H&M Competitive Analysis: VRIN Framework and Value Chain Assessment

This case study provides a detailed analysis of Hennes & Mauritz (H&M), examining its resources, capabilities, and competitive advantages within the fast-fashion industry. It utilizes the VRIN framework to assess the value, rarity, imitability, and non-substitutability of H&M's resources, highlighting the significance of its cross-cultural workforce, adaptability to market trends, and strong social media presence. The analysis extends to H&M's value chain, focusing on primary activities such as short lead times and efficient distribution channels, as well as support activities like material and labor sourcing. The case study also considers H&M's position in the European market, acknowledging recent sales declines and the company's strategic shift towards online shopping experiences, while emphasizing its commitment to affordable prices and sustainable practices.

Running head: ANALYSIS OF HENNES& MAURITZ
Analysis of Hennes & Mauritz
Name of the Student
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Author Note

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ANALYSIS OF HENNES& MAURITZ
Resource and Capabilities
An organizations resource and its capabilities represent its competitive assets that can be
used to compete and gain the ability to succeed in the market. The Hennes& MauritzCompany
operates in over 69 markets across 4700 stores with 114,586 numbers of employees. The brand
stands to be $19 billion in the market. Human capital engaged in its production and managing
process is hired from across the countries (About.hm.com 2018). Its main resource stands out to
be its cross cultural employees working with the brand. The capabilities can be considered as its
high responsiveness of the trends that it adapts to attract more of its customers (Arrigo 2018). It
has a good purchasing power and utilizes its suppliers accordingly to achieve the target. The
brand collaborates with best designers such as Balmain, which turns out to stand as the capability
for the company. The company has a strong social media presence and uses long term
advertising campaigns.
VRIN Analysis
VRIN framework stand for the analysis of valuable, rare, imitate and non substitutable.
Valuable
The brand has a strong culture involvement in its process with the management following
non-hierarchical style which helps to generate innovation from within the organization which is
valuable. The company has a strong adaptability to the new market environment with ensuring
improvements assuming the given feedback of the customers with the help of media relationship;
this is possible for its diverse workforce (Nadeem et al. 2015). Its advertising campaigns also
help to grab the customer’s attention which is really important to H&M to make it stand unique

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from its competitors. The competent leaders, strong corporate culture & Persson family’s legacy
are the valuable of H&M. In addition H&M is the leading user of Organic cotton in the world.
Rare
The leadership of H&M becomes rare with its market and brand positioning methods as
compared to its competitors (Youell 2013). It is essential for every company to maintain its
resources securely because the internal clients of the company are its main sources that needs to
be distinguished from others to generate effective management. Its human resource is considered
to be the organizations sustainable advantage. Encouraging experimentation, trial and error
learning, decision making and trying of new ideas is rare to H&M.
Cost Imitate
Procuring more cost in operating the store, purchasing the garments with its best
designers across the world leads to temporary competitive advantage (Shen 2014). Similarly,
brand and reputation cannot be imitated because the company has strong influence in its market
across the world is considered to sustainable competitive advantage to the organization. The
unique design of its stores are cost imitate and competitive advantageous also.
Non Substitutable
The human resource management, the family majority and long term membership leads
to financial support and supply chain management are crucial departments in the organization
that cannot be functionally substitutes (Li et al. 2014). All lead to sustainable competitive
advantage of the organization along with the three generation of the Persson family contribution.
H&M’s business model: fast-fashion and cheap and chic serves as a non-substitutable resource
which can be termed as temporary competitive advantage.

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ANALYSIS OF HENNES& MAURITZ
Value chain analysis
Value chain is the set of activities taking place in an organization that creates product and
service. The set of activities can be divided into two – primary and supporting activities.
Primary Activities
In fashion industry it is important to have short lead time to benefit as the fashion
products have short period of life. In the present time, the brand takes 3-6 weeks of lead after the
completion of the garments by the designers. Hence, H&M is aiming to cut its lead time with the
help of effective logistics and advanced planning (About.hm.com 2018). It ensures that its
distribution channels work efficiently as every country has its own distribution centre which
distributes to the stores (Mo 2015). The distributions to online customers are delivered by the
distribution centre itself .H&M always had its best tried to attract the customers and build a
strong value for its brand image. The company focuses to offer the best price with the best
quality. Occupying a huge market that subsequently helps the brand to reduce its cost and then
they collaborate with the suppliers of different markets to enable the production to take place in
it lowest cost. The brand maintains to combine fashion and best possible price to concern more
customer satisfaction.
Support activities
Being the second Europe’s cloth retailer company, H&M has its main recourse as its
material and labor (About.hm.com 2018). It can stand out to be a point where the small changes
made by the company can affect its profit. The company does not own any factories where
production can take place which creates problem by not giving any control over the production
prices (Cortez et al. 2015). Instead the company works with independent suppliers. Many of its

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labors are from the poorest countries and garment production takes place there. This leads to a
small advantage that it does not need to be dependent on its suppliers if any problem occurs.
The European Situation
The brand H&M has acquired the market across the world in the clothing retailer and
stands out to be the second biggest company in Sweden. The textile and fashion industry in
European market has trend to increase in the present times focusing more on the wider variety of
products with higher quality. The H&M Company is also focusing to provide more affordable
prices and make competitive advantage of attracting its customers by affordable prices all over
the world and providing its employees the best working environment (About.hm.com 2018).
This year the sales report stands out to show a little drop down of 11% in the sales percentage of
the company (Ft.com, 2018). The company is focusing more to offer its customers the
experience of online shopping. The H&M operates with its unique brands listed as H&M, COS,
Monki, Weekday, Cheap Monday, & other stories and ARKET. The company provides the best
quality with affordable price since its beginning which let the company flourish throughout the
world (Zawadzka 2015).

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Reference
About.hm.com 2018 Welcome to the H&M Group retrieved from: http://about.hm.com/en.html
[Accessed on 10th February, 2018]
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Ft.com. (2018). H&M faces up to a new reality. [online] Available at:
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Li, Y., Zhao, X., Shi, D. and Li, X., 2014. Governance of sustainable supply chains in the fast
fashion industry. European Management Journal, 32(5), pp.823-836.
Mo, Z., 2015. Internationalization process of fast fashion retailers: evidence of H&M and
Zara. International Journal of Business and Management, 10(3), p.217.
Nadeem, W., Andreini, D., Salo, J. and Laukkanen, T., 2015. Engaging consumers online
through websites and social media: A gender study of Italian Generation Y clothing
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Shen, B., 2014. Sustainable fashion supply chain: Lessons from H&M. Sustainability, 6(9),
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Youell, M. (2013). An Analysis of the Growth and Success of H&M. How They Could Impact
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Zawadzka, S., 2015. Implementation of Marketing Strategies Practiced by Western and Eastern
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