MGMT201: H&M Case Study - Strategic Management Analysis Report

This report provides a comprehensive strategic management analysis of H&M, a leading apparel company in the fast-fashion industry. It begins with an executive summary highlighting H&M's employee-centric and customer-centric approaches, emphasizing the importance of employee engagement and horizontal communication. The introduction provides a brief overview of H&M's history, global presence, and brand recognition. The report then delves into an external environmental analysis, considering political, economic, social, technological, legal, and environmental factors. Internal capabilities and competencies of the company, including pricing strategies, product uniqueness, employee involvement, and location strategies, are also evaluated. Finally, the report identifies future challenges such as technological advancements, e-commerce development, and the need for employee training, concluding with recommendations for continued success in the competitive fast-fashion market. The analysis is supported by academic journal and textbook references.

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Management
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Executive summary
H&M is one of the leading apparel companies in the world. They have been able to maintain
their legacy as one of the leading fast-fashion retails chains that can satisfy the needs and
demands of their customers. The company tries to follow an employee-centric approach and a
customer-centric approach as well. One of the most unique features of their company culture is
to ensure that employee engagement is taking place properly and there is horizontal
communication maintained all over the company. However, to survive in the long run, they will
have to focus on strategies like developing e-commerce platforms and others.

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introduction
H&M is one of the most well-known names in the filed of the apparel industry. They try
their level best to ensure that they are maintaining a proper pace with the Global and the local
culture as well. The name H&M has become one of the most unforgettable ones not only in the
field of fast fashion but it shows the indomitable courage and the firm determination of the
founder. Erling Persson started this business with one single store in the year 1947 and since then
they have been able to carry on the legacy of the business and today they have about 3700 stores
in 61 countries, with 132000 employees on a worldwide basis (Scholes et al., 2014)
External environmental Analysis
Political
The fashion industry itself is a particular industry that is subjected to many kinds of
changes and uncertainties. However, the company has tried its level best to abide by all the
different political forces but at the same time, they have also been facing huge competition from
the other local brands. One Of them is the brand called Uniqlo the Japanese brand than was
growing in a very aggressive manner. Therefore H&M had to ensure that they are taking
strategies that will be by the changing political system and at the same time be able to give them
a proper profit and revenue as well. As the company mainly has its branches in Turkey, Egypt,
Lebanon, and others, that after have to come across many governmental, restrictions, the
Government set up in Lebanon, is a bit unstable.
Economic
The developing countries usually have a low rate of labor charges, therefore, setting up
the production units in these areas is useful. However, on the other hand, the disposable income
of people is increasing and thus making a sharp rise in the income and the affordability of

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customers. It is for this reason that the company is at a profit as they will be able to sell more of
their products.
Social
They try to design their clothes by staying in proper touch with the ongoing fashion in the
industry. In other words, they try to keep pace both with the likings of the celebrities and also the
preferences of the local people. They try to ensure that none of the social groups re left
untargeted and also try to incorporate the most modern trends in their designs. In other words,
they like to make sure that the digitalized platforms are also being captured well so that they can
cater to the needs and demands of all the people belonging from all the different social sectors
Technological
Technology is one of the most important factors that must be considered. People in
different parts of the world are looking for modern technologies so that they can make their
purchasing experiences memorable and also easier. Therefore all the companies are trying their
level best to bring modern technological pieces of equipment in their production process so that
they can get satisfy the needs and demands of their customers. They have developed the online
ordering applications that are helping them to order the products and at the same time, H&M has
also tied up with Hermes as their partner in logistics as their logistic facility is highly advanced
and useful.
Legal
H&M works in many different countries and therefore has to abide by the legal rules of every
country. This is essential because the legal system of different countries and different economies
are different and therefore they have to abide by all those rules.
Environmental
Textile industries are responsible for creating pollution in the environment as they use
many chemicals in their entire production process. However, they must try to ensure that their
activities are not causing any great harm to the environment (Eliasson, 2018). All the apparel
industries or the cloth manufacturing industries must be able to develop some sustainable goals

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so that they can fulfill them. H&M has tried to adhere to the rules of a clean environment and
also developed for some recycling system that will be helping them to produce their new
clothing items from the recycled ones.
The capabilities and competencies of the company
Price
The company always tries to make fashion affordable for all. They try to ensure that they
are following the differential pricing strategy. This is done as they can develop two different
kinds of pricing strategies. On one hand, they try to appeal to the high-end customers by keeping
the price of these products high. On the other hand, they are trying to provide their products to
the customers who belong to the middle-class groups as well. main brand H&M and Cheap
Monday provide affordable fashion products. However, Naidoo & Gasparatos, (2018) have
argued in a similar context that they must try to bring more variation in their pricing styles and
also make sure that they are providing some discounts and offers for their customers.
Products
The company tries to keep uniqueness at the very center of their company culture. This is
because right from the store interiors to the dress designs everything is subjected to rapid change
to meet the current acceptable standards of the fashion industry. Experimentation is at the very
core of the company culture. To keep pace with the changing patterns of customer demands the
company always keeps on experimenting with its products.
People
One of the most unique capabilities of the company is its employee involvement in the
business development process. This is very useful because employees have many important and
innovative business ideas that are useful for the overall growth and development of the business.
As the company has the chance of facing competition from so many local and Global brands they
must be following the method of continuous improvement (Chen & Fang, 2019). It is for this
reason that they must be able to get innovative ideas from their employees. H&M has this feature
of employee involvement deeply I grained in their company culture as well. This is mainly
because they always try to appreciate the new ideas that are being given by their employees and

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their managers as well (Eliasson, 2018). They try to maintain the spirit of the company that is
down to earth approach and also the pillars of appreciation and identification. Internal promotion
and job rotation are some of the most unique strategies that are used by the company so that they
can keep their employees happy and also they can reduce their expenses on the external
expenses. This will surely be helpful for them so that they can get these additional funds for their
overall production process and also for bringing about some improvements in their R&D
department for their future (Romani,2018).
Place
One of the unique capabilities and qualities is that they rent stores rather than owning it.
It is because of this reason that they can maintain the swiftness and the flexibility in changing
their locations as per the need of the situation (Ha, 2018). They make sure that the window
display designs are made in such a way that they can attract the attention of the customers. The
window display designs are mainly made in the test store that is located in Stockholm. They
keep on changing and also creating a new interior program every two or three years so that they
can get the chance of showcasing the unique items that they are designed for their customers
(Backs et al., 2020).
Future challenges
 It is recommended that they develop some kinds of additional facilities along with
lowering their product prices. This will ensure that they can give their customers some
additional services as well. This, in turn, will be able to make customers from all income
groups to be able to buy their products. As currently, H&M is trying to provide products
for the middle-income groups and the high-income end customers, their competitor Zara
might give them tough competition in this regard. This is because Zara currently provides
its products to all the different customers belonging to different economic levels, at
different prices.
 Technological advancement is another important groud on which H&M must be
focussing. This is because to survive in the long run, they will have to make the shopping
experience much easier for their customers. Apart from developing the online mobile
applications for placing orders, the company will also have to set up the customer care

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executive systems so that they can take care of the customer queries and help them to get
their complaints answered at the right point of time. E-commerce has to be developed
properly so that customers sitting in any corner of the world can continue their shopping
from online applications (Nguyen, 2018).
 It is recommended that they must set up on jo training facilities so that they can stay true
to their policies of internal promotion and job rotation. Howeverv Mensah and Osman
(2018) think that their current policy of active employee participation and engagement is
one of the most essential strategies that will be helping them in the future. This will
enable them to get the best business ideas and opinions from all their employees.

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References
Backs, S., Jahnke, H., Lüpke, L., Stuecken, M., & Stummer, C. (2020). Supply Chain Strategies
of the Apparel Industry in Research: A Literature Review. Available at SSRN 3558419.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3558419
Beyer, J., Bierling, K., & Öjerbrant, F. (2018). Case H&M-(Un) coolest Monkey in the Jungle-
When Ads Turn Against Their Creators. LBMG Corporate Brand Management and
Reputation-Masters Case Series.
http://lup.lub.lu.se/student-papers/record/8970743/file/8970746.pdf
Chen, X. J., & Fang, G. (2019, May). Analysis on Green Marketing Strategy of Clothing Firm:
Take H&M for Example. In Proceedings of the 2019 International Conference on
Management Science and Industrial Engineering (pp. 146-150).
https://dl.acm.org/doi/pdf/10.1145/3335550.3335555
Eliasson, J. (2018). The H&M Group: Enabling the Future: An anthropological discourse
analysis of The H&M Group Sustainability Report
2016.https://uu.divaportal.org/smash/get/diva2:1176130/FULLTEXT01.pdf
Ha, D. T. H. (2018). Zara and H&M pricing strategy in the South east Asia-Vietnam vs Thailand
market (Doctoral dissertation, International University-HCMC).
http://125.234.238.104/handle/123456789/3149
Mensah, F., & Osman, T. (2018). Communicating through social media to regain stakeholders
trust during crises: A case study about H&M.
http://www.diva-portal.org/smash/get/diva2:1230931/FULLTEXT01.pdf
Naidoo, M., & Gasparatos, A. (2018). Corporate Environmental Sustainability in the retail
sector: Drivers, strategies and performance measurement. Journal of Cleaner
Production, 203, 125-142.

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http://www.gasparatos-lab.org/uploads/7/6/6/1/76614589/naidoo_and_gasparatos_2018.p
df
Nguyen, D. (2018). Social media marketing strategy-Case study H&M Hennes & Mauritz.
https://www.theseus.fi/bitstream/handle/10024/150072/Nguyen_Dung_Social%20media
%20marketing%20strategy%20Hennes%20Mauritz.pdf?sequence=1&isAllowed=y
Romani, M. (2018). Connections between luxury and mass market: the co-branding strategy and
the H&M case study. https://tesi.luiss.it/id/eprint/21380
Scholes, K., Regner, P., Johnson, G., Whittington, R., & Angwin, D. (2014). Exploring strategy:
Text & cases. Pearson.