Strategic Management Report: Analysis and Recommendations for H&M

This report provides a comprehensive strategic management analysis of H&M, a prominent clothing retail company. It begins with an introduction to strategic management and an overview of H&M's background. The report then delves into an external analysis of the fast fashion industry, utiliz...Read More

Strategic management

Table of Contents
INTRODUCTION...........................................................................................................................1
Background of H&M...........................................................................................................1
External: Fast Fashion Industry Analysis:........................................................................1
SWOT Analysis.....................................................................................................................3
Strategic Options:.................................................................................................................4
5. Strategy Selection and Justification:..............................................................................5
Conclusion and recommendations...................................................................................................6

INTRODUCTION
Strategic management refers to the ongoing monitoring, planning and a significant
analysis of all the necessities of an organisation that needs to meet of goals and objectives. The
changes in business environment requires the organisation strategical behaviour for success.
H&M is one of the organisation of the clothing retail company and the company has been known
for clothing of men, women, children and teenagers.
The company has been founded in 1947 and it has its headquartered in Sweden. The
company's large stores have been available in almost 33 countries. The discussion includes
background of H&M, external analysis of the fast fashion industry, internal capabilities. In
addition to this, a strategic analysis tool to evaluate the H&M strategic choices and future
direction. A critical evaluation and justification based on the H&M. Apart from it, future
recommendations on which company can be able to achieve goals and maximise profit.
Background of company
Hennes & Mauritz is one of the leading organisation which providing various products
and services and it is specifically called as the fashion company in order to clothing segment of
the women, men, children and teenagers. In 2019, November H&M operates in almost 70
countries and in almost 5000 stores. There are almost 126,000 positions availability for all the
employees in an organisation. The founder of a company is Erling Persson in 1947 and first shop
was opened his first store in Vasteras, Sweden and at present, the organisation have been built at
the place of this store where almost 75000 employees have been working constantly. In reference
of comapny, it refers to five brands with an effective and different concept (Clarke and Fuller,
2010).
External: Fast Fashion Industry Analysis:
The H&M industry is one of the growing and one of the fastest retail industry which
observed that the industries observed enormous growth in almost 6 years on the basis of several
factors including economic growth, high standard of living, social fact, technological
improvement and many others. Therefore, it can be simply suggested that PESTEL analysis is
utilised to manifests the discussion on the external influencers including various factors. This
components can be simply helps in exploring the growth of external factors on the macro
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environment which can simply influences the H&M company. It can be also suggested that
H&M is a useful analysing technique that can simply helps the influences on H&M businesses.
The political factors refers to the intervention of the government or some legal factors
which systematically and efficiently influences the geopolitical instability, terrorism and Brexit.
The company have been operated in almost 44 countries and in early 2018, H&M should have a
political controversy of the racism and the hurting segments of the Africans. H&M products have
been widely acceptable and on the basis of pricing affordability and good quality. It is very
crucial for the H&M group to remain updated and embrace some technological aspects as well
(Singer and Donoho, 1992).
.
The PESTEL analysis have been presented below
Political factors: It refers to such type of factors which includes government
interventions. It includes de-globalization across the globe, the economic instability at the time
of trade restrictions and the change in leaders also helps in affecting the USA( Europe
Mosadeghrad, 2012).
Economical factors: It refers to the economic factors that impact towards the
organisation. The change in the tax systems, changes in the economic scale, changes in the
labour laws and increase in the disposable income are all included in the economic aspects.
Social factors: It refers to the several factors which are related with the the caste, gender
and many others. It helps in influencing the cost and efforts. The social factors helps in the large
scale forces within the culture and societies that can simply affect the feelings, behaviour and
thoughtful practices. The social factors includes choices of consumers, social media forefront for
the fashion retailers (Chen and Lieberman, 2015).
Technological factors: It refers to the technological advancement and ideological
upliftment. The innovative technologies including data analytics and improvement in the
efficiencies. Also, there is a need to increase the importance of channels. In relevance of
organisation, it including H&M using the effective technology in order to attracting large
numbers of customers. It ideals in fashion segment accordingly changes technology and fulfil the
needs and wants of customer as well as promotes their products and services through social
media.
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Environmental factors: It factors refers to includes several eco-friendly products and
the change in climatic conditions that influences the apparel choices.
Legal factors: It includes several norms and regulations for the companies that have
been in foreign in some of the several countries. In relation with the H&M, there are some
effective policies adopted by the legal factors. Also, there is a need to have a systematic and
functional ability so that everything in the organisation must go properly and effectively.
SWOT Analysis
The clothing retail industry is seems out to be the major and the most effective
progressive countries which has a major aim in observing the growth over the last few years. The
technology plays a vital role the growth of the industry. The second largest clothing retailer can
be able to enjoy all the benefits and remain outreach with the fact of offering the quality as well
as fashionable products.
The SWOT analysis of the H&M company helps in manifesting the current strengths and
weaknesses that can be simply helpful in strengthen the company. The report shows intelligence
on the basis of internal weaknesses and several threats that affected the organisation. H&M is
one of the leading and the largest clothing retailer on the basis of internal and the most efficient
clothing. The broad arrays of the products are referring as the backbone of the products including
clothing, accessories and fashion traits. The internal factors including strong and the diversified
presences, retail channels, affordable prices, speedy delivery are all included in strengthening the
online presence. The SWOT analysis of the H&M have been mentioned below
Strengths
 H&M has a strongest and vulnerable presence globally.
 The consumer satisfaction is quiet higher
 the stable finances are the biggest strength of H&M
 affordability and values of prices is higher
Weaknesses
 The replicate design
 the massive and the most disruptive inventory
 the consumer trends have slow responses
 Insensitive promotions and the backlash
Opportunities
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 the popularity of the online stores
 the market presence
 effective and increase in the purchasing power
Threats
 changes in the global dynamics
 the competitors and local artisans threats
 latest trends
Strategic Options:
The strategic management is one of the tool which is quiet useful in understanding about
the organisation of next five years and beyond it. One of the most sorted and affective tool is the
Ans off strategic planning tool which can simply helps the senior manager, The strategic
management planning tools is useful in determining the organisation in the next five years and
beyond to get there specifically. Ans off is one of the strategic planning tool and it is one of the
framework which helps the in providing the managers, executives and other marketers. Ans off is
one of the model which has been given by the American named as Igor Ans off and it has been
applied to create a concept (Bergh and et. al., 2016).
The Ans off matrix includes several types of segments such as the development in
various segment and criteria. Amongst all, the diversification is one of the most important and
effective segment which offer multiple and quiet unrelated structure of the marketing and it
suggest the risk portfolio as well.
Market penetration: The market penetration in an organisation is seems out to be the usage of
existing product and services. The current market scenario includes organisation existing which
helps in increasing the market share as well. It involves various tools and techniques which
utilizing by company in order to attractive large customer segment. These is tool which refers to
existing market segments which helps to enlarge market. It includes providing wide range of
products and services to targeting new customer segments which result as find out the new
customers in existing market. .
Market development: These is concept which includes various process organisation using these
techniques in order to expand market with new geographies and countries. It includes targeting
new customer base which includes region of the country, region and also attracting foreign
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customers. It is strategy which using by most of organisation considered as advance technology,
techniques which helps to growth and successfully depends on these factors.
Product development: It is techniques which utilizing by most of organisation which helps to
developing new innovative products and services for existing market in order to achieving
organisation goal and objective of company. On that basis organisation achieving success and
growth with help off utilizing this strategy. It considered as organisation conducting market
research which helps to know about the customer taste, preferences and market trends.
Diversification: It is last stage which refers to new offering for customers and they easily
capturing new market share. Organisation using these strategy when they developing new
products for customer but it is difficult to handle due to new products and services launch by
company.
5. Strategy Selection and Justification:
The company should hire one of the strategy which must be adopted by the H&M
because it is one of the great and effective reputation in the market. There is a need to have an
effective and quiet easy market values in terms of increasing an effective brand reoccupation as
well. It has been simply suggested that market penetration reflects an ability to uses the various
and effective products on the basis of increasing the aims and objectives to specifically aims the
market penetration strategy. There is a need to increase an effective and quiet efficient prices
which is able to modified and deprived the festival timelines, top priority and the increase in the
promotion. Also, an acquiring the competitor in the same marketplace is very important to be
describe (Weiser, 2020).
Conclusion and recommendations
The above discussion suggest that H&M strategic management must be based on several
facts and the effective theories. Some recommendations that have been included must be taken
into the consideration. It includes
 H&M should adopt strategies on the basis of flexible help and regular check on the
strategy and growth (Mosadeghrad, 2012).
 There is a need to have well maintained and well structured distribution network. It is
process which including various tools and techniques refers to the simultaneous help in
the process of production and the proceed of faster as well as reactive incarnation.
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 Internationalization: There is a need to invest in the new market and there must be a
effective prediction in the consumer segmentation. The firm or an organisation shoudflbe
and quiet effectively constitute the functional ability of the consumer segmentation.
H&M should introduce large scale of products and services which specifically focus on
the consumer segmentation. H&M should include the power and maintenance of the
consumer base on the basis of high manufacturing process as well as the process of the
depreciation (Theriou, 2015).
 The internal improvement: It can be functionally suggest that H&M has a systematic as
well as majorly affected collaboration in the market and the H&M systematically provide
changes. H&M should majorly invest in the market collaborations with other
organisations as well. Also, the H&M introduce several levels.
 The target customers should be risen so that the organisation would attain maximum
growth and satisfaction.
 Effortless display: it can be simply suggested that H&M must have a hanger test function
for the customers to check the review and progress. The days have been significantly
gone when tiny rails have been showed for the products so that there must be consumer
review, retrieve and replacement of any item. The days have been simply gone where the
warehouse volumes must have a visit of H&M which will be noticeable and packed after
12 storeys high. The consumer experience should reflect easy way of products in which
there must be a good falling all over the world. It is quiet reflective to understand the fact
and the relevant knowledge.
 The power of consistency: The consistency in retain must not be easy but H&M will
carry different brands and ranges, in which the products are quiet consistent. The
consistency includes customer engagement and organisation. Consistency should include
H&M and Starbucks for the frequent visitor and the visit towards the nearby stores.
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