H&M –

PESTEL &
SWOT
ANALYSIS
Group members:
• Sneha Rout
• Ayush Shaw
• Ritabeen Roy
• Arpan Dutta
• K. Tulsi
• Navneet Singh
SWOT
ANALY
SIS
PESTLE ANALYSIS
 Political Factors
India’s most flexible investment policy is a 100 per cent automatic FDI cap in the textile and apparel sector.
Although H&M collaborates with suppliers, mostly in Asia and Europe, they do not own entries.
As a result, H&M uses its considerable purchasing power to pressure its suppliers to treat its employees fairly and ethically. They have adopted the UN
Guiding Principles on Business and Human Rights and collaborate with civil rights advocates to support equality and human rights.

Economic Factors

With several short- and long-term catalysts, including a recovery in economic development that will raise disposable income, growing populations, the
adoption of GST, and shifting fashion consumption preferences, the Indian fashion retail industry is ready for rapid growth.
According to respected industry consultancy Wazir Advisors, fashion retail is predicted to increase at a CAGR of 12.2% over the next 10 years. Growth in the
GDP and SSG have a significant trend link

Social Factors
India's position is being boosted by differences in customer tastes, a rise in the share of designer clothing, and improved offline and online reach.
H&M "selects and rewards responsible partners" for that purpose.
H&M regards its employees highly, as evidenced by the following:
• We trust in people.
• Be a team
Technological Factors

Due to a growing workforce making physical stores inaccessible and an increase in e-commerce, consumer behaviour has significantly
changed. Online retailers and platforms are used by more consumers than ever to purchase clothing.

Environmental Factors

Green living is growing in popularity as more people become aware of the negative consequences that human activity has on the
environment. Global warming is making many regions hotter, which is changing fashion trends. Clothing fabrics have undergone a huge
transition from synthetic to natural materials.
Artificial fibres that aren't recyclable have been deemed illegal by ecologists and fashion experts.

Legal Factors

To encourage the growth of the textile and garment sectors, the Indian government has passed legislation. The government made significant
investments in the Technology Upgradation Fund Scheme and the Scheme for Integrated Textile Parks (SITP) to encourage more private
investment and train workers (TUFS). By 2024–2025, the NTE, or new textile policy, aims to increase textile and apparel exports by $300
billion and add 35 million new jobs.
ANSOFF
MATRIX
Market Penetration

Market penetration is the strategy of launching existing products in existing markets. The first strategy
the company uses is to offer various discounts. These can be in the form of sales during specific times
in a year of augmented discounts such as discounts on large purchases or buy one get one free. H&M
has also acquired various smaller retailers to reduce competition and increase its market share. The huge
marketing budget also creates entry barriers as developing a successful brand like H&M takes a large
advertising budget which most new entrants cannot afford. H&M also creates new store outlets at
strategic locations that are meant to entice passers and encourage them to visit the store and purchase
something.

Market Development

In this activity, existing products are promoted in new markets. The first strategy that H&M uses in this
regard is to enter into new geographical markets. This is done in two ways. The first way is to enter into
new markets where the company does not have any stores. The second strategy is to create new outlets
in an already serving market to increase access for consumers. When entering a new market, the
company incurs huge expenses in marketing to create awareness amongst consumers.
Product Development

Product development is the strategy of launching new products in existing markets. H&M does this in various
ways. The first strategy that H&M adopts is to create new products. These are in terms of new designs and
colours for existing products. The company also creates new products which it was not selling earlier. The
launch of each new product is accompanied by a massive marketing campaign. Also, the time of launch is
selected strategically based on the cloth material and design. 

Recommendations :
Diversification:
This strategy requires an organization to launch new products in new markets. H&M only operates in the
clothing and accessories industry. It can diversify in various ways. It can vertically backwards diversify by
establishing its cotton fields and textile mills rather than procuring fabric from suppliers. The company can
also horizontally diversify by steeping into various related industries such as sports clothing, apparel, hosiery,
and so on. Related diversification is a safer strategy.
GE NINE CELL MATRIX

BCG MATRIX OF H&M
The BCG Matrix for H M will help H M in implementing the business level strategies
for its business units. The analysis will first identify where the strategic business units
of H M fall within the BCG Matrix for H M.
 VRIO FRAMEWORK

The VRIO Framework or VRIO analysis is a strategic management tool that is used to analyze a firm’s
internal strengths and resources that give them a long term competitive advantage.
VRIO
ANALYSIS
OF H&M
BALAN
CED
SCOREC
ARD
 Objectives Measures Targets Initiatives
Increase Profits ROE Increase ROE by 5% Increase sales
Key Stakeholder
Perspective Increase Frequency Sales/employee Increase By 6% Increase Productivity time

Price
Customer Satisfaction Reduce waiting time between
Customer delivery and sale
Perspective
Increase Sales
Online Channels 5% sales increase Expand Coverage of online channels
by 25%
Attractive stores Gather customer feedback about the
stores
Supply Management Decrease the avg time by Dec. the avg time between order &
6% delivery
Management of Partnership Decrease the avg delay Dec the avg order delay time
time by 25%
Designing Process Decrease the processing Dec the processing time between
Reduction Production
Internal Process Cost
time by 4% design and production

Property Management Decrease the proportion Can be monitored by rental costs

turnover by 3%
Information Databases Decrease by 50% Dec the response time of user
queries
 Objectives Measures Targets Initiatives

Develop better selling skills
Learning & Reduce Employee Turnover
Growth
Develop better customer
Training 20% of increase of sales after Organize sales training based
training on need of employees
Motivation Decrease of employees Give awards to the employees
turnover by 20%
Key skills Increase customer satisfaction Upgrade key skills can be
monitored

Recommendations:
 1st Strategy of Growth & Investment - H&M should exploit the opportunity that is arisen from the increasing tendency of
customers to be more health aware might be a potential opportunity which might meet a future high growth rate and start
investing in sportswear units.
 2nd Strategy of Growth: +60 Aged Population - The firm should invest in entering a new market, the one of the over-60 aged
population, which is predicted that will constitute a customer segmentation, with high spending power in comparison with the
core young and fashionable customers. H&M may introduce large scales of products focused on this customer segmentation,
by creating a new sub-brand.
 3rd Strategy for Internal Improvement: Increase the presence of H&M’s sub-brand names - To maintain its position as
the market leader, H&M should invest in its partnerships with other major brands that have a modest or nonexistent presence
in the sector. Although H&M began reversing this trend by introducing new labels like "& other stories," it should continue to
do so to draw in a wider customer base and increase the scale of the presence of the market's current sub-brand names, which
are focused on providing specific types of clothing like innerwear.
THANK
YOU!