The activities in a brand’s value chain determine its costs and affect profits. Companies use value chain as a strategy to meet the consumer needs and satisfaction. The primary activities like inbound logistics, operations, outbound logistics, marketing & sales, services and secondly activities like procurement, human resource management, technological development and infrastructure from the part of the value chain of a company (Value chain, 2005).
In this case study, there is a complete analysis of luxury and fast fashion brands using porter’s value chain by evaluation the value chain for the luxury brand: Louis Vuitton and the fast fashion brand: Hennes & Mauritz (H&M).
Louis Vuitton, like other luxury brands, has a high global awareness and identity. Rarity, premium pricing, the heritage of craftsmanship, exclusivity and superior quality are some of the factors which add value to the brand and evoke purchase (Amatulli & Guido, 2011). This gives an immeasurable level of satisfaction on purchase inculcating a sense of trust to the consumer. Solid entrepreneurial skills involving creativity and innovation of product design stimulates success and upliftment of the brand.
On the contrary, H&M ensures low pricing, accessible variety, high fashion and permanent assortment rotation. (H&M annual report, 2016). It offers fashion and quality at the best price. H&M claims ‘H’s business concept is to offer fashion and quality at the best price in a sustainable way (hm.com). H&M like other fast fashion brands imitates latest luxury fashion and their catwalk offerings.
Fast fashion brands are in competition with luxury brands by introducing celebrity endorsements, limited edition products, opening stores in prestigious locations and high advertisements (Mosca & Gallo, 2016). From designer collaborations to low price strategies, fast fashion, especially H&M is doing it all to keep high traffic in their store.
Luxury brands are trying to keep up with their biggest competition fast fashion brands, they are trying to increase the availability with the time of production and creating affordable lower-priced diffusion lines. Luxury brands are presenting the innovative new designs the in the fashion shows for preordering and quick launching purpose (Alabbasi, 2016).
In the race of Fast fashion and luxury brands, there has been an interesting mix of trends and practices. Both the companies try to generate demand pull. They trigger the purchase by the aspects of marketing specially by making the product available on the shelf in the best way.
There are several opportunities analyzed in the case study which highlight the positive outlook for a company which can help the company in expanding the market. Acknowledging the market, it is clear that both the sectors have several issues too which can be worked on making the situation more favorable for the brand