The slides summarise the areas on which H&M built its competitive advantage i.e. resources and capabilities.

1. Competitive
Advantage of
H&M
SLAWOMIR STARZEC
DORSET COLLEGE DUBLIN
DATE: 28TH APRIL 2015

2. Company Profile and Business
Concept
 H&M pursues the strategy focused on the long-term
view which combined with the distinctive business
model ‘high fashion at low prices’ provides the
company with a sustained position in the apparel
market.
 With focus on economies of scale, with low wage and
high volume production the company maintains low
input cost and often has the latest trends in its stores
within a month of the initial design.

3. “
”
The strategic capability is primarily
concerned with the resources and
competences that a company
can employ in order to provide
value to its customers.
Strategic Capability
(Johnson et al., 2006)

4. Competitive Advantage of H&M
 According to Porter, properly identified and configured
resources and competencies form a base for a
competitive advantage (1998).
 Porter argues that competitive strategy is about being
different which implies that a different set of activities
should be selected in order to deliver a unique value
(1998).
(Porter, M. E., 1998. Competitive Strategy: techniques for Analysing Industries
and Competitors. 1 ed. s.l.: Free Press)

5. What’s different about H&M?
 Strong brand
awareness
 Ethical practices
 Improving working
conditions (e.g. in
Bangladesh)
 Emphasis on using
natural resources
responsibly (H&M
Conscious Actions)
Brand & trust
The spirit of H&M (7
ingredients)
Non-hierarchical
management style
Participative culture
 Delegation of
responsibilities
High level of
identification with
H&M’s corporate
culture
Human capital
Brand worth $12-16
billion
 Revenues at $16
million (2011)
Leased store
premises (flexibility
and access to prime
locations)
3.500 stores in 57
countries
Employs 132.000
people
Financials & other
physical assets

6. Strategic Capabilities
Supply Chain
Management
Centralised
Highly innovative
infrastructure
Purchasing
flexibility
Turnaround
speed of 20 days
Design
Centralised
High
responsiveness to
trends
Minimal time-to-
market
Sustained Competitive Advantage
Marketing
Collaboration
with famous
designers
Long-term
advertising
campaigns
Strong social
media presence

7. Value, Rarity, Imitability, Organized

8. Competitors of H&M

9. Is the H&M’s Competitive Advantage
Sustainable?
 Given the effectively configured
resources and capabilities and strong
corporate culture developed through
decades on which the new H&M’s
leader aims to capitalise, there is every
indication that the company will be
able to sustain its competitive
advantage and keep up with Zara and
other competitors.
Design
Marketing
Human
capital Supply
Chain

10. THANK YOU

11. Bibliography
 Barney, J., 1991. Firm Resources and Sustained Competitive
Advantage. Journal of Management, 17(1), pp. 99-120.
 Johnson, G., Scholes K. and Whittington, R. , 2006. Exploring
Corporate Strategy. 8 ed. Harlow: Pearson Education Limited.
 Porter, M. E., 1985. Competitive Advantage. 1 ed. New York: Free
Press.
 Porter, M. E., 1998. Competitive Strategy: techniques for Analysing
Industries and Competitors. 1 ed. s.l.: Free Press.