In the increasingly competitive and changing fashion retail market the two European fashion retailers Hennes & Mauritz (H&M) and ZARA have explored the market possibilities in different ways: Both companies have chosen unique and very opposite business models and growth strategies which had enabled them to expand quickly and successfully beyond its own borders.
Whereas H&M focuses on outsourcing production, ZARA relies on controlling every step of the value chain. Whereas H&M follows an aggressive marketing and PR strategy, ZARA does virtually no advertising. But both companies known for their “fast fashion” dress fashionable people around the globe and compete for the title of the largest clothing retailer in Europe in a league of their own.
Thus, two main questions arise: What makes both companies so successful and what are the fundamental differences and similarities in their business models?
The following assignments starts with presenting the background and development of both companies and giving a short overview about the clothing retail industry. Chapter two explores the business models of H&M and ZARA in terms of the whole value chain. Based chapter two, the assignment ends with summarizing both business strategies to provide a reasonable answer to the key question: If you would have 100 euro to invest, in which company would you invest in: H&M or ZARA?
Table of Contents
- Overview
- Introduction
- H&M and ZARA: Background and Development
- The Clothing Retail Industry
- H&M vs. ZARA
- Size and Bargain Power
- Sourcing and Manufacturing
- Supply Chain / Distribution
- Retailing
- Expansion Strategy
- Conclusion
- Positioning of H&M and ZARA Within the Market
- Answering the '100 EUR Question'
Objectives and Key Themes
This assignment aims to analyze the business models of H&M and ZARA, two successful European fashion retailers, and compare their strategies for growth and market expansion. The analysis will explore their contrasting approaches to production, distribution, and marketing, ultimately aiming to determine which company represents a more attractive investment.
- Contrasting business models of H&M and ZARA
- Analysis of the value chain in the fashion retail industry
- Comparison of sourcing and manufacturing strategies
- Evaluation of marketing and distribution approaches
- Assessment of expansion strategies and market positioning
Chapter Summaries
The Overview chapter introduces H&M and ZARA, highlighting their contrasting business models and posing the central question of which company is a better investment. The H&M vs. ZARA chapter delves into a detailed comparison of the two companies across various aspects of their operations, including size, sourcing, manufacturing, supply chain, distribution, retailing, and expansion strategies. This detailed analysis forms the basis for answering the concluding investment question.
Keywords
H&M, ZARA, fast fashion, business models, value chain, sourcing, manufacturing, supply chain, distribution, retailing, marketing, expansion strategy, competitive advantage, investment analysis.
- Quote paper
- Nadine Pahl (Author), Wiebke Mohring (Author), 2008, Successful Business Models in the Fashion Retail Industry. Strategic Audit of H&M compared to ZARA, Munich, GRIN Verlag, https://www.grin.com/document/124623
