Zara vs hm em inglês

University of Maribor Economics and Business Faculty 2011/2012 LLP ERASMUS Int. Strat. Marketing Management Prof. Milan Jurše

Business Models Comparison
By Amina Šahinpašić, Miguel Rojo, Paulo Coelho

COMPARISON

Two flows in opposite directions: • • The product flow; The flow of market information.

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The competitive benefits distinguishes them from other competitors; They do the same as competitors, but in a specific way; Different paths, but does not mean that some strategy is wrong.

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Zara has created a new model in the fashion industry – “fast fashion”; H&M has a better performance in terms of their costs.

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The big difference between the models is how they manage their supply chains and the dichotomy of the strategy to buy/sell.

Another issue that distinguishes the clothing chains is  Stock management;  Formulation of forecasts.

Changing the nature of supply chains, so that processes are able to respond flexibly and efficiently and instantly to customer needs, makes prediction unnecessary.

The main difference between the chains of Zara and H&M:
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The decision to buy/do;

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Is it better to internalize?
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To what extent?

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Is it more advantageous to do outsource?
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Focusing resources on core competencies.

ZARA
• High degree of vertical integration (design, production, logistics and distribution in own stores); 60% of its products are produced internally; "Fast fashion", because they can create new models in 5 weeks and modify existing in 2 weeks; • • • • •

H&M
Do not have any factory; Materials are provided for about 700 suppliers (Asia and Europe); Production shifted to places where labour is cheaper; Outsourcing is the strategic option; Central to its strategy(reduction of production costs); Agile and flexible; The stores, the Internet and catalogues;

Make or buy

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Chain

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Very agile and quick; Locates its stores in areas with more traffic and prestige; The