H&M's Strategic Management: An In-depth Business Report Analysis

This report provides a comprehensive strategic analysis of H&M, a major player in the fast fashion industry. The analysis begins with an introduction to strategic management and its importance in the context of a dynamic business environment. The main body of the report includes a background on H&M, followed by an external analysis using the PESTLE framework to assess political, economic, social, technological, environmental, and legal factors impacting the company. Porter's Five Forces are then applied to evaluate the competitive landscape. An internal analysis is conducted using SWOT analysis to identify the company's strengths, weaknesses, opportunities, and threats. The Ansoff Matrix is utilized to explore various growth strategies, including market penetration, market development, product development, and diversification. The report concludes with a summary of the findings, emphasizing the challenges and opportunities facing H&M in the competitive retail market.

Strategic management

Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Background..................................................................................................................................3
PESTLE.......................................................................................................................................3
Porter five force analysis.............................................................................................................4
SWOT ANALYSIS.....................................................................................................................5
ANSOFF MATRIX.....................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Strategic management is considered to be ongoing planning, monitory and appropriates analysis
with accomplishment of all level of necessities in order to meet up firm expected goals and
objectives. There is continuous level of change in differentiated business environment which
constantly have requirement of respective strategies assessing for success (Rezaeian, M.R.,and
et.al.,2019). H&M is retail fashion firm which have the wide varsity of clothing dealing in men,
women and kids. In this report, there will be discussion regarding the analysis of firm at
intermale and external level to form different level of strategies in order to gains success in
competitive market.
MAIN BODY
Background
H&M is considered to be the second largest apparel in the world having more than 2600 stores in
more than 43 countries. The company is considered to be pioneer which is having proper level of
pursuing of vertical integration with the help o large distribution network. The company more
level of collected is being designed by the Swedish designers. The company is facing a large
number of challenges in are of expansion or to cope the continuum level of change in order to
cope in competitive business environment.
To have the proper level of strategic formation, there is need to have appropriate internals and
externals analysis in order to gain more level of competitive advantage in respective market. The
firm have their business strategy to have there offering of fashion industry with quality at best
prices in more sustainable way (Sutrisno and et.al., 2016). In the external analysis, the fast
fashion industry has been most of polluting industry in which is firm is operating as huge
responsibility towards providing their sustainable fashion industry an creating minimum level of
impact on the environment.
PESTLE
Political factor
As the firm is in pressure to open the store over controversial area. On the other hand, as per the
country official it has been stated that H&M will help company to establish in more economical
manner. In addition to that firm have the accused against not following corporate social
responsibility. This have resulted in destroying the firm image in underdeveloped market which
have led to decrease in level of sales.
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Economic factor
The firm have the assurance of procuring their efficient goods with quality through efficient
pricing. the company is able to maintain competitive pricing strategies by buying in bulk at best
rates and having talents house designing with perfect inventory management. The firm have
economic shock due to expansion in various countries. due to high level of fluctuation in
economic factors it is difficult for n MNC to operates while managing stable pricing scheme.
Social factor
The firm have catered the women participation by having more level of employment to women
as compared to men at higher position on firm. This firm have provided equal chances by
showed casing appropriate talent management which they are concern at most. On the other hand
the firm tries to have proper level of wage and salaries management with appropriate hygienic
working condition.
Technological factor
The firm stays to be updated as the world environment is the changing aspect as per the new
level of trends which id being observed into market. The company is offering more level of
catalogue which is been offered by the sored as per different summer and winter season. There is
large level of complexity which s being involved in order to keep up the trends as per demand of
customer (Ortega and Okechukwu, 2017). Due to technology, the firm have the threat of rapid
change in demand and trends of customer
Environmental factor
The firm is gain in retailing so it has been always been spotlight, so the firm have to very careful
in the whatever action which is taken by the firm. The firm have make assured which is sourcing
it merchandizing as there no level of environment hazards by the products. The firm is having
proper following of environment at law without having no legal dumping in water.
Legal law factor
It is considered to be compulsdory for all firm to have proper following of nation laws in which
the firm is been operatizing. The firm have no child labour in manufacturing units along with all
safety equipment in factories which consist of emergency exits, alarm and extinguishers. All the
employees are given wages and salaries as per the national norm of countries in which there are
operating.
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Porter five force analysis
Threat of new entrants
The UK market is not saturated as tree are not barriers to entry as there is need of small capital
in order to have opening of new store (Mierzejewska, 2017). However, it been considered that’s
manufacturing unit have barriers of entry due to large scale of investments and differentia
economies scale. In relation to that fashion product have higher margin.
Threat of substitute products
As the product is being considered, fashion industry is replacing the brands not the product.
Hence, the manufacturing there are important barriers to entry dur to large scales economics and
requirement of the high level of investments. There are a lot of fashion retailers in the market
which H&M is present. The demand of product is variable as there is continuous change
customer needs and requirement.
Bargaining power of buyers
There is existence of one negative aspect as nonexistence loyalty in cheap level of fashion
segment as the switching low is too low. On the other hand, price plays an important role for
variable of customers (Gomes, 2017). In addition to that’s positive aspect volume of purchases
is considered to be mall which is single buyers is irrelevant for company. Apart from this
customer associations have the well-organized level of defending their interest.
Bargaining power of suppliers
It is not very high as there are large level of suppliers in the various countries in addition to low
labour cost. This can be stated that retailer can have the imposition of variants demanding
condition as they have the more powered hand the suppliers.
Rivalry among existing firms in the fashion industry
There is a lot of existing local, national and international competitors of the H&M industry as
the growth opportunities are considered o very low as the maturity of this sector (ZARA,., 2017).
The variable of price in considered to very influential for consumer while considering various
alternatives. There are quick level of changes as per the customer requirements which don’t have
perkiness to be develop a strong scale of economies.
Internal analysis
SWOT ANALYSIS
Strength Weakness
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The firm have the global level of presences
with having strong level of brand values.
The firm is having more or high level of
customer satisfaction.
The firm have been identified as having
continuous level of stable financial situation
which is helpful in providing more level of
affordability and value for price.
Purchases are considered to be mall which is
single buyers is irrelevant for company
The firm have weakness as it is easier to
replicates there designing which can be
advisable at cheaper rate.
In addition to that’s there can be massive level
of increase in unsold inventory.
There is more slow level of response as the
consumer trends are changing as there is
failure id mall strategy.
There is backlash over having insensitive
promotion.
Opportunities Threat
There is more level of increasing popularity on
the online store which will be helpful in
gaining more level of popularity in business.
There is large level of global opportunities
which have its presence in market at
international platform.
There is increase purchases is considered to be
mall which is single buyers is irrelevant for
company purchasing power of customer which
will have positive impact on increase level of
sales.
The firm have threat of changing level of
global dynamics due to recent level of changes
in current demands and customer prescription.
There is the threat form the competitors with
presence of local arcticians.
There is continuous level of innovation in the
line in latest trends which is considered o be
more significant.
ANSOFF MATRIX
As per the implication of Ansoff matrix
Cost leadership
As this is based on strategy which are based on large scale economies along with outsourcing
manufacturing process to the differentia countries with low cost labours (Nasir, 2017). The firm
will have offering of low prices without have any compromise wire quality along with being
efficiently profitable. In addition to that, there will be situation when the company will have self-
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finance in order to have increase the number of stores and sales as H&M mission is “offering
quality at the best price”.
Differentiation strategy
There will be collaboration with celebrities and famous designers for having exclusive level of
collection in order to achieve the target o differentia market in more perfect way. This
phenomenon is called “masstige”, and can be defined as an alliance between a prestigious brand
and a mass consumer brand. The firm will have addition value as camper to other competitors in
order to bring stronger brand awryness which will be helpful in penetrating thee difficult market.
Market penetration
This is the strategy to have increase the sales of exiting product in current market, so the firm is
offering more level of fashionable products at cheaper price as compared to Zara. The company
is concerned about quality control methods being clearly guarantee.
Market development
This strategy has involvement of the new segment in existing marker. In this situation firm is
being prepared for having proper standardization of H&M products which have slight variation
in new culture (Hjelmeland and et.al., 2016). According to the new market segments, the
company has launched COS (Collection of Style) with more expensive and smarter clothes than
the H&M’s common one.
Product development
There will be collaboration with celebrities and famous designers for having exclusive level of
collection in order to achieve the target of differentia market in more perfect way. the firm is
concern to have optimistic research and development for interdicting environment friendly ions.
Diversification
There is development of new products into new market as the firm is focusing of the like clothes,
jeweller, shoes, bags or accessories so it has not developed very much this strategy. The firm
have also entered in gaming zones as stuff pack of computer games with collaboration with other
developed
.
CONCLUSION
From the above report it can be conclude as H&M is retail fashion firm which have the wide
varsity of clothing dealing in men, women and kids. The company is facing a large number of
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challenges in are of expansion or to cope the continuum level of change in order to cope in
competitive business environment. This firm have provided equal chances by showed casing
appropriate talent management which they are concern at most. There are a lot of fashion
retailers in the market which H&M is present. The demand of product is variable as there is
continuous change customer needs and requirement. There is continuous level of innovation in
the line in latest trends which is considered to be more significant.
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REFERENCES
Books and Journals
Online
Hjelmeland, K. and et.al., 2016. Devold wool underwear (Bachelor's thesis).
Nasir, T., 2017. Recruitment and selection process of ITAL Adweg (Pvt) Ltd.
ZARA, B.P.E.O., 2017. INTERNATIONAL JOURNALS.
Mierzejewska, J., 2017. Analysis and evaluation of marketing strategies for clothing companies
on the example of Zara and H&M (Doctoral dissertation, Katedra Procesów Zarządzania).
Ortega, A.M.G. and Okechukwu, C.U.U., 2017. Strategic means to launch business-Primark in
Denmark.
Sutrisno, A and et.al., 2016. Integrating SWOT analysis into the FMEA methodology to improve
corrective action decision making. International Journal of Productivity and Quality
Management, 17(1), pp.104-126.
Rezaeian, M.R.,and et.al2019. Developing human resource strategies using swot analysis. Case
study of Iran customs administration. Dilemas Contemporáneos: Educación, Política y Valore,
6(3), pp.1-12.
Gomes, D.M., 2017. Recruitment and selection process of H&M Bangladesh.
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