Principles of Marketing: A PESTCOM and SWOT Analysis of H&M

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Principles of Marketing
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Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................4
PRESTCOM analysis..................................................................................................................4
SWOT analysis............................................................................................................................7
Most significant factors from PESTCOM/ SWOT......................................................................9
Current marketing environment for H&M................................................................................10
Conclusion.....................................................................................................................................11
References......................................................................................................................................12
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Introduction
The marketing process is helpful for a business to not only exchange goods and services from
manufacturer to consumer but also make them aware of new range of products and services.
There are some principles identified for marketing so that business become successful and
distinct from others. Moreover, principles of marketing enable a firm to compete easily in the
market with an assessment of internal and external factors. This assessment is focused on H&M,
a famous clothing retail company which mainly provides products for men, women, teenager,
and children. They are currently operating in more than 70 countries in the world. Senior
management will be going t assess the internal and external aspects of the market with the use of
PESTCOM and SWOT analysis. Most important aspects from PRESTCOM/ SWOT will be
analyzed as well with assessment of current marketing environment.
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Discussion
PRESTCOM analysis
A business mainly uses a different framework while assessing the external environment for the
business purpose (Shen, 2014). Different factors are helpful for a business to assess its relevancy
so that association can grab positive outcome and modify work as per requirements. H&M wants
to assess the environment of the UK properly so that they can bring some changes and
modifications in their work. For this, business managers will be going to use PESTCOM analysis
which used to signify further as follow:
 Political and regulatory analysis: This factor is helpful and describes the political and
regulatory assessment of a market. Many companies are attracting the UK due to the least
number of regulations as well as a high probability of Brexit. The government mainly
focused on customer's protection which includes their rights and workers of the UK
which signify exploitation related acts (Cortez, et. al., 2014). Hence, regulatory and
political analysis of the UK stated that it is the best place to facilitate business and attract
many market giants to enter the region to share benefits. Along with this, the government
is stable in the UK which reduce chances of fluctuation in the regulations of the country.
Thus, it is identified as the best area of operations to generate more and more profit and
need to undertake by H&M properly.
 Economic: Another aspect on which many businesses used to focus on is the economy of
a country. The UK indicates a strong position of the economy as the pound is relatively
most powerful currency than dollar. Along with this, minimal unemployment makes the
economy more effective with maximum dependency on MNC's. Hence, as per the
perspective of the economy, it is more appropriate for business. H&M found that stable
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economic condition enables firm to research about social aspects easily to provide
effective products.
 Social: Society of the UK is mainly focusing on fashion trend and events. They prefer
fashionable products much as compared with another stream. For clothing retail
companies, the UK is the best place to facilitate their operations. Many other firms are
trying to enter into UK fashion market so that they get equivalent profit share like other
fashion retail companies in the UK. Hence, social standards are appropriate for the
concern of business purpose. H&M is providing recent trends and bring many changes in
the society of the UK. This has resulted in them to become a leader in the fashionable
range of products in the UK and other parts of the world.
 Technological: Companies are using technology aspect into business so that they can
reach maximum clients properly (Sheehan and Foss, 2017). Similarly, many businesses
start providing online purchase facility so that user can order desire product from any part
of a world. The UK already working on another technological aspect like 5G, cloud
services, more online providers of the product so that local companies can sell products
around the globe. Hence, the technological factor is supporting companies which mainly
operates in the UK and from the UK. H&M is using social media technology to reach
maximum users living in the UK and outside the UK to manage their position and
profitability.
 Competitive: If a clothing firm wants to sustain in the UK market, then they need to
invest properly to manage their competitive position or to remain competitive. A business
becomes more competitive in nature if they render a quality range of products to the
users. Clothing companies need to focus on recent trends and fashion to facilitate their
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competitive position in the market. H&M is providing a quality range of products to the
users which assist them to manage the competitive position as compared with Zara,
Flying Machine and others.
 Organizational: H&M is mainly operating in more than 70 countries with a high number
of employees. Each single is going to do research about new and recent trends to greet
their customers properly. An effective organizational structure with the delivery of
products via intermediaries maintains the profitability of H&M.
 Market: H&M has covered a good market in the world with operations in more than 70
countries. They are using effective sales and marketing strategy as well to make users
aware of products and services.
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SWOT analysis
H&M is a famous Swedish company with operations in more than 70 countries of the world. It
provides fast fashion clothing so that business becomes successful and competitive in the market
world. Thus, below is a SWOT analysis of a company so that they can manage their position in
the ever-changing market world (SWOT Analysis of H&M, 2018):
Strength Weakness Opportunities Threats
H&M provides a
wide range of
products which
anticipate as strength
of a business to
manage their
position.
H&M is mainly using
outsource products
and services. There
are mainly 800
vendors incorporate
services of H&M.
Negligence from the
side of the vendor
create a negative
image of a company.
Need to focus on
aspects which
enhance profitability.
H&M is required to
manage the products
rather than outsource
it which consider as
an opportunity for
business.
A frequent change in
fashion considers a
threat to a business.
A single mistake can
lag behind the
company easily in
such a competitive
industry.
The company invests
in research and
development so that
they can provide
unique products and
services.
Mainly focus on
affordable prices
which create
disruption in users
about products of
H&M.
Use e-commerce as a
platform to provide
fast fashionable
clothes in many other
parts of the world at a
reasonable cost.
Social media, internet
become a platform
for much new
business. Thus,
competition is
increasing day after
day which imposes a
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threat for a business.
A competitive
financial position of a
company adds
association ability to
get a competitive
advantage over on
others.
H&M is investing
more and more in
research but still
follow luxury brands
trends which indicate
their weakness.
Target new customers
which mainly
concentrate on fast
fashion. Thus, it also
indicates another
opportunity for
business growth.
Labor cost increment
is also analyzed as a
potential threat for
H&M and much
other retail business.
It is really essential for a business to understand each single aspect of SWOT analysis. It is
helpful to determine internal and external ability of a business so that association can manage
their position in a keen competitive world. It is helpful for an organization use appropriate steps
so that business become successful. H&M is required to understand each factor properly so that
they can facilitate operations in other parts of the world. Strength and weakness impose internal
aspects of a business through which management can draft relevant strategies for future attribute.
On the other hand, opportunities are anticipated in context of future with threats of a business.
Opportunities and threats are major part of a business as it make influence on business from
outside of the business world.
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Most significant factors from PESTCOM/ SWOT
With a clear discussion about PESTCOM and SWOT, the major aspects which analyze as the
most important one for the H&M are defined as follow:
 Threat: One of a factor on which H&M need to maintain their focus align on threats.
Threats can harm business potential to compete in the market. The major threats are
analyzed in terms of high competition, labor cost, etc. All these can be minimized with
some strategic plan and objectives. The company can use minimum labor for the
manufacturing of products and services. H&M can provide products at reasonable rates
with high quality so that users used to consume and prefer it on others.
 Social: It is another significant factor which derives from the PESTCOM in favor of
H&M. The company can target some special group of society in and around the region.
This will be helped H&M to make specific products for the specific group which easily
boost their sales and define a different image of a company in front of their customers. It
is a profitable aspect for the growth of a business.
 Strength: A major thing through which H&M can manage their level of performance is
their strength. Company has a good financial position with an appropriate sense of
knowledge about fashion trends. It allows an organization to manage its position at a
global level.
All of the define factors are helpful for a business to become successful and make a significant
influence on an organization. H&M is required to assess each one of them so that they can
facilitate their operations in such keen competitive environment world. With strength assessment
management can encourage business employees and associates towards the targets and goals. On
the other hand, social background understanding is helpful for a business to manage operations
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as per social frame. Society define that they really need fast fashion clothing so that they can be a
part of modern trend. Threats enable H&M to prepare strategies so that management can easily
compete with others. An intense competition with high social media use create problem for
H&M to operate properly and draft some barriers which restricts growth options. Thus, all such
aspects are required to understand by managers of H&M for active execution of wide range of
operations in a most beneficial manner.
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Current marketing environment for H&M
The current marketing frame of H&M indicates that they use a mortal and barter system. They
are providing goods and services from the internet as well as with actual stores. It enables a firm
to remain competitive and different from others. Moreover, it is a beneficial aspect to get
consumer confidence and become distinct from others (Rahman and Rahman, 2019). On the
occasion of Christmas, H&M deliver quality range of fashion products on very reasonable rates
which catch the view of maximum users from around the world. The major benefits of current
market environment for H&M are described as follow:
 It enhance the business ability to compete with new competitors identify from the social
media background. This aspect is really essential for a business to grow and make their
aspects different from others. Mortal and barter system facilitates and brings many
opportunities for a business in terms of new customers.
 It also maximizes the profitability of a business and facilitates new image build up in
customers. H&M is looking for high quality products with efficient goods and services. A
high profit aspect provide various support to business through which they can open
multiple number of stores around the globe and provide good reward aspects to the
individual work with a firm.
These are some major benefits which analyze for the H&M with the use of suitable range of
aspect. They can facilitate such factor in modern business world to enhance the sales and
profitability of a business. Moreover, many new customers can be targeted as well.
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Conclusion
It gets anticipated from the above study that various frameworks analyze the performance and
ability of a company to compete in desire market world. PESTCOM and SWOT have been
evaluated as beneficial tools which allow a business to assess their position and facilitate
operations in other parts of the world. Moreover, major aspects have been identified as social,
threats and strength of business through which management can enhance their position. Mortal
and barter system has been underpinning as the most suitable approach for modern business
facilitators.
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