Strategic Management Report: H&M's Competitive Strategy Analysis

This report provides a comprehensive strategic analysis of Hennes & Mauritz (H&M), a Swedish multinational clothing company. It begins with an introduction to strategic management and its importance in enhancing a company's profitability and productivity. The report then delves into a critical analysis of H&M's background, focusing on its various strategies such as identifying its strategic position, gathering customer information, analyzing the external environment (using PESTEL and SWOT models), developing and executing plans, and monitoring performance. The report evaluates H&M's internal and external environments, highlighting political, economic, social, technological, environmental, and legal factors. Furthermore, it examines the internal environment using a SWOT framework to identify strengths, weaknesses, opportunities, and threats. The analysis includes an evaluation of tactical techniques used by the corporation, such as digital marketing and the Bowman strategy model, to assess market positions and gain a competitive edge. The report concludes by discussing how H&M uses various strategies to adapt to a changing environment and maintain its market position.

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................3
Critically analysis the H&M background in order to focusing different strategy......................3
Evaluate internal and external environment in order to increasing productivity of company....4
Examine the internal environment which organisation helps to grape market opportunities.....6
H&M using various strategy on that basis organisation choosing future strategy.....................8
CONCLUSION...............................................................................................................................9
REFERNCES.................................................................................................................................10

INTRODUCTION
Strategic management is process which most of organisation adapting effectively in order
to developing new strategies which result as enhancing profitability and productivity of
company. It includes organisation using various tools and techniques due to survive in the
market at longer period of time. It is process which organisation formulating and executing
various strategies because it helps to gaining competitive advantages. It includes developing
various strategies which result as sustainability and growth are depends on these factor. It
considered as various tools which helps to survive at market place for longer period of time as
well as these process is six-stages so organisation execute because developing brand image in
the mind of customers (Alamri, 2019). The report is about Hennes & Mauuritz which is situated
in UK and it is Swedish multinational company which dealing in clothing segment. The paper
consist organisation using various methods in order to analysed the external and internal
environment which helps to enhancing profitability and productivity of company. In addition to
this, it includes Bowman strategy model which helps to gaining competitive advantages and
developing goodwill at marketplace.
Critically analysis the H&M background in order to focusing different strategy.
Hennes & Mauuritz is one of the famous company in order to dealing in wide range of
products and services and majorly dealing in clothing segment as well as attracting large
numbers of customers. It expand their business globally which Headquarter situated in Sweden.
It includes they are dealing in variety of fashionable clothing items, cosmetic products, footwear,
home textiles and many others. It using various strategy in order to attracting large customer
segment and enhancing profitability and productivity of company. There are ample numbers of
strategy which are discussed below (Balaman, 2016).
Identify strategic position-: These are strategy which most of organisation used in order
to achieving organisation goal and objective of company. Top management plays vital role
because they formulated new strategy on the basis of analysed external and internal
environment. On the basis of these strategy organisation determined their position at marketplace
and accordingly preparing long-term and short-term goals.
Gathering information regarding customers-: These are basic function which each and
every organisation in order to conducting market research in order to gathering the information
about the customers trends, preferences and many more. It includes organisation collecting

various important information which helps to easily attracting customer and developing brand
image in the mind of customers.
Analysed external environment- : These is the important concept most of the
organisation using in order evaluating the opportunity and threat which are available in the
market so organisation accordingly preparing strategy on that basis easily gaining competitive
advantages. There are ample numbers of tools and techniques which organisation utilizing such
as PESTEL model, SWOT analysed both are important tools in order to analysed the market
condition and situation (Barca, 2017).
Developing and execution of plan-: There are ample numbers of strategy which are
formulated by organisation so they execute effectively in order to enhancing profitability and
productivity of company. H&M using these techniques in order to smoothly run business
operations and implemented task as well as activities assigned to their employees effectively.
Monitoring and controlling performance-: When organisation formulated and execute
the strategy in an company so they effectively monitored and controlled strategy which result as
check the performance of employee’s and taking corrective actions on time. In context of
company, it includes managers providing task to their employees and they are accountable for
performance.
Therefore, it includes various strategy of H&M which using in order to gaining
competitive advantages so organisation adapting different strategy effectively and efficiently
which helps to survive in the market at longer period of time.
Evaluate internal and external environment in order to increasing productivity of company.
In present scenario, technology, market condition and situation changes very fast in order
to adapting various tools and framework with the help of these organisation easily analysed
market situation (Bauman, 2018)(Denning, 2017)(Elbanna, 2016). It considered as H&M using
these tools in order to improved the performance of company and increasing effectiveness of
organisation. Most of organisation using PESTEL model in order to analysed the external
environment which are discussed below.
Political-: These is important factor which refers to include rules, regulation and policy.
It includes those policy and which imposed by government as well as Hennes & Mauuritz
adhered to followed such rules and situations so they effectively adapting in order to smooth

ruining of business operations. The political condition of United states are stable and strong so
government imposed those rules which favourable for companies.
Economical-: It includes various factors which affect the business such as tax rates,
interest rates, inflation, legislation and exchange rate. The economic condition of Unites
Kingdom is strong and stable which organisation survive for long time. In context of
organisation, it considered as demand and supply of market so organisation managing as along
with deciding the pricing about the products and services so customer increasing purchasing
habit (Denning, 2017).
Social-: These factors include which refers to different culture, value, belief, tradition
and customer attitude about products and services. Most of the organisation focusing all these
factors in order to attracting large numbers of customers. In relevance of H&M, it is one of the
leading company so providing fashionable clothing in on the basis of lifestyle of customers.
Technology-: These factors changes very first and they impact globally so it affect
business strategy. In relevance of H&M, it includes using advanced technology because they
impact on business profitability and productivity of company. These is fashion company so
majorly using latest technology and fashion trend in order to expand their business operations
another country.
Environmental-: These is the essential element because organisation sustainability
depends on these factors. Most of organisation using these in order to recycling products and
services, wastage of disposable which are beneficial for environment. In context of organisation,
it utilizing those techniques because they not harmful for environment.
Legal-: It refers to those which considered as norms, policies, labour laws and employees
contract which organisation compulsory to followed all the laws and regulation in order to
smooth flow of operations (Elbanna, 2016). In reference of organisation, it involves organisation
adhered to followed such condition and legislation which helps to easily set up the business
model.
Therefore, it includes various factors which affect the external environment because
organisation analysed the market condition and grape new opportunities which are present in the
environment.

Examine the internal environment which organisation helps to grape market opportunities.
Organisation includes SWOT framework which effectively adapting these model in order
to gaining competitive advantages and beat competitor at marketplace. There are ample numbers
of competitors are available in the market so essential to analysed these model and accordingly
formulated strategies effectively which helps to minimizing threat at marketplace. These model
utilizing by H&M because organisation take right decision at right time. Here, using these tools
which are follows.
Strength Weaknesses
 It utilizing advanced technology so
they easily grape market opportunities
and attracting large numbers of
customers (Heath, 2018).
 H&M dealing in wide range of
products and customers as well as
majorly dealing in fashionable industry
so they increasing large customer base.
 It analysed the needs and want of
customer accordingly providing
products and services so it achieving
higher level of customer satisfaction.
 There are ample numbers of
competitors rae present at marketplace
so they affect the productivity of
company.
 Due to Brexit affect the business model
sue to affect high inflation rate in UK
and also enhancing the cost of trade.
 The biggest weaknesses of organisation
in order to affect the export and import
duties on business operations.
 Opportunities Threats
 H&M has greater opportunity in order
to dealing in clothing segment so UK is
strong economical condition on that
basis they easily expand their business
operations another country.
 It includes they using artificial
intelligence so effectively serves to the
customers.
 It considered as utilizing various
 There various competitors present so
one of the biggest threat for
organisation they easily make changes
replaced products and services.
 It refers to COVID-19 condition affect
the business profitability and
productivity of company (Holloway,
2018).
 It includes various competitors such as

promotional techniques which helps to
build the strong relationship with
customers for longer period of time.
Marks & Spencer, Zara and so on
which formulated strategy in order to
affect the customer loyalty towards the
products and services.

Hence, it considered as organisation using these tool to analysed the internal environment
which easily know about the strength, weaknesses, threats and opportunities. On that basis
organisation formulated strategy which helps to attracting large numbers of customers. These
tools helps to enhancing profitability and productivity of company (Skenny, 2017).
4) Evaluation of sevral tactical techniques used by the corporation in the future
In this ever-changing environment organisations use several strategies to elevate their
employees performances. They use tools such as SWOT and PESTEL analysis to asses their
firm's position in the market and the external factors affecting it (Johnsen, 2016). In context of
Hermes and Mauuritz, non-traditional methods such as digital marketing through social media
applications. H&M deals with apparel industry, so they opened their website and social media
handles to attract attention of the younger digital savvy generation. When assessing the
company's position in the industry various factors such as political economical technological
legal and environmental to understand risks and opportunities involved and plan accordingly.
Bowman strategy model
This strategy was chosen by the organisation as it accurately evaluates the market
situation of its competitors (Li, 2018). It gives the organisation competitive edge against its
rivals by giving them cost advantages and helping them formulate plans and be better prepared
for any moves made by their competitors. Several market positions are given below:
Low price and low added value: This position faces significantly more competition as
compared to others. This is because there is small to none uniqueness in the product or services
offered by the company, so the customer compares products or services on the basis of their
price. In context to H&M this model is used to compete with suppliers who might offer a lower
price to the customer.
Low price: In this position the products offered at the lowest price and if the company
dose not have high production yield it faces low profitability. With reference to the corporation

they focus on low-cost markets which have substantial economies and concentrate on price
reduction so they can crate profit.
Hybrid: This is one of the more efficient position of the bowman model as it looks at
selling unique products or services. H&M uses this strategy to give its customers cheap and
exceptional products. This position is advantageous to both company and it's consumers.
Differentiation : This strategy involves giving customers the best services to the
customers at the best price. This position also uses branding to specific segments of customers to
yield higher profits. H&M uses this strategy to sell different quality products and to their
customers needs and wants (Pasch, 2019).
Focused Differentiation: This strategy is used by H&M to sell high quality branded
products at high price.
Risk high margins: This type of strategy is used by organisations who sell high priced
products. With reference to the organisation this strategy is used to sell their exclusive apparel
products.
Monopoly pricing: this position is acquired by corporates who operate in monopoly
markets . Such markets have corporates which are the only ones providing their specific service
or products.
Loss of market share: This strategy includes offering products at a common rate and
thus not gaining any competitive advantage and results in loss of customers.
Mentioned above are some methods and procedures for assessing factors affecting an
organisation and afterwards deciding a profitable market position of an organisation.
H&M using various strategy on that basis organisation choosing future strategy.
Organisation utilizing various strategy on that basis they are effectively adapting due to
they are helps to increasing profitability and productivity of company. In today's scenario
environment changes very fast so organisation accordingly evaluated and then implementing
strategy which helps to attained the goal and objective of company (Pisano, 2017). It includes
organisation executed strategy on the basis of business condition and situation. Top management
of companies has power to take decisions effectively because most of companies centralise
system so information flow from to top to bottom and using smooth flow of communication. In
reference of H&M, it is one of the famous brand in UK. Which favourably using transformation
strategy in order to using high tech technology in order to transformed the products and services

and emerging new market trends in order to attracting large numbers of customer. They utilizing
effective tool and techniques in order to smooth running of business operations. It considered as
using promotional activities which includes various promotional tools such as they promote the
products and services through social media such as what's app, Instagram, Facebook, you tube
and many more. Organisation using monitoring and controlling functions in order to improving
effectiveness of company as well as enhancing profitability and productivity of company.
Superiors provide task to their subordinates and they perform on that basis evaluate and then
take corrective actions effectively. The main reason for developing new strategies because they
easily gaining competitive advantages in order to fulfil the requirements of customers along with
organisation successful formulated strategies because it is necessary for long term benefit and
growth perceptive. All kinds of techniques helps to increasing sustainability of business and
easily survive for longer period as well as enhancing goodwill at marketplace (Somov, 2018).
Top level authority of organisation monitoring and controlling the business operations on that
basis they helps to improving employee’s performances and building strong relationship with
customers. In addition to this, H&M mangers creating various programmes in order to
developing brand image in the mind of customers. It refers to top level management formulated
business plan which estimation of cost of each activity which carrying out business activity and
accordingly plan for future strategies because specific budget required in order to formulated and
execute strategies.
Thus, it include important aspect which organisation analysis the future condition on that
basis plan the strategies effectively which majorly top management takes decision and
effectively execute in order to achieving goal and objective of company. H&M as fashion
industry so essential to developing new techniques which plays vital role in order to enhancing
profitability and productivity of company.
CONCLUSION
From the above report it has been concluded that, strategies management is process
which refers to most of organisation using these process in order to achieving organization goal
and objective of company. It includes top level of authority which formulated new strategy and
majorly they takes decisions which result as enhancing profitability and productivity of
company. There are ample numbers of methods which organisation effectively adapting in order
to analysed the external and internal organisation such as PESTEL model and SWOT which

helps to providing new opportunities. Organisation essential to evaluate the macro environment
factors which result as competitive advantages and developing goodwill at marketplace. H&M is
one of the leading company so it utilizing transformation process on that basis utilizing effective
technique in order to properly monitoring and controlling business operations. It helps to
developing brand image in the mind of customer and developing strong relationship for longer
period of time.
REFERNCES
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