Q1. What do you think is the most critical strategic issue confronting H&M? Explain your answer by drawing on relevant topics in Strategic Management
The most critical strategic issue that H&M needs to confront is the declining market position in relation to the rapid expansion of Zara and other fashion retailers.
Hennes and Maurtiz, or also known for short as H&M, is a big billion dollar Swedish fashion company which engages in designing and retailing fashion products from cosmetics, footwear and accessories for men, women and children. Operating all over the globe, throughout 43…show more content… Thanks to these, H&M was ranked number 21 out of 100 for the most valuable global brands according to inter brand in 2011, with a brand value of 16.5 billion dollars. In comparison with close competitor Zara ranked in at number 44 with 8 billion dollars’ worth of brand value.
This huge difference can partly be attributed to H&M’s long term advertising campaigns with high-profile celebrities. In order to enhance the value of its brand name, H&M spends around 5% of its revenue on advertising.
H&M has also established a strong social media presence. The company aims to become part of its customer’s daily lives through its pages on Facebook, Twitter, Instagram, Google+ and YouTube as well as the Chinese social media networks Youku and Sina Weibo.
Through these networks followers share ideas and opinions and get quick answers to their questions. This is important for this day and ages were people do not want to wait for too long. Also new fashion videos and catwalks are constantly uploaded to YouTube with millions of views. The App for uses is also new which offers the latest collection and campaigns and find out what is new.
In relation to strategic management it’s important to note the Five Forces Framework when determining the competitive forces. If an industry has low competitiveness then there will be an expected high level of profit then in comparison to