H&M’s New Business Strategy 2
H&M’s New Business Strategy
The report is to evaluate the opportunities available in the fashion industry which is
intense and recommend a new business strategy for H&M. The business strategy must be able to
improve the sustainable competitive advantage of the company in the markets (Johnson et al.,
2013, p.98). H&M is a global company that deals in apparel and accessories. The assessment of
the different reports including SWOT analysis and Pestle will be critical in the redesigning of the
company’s business strategy to push for growth and expansion.
Based on the reports and information from the SWOT analysis, USP, and Pestle, H&M's
new business strategy should focus on entering into new market segments as well as introducing
new products to compete well in the industry. In the past, H&M focused on the production of a
wide selection of fashion products at cheap costs. The company should focus its attention on the
high fashion path and create a new product for the luxury market. The entry into the luxury
fashion industry will be critical in expanding the reach of the company in the fashion industry.
SWOT analysis also examined that the company has an opportunity to develop the next lifestyle
concept. H&M should employ create fashion designers who would come up with the next
product lines in the fashion industry (Runfola and Guercini, 2013, p. 205). It could improve the
customer experience in their stores. For example, the creation of an extraordinary in-store
experience for the customers would push for the success of the company in the entire industry
which is critical.
The new business strategy should also include the introduction of a higher quality brand
at the organization. In the current fashion industry, the young adults consider the quality of the
fashion brands rather than the costs when making their purchases. Thus, the management at
H&M should learn to shift their business focus from mass production to the development of a
high-quality brand in the fashion industry (Grant, 2016, p.78). The shift in focus will be critical
in developing a new product line to improve the long-term potential of success of H&M brand.
It will be recommendable for H&M to rely on social media marketing campaigns to market their
products such as the use of models at Instagram. The use of such influencer marketing approach
will be useful in creating a connection between most young adults and their new brand.
It is important for the new business strategy to align well with a compatible marketing
strategy to improve the growth and recognition of the new brands to a wider market. H&M has
not been able to exploit technology such as the use of the internet to improve its sales. It is
recommendable for H&M to develop an online shopping platform (Buckley, Burton, and Mirza,
2016, p.78). The online shopping platform will be more convenient and reliable for most young
people who purchases luxury brands in the markets. It is necessary for the company to come up
with friendly online shopping platform to improve the reach of the company across the world
(Pedersen and Netter, 2015, p. 267). Such a strategy relates to the change in the business
environment technologically in the industry.
The USP of the company proposes that the company should collaborate with the stylish
design of clothes at affordable prices. Such collaboration with designer and classic looking
clothes is useful. However, the company will need to develop a new luxury brand that represents
the company's brand in the fashion industry (Bharadwaj, El Sawy, Pavlou and Venkatraman,
2013, p. 476). The company has been unable to attract the higher fashion class consumers due to
the business focus on the middle-class shoppers. Therefore, the new business strategy at H&M
should incorporate the development of new product brands, more so a luxury brand as well as the
use of online shopping platforms to grow the reach of the company.
