H&M and Apparel Industry

We have identified four major resources/capabilities for H&M under intangible resources, tangible resources, human resources, and supplier capabilities. Intangible resources for H&M can be classified as brand, culture, and copyrights. According to Inter Brand, H&M is ranked as the 23rd amongst the best global brands. Branding generates awareness and creates incentives for customers to associate themselves with H&M. Culture, on the other hand, creates motivation and incentives for employees to generate an organic growth for the company. On a global scale, it is rare to imitate such brand recognition and culture as there will be financial and cultural constraints such as budget limitations for advertisements and communication coordination barriers.

Tangible resources can be listed as financial resources and physical assets such as distribution centers and stores. H&M has minimal debt, which decreases its interest costs, increases financial flexibility, and instills confidence for debtors and shareholders. It is extremely unique to see such a capital structure in modern capital markets as most companies are financed by debt. Given the target growth rate of H&M, it can also be said that it is hard to imitate such financial structure while maintaining growth. Efficiencies and synergies in between distribution channels lead to a higher store turnover rates and the availability of stores in prime locations creates value by an increase in sales. This type of efficiency is unusual in industry, and hard to imitate on a global scale.

H&M’s human resources are its managers, designers, and overall experience of the employees. Though H&M is a public company, it was founded and managed as a family company since 1964. This ownership aligns interests of the shareholders with managers and helps managers to focus on long-term growth. This type of structure is hard to imitate and unique for global companies. H&M’s designers and special contracts with high-end designers increase