H&M STRATEGY

3665 WordsOct 3, 201415 Pages
Question 1 Hennes and Mauritz (H&M) is a fast-fashion global leader in the fashion industry. Hence, to have a holistic sustainable development point of view, we will examine and address the Marco-environment by looking at PESTEL analysis framework. The competitive forces within the fashion industry will also be revealed throughout the Porter Five Forces Model. PESTEL ANALYSIS Case Evidence Positive (Opportunities) Neutral Negative (Threats) POLITICAL factors: Critical observation faced from the public on H&M’s overseas suppliers’ welfare and working conditions. The company is under critical observation on their supplier’s welfare and working conditions that has raised issue on upholding its branding (Yildiz, 2014,pg 580) This…show more content…
The pact increases the number of supplier that allows H&M to work with them at a much lower price. (Johnson et al., 2014, pg 576) It allows H&M to source their suppliers easily at a lower cost. In return, save some operational costs and improve its revenue. Summary Based on the PESTEL Analysis, the external environment of H&M is hostile as there are more threats than opportunities. This is mainly due to the high unpredictable of Socio-Culture factor where customer’s trend preferences and expectations on apparel are difficult to gauge and manage. Furthermore, Economic factor further intensifies the competition as it tends to control customer’s willingness to spend. Porter’s Five Forces Model Threat of new entrants (High) This is due to the low capital required for entrepreneurs to establish an independent retail which can be easily done through other channels. (Johnson et al., 2014, pg 576) For instance, blogshops, Qoo10 or Taobao to sell apparel. Power of Buyers (High) The power of buyer is high as there is an overabundance of retailers in the market. For instance, Zara, Gap and Uniqlo. (Johnson et al., 2014, pg 576) This implied that customers have a wide variety of stores to shop around for bargainable apparel at the best prices. This leads the buyers to switch from one brand to another effortlessly. Power of Suppliers (Low) The power of supplier is low as H&M has 140

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