Strategic Management Report: H&M Company Analysis and Recommendations

This report provides a comprehensive strategic analysis of H&M, a prominent fashion brand, focusing on its strategic management practices. The report begins with an introduction to strategic management, emphasizing its role in setting objectives and analyzing the competitive landscape. The main body explores strategic options using the Ansoff matrix, evaluating market penetration, product development, market development, and diversification strategies. The report recommends the market development strategy for H&M, justifying this choice based on its potential to expand sales in new market segments. The report also includes future recommendations, highlighting the importance of PESTLE and Porter's Five Forces analyses to understand the external environment and competition. Internal analysis using VRIO is recommended to protect company resources. The conclusion reiterates the importance of strategic management for company growth and highlights the use of various analytical tools for internal and external analysis, and the Ansoff matrix for strategic options.

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................6
MAIN BODY..................................................................................................................................6
Strategic Options.........................................................................................................................6
Strategic Selection and Justification............................................................................................8
FUTURE RECOMMENDATION..................................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Strategic Management consider to enhance and set the objectives after this analyse the
competition level and also analysing the internal situations of the organization. Strategic
management help to create and evaluate the effective strategy which ensures success to the
management of the organization. Strategic management provide the right direction so that
company easily develop their plans and policies so that company can achieve effectively
organizational objectives. For this report, H&M organization is considered. H&M Company
established in the year 1947 and the founder of the company was Erling Persson. This report
identify the the strategic options so that it will gives future strategic directions to the
organization. This report use Ansoff matrix model which help in marketing planning of the
company.
MAIN BODY
Strategic Options
To evaluate the strategic choices and future strategic direction purpose H&M Company
analyse the Ansoff matrix model which is a very useful strategic direction tool. The explanation
of Ansoff Matrix as follows -
Ansoff Matrix
Ansoff model developed by the Icon Ansoff and it is considered as a core strategy tool
for the business.Basically Ansoff matrix model is used for the marketing planning purpose. This
model is useful to identify that which strategy company should use so that company can achieve
their market task. It is also known as the Market grid matrix.
There are four strategies involved in this matrix which are discussed below-
 Market Penetration: It is a lower risk strategy for every business that sell existing
products into existing market place. That strategy possible when market place are
growing and companies still trying to make other marketing mix strategy and
promotional activities. Through this strategy H & M company mainly increase the sales
with the help of existing products in the old and well established market. This strategy is
less risky than other Ansoff strategy (Ansoff, et. al., 2018).

 Product Development: This a second strategy tool of the strategic option. These model
develoo new products into a existing market and sell new products to the existing
customers. In this strategy the product and it's promotion will change that's why risk is
more in this strategy as compared to the market penetrate. The success of product
development strategy is depend upon the company research which company conduct at
Marketplace to know the customer need and the internal capabilities of the company to
innovate different things. H&M Company is very famous company for fashion brand this
company introduces products time to time and follows the latest trends. Through this
strategy H&M launch new products in the old existing market so that company provides
different features and variety of products to their existing customers.
Illustration 1: Ansoff Matrix Strategy, 2020
 Market Development: This is third strategy given by the Ansoff matrix. This third
strategic option develop an existing products and services in to the new market
place .This strategy is more risky than the market penetration strategies because new
market contain own complexities. The marketing mix consider the changes in the "place"
and promotional activities .H &M is a big brand and company main focus is to expand
their market all over the world so company expand their old and existing products in to

the new market place so that company sell increase and H & M company can earn more
profit (Bindra, Parameswar and Dhir, 2019).
 Diversification: This is a fourth and last strategy of the Ansoff mateix. The main motive
of this strategy is to develop new products in to totally new marketplace. This strategy is
more risky than other strategies because the company expands their business in the new
and unfamiliar market. This strategy contains the potential to earn more revenue. H & M
is a most famous brand well established brand.(Makadok, Burton and Barney, 2018).
Through this strategy, H &M is fashion brand which offer fashionable products in a low
price. With the help of this strategy, company can reaching new the market place with
new products.This strategy provided a good potential for the development and growth but
also a huge risk and failure.
Strategic Selection and Justification
Strategic Selection
For H & M company purpose, this report suggested the “Market Development" strategy
of Ansoff mateix for the future strategic purpose. Through this strategy H & M company easily
access their current products and services in new market segment. This is considered as a growth
strategy which expands their sales in to entirely new market. H&M Company can try to sale their
existing products with additional features so that it gives benefit in the enhancement of company
market value and sales. The strategy in boost the company sale and generate more profit and
besides this, this strategy create more marketing opportunities for the company because company
expand their business in new market (Kaar and Stary, 2019).
Justification
The justification to use "Market Development" strategy for the future purpose gorwth of H
& M Company considered some basic aspects that determine the market growth of the business.
Through Market development strategy, H&M company easily target various geographical areas
and market at home country or abroad. Company can use various sales channels like online
platform or direct sales channels through stores. H& M company also can use Market
segmentation so that company easily identify and target different people and group of people ,
ages ,gender consider demographic profile.H& M can use marketing Mix so that company easily

know how to establish proper way in new market and how to create good impact so that
company reposition their products value in new maeket.
FUTURE RECOMMENDATION
In this report , H& M company identified the impact of external environmental through
PESTLE analysis and identify that econoical and legal factors affected the most so that H & M
need to revisit their budget plan and determine company financial priorities and use specific
tools so that company can increase employees retention. To deal with legal factors, company
should familiar with the specific applicability of Laws and keep things confidential. Through
porters five forces model, H&M analysis the competition in the market and identified the
number of competitors at the marketplace. H& M need to provide specific discounts and offers
with good quality products so that company can attract large number of customers. VRIO
analysis basically internal analysis tools which help to protect the company all resources that
provide company a long time competitive advantages ( Schawel and Billing, 2018). H & M need
to use this framework to analyse the value of their products and hwo to take advantage. This
report also evaluate the Ansoff mateix which provide four strategies in which strategies,H& M
need to use Market Development strategy which help in operate current products in a new
market segmentation so that company can expand their market and take benefits from the new
audiences (Tsatsoula, 2018)
.
CONCLUSION
As per this report it is concluded that strategic management help to maintain all the
marketing activities of the company so that company easily survive at the marketplace. For
company growth internl and external analysis is really essential. This report mainly deal with the
internal and external analysis tools which help the company to identified the impact of internal
and external environmental factors. Company can conduct market research and analyse influence
of these factors through specific analysis tools. Company used PESTLE analysis to identified the
impact of external environmental factors and used porters five forces model to determine the
competition level so that company can take competitive advantage. Company evaluat VRIO
model so that company can cover their capabilities of research which help in take the

competitive advantage for a longer period of time . In this report, Ansoff mateix is also used to
analyse the strategic option for the future purpose of the company so it analysed the company
should apply Market Development strategy for future growth purpose.

REFERENCES
Books and Journals
Ansoff, H.I., Et. al., 2018. Implanting strategic management. Springer.
Bindra, S., Parameswar, N. and Dhir, S., 2019. Strategic management: The evolution of the
field. Strategic Change. 28(6). pp.469-478.
Kaar, C. and Stary, C., 2019. Intelligent business transformation through market‐specific value
network analysis: Structured interventions and process bootstrapping in
geomarketing. Knowledge and Process Management. 26(2). pp.163-181.
Makadok, R., Burton, R. and Barney, J., 2018. A practical guide for making theory contributions
in strategic management. Strategic Management Journal. 39(6). pp.1530-1545.
Schawel, C. and Billing, F., 2018. Ansoff-Matrix. In Top 100 Management Tools (pp. 31-33).
Springer Gabler, Wiesbaden.
Tsatsoula, E., 2018. Application of Ansoff's Matrix-Methodology: Marketing Growth Strategies
For Products.