This is sudden, but here is a question.  What is the difference between these two companies?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

One is H&M and the other is Burberry.  Their atmospheres are quite different.  H&M is producing the atmosphere of casual and friendly feelings.  Burberry is producing the sense of high quality and the impression that is slightly unapproachable.  What was meant here is that they are both successful companies and are accruing great amounts of profits but their structures to accrue profits are totally different.

 

• H&M is increasing sales by increasing the sales quantities.

• Burberry is increasing sales by raising the average price per customer.

 

Both are reasonable ways to accrue profits according to "Sales=Sales quantity × Average price per customer".  Why does such a difference occur?  Because the business models are different between those two companies.

 

• H&M is trying to reduce labor and manufacturing costs as much as possible in order to provide quality products at low prices.  It is promoting actively because the average price per customer is relatively low.  Their products must be purchased by many customers in order to accrue profit.

• Burberry is actively investing in order to sustain high quality or brand image because it is a business which is targeting the wealthy class.  Product prices are set very high and are promoted as status symbols for a limited number of people.

 

The way to increase sales is to choose consistency between the company and the business model.