purchasing of their products(Bonn, Cronin and Cho, 2016).
 It is also essential for H & M that they are following all rules and legal laws which ave
been set by government for ensuring smooth functioning of their function and operations.

CONCLUSION
From the above business report, it has been concluded that firm had to face various
environment challenges in which firm are operating their business activities. The most important
factor for business is that they had to analyse every factor which are operating in macro & micro
environment. The factors comprise of external & internal factor operating within business as they
have huge impact on business operations. In order to enhance the economic growth of country
retail sector plays a very important role. The demand and sales of product is enhanced at the
market area thus intern maximising sales and profitability ratios. The challenges had to be dealt
with the use of various tactics and strategies so that business can attain growth and success in
their operations.

Reference
Books & Journals
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