Question

What generic business strategy Ralph Lauren is using to achieve competitive advantage? List and explain the specific steps Ralph Lauren is taking to implement this strategy? Compare and contrast their strategy with Zara and H&M.

Answer 1

Ralph Lauren has cost leadership and differentiation strategies to achieve a competitive advantage.

Steps for implementing a cost leadership strategy:

1. Ralph Lauren targets middle-class people by offering the products at lower prices through reduced production costs.
2. The company has used the concept of supply chain efficiency to reduce the cost.
3. The company provides different offers, discounts, and coupons to achieve the sales target of the company.

Steps for implementing differentiation strategy:

1. The company produces products by focusing the health concerns and innovation.
2. To differentiate from competitors, the company uses extensive marketing through advertisements and celebrity endorsements.
3. The company uses differentiated augmented services, offers different varieties of products to increase customer delight.

Similarities of the strategies of Ralph Lauren, Zara, and H&M:

1. These three companies provide the products at a lower cost. H&M has a different brand for a designer collection.
2. These three competitors target almost the same customer segment.

Differences of strategies of Ralph Lauren, Zara, and H&M:

1. Ralph Lauren and H&M have outsourced the manufacturing to developing countries, Zara has in-house designing and production.
2. Zara focuses on the limited production of specific design products to create scarcity, while Ralph Lauren and H&M have higher stock of products due to outsourcing. In other words, Zara has a pull strategy, and the other two have a push strategy.
3. Due to differences in strategy, Zara spends less on marketing to differentiate its products compared to Ralph Lauren and H&M.