Internal environment – swot analysis

Strengths: H&M (Hennes & Mauritz) is a well-known global retailer of clothing,

recognized for its fashionable yet fairly priced products.
H&M has built a strong brand that is well-known and recognized around the world.
H&M has gained popularity among customers who are budget-conscious and
fashionable due to its reasonably priced apparel lines. The brand has a loyal
customer base because of its reputation for offering stylish yet reasonably-
priced clothing. Strong brand recognition allows H&M to attract new customers
and maintain a competitive edge in the fashion retail industry (PEREIRA, 2023)..
H&M offers a broad range of products, such as clothing, accessories, and home
decor. H&M's broad range of products enables them to serve a variety of
customers, including men, women, and kids of all ages and fashion tastes.
H&M makes sure that clients can find everything they need in one location by
providing a wide range of items, making it a dependable and easy place to buy
(PEREIRA, 2023).

Weakness: H&M has come under criticism for its effect on the environment and
labor standards throughout its supply chain. Concerns have been voiced by a few
stakeholders and consumers about things like waste production, chemical
contamination, and excessive water use related to H&M's manufacturing methods
(PEREIRA, 2023). In addition, some of the factories that make the clothing for
H&M have been accused of having subpar working conditions and low wages.
H&M has taken measures to enhance its environmental and social performance,
including recycling programs, the use of sustainable materials, and the promotion
of ethical labor standards, in response to sustainability concerns.
Despite providing reasonably priced clothing, some consumers believe that H&M's
goods are of inferior quality when compared to those of luxury labels. The fast
fashion business model, which prioritizes low prices and rapid production, is
partially to blame for this impression. Concerns about color fading, stitching
quality, and fabric longevity have been brought up by a few consumers. But it's
important to remember that H&M has been addressing this issue by
emphasizing product development, quality assurance, and partnering with reliable
suppliers to guarantee higher standards of quality. H&M wants to change people's
unfavorable perceptions and provide them with greater value for their money, so
they're continually striving to improve the quality of their products (PEREIRA,
2023).
Opportunities: H&M has the chance to proactively increase its market share in
emerging economies, especially in those where the middle class is expanding and
disposable income is rising. H&M can customize its range of products and
promotional tactics to efficiently serve these developing regions (Edrawsoft, n.d.).

These marketplaces provide a sizable consumer base that is growing more keen on
fashion and looking for reasonably priced yet stylish products. Through an in-
depth analysis of market patterns, customer inclinations, and cultural subtleties,
H&M can customize its range of products and promotional tactics to efficiently
serve these developing regions. By diversifying its income sources and lowering its
dependency on developed countries, H&M may also lower the risks associated
with regional economic downturns by expanding into emerging economies.

H&M has great potential to benefit from the trend of the online retail industry's
rapid expansion by enhancing its e-commerce skills. Customers are increasingly
using digital platforms to make their fashion purchases because of how accessible
and convenient shopping online is. H&M has the potential to expand its client base
outside its physical stores by improving its online presence, streamlining its
website and mobile app, and providing seamless shopping experiences. Sales may
be increased, and consumer engagement can be further enhanced by using user-
friendly interfaces, specific recommendations, and efficient online marketing.
Putting money into fulfillment and logistics infrastructure will also guarantee
prompt delivery and effective order processing, which may raise consumer
happiness in the digital sphere (Edrawsoft, n.d.).

Threats

The fashion retail sector is marked by fierce rivalry as a multitude of competitors,

including traditional brick-and-mortar stores and online platforms, compete for
market share.
In addition to direct competitors in the fast fashion industry, department stores,
premium labels, and other fashion retailers also pose a threat to H&M.
Threats: H&M faces pressure from the competitive environment to consistently
innovate, set itself apart from the competition, and offer a strong value proposition
to draw in and keep consumers. Rapid shifts in fashion trends and consumer
choices make it difficult for H&M to effectively predict and satisfy customer needs
(Edrawsoft, n.d.).
To stay ahead of the competition in this fiercely competitive industry, H&M must
continue to build a strong brand presence, provide distinctive designs, provide
exceptional customer service, and keep an eye on changing fashion trends.
Rapid shifts in fashion trends and consumer choices make it difficult for H&M to
effectively predict and satisfy customer needs.
To understand how customer preferences are changing, H&M has to do market
research, interact with fashion influencers, and keep an eye on market trends.
H&M can maintain its agility and quickly adapt to shifting fashion trends by
utilizing data analytics and client input. For H&M to successfully match its
products with changing customer tastes, it must be flexible in modifying designs,
implementing sustainable processes, and using social media platforms to monitor
sentiment (Edrawsoft, n.d.).

External environment - PESTLE

PESTLE Analysis evaluates the brand based on various criteria related to its
business strategies. H&M's PESTLE analysis looks at the legal and environmental
aspects of the company's operations and the other external factors—political,
economic, social, and technological—that influence them (Zigu, 2011).

Political Factors: The bulk of H&M's production is based in Turkey, Egypt, and
Lebanon. Political unrest plagued Lebanon both before and after its independence.
Over time, there is a shift in the balance of power that primarily leads to war and
other related situations. The US vs. China trade wars are another big worry for the
whole industry, not just H&M. Textile product prices rise as a result of its effects.
From then on, the need for labor has only increased (Zigu, 2011).
They call for more pay, safe working conditions, and equitable working conditions.
The minimum salaries that must be paid can also raise the cost of production in
several emerging nations with stable governments because they alter labor rules.
The political environment that has been created by Brexit is extremely challenging.
Typically, the result is that consumers find less expensive options for goods since
the manufactured goods become more expensive (Zigu, 2011).

Economic Factors: Sales increased by 7% despite Brexit. This is viewed as positive

news for the company because its pace of profit-making remained unaffected by
such a significant political turnaround.
Labor regulations differ greatly across nations. Establishing manufacturing
facilities in developing nations is advantageous due to their much lower labor
costs. People's disposable income is rising as economies around the world are
getting better (Zigu, 2011). They can afford to spend more on opulent things, such
as designer clothes. The firm's financial health is impacted when tax laws change
over time. Different countries have different corporate tax laws; therefore, H&M
must structure its operations appropriately (www.mbaskool.com, n.d.).

Social Factors: People are directly impacted by celebrities and social media in the
clothing industry. People identify better with the brand that their favorite celebrity
promotes. Therefore, spreading the word about the channels and marketing the
items on social media is crucial (www.mbaskool.com, n.d.). Customers' perspectives
are evolving. These days, people like designer clothing, which is driving up
demand for it. To ensure that no social group is overlooked, it is necessary to
evaluate this shifting trend in purchasing behavior and attitude (www.mbaskool.com,
n.d.).

Technological Factors: Nowadays, with the availability of mobile applications,

people are less inclined to visit physical stores to purchase clothing products.
Customers may place orders conveniently from anywhere, even in their workplace.
H&M needs to be up-to-date with the latest developments in technology and the
corresponding shift in consumer behavior (www.mbaskool.com, n.d.).

Legal Factors: Every nation has unique laws and regulations. For their businesses
to be properly run, firms that operate inside those businesses must follow the
guidelines. H&M must work with franchise partners in the UAE, Kuwait, Oman,
and other countries, even though franchising is not a component of H&M's
expansion plan. One of the main concerns is intellectual property rights. Let's say
H&M produces a creative design, but if it is not legally protected, its rivals may be
able to steal it, and the innovation that would have given them an advantage in the
market would quickly disappear (www.mbaskool.com, n.d.).

Environmental Factors: The oil and petroleum industries pollute more than twice
as much as the textile sector as a whole. Water bodies become contaminated due to
the large volume of water waste produced. Individuals who reside near those
bodies of water are afflicted with several deadly ailments.The air is contaminated
throughout the apparel manufacturing process. Even with government regulations
controlling these emissions into the atmosphere, the harm cannot be completely
prevented. H&M wants to make all of its clothes entirely from recycled materials
(www.mbaskool.com, n.d.).
A perceptual map that defines H&M’S market position in relation to its
competitors

The above chart shows the brand perceptual map of H&M and its competitors. The
brands are positioned according to their style and affordability. At the top of the
chart are luxury brands that consumers consider to be fashionable and pricey,
which are Yves Saint Laurent and Ralph Lauren, as they are perceived by
consumers as having a reasonable style and price point. Mid-range fashion labels
like Zara, H&M, and Nanushka are located in the center of the map as they are
perceived by consumers as having a casual style and a cheap price. Budget fashion
businesses like Primark, Shein, and Forever 21 are the least visible on the map
(Harry, 2023).
Definition of one market segment that H&M is currently targeting using
appropriate segmentation variables

Psychographic segmentation of H&M: H&M uses psychographic segmentation as

a strategy to appeal to fashion-conscious consumers who value trendy yet
affordable apparel. Their usual consumer base consists of young, energetic people
who want to express themselves through style. Individuals who enjoy regular style
changes with inexpensive, easily dressed clothes and the freedom to refresh their
wardrobes to suit new trends are drawn to H&M. H&M’s apparel lines place a
great emphasis on sustainability, which attracts clients who are socially and
environmentally conscious. H&M attracts clients who are enthusiastic about
fashion, desire variety, and are conscious of the implications of their actions on the
environment and society, with an emphasis on diversity and targeted marketing
(thesocialgrabber.com, 2024).

Geographic segmentation of H&M: H&M deliberately utilizes geographic

segmentation to ensure availability for a wide range of customer demographics in
various cultural circumstances by selectively locating its stores in major urban
centers across the world. The company considers the choices and preferences of
the market while developing its products to fit in with regional fashion trends. By
using this tactic, H&M can create a consistent global brand image and encourage a
personalized shopping experience. By developing a subtle and lively presence in
densely populated urban and suburban locations. H&M shows its dedication to
catering to the many demands and tastes of its worldwide consumer base. This is
accomplished by adapting marketing strategies to appeal to certain preferences and
ways of life that are common in various geographic areas (thesocialgrabber.com,
2024).

Outline the customer persona for one identified target segment that outlines their
characteristics and buying behavior.

A buyer persona, often referred to as a customer persona, is a depiction of the

clients who purchase your goods or services. This aids marketers in learning more
about their target market’s characteristics, motivations, and decision-making
process (Anon, 2021).

Name: Ms. Anna

Age: 20
Gender: Female
Location: New Delhi
Occupation: Audit associate
Income level: 30k

Bio:

Anna is a 20-year-old girl from a middle-class family. She loves purchasing new
and trendy clothes both online and offline. She is also very active on her social
media platform and mostly concentrates on fashion brands on Instagram. She is
very intelligent and has a great personality. She likes to visit shopping malls to
explore new designs and trendy clothes, especially with her friends and family on
weekends.

Identifiers:
High social media profile, active on Instagram and TikTok
Creative and intelligent
Strong personal style

Challenges:
Lack of discounts
Unable to find reasonably priced and trendy clothes of good quality

Goals:
To be able to purchase clothes from high-end brands
To purchase highly fashionable and on-trend clothes

Motivation:
Coupons offered
Sale

An outline of H&M’s current marketing mix

A key factor in H&M’s marketing success is the company’s effective

implementation of the 4p’s, or marketing mix, which includes product, price,
place, and promotion.
Product: The core of H&M’s product strategy is the wide range of stylish apparel
for men, women, teenagers, and children. The company offers a broad selection of
designs, ranging from business casual to formal dress, to accommodate different
consumer tastes. H&M always updates its items with the newest styles and patterns
to suit its fashion-forward customers. H&M expands its product line to
accommodate customers’ diverse lifestyle demands by providing a variety of
accessories, footwear, and home furnishings in addition to apparel. H&M strikes a
balance between providing stylish designs and guaranteeing reasonable prices
without sacrificing the caliber of their products (TBH, 2024).

Price: H&M uses a competitive pricing approach to reach a wide range of

consumers who are looking for fashionable yet reasonably priced apparel. Price-
conscious consumers are drawn to H&M because of its reasonable pricing, which
may give the impression that the clothing is worth the money. The brand may
change pricing based on variables such as demand, inventory levels, and
seasonality. H&M often runs promotions and deals, which help to attract customers
and increase sales for the company (TBH, 2024).

Place: H&M has a worldwide presence through various channels, and its
distribution strategy ensures that its items are widely accessible. Around the world,
H&M has numerous physical stores that are well-situated in shopping centers,
urban areas, and high-traffic areas. The company has a reputable online store that
helps consumers buy products digitally and ships its products to consumers all over
the world (TBH, 2024). The trendy and eye-catching designs of H&M’s outlets
provide consumers with a fun and creative shopping experience (TBH, 2024).

Promotion: H&M has a detailed promotional plan to interact with its target market
and keep its brand visible in the market. To reach a wide audience, H&M employs
a variety of advertising mediums, including print, web, and TV advertisements.
The business collaborates with fashion bloggers and influencers to increase its
popularity and attract more customers. They can also actively connect with their
consumers on social media channels. To increase sales and attract more customers,
H&M creates imaginative and themed advertising that corresponds with holidays,
events, and seasonal changes. H&M hosts in-store activities and promotions to
attract more customers, which boosts their energy when shopping. The loyalty
program at H&M, called membership, aims to increase customer retention and
build brand loyalty by offering members special privileges and prizes (TBH,
2024).
Skills required to operate within a marketing department

Creativity: Marketing involves improving concepts to reach both potential and

current clients. Although certain jobs, such as social media coordinator or
copywriter, may require more imagination than others, having a strong creative
sense will help you succeed in the marketing industry. Therefore, creativity is a
necessary skill for all marketing positions (Coursera, n.d.).

Communication: Effective communication skills are essential for marketers as

they interact with audiences, team members, key stakeholders, and business
executives. When communication is clear and efficient with numerous groups, it
can prevent any issues that may result from ineffective communication (Coursera,
n.d.).

Technical marketing skills: Technical proficiency is equally essential for

marketing. Technical expertise enables marketers to assess client data, traverse
digital platforms efficiently, and make decisions based on facts. Marketers can
better target their audience, optimize marketing campaigns, and drive business
growth by understanding and utilizing marketing technologies
(www.brandcredential.com, n.d.).

Social media: A company’s digital marketing plan must include social media.
Gaining knowledge about the main platforms and the various types of content that
appeal to different audiences can help you become more adept at marketing.
Customers utilize social media platforms to research brands and browse their
offerings. Implementing social media strategies can help reach a large number of
audiences in various locations where the target customers are found (Indeed
Editorial Team, 2022).

Collaboration: Marketers can also collaborate with other members of the

company. When creating new products for audiences or finding answers to
problems that consumers are having, marketers frequently collaborate with data
scientists, software developers, and salespeople, among others (Coursera, n.d.).