BMP3002 Semester 1: H&M's Internal & External Factor Analysis Report

This report provides a comprehensive analysis of H&M, a multinational retail company, examining its internal and external factors. It begins with an introduction to H&M, its history, and global presence. The core of the report focuses on analyzing H&M's internal environment, including its strengths (brand value, customer satisfaction) and weaknesses (design replication, insensitive promotions). The external environment is analyzed through PESTLE (Political, Economic, Social, Technological, Legal, Environmental) factors. The report discusses political factors (trade instability, changing leaders), economic factors (GDP contribution, disposable income), social factors (changing customer choices, social media), technological factors (AI, data analytics), legal factors (regulations), and environmental factors (eco-friendly materials). Furthermore, the report details the company's impact on the external environment. Finally, the report concludes by summarizing the importance of analyzing both internal and external factors for organizational success and provides references to support its findings. The assignment draws upon the provided assignment brief, which requires an investigation into the relationship between a business organization and its external environment, including the impact of internal and external factors on the chosen business or organization.

Introduction
H&M is very popular multinational retail company especially known for its
fast-clothing for men, teenagers, children and women. The company was
founded in 4 October, 1947 by Erling Persson. The headquarters is situated
in Stockholm, Sweden. According to the reports of 2019, it had generated
that it operates more than 74 countries with over 500o stores with different
brands of company.
H&M and its Internal and External Factors
External Environment
Political:
 Instability of economy because of trade
 Constantly changing leaders of Asia, Europe and USA
Economical:
 Improving disposable income of targeted market
 Changed laws related to labour
Social:
 Constantly changing customers’ choices
 Emerging social media channels
Technological:
 Bringing innovative technologies like Artificial Intelligence and Data
Analytics for improving efficiency
 Enhanced significance of digital channels
Legal:
 Strict rules, regulations and norms for foreign organizations in different
countries
 Taxpaying rules
Environmental:
 Increasing demand for products that are eco-friendly
 Changing demand in apparel due to conditions of climate
 Impact of H&M on external environment:
Political:
 Producing and importing products in different countries
according to the rules
Economical:
 Contributing in Gross Domestic Products
 Employing large number of employees
Environmental:
 Using environment friendly materials in the production of
apparel
 Experimenting with recycle and reuse
Social:
 Fulfilling expectations and needs of consumers’
Internal Factors
Strengths:
 Great brand value with strong presence globally
 Large number of satisfied customers
Weaknesses:
 Designs could easily replicate by local brands
 Due to insensitive promotions it has to face backlash
Opportunities:
 Popularity among customers’ for online as well as offline stores
 Improving buying power of customers’
Threats:
 Competition from local artisans and other competitors
 Requirement of innovation to keep up with latest and fashionable trends
Conclusion
From the above data it is being summarized that for every
type of organizations analysis of external and internal environment
is necessary.
Belin, P., 2019. Marketinške strategije u poslovanju poduzeća H&M (Doctoral dissertation, University of Dubrovnik. Department of Economics and Business Economics.).
Islam, S. M., 2020. Marketing Strategies of Vintage Denim Apparels Limited (VDAL).
Sarker, T. R. and Al Saeed, L. S. L. A., 2020. Benchmarking Marketing and Business Strategy of UNIQLO to Start-up a Retail Shop in Bangladesh. Benchmarking. 12(2).