Business Environment

Business Environment

Introduction

The report aims on discussing the economic, political and social factors that affect the business. The organization that I have chosen is H&M and the discussions on political, social and economical factors will be done in relation to the H&M Company. H&M is a popular brand that offers fashion and quality at the best price. H&M stands for Hennes & Mauritz, a multinational company based in Sweden. The company was founded in 1947 by Erling Persson. The company was initially called Hennes. Hennes is a Swedish word for “hers”. During the intial days of business the company sold only women's clothing. The company was renamed to Hennes & Mauritz in 1968 and, since then the company diversified and expanded its product portfolio. The company offer products including menswear, womenswear, footwear, childrenswear, home furnishings, and cosmetics. The company has worked hard and developed a lot. Now the company is comprised of five independent brands. These includes H&M, Cheap Monday, Weekday, Monki, and COS (Hennes & Mauritz AB, 2012).

H&M began global expansion in the 1950, by entering neighboring countries throughout Europe. H&M bought Rowells, a mail order company during the 1980s, to begin catalogue sales. The company continued its expansion through out the Europe and got success in through their products. The company opened its first store in US in 2000 on Fifth Avenue, New York. H&M got success in US markets due to their high quality products in affordable prices. This strengthens the company and opened its route to other cities in the US. The company entered in Asian market in 2007 by opening its first store in Shanghai and Hong Kong (Hennes & Mauritz AB, 2012).

The companies started using famous models in their advertising campaigns in 1998. Using famous models in their advertisements has helped them attract more customers in the new markets. Following the success of advertising campaigns, H&M collaborated with the designers to increase the appeal of their brands. H&M partnered with Karl Lagerfeld who was a creative director for Chanel. Designer's collaboration has taken the company to a new height and became a part of yearly merchandise development cycle for H&M.

The report will provide the analysis of environmental factors on the business of H&M. Analysis of economic, social and political factors will provide a good understanding of how these factors affect the business and how companies like H&M got the success in the market.

Economic Factors

Recession affects the business and influences the consumer buying behavior. The current recession originates from the United States mortgage market in December 2007. The recession started from the property market of US and slowly spread to the rest of the world's financial system resulting a global recession. Recession is linked to the consumer behavior and the consumer behavior will change during a recession depending on the demographics. There are some age groups that are badly affected by recession, these includes 60-65 year olds and 18-24 year olds. Due to our study on H&M, the group that most fits our study is ...