H&M in Fast Fashion: Case Study

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MG 3047 Strategic Management

Seminar 1 A
Case Study: H&M in fast fashion: continued success I

Dr. Maria Balta

Questions

3/10/15

1. In which areas does H&M have strategic capabilities and what are they? 2. What are H&M’s threshold and distinctive resources and competences? 3. In what areas and functions do H&M’s strategic capabilities provide for competitive advantage?
4. To what extent can they be sustained?

Brunel University London

Presentation Title

2

H&M in fast fashion: continued success I

3/10/15

Background
H&M’s strategy and competitive position
The company has been tremendously successful in fast fashion and has a range of strategic capabilities.
The roots of the H&M ‘spirit’ can be traced back to the 1940s when the first store was opened by Erling Persson, whose legacy and philosophy for keeping business simple is still influential in the corporate culture.
 H&M relentlessly continues to emphasise the long-term view and expansion story. In that regard, successful replication of its business model is a key to the survival of the Swedish fashion retailer.

Brunel University London

Presentation Title

3

H&M in fast fashion: continued success I

3/10/15

Background
 The business model, commonly referred to as fast fashion or ‘cheap-and-chic’, emphasises high fashion at prices significantly under those of competitors.
 While H&M pays special attention to having the right design team to capture and respond to the market trends, the cost advantage is being threatened by rising input prices and rivals with lower cost structures.
 The flat and simple organisational structure has also been more challenging to preserve due to H&M’s tremendous growth.
 Another possible challenge is that H&M is lagging behind its main competitor in key emerging markets in Asia and South America, which contributed to H&M falling behind Zara in terms of market capitalisation.
 Thanks to its long-term advertising campaigns with