The paper “ H& M Company’ s Unique Business Formula” is an affecting variant of the case study on business. Over the years, large firms have tried to understand the importance of investing in start-ups (Covin & Morgan 2007). The increasing interest has been fueled by the ever-changing business environment. Owing to the dynamic changes in both external and internal-external environments of a firm, it has become continuously significant to adapt structurally and strategically. Da Gbadji and Gailly (2009, p. 3) stated that in the process, corporate venturing has been found to a suitable strategy not only just for innovativeness but also for creating entrepreneurial spirit.
Despite the increasing need to adopt corporate venturing to increase competitive advantage, selecting the type of corporate venturing mode has been a problem for most managers (Lantza, Sahut & Teulon 2011, p. 371). However, H& M has shown its prowess in strategic issues by selecting one of the best modes of corporate venture which has steered it to massive growth. H& M uses enabling investments to increase its competitive advantage in the world fashion industry. Therefore, this assessment will focus on enabling investments as a mode of corporate venturing (VC). This firm normally creates investment majorly for the strategic purpose; however, the company does not link the venture strongly with its operations.
Lerner (2013) argued that the hypothesis here holds that a flourishing investment or venture will make a firm’ s own businesses and undertakings to gain but the tight operational connection between the firm and start is considered unnecessary in getting the benefit. Many people normally do not understand how this works and consider it not actually true. However, from H& M’ s practice, this is done through the concept of complimentary.
H& M uses this concept because they believe the successful marketing of one product makes customers want another (Siegle 2013). H& M often capitalizes on this concept by applying its venture capital investments so as to spur the growth of the environment it operates in which contain customers, suppliers, and third-party developers which produce products that raise demand for the offerings of the company.
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