Future of Fast Fashion Rivalry: Zara and H&M MKTG/MGMT 421 (original) (raw)
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Super Responsive Supply Chain: The Case of Spanish Fast Fashion Retailer Inditex-Zara
The successful implementation of an integrated supply chain strategy enhances total control over the operations and thus enhances speed and flexibility. The objective of this study is twofold: first to identify the constituents that mold the fast fashion retailing business model, and second to discuss how global leader of fast fashion retailing Inditex-Zara's product offering is strongly supported by integration of various supply chain operations. The findings suggest that vertical integration through ownership of various operational stages including product design and development, production operation, logistics and distribution channel; appropriate sourcing strategy to meet product needs; application of process/product modularity practices in product design, material procurement and manufacturing to ensure manufacturing flexibility; flexible logistics capability; and all of these seamlessly integrated and coordinated by a centralized IT infrastructure can significantly raise overall supply chain flexibility and responsiveness. Inditex-Zara's super-responsive supply chain reduces 'bullwhip effect', order-to-delivery lead time to stores, ensures lean inventory and high level of responsiveness to adapt and deliver products to stores with latest fashion trends and customer feedbacks at a rapid speed. Thus Inditex-Zara is able to successfully counter the negative effects of short product life cycles, high product variety, demand uncertainty and thus able to closely match product supply to the stores with market demand. This contributes to lower inventory backlogs; avoid mark-down losses and/or inventory stock out.
The research in this thesis illustrates that retailing companies in the apparel industry, like H&M AB and Inditex, are faced with the complexity of culturally different markets. Four key business areas are selected as a basis for the analysis, namely market entry, brand positioning, promotion, and product adaptation, and are examined in the context of the German, Chinese, and US-American markets. The strategies adopted in these four business areas and in these three countries serves as the outline for a comparison of the two firms. In conclusion can be said that both brands aim to standardize and implement a global strategy but adapt to the business environment, consumer behavior, and cultural perceptions when it is necessary to create and sustain a competitive advantage. Several cases of best practices are given for the consideration of companies that also want to enter culturally different markets in the apparel industry.
Until recently, Zara, a major international clothing retailer and pioneer of 'fast fashion' principles, kept almost half of its production in Spain and Portugal, earning the reputation of being one of the exceptions to globalization. Since the 1980s, the existence of such exceptions has been fueling an expectation that the production of high-quality fashion garments and tailored suits would remain in the industrialized core.
Internationalization Process of Fast Fashion Retailers: Evidence of H&M and Zara
The fashion apparel industry has evolved significantly over the last two decades driven by the internationalisation and rapid rise of global fast fashion retailer brands. This research seeks to introduce and explore how two internationalization models-Incremental and Rapid Internationalization-can be applied to two representative global fast fashion retailers (Zara and H&M). It seeks to apply these models on the basis of three perspectives-"knowledge sharing, resource-based view and psychic distance". The result suggested that H&M and Zara do not entirely correlate with the expectations of Incremental and Rapid Internationalization Models. This appears to be significantly different from what has been covered in the literature, which concludes that Zara was a born-global fast fashion retailer and H&M was a traditional/gradual global one. Another conclusion is the adoption of the Rapid Internationalization Models by the two fast fashion retailers were not completely independently from use of the Incremental Models, especially in their early expansion stages.
Case Study of Online Retailing Fast Fashion Industry
The study investigates into the fast fashion industry worldwide, specifically on Zara, H&M and UNIQLO with respect to efficient supply chain management, scarce value creation, low costs promotions and positioning strategy, supported by comparisons between several typical well-known fast fashion brands. Through the overall analysis of B2C apparel online retailing in China, statistics show an enormous space for online retailing fast fashion industry to explore but a far way to catch up with the leading enterprises in the world in terms of e-commerce scale. The next main part demonstrates a case of a Chinese fast fashion online retailer-Vancl, analyzing its keys to success in aspects of proper product positioning, brand positioning, business mode, marketing strategy, products and services, user experience, logistics and team management. In addition, relevant suggestions for further prosperity are proposed in the end of the paper.
Fashion Industry Supply Chain Issues: Zara (Azel France)
European Researcher, 2013
The main purpose of retail business is to continuously maintain the responsiveness to the changing trends in consumer fashion tastes through quickly creating new designs that are suitable for all customers with an affordable price. Hence, the importance of Supply Chain (Management) has appeared. The objectives of this study are to analyze the impact of purchasing and supply chain management strategies in retail industry and identify the way of success of AZEL FRANCE Retailer Company of ZARA clothing in Bosnia and Herzegovina from supply chain perspective management by conducting a survey study. AZEL FRANCE is found to be successful in that it can control and streamline the highly consumable fashion items in their supply chains so that they can greatly decrease their lead time and thus increase be responsive enough for fast changes in fashion customer needs and desires by minimizing the industry risks. The retailer stores of AZEL FRANCE are also found to be confident about the future profitability. However, some technical inabilities of the company are also identified. It can be suggested that AZEL FRANCE can easily leverage more its successfully implemented supply chain activities by increasing its technical abilities.