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Competitive Strategies Case Study

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Case Title:

H&M vs Zara: Competitive Growth Strategies

Publication Year :  2007

Authors: Mridu Verma

Industry: Retailing

Region:USA Spain

Case Code: COM0196P

Teaching Note: Not Available

Structured Assignment: Not Available

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Abstract:

The case compares the competitive growth strategies of two ‘fast fashion’ retailers – H&M and Zara. Swedish retailer H&M has been growing at an average rate of 20% annually in the past two decades. No other European retailer has expanded so quickly and so successfully beyond its own borders. At the heart of Zara's success is a vertically integrated business model spanning design, just-in-time production, marketing and sales. Inditex and its flagship store Zara have been growing at a furious pace.

The two European retailers are known for their ‘fast fashion’ had unique business models and growth strategies which have enabled them to expand quickly and successfully beyond their own borders. With the European markets becoming saturated, the two companies are looking for ways to expand outside Europe and establish their hegemony in the U.S., in many ways the world’s most important market.

The case outlines the growth strategy of the two companies in the US, emphasizing the similarities and the differences in their approach. H&M has tailored its product strategy to fit the US market. It has headed for more upscale malls and busy downtown centers and decided to open smaller stores. Zara has decided against developing a manufacturing base in the US. However, it has followed the same business model and product strategy that it followed in Europe. Its clothes are however priced higher in the US than in Europe to take case of supply costs.

Pedagogical Objectives:

  • To compare the growth strategies and business models of fashion retailers – H&M and Zara
  • To understand how these European companies are trying to expand beyond their borders.

Keywords : H&M; Zara; Inditex; fast fashion; Competitive Strategies Case Study; business model; supply chain; management; retail strategy; pricing; marketing strategy; concept store; shelf life; Spain; Sweden; store chain; expansion strategy

Contents : 
H&M’s Business Model
Zara’s Business Model
H&M in the US
Zara in US
Zara’s timeline
Zara’s SWOT Analysis
Inditex concept wise sales

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