heypih Essay

2515 Words Sep 2nd, 2014 11 Pages
Najah Ronya Imad


Strategic Management - MMM365 T2 2014

H&M Individual Case Analysis
Word count: 2393

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
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By using Porters Five Forces Framework we can measure 1) threat of entry 2) threat of substitutes 3) power of buyers 4) power of suppliers 5) extent of rivalry between competitors.
In regards to competitors and rivalry, the competitive rival for H&M is Zara and a substitute would be somewhere like Target/Kmart. Zara would be a very dominant organisation to H&M with its products being very similar. A low differentiation between companies is also an issue as both are assumed to be similar when spoken about with consumers.
The threat of entry works in H&M’s advantage as they have different products which Zara does not offer – for example the conscious collection.The threat of substitution is a big one for this industry as Zara and H&M are very closely knitted. Firstly being price/performance rations. Zara’s products are slightly higher prices than H&M but overall the prices/performance ratio is very tight.

Q2. Drawing on relevant topics in this unit, what do you consider to be H&M’s rare and inimitable strategic capability/ies? Explain your answer. How do you think H&M can identify and leverage or exploit its rare and inimitable strategic capability/ies to achieve or sustain its competitive advantage and respond to the critical issue that you have identified in Q1?
Upon research and further reading into the topic I would consider the fact H&M has its own range ‘the conscious collection’ reaching an audience of those who are

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