Marketing Challenges Faced by H&M: A PESTEL Analysis and Strategies

This report provides a comprehensive analysis of the marketing challenges faced by H&M, a prominent clothing brand, using the PESTEL framework (Political, Economic, Social, Technological, Environmental, and Legal). The analysis explores various factors influencing H&M's operations, including the impact of trade wars, labor laws, social media's role, technological advancements in logistics and online sales, intellectual property rights, and environmental concerns within the textile industry. The report identifies key marketing challenges related to consumer behavior, competition, and the need for effective communication of product value. It recommends strategies focusing on talent acquisition, effective leadership, understanding consumer needs, and achieving sales targets. The report also includes a comparative analysis of H&M with competitors like Zara and M&S, based on financial strength, R&D, international marketing, and company culture. The analysis is supported by references to relevant books and journals, offering a detailed understanding of the company's marketing environment and strategic recommendations for improvement.

MARKAETING CHALLENGES
PESTEL analysis of H&M
Political — H&M's majority of production is set up in Turkey, Egypt, Lebanon. Due to
Lebanon being unstable, there is shift of power of supremacy over a period. US and
China's trade war impacts results in increasing prices of textile products. The demand of
workers has been growing ever since. H&M demands fair working conditions, safe work
place and improved wages along with increase in production cost.
Economic — In different countries labour laws vary differently and such is the case in
UK. They have low labour rate and thus setting up of manufacturing units is profitable.
As corporate tax varies from country to country H&M aligns its business accordingly
while keeping in mind the disposable income of people. Due to changes in the tax policy,
economic stability of the organization is affected.
Social — As H&M company is a clothing brand, social media plays a major role in
promotion of this brand as the social factor becomes an important aspect for the brand.
Customers are more inclined towards buying branded clothes in which H&M has played
major role in contributing to the customer needs and wants. Thus, the buying behaviour
patterns are to be analysed for more consumer engagement.
Technology — Technology plays major role in its advancements and
providing easy accessibility of products and services to the
consumers. H&M is also tied up with Hermes as its logistics partner
which is highly advanced. For strong emphasis on H&M, technology
has advance its techniques of services by creation of website through
which consumers can order the products and various reward points
are provided including discounts.
Legal — H&M needs to collaborate with franchising partners in
UAE, Kuwait, Oman etc. even when franchising was not part of
expansion strategy of H&M. The intellectual property rights are
major concern. If an innovative design is invented by H&M and it is
not legally secured, then the company may face major competition
with the other big brand companies as those designs will be copied by
them.
Environmental — Textile industry is the most second polluting
industry as high amount of wastage is generated which pollutes water
bodies. Air gets polluted in manufacturing of the clothes. H&M has
formed a goal to use completely recycled clothes material for the
production process. Thus, to keep environment eco — friendly the
company ensures that no harm is done to the environment keeping in
mind its safety.
REFERENCES
Books and journals
Çitilci, T. and Akbalık, M., 2020. The Importance of PESTEL Analysis for
Environmental Scanning Process. In Handbook of Research on Decision-
Making Techniques in Financial Marketing (pp. 336-357). IGI Global.
Thompson, J. and McLarney, C., 2017. What effects will the strategy changes
undertaken by next Plc have on themselves and their competition in the UK
Clothing Retail Market?. Journal of Commerce and Management
Thought.8(2).pp.234-264.
Yang, R., Sliusarenko, A. and Ferraro-Doucette, E., 2020. Ever lane: a
‘radically transparent’ fashion company disrupting the industry. International
expansion strategy.
Marketing challenges- Recommendation
There are various marketing challenges
which are being faced by H&M in
conducting its business operation, It is
being related with understanding of
consumer behaviour and which can be
anytime change in regards with not
purchasing of H&M product and services
and considering of its competitors products
and services. The challenge lies with how
the marketers of company pitch to the
customers which helps in retention of
customer, conveys the benefit of products
and how they are being better than that of
its competitors in the marketplace.
The challenge lies with
communicating the value of products and
services to its customers and taking out
money from them. It leads with creation of
brand value and positioning in minds of its
target customer and building with the ever
long lasting relationship.
The challenge also pertain with
fulfilling of sales target which helps in
getting revenue to the company and
increase with the profitability margin
which will help in surviving in highly
competitive marketplace.
The recommendation to overcome this
challenges implies with hiring, recruiting
and selecting highly talented individual. It
is so because they will helps in attracting
right audience and retention of customers
and helps with closing and follow up of
deals.
It is being recommended that
leadership should be highly effective in
terms of monitoring and control of various
task and activities. It will thus lead with
having transparency and flexibility in
marketing operation of H&M. This should
lead with effective participation of
individuals in decision making process as
a result leads with innovative and
creativity in conducting marketing
activities.
It is being required and
recommended to consider actual needs
and wants of what customer require, before
pitching them as if it is being not required
than it will lead bad impression on
customer and will affect the brand value
negatively.
CRITERIA H&M ZARA M&S
Financial strength -1 1 2
R&D 1 0 3
International
marketing
2 2 0
Culture 1 0 -1