Strategic Analysis of H&M: KPI, Matrix Analysis, and Recommendations

This report provides a comprehensive strategic analysis of Hennes & Mauritz (H&M), a global clothing retailer. It begins with an introduction to strategic management and an executive summary. The core of the report focuses on analyzing H&M's strategic direction using key performance indicators (KPIs) like Geckoboard, Sales force, Tableau, Olation, Simple KPI, StatsMix, and Asana. The report then delves into an analysis of H&M's strategic directions using the Ansoff matrix and BCG matrix, evaluating strategies such as market penetration, product development, market development, and diversification, along with a critical evaluation of the organization's strategy in terms of suitability, acceptability, feasibility, and sustainability using the SAF model. The report concludes with recommendations for H&M based on the analysis.

Strategic management

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
EXECUTIVE SUMMARY.............................................................................................................3
Analysis of the organisation’s strategic direction using relevant KPI tools................................4
Analysis of strategic directions....................................................................................................6
Critical evaluation of organisation strategy organisation strategy in terms of suitability,
acceptability, feasibility and sustainability................................................................................8
Recommendation.........................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Strategic management refers to continuous process of planning, monitoring, analysis and
assessment of all those purposes which are necessary for the organisation. Present report is based
on Hennes & Mauritz which is also determined as H&M. It is a Swedish multinational clothing
retail company that is known for its fast fashion clothing which is made for men, women,
teenagers and children, company operates in 62 countries with more than 4500 stores and total
people employed in the year 2015 were counted to 148,000. It is the worlds second largest global
clothing retailer with a significant online presence and online shopping sites. Company had a
revenue of US$ 25.191 billion in the year 2016 with net income of US$ 2.692 billion. Company
is giving a tough competition in the market to several companies which includes Zara, Uniqlo,
ASOS, Gap and Macy's. Present report includes H&Ms' strategic directions with the help of
relevant key performance indicators. Further this report consist of evaluation of organisation's
strategy. Lastly, this report includes recommendations after examining the organisation.
EXECUTIVE SUMMARY
Strategic management can be determined as the process of planning, monitoring, analysis
and assessment of all those purposes which are necessary for the organisation. This report has
been based on H&M which is a Swedish multinational company dealing in retailing of fast
fashion clothing which is made for men, women, teenagers and children. This report is been
including of an overview of operations of an organisation with their proposed strategy, financial
situation and its key competitors. Models and concepts with the framework to an organisation are
also been applied in this report. This report has been included with analysis of organisation's
strategic directions with the help of relevant key performance indicators. This report has been
consist of Ansoff, BCG or GE McKinsey which are used to analyse organisational strategic
directions. Further this report also has an organisation's strategy can be evaluated in terms of its
suitability, acceptability, feasibility and sustainability. Lastly this has been containing
recommendations about what is being derived by examining the organisation and determining
that recommendations are rational, reaction of various stakeholders and these decisions can be
discussed in board meeting.

Analysis of the organisation’s strategic direction using relevant KPI tools
Key performance indicators are those tools which are used by the company to identify that how
much time and resources are taken by the company to achieve a goal of the organisation. H&M
have various key performance indicators to see the proper working of the company. H&M deals
with various footwear, clothing and accessories. There are various tools or KPI which can be
used by the company and some of them are:
1) Geckoboard: It is a tracking tool used by company. It sees live records of the employees.
This is designed for those teams who are not able to focus on their important work while
doing their work. Geckoboard uses all the common business software that are google
analytics, sales force and more. H&M uses this software to check whether the employees
are able to perform properly in the office.
2) Sales force: It is mostly used for seeing the business as a whole or can be used to track a
single employee also. H&M can use this type of KPI to work on an individual. Sales
force show every employee data and this helps the company in achieving organisational
goals as well as individual goal. All the employees are accountable and work of every
employee can be seen(Parmenter, 2015).
3) Tableau: This KPI is very good for data analytics and retailer engagement. It has intuitive
interface which sets it different from other like Real time information and data blending.
Tableau connects to the data of the H&M and it develops timely insight by using the real-
time data and data can be blended from excel, google analytics.
4) Olation: The company gets a very big loss when an expensive software crashes. This
result in the loss of company with wastage of time as it takes time for company to train
other for new software. Olation puts intelligence in the business and it predicts the data
and give one solution. H&M uses this software so that if anything is done then it can get
the data from another source.
5) Simple KPI: This is very beneficial for a company as it helps in tracking the performance
indicators. H&M have access to a variety of data so that various innovative marketing
test can be done. There are various software like cloud-based which enables the company
to have access to the software from any location.

6) StatsMix: Due to statsmix the reports of KPI can be automated and it can be shareable
with other team members as well. H&M uses this KPI to share its Reports to other
members. StatsMix tracks both internal and third party.
7) Asana: Asana is a great tool top track the KPI of company. H&M vision and missions
can be checked by all the members of the company. Asana helps to track the subtasks
necessary to achieve the particular KPI(Rodrigues, Pigosso and McAloone, 2016).

Analysis of strategic directions.
Ansoff Matrix :
Ansoff Matrix was developed by Igor Ansoff, the matrix involves current and future
products and markets of the company. On the basis of present products, present markets, new
products and new markets, there are four strategies H&M may adopt such as -
Market penetration-
It is the strategy under which company sell its current products in current markets. It
helps the organization to increase the market share. It involves the least risk because market
penetration involves existing capabilities and resources of company. H&M may adopt this
strategy for offering clothing and other accessories in countries it is serving currently (Kim,
Shkurupy and Putyatina, 2019).
Product development-
Under this strategy, firm tries to achieve growth by developing new products for selling
them in existing markets. H&M may adopt product development strategy by developing new
clothing items to offer them in existing markets like India, United States etc.
Market development-
It is the type of strategy in which company sell the current products in new geographical
markets. It involves high level of risk because company will enter in new market with existing
products. H&M may use this strategy to offer clothing and other accessories in new markets.
Company will have to develop innovative marketing strategy, pricing strategy etc.
Diversification-
It is considered as most risky strategy because in this, firm is required to use both product
development and market development strategy. H&M can also use diversification for selling new
clothing items in new geographical markets. It will help to reduce overall risk of the business.
Recommendation-
H&M should adopt product development strategy for selling current clothing items and
accessories like belts, gloves etc. for selling them in existing markets like US, India etc. The
strategy will help to increase sale and profit of the firm (Gurcaylilar-Yenidogan and Aksoy,
2018).
BCG Matrix :

It is one of the useful tool, it helps to compare market share with growth rate of market. It
will help H&M to analyse that in which product firm should invest and which product it should
dropped out from matrix. It is divided in 4 categories.
Question mark-
Products that are having low share in the market and high growth rate in the industry.
Home wear collection of H&M should be placed in category of question mark because these
products are growing with high rate in the market and they are consuming large amount of funds.
These are having ability to become stars.
Stars-
Under women collection range, company offers wide range of clothing items. Women
clothing of H&M can be placed in the category of question mark because these products are
having high share in market and high growth rate in fashion industry (Mohajan, 2017).
Dogs-
The products that are having low growth rate and low market share will be placed in dogs
category. Products of the company in the category of children can be placed in dogs. Children
category is having low market share.
Cash cow-
The products that are having high market share with low rate of growth rate are placed
under cash cows. Men's collection of the firm can be placed under this category as these products
are having low growth rate and high market share (Zamberi Ahmad and Rahim Abu Bakar,
2018).

Critical evaluation of organisation strategy organisation strategy in terms of suitability,
acceptability, feasibility and sustainability
Selection of an appropriate business strategy is very much essential as it is the factor which
has significant effect on business success growth as well as performance. Making the choice related
to the choice of appropriate business strategy is quite difficult task as due to wring selection of
strategy an organization might have to face long term consequences. By utilizing an auxiliary tool
that is SAF model the management in H&m can make the selection of business strategies on the
three criteria these are feasibility, suitability and acceptability(Ansoff and et.al. 2018.)
SAFs is basically a sustainability assessment framework which can be utilized by
management in H & M organization for analysing the feasibility, suitability, acceptability and
sustainability of the different strategies adopted by organization. Analysing effectiveness of
business strategies before implementing it is very much essential in order to achieve desired
business objectives. It is the statics which also assist firm in eliminating the risk associated with
execution of different plans. The different model of SAF model include:
Suitability: It is basically extended up to which the strategic opportunity is suitable for an
organization. In context of the H&M organization the product development is the strategy which is
highly suitable for an enterprise as it will help firm in increasing sales and profitability. In addition
to this by developing innovative products H& M will get an ease in attracting customers. Product
development is the strategy which will provide business entity an opportunity to gain the
competitive advantage in the market. It is the business strategy which will support an enterprise in
providing the high level of satisfaction to customers. In context of the digital marketing strategy is
also suitable for an enterprise as by applying the digital strategy can promote its goods or services at
large scale. In addition to this, by implementing the digital technology an organization can bring
improvement in its marketing activities.
Feasibility: In relation to the Product development strategy is highly feasible as H&M has valuable
resources as well as skilled manpower which can be used by management in an organization for
developing new products. In addition to this, H& m has sufficient amount of financial resources
which can be used by the firm for conducting the research in order to develop the creative ideas for
development of new product. In context of digital marketing strategy is highly feasible as H& M
has already has implemented the advance technology in its business operations. In addition to this,
an enterprise also have team of highly technically skilled workers those who can support
management in implementation of digital technology(Hill, 2017.)
Acceptability : Both the strategies that is digital marketing and product development are highly
acceptable by all the stakeholders of the H& M. In context of the product development strategy, the

stakeholders has accepted the product development strategy as they expect that they will get high
rate of investment if the specific strategy has been implemented in successful manner.
Recommendation
H&M is one of the leading retailer in world, they serves its best services to customer and
provide quality products to people. In order to sustain business for longer term period and retain
consumers effectively, company needs to apply different types of business strategies. As it
recommend to organization for using product development strategy. H&M should apply product
development strategy which help to increase their profit margin and productivity. Product
development refers to creating new goods to serve same market (Stephen, 2016). This strategy
make firm more popular rather than now as it is beneficial and useful approach. According to this
plan, company must sell its new goods to existing clients and progress their business without
tapping the new markets effectively. Product development is highly recommended to firm which is
appropriate and suitable for generating revenue and increasing market share. With the help of
product development strategy, H&M creates the culture of innovation and it also help to drive
higher value proposition. Stakeholders of company were agree and ready to implement this new
strategy within organizational structure, they considered as one of the best way to generate revenue
and attract peoples (Taiminen and Karjaluoto, 2015). Stakeholders take participants in business
decision making procedure and provide ideas for business growth. Organization stakeholders
reaction is in positive ways, they just wants to build good market position and satisfied its
consumers. Firm make all the preparation for board meeting and discuss their idea of product
development with different stakeholders which is essential before strategic implementation.
In order, generate awareness of new products H&M must used digital marketing platform
which is beneficial to gain people trust and appropriate for introducing new goods in marketplace.
Social media marketing, online advertising, search engine marketing and content marketing are
different types of digital marketing sources (Kannan, 2017). Digital marketing include all
marketing efforts that use the internet or electronic device. It refers to promotion delivered
thorough digital channels like search engine, social media, mobile apps etc. Social media
marketing is recommend to Hennes & Mauritz company which help to make business more popular
and generate awareness among group of people and its target market effectively. It is the procedure
of gaining website attention or traffic through social media sites. In recent time, most of the people
are using social media sites in order to gain knowledge and take some information about new
products launched in marketplace. So for that Company must used social media as marketing tool
that help to increase brand awareness, attract people and make strong customer base. Social media
marketing allows H&M to provide better consumer satisfaction and it is cost effective. It is very
important for product marketing, social media platform supports H&M connect with its consumers,

boost its sales and leads and increase awareness about new innovation. It makes organization able
to reach at its target market and provide the valuable venue for better learning and understanding.
Due to several benefits of social media marketing, it is suggested to H&M for implementing it in
overall business structure.
CONCLUSION
From the present report it can be concluded that strategic management play a major role in
planning, monitoring, analysing and assessment of all the purposes which are necessary for an
organisation. This report concludes that usage of relevant key performance indicators helps in
analysing organisation's strategic decisions. This report also concludes that Ansoff, BCG or GE
McKinsey are used to analyse organisational strategic directions. Further this report concludes that
an organisation's strategy can be evaluated in terms of its suitability, acceptability, feasibility and
sustainability. Lastly this report contains recommendations about what is being derived by
examining the organisation and determining that recommendations are rational, reaction of various
stakeholders and these decisions can be discussed in board meeting.

REFERENCES
Book and Journals
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Hill, T., 2017. Manufacturing strategy: the strategic management of the manufacturing function.
Macmillan International Higher Education.
Kannan, P.K., 2017. Digital marketing: A framework, review and research agenda. International
Journal of Research in Marketing. 34(1). pp.22-45.
Kim, L. B., Shkurupy, V. A. and Putyatina, A. N., 2019. Correlations between the Levels of the
Main Extracellular Matrix Components in Mouse Liver in Chronic BCG-Induced
Granulomatosis. Bulletin of experimental biology and medicine. 166(4). pp.469-472.
Mohajan, H., 2017. An analysis on BCG Growth sharing matrix.
Parmenter, D., 2015. Key performance indicators: developing, implementing, and using winning
KPIs. John Wiley & Sons.
Rodrigues, V.P., Pigosso, D.C. and McAloone, T.C., 2016. Process-related key performance
indicators for measuring sustainability performance of ecodesign implementation into
product development. Journal of Cleaner production.139. pp.416-428.
Stephen, A.T., 2016. The role of digital and social media marketing in consumer behavior. Current
Opinion in Psychology. 10. pp.17-21.
Taiminen, H.M. and Karjaluoto, H., 2015. The usage of digital marketing channels in
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Zamberi Ahmad, S. and Rahim Abu Bakar, A., 2018. Emirates Dates: a case of growth strategy
dilemma. Emerald Emerging Markets Case Studies. 8(3). pp.1-14.