Porter’s Value Chain
According to Porter, a company’s competitive edge can be understood by studying the manifold activities which a company pursues in its design, production, marketing, delivery and supporting functions. He places the corporate value chain in a greater stream of activities, which he calls the value system. The addition of value to a product from raw material and purchasing to the finished article. Luxury and Fast Fashion
The development of technology and mass class of wealthy individuals has roared the awareness of brands. Its not rare to see blending of luxury and fast fashion items by the shoppers who mold their shopping according to the best options available, in a way that seems to lead to the so called “democratisation of luxury”(Mosca and Gallo, 2016, p. 245)
“Luxury brands have traditionally embraced the premium pricing strategy to highlight their brand exclusivity (Fionda & Moore, 2009), high quality, and the strength associated with luxury goods, and also to distinguish them from the fast fashion brands”.
Luxury consumers are highly sophisticated, stylish, brand literate, fashionable, aware of their tastes and preferences with strong value and principles (Amatulli, Guido & Caputo, 2011). They seem to have high expectations.
Unlikely, Fast fashion is refers to the theory of reducing the lead time (production, distribution) and presenting fresh products to the market as quick as possible. Fast fashion fulfils the want of luxury, developing a “luxurious appeal” at a better price-value balance (Joy et al., 2012). Many consumers crave of wearing replicas of catwalk looks or celebrity couture fashions (Miller, 2013)
The world leader in luxury, Louis vuitton has deployed a business model marked by dynamic growth since its creation in 1987. Louis vuitton continues to combine utility and beauty in their production. Since its establishment, the Louis Vuitton name has been synonymous with a life of luxury and travel, enjoyed by a cultivated elite. Its creations have always reflected the spirit of their time, maintaining a dialogue with contemporary aesthetic sensibilities.(Gasparina et al., 2009, p. 44)
Fast fashion is about making fashion democratized with its low price and speed, which means cheap plays an essential role in fast fashion. The best example for this, Hennes & Mauritz (H&M) describes its mission as “Fashion and quality at the best price”.
H&M says that it owes its success to three factors: inventive design, the best quality at the best price, and efficient logistics.(H&M annual report, 2016)
H&M is one of the world’s leading fashion company. With stores in 2500locations in 53 countries and e-commerce in 35 H markets. They have a global store net- work and a strong digital presence (H annual report, 2016). The collections are created by their own designers, pattern makers and buyers, while manufacturing is outsourced to independent suppliers.
According to the H annual report 2016, H has no middlemen;they buy the right product from the right market, to have effective logistics and to be cost-conscious in every part of the business.