Customer Driven Strategy

Customer Driven Strategies –Cost Leadership, Differentiation and Focus H&M’s business-level strategy is an integrated and coordinate set of commitments and actions designed to provide value to customers and gain a competitive advantage by exploiting core competencies in apparel sectors. It also reflects H&M’s belief about where and how it has an advantage over its rivals, they believes that customers are foundation of successful business-level strategies. Increasingly, they emphasize importance of the link between building relationships and delivering products to customers and their financial performance.

Cost Leadership H&M’s cost leadership strategy is an integrated set of actions designed to produce or deliver fashion at the best price, relative to that of competitors, with features that are acceptable to customers. Successful implementation of cost

leadership strategy requires a consistent focus on driving cost lower; their collections are created centrally in H&M’s design and buying department. H&M does not own

any factories, but instead has 21 production offices in Asia and Europe that work closely together with some 700 independent suppliers.

H&M believes that simply reducing costs is not equivalent to implementing the cost leadership strategy; their products are of high quality where all suppliers must comply with their quality standards, and quality is also ensured through continuous controls. Quality also means producing the items with minimal environmental impact and under good working conditions.

Differentiation H&M’s differentiation strategy is an integrated set of actions designed to offer fashion and quality at the best price that customers perceive as being different in ways that are important to them. H&M claims that it is wrong thinking that fashion should be the preserve for the rich, but for everyone. To do this successfully, H&M must truly be unique and be perceived as unique.

H&M uses the differentiation strategy to be...