Competitive Growth Strategy ZARA and H&M Essay Example | Topics and Well Written Essays - 1500 words

Competitive Growth Strategy ZARA and H&M - Essay Example A close analysis of the two companies namely Hennes and Mauritz (H&M) and Zara reveals that they both have strengths peculiar to their business operations. One major strength characteristic of both companies is that they have vertically integrated business models which allow them to set the pace of information flow thereby determine their own business operations. Their stores have diversified products as well ranging from clothing for all age groups to cosmetics which give variety to shoppers. Another notable strength characteristic of both organisations is the ability to have the global patent, which is exclusive rights to their brand names and products which make them different from other rival competitors’ products. It shows that they are operating legally which creates mutual trust among customers. This can also be done by making their brands absolutely unique from other products already on the market as a way of showing that they are not mere copycats. By also establishing well-defined distribution channels, the company would stand better chances of positive growth. Whilst the two companies have different approaches to their distribution methods, it can be noted that they have efficient distribution systems which offer a credit in the success of the business. However, there are bound to be weaknesses faced by H &M as well as Zara in their attempt to achieve this feat of establishing themselves as forces to reckon with in the market. One major weakness that is evident for H & M in its endeavour to establish itself as a formidable organisation is its apparent lack of competitor and customer analysis. This often is dangerous as it risks failing to keep pace with customer needs as a result of lack of information. On the other hand, Zara’s major weakness is that its design and product development are human intensive which leads to less retail returns than the cost of production. On the other  hand, opportunities for both companies lie in their ability to penetrate international markets which may have a different appeal than the local markets.