H&M's Competitive Strategy: Analyzing Fast Fashion and Sustainability

This report provides a comprehensive analysis of H&M's strategic capabilities within the fast fashion industry. It explores H&M's business model, highlighting its focus on rapid trend adaptation, competitive pricing, and quality. The report examines the company's key strategic capabilities, including its design processes, supply chain management, and marketing strategies, and how these contribute to its competitive advantage. It also discusses the potential threats from competitors like Zara and suggests strategies for H&M to sustain and strengthen its market position, including vertical integration and a focus on unique marketing angles. The analysis incorporates insights on how H&M can leverage its resources, such as its global workforce and organizational culture, to maintain its success in the evolving fashion market. Furthermore, the report suggests that H&M should focus on unique marketing strategies, customer loyalty, and targeted market research to further enhance its competitive edge.

Running head: EXPLORING STRATEGY
H&M in fast fashion: continued success
Name of the Student
Name of the University
Author Note

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Table of Contents
Answer 1....................................................................................................................................2
Answer 2....................................................................................................................................2
Answer 3....................................................................................................................................3
Answer 4....................................................................................................................................4
References..................................................................................................................................5

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Answer 1
The strategic capabilities of H&M are that of ‘fast fashion’ where they rapidly focus
to latest trends and items of fashions and thereafter deliver it to their stores. Along with it
their business model is highly based on the concept of providing their customers with high
fashion at comparatively low prices that to its competitors, without compromising on the
quality. Moreover, their expansion strategy, their encouraging and rapid decision-making and
a strong organizational culture where their values are well defined to their employees took
H&M towards success. Moreover, they have been seen delivering much of their time for
researching as well as predicting that what the growing market trends are and what are
customer’s needs. Lastly, the threshold and distinctive resources that H&M uses are there
132,000 employees globally along with the strategies pointed above. Then if the
competencies are to be considered then definitely, their quality that they never compromise
even with cheaper prices of their products along with innovation as fashion is changing
continuously and so are they showing creativity and encouraging innovation in every fresh
stock that arrives at their stores1.
Answer 2
The strategic capabilities of H&M that can provide competitive advantage are as follows-
1. Design comprises of them being centralized, increased responsiveness towards
fashion and the minimum time they take to market their products.
1 Caro, F., and Martínez-de-Albéniz, V.Fast fashion: business model overview and research opportunities.
In Retail Supply Chain Management (pp. 237-264). Springer US. (2015).

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2. Management of supply chain being having an increased creative infrastructure,
flexibility in their purchasing
3. Marketing includes their tie-ups with famous designers, advertisement campaigns for
long term along with the presence of social media.
If H&M utilizes their impactful configured resources along with the capabilities and
powerful organizational culture that are developed over the years on, which the leaders are
focused to capitalize gives all the positive signs that this company can sustain and keep up
with its competitors2. However, other fashion retailers can imitate the constancy with which
H&M brings new products to the markets, giving more attention towards their targeted
customers, keeping their price structure constant and communicating the identity of the brand
to the customers through social media are the features that can take any brand towards
success. The real threat to H&M is Zara because of their swift expansions to the developing
markets.
Answer 3
H&M and their CEO karl-Johan Persson can sustain and further strengthen their
competitive advantages by searching for an unique angle in marketing that can actually
highlight this organization from the rest. The very first step that they can take is to find out
that why the consumers prefer this brand to the others. Thus, the loyal customers must be
communicated well and they should be asked if they need any changes or if any of their
needs are not meeting. Then the very next step can be focusing solely on the target market
and research should be thoroughly done over their problems, its solutions and how the lives
2 Abecassis-Moedas C and Benghozi P, 'Efficiency And Innovativeness As Determinants Of Design
Architecture Choices' (2017)

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of the customers be improved. Lastly what they must do is offer free services at times to the
customers so that they feel that this brand is making them feel special than any other brand.
However, they must not be over confident and should always keep a check on their
competitors. To lead the market always H&M needs to keep a check on the marketing and
awareness of their competitive brands so that they can take necessary moves3.
Answer 4
H&M can utilize vertical integration with that of outsourcing model. However,
through this they can be easily operating in more than one level of their distribution channel,
which will help them in gaining more control over their value chain, have a control of costs
over their distribution process along with giving this organization to access more inputs of
production, distribution resources as well as process and retail channels4. However, they must
also own an in-house production so that they can produce their primary products. This will
not only improve the qualities but also help in controlling the production and tackling the
costs. Moreover, they must also have flexibility as well as freedom in manufacturing their
products which will further help in saving money for the organization as they decrease the
cost for operations. Moreover, it needs small amount of labor in maintaining a flexible
manufacturing system. They can further take their business to the low cost countries.
Therefore, it has been seen that purchasing/production is the area in which H&M needs to
develop further capabilities in order to stay in competition like Zara, GAP and UNIQLO.
3 Dach L and Allmendinger K, 'Sustainability In Corporate Communications And Its Influence On Consumer
Awareness And Perceptions: A Study Of H&M And Primark' (2017)
4 'Vertical Integrationthe Antitrust Bulletin - Paul L. Joskow, 2012' (Journals.sagepub.com, 2017)
<http://journals.sagepub.com/doi/abs/10.1177/0003603X1205700303> accessed 16 November 2017

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EXPLORING STRATEGY
References
Abecassis-Moedas C and Benghozi P, 'Efficiency And Innovativeness As Determinants Of
Design Architecture Choices' (2017)
Caro, F., and Martínez-de-Albéniz, V.Fast fashion: business model overview and research
opportunities. In Retail Supply Chain Management (pp. 237-264). Springer US. (2015).
Dach L and Allmendinger K, 'Sustainability In Corporate Communications And Its Influence
On Consumer Awareness And Perceptions: A Study Of H&M And Primark' (2017)
'Vertical Integrationthe Antitrust Bulletin - Paul L. Joskow, 2012' (Journals.sagepub.com,
2017) <http://journals.sagepub.com/doi/abs/10.1177/0003603X1205700303> accessed 16
November 2017