H&M case study
BUS 488 Strategy
Question 1
Evaluate the external environment in which H & M operates in.
PESTEL Analysis
PESTEL Analysis
Positive
Negative
Politics factors:
Economic factors
Poor economic situation in 2011 further intensified by increased competition
X
Margins started to erode due to increased cotton prices and rising production costs in Asia
X
Social factors.
H&M 's strategy recruit local people wherever it opens a new store.
X
Technological
Company aims to become part of its customers ' daily lives through its pages on Facebook, Twitter, Instagram, Google+ and YouTube, Youku and Sina Weibo. Each network is updated on a regular basis.
X
H&M logistics depend on effective information sharing and the latest IT systems for the provision of understanding needs of customers and placement of products as well as more optimal decisions on demand and supply.
X
Ecological
H&M produces a special collection (the Conscious Collection) using sustainable materials.
X
The company has formulated seven commitments called 'H&M Conscious Actions ' which includes adopting ethical practices, improving working conditions and using natural resources responsibly.
X
Legal
The general environment is still favorable for H&M to operate in. The key drivers of change is in technological, social and economic factors. H&M has leverage on technology to improve the company 's efficiency. H&M has also leverage on the local people when expanding to a new country and thus avoiding political, social and legal issues as 1) this is giving opportunities for the local people and 2) the local people would know their government policies well to avoid legal and political issues. Even though 2011 was a year of poor economic situation with increased prices and rising production costs in Asia,, H&M has performed better than
Question 1
Evaluate the external environment in which H & M operates in.
PESTEL Analysis
PESTEL Analysis
Positive
Negative
Politics factors:
Economic factors
Poor economic situation in 2011 further intensified by increased competition
X
Margins started to erode due to increased cotton prices and rising production costs in Asia
X
Social factors.
H&M 's strategy recruit local people wherever it opens a new store.
X
Technological
Company aims to become part of its customers ' daily lives through its pages on Facebook, Twitter, Instagram, Google+ and YouTube, Youku and Sina Weibo. Each network is updated on a regular basis.
X
H&M logistics depend on effective information sharing and the latest IT systems for the provision of understanding needs of customers and placement of products as well as more optimal decisions on demand and supply.
X
Ecological
H&M produces a special collection (the Conscious Collection) using sustainable materials.
X
The company has formulated seven commitments called 'H&M Conscious Actions ' which includes adopting ethical practices, improving working conditions and using natural resources responsibly.
X
Legal
The general environment is still favorable for H&M to operate in. The key drivers of change is in technological, social and economic factors. H&M has leverage on technology to improve the company 's efficiency. H&M has also leverage on the local people when expanding to a new country and thus avoiding political, social and legal issues as 1) this is giving opportunities for the local people and 2) the local people would know their government policies well to avoid legal and political issues. Even though 2011 was a year of poor economic situation with increased prices and rising production costs in Asia,, H&M has performed better than
References: pg 52, pg 84, pg575 – 582 from in Exploring Strategy, Johnson, Gerry et al, 10th edition, Pearson Education Limited, 2014. by Patrick Regner & H. Emre Yildiz http://www.anskypoker.com/2010/02/the-poker-life-cycle/