Zara Fast Fashion

Topics: Retailing, Manufacturing, Shopping mall Pages: 4 (859 words) Published: January 27, 2013
1. What does it take to succeed in the global apparel industry? Is that different from what it takes a regional player to succeed? 2. What elements of Zara’s value chain help/hurt its ability to grow? Do you think Zara should grow 3. How would you advise Salgado to proceed on the issue of upgrading Zara’s POS systems?

- Inditex (Industria de Diseño Textil) of Spain, the owner of Zara and five other apparel retailing chains

* Global Apparel Chain
- Characterized as a prototypical example of a buyer-driven global chain, in which profits derived from "unique combinations of high-value research, design, sales, marketing, and financial services that allow retailers, branded marketers, and branded manufacturers to act as strategic brokers in linking overseas factories" with markets.

Global Chains 
(e.g., Apparel)| Producer-Driven
Global Chains 
(e.g., Automobiles)|
Upstream Structure| Fragmented, locally owned, dispersed and often tiered production| Global oligopolies| Downstream Structure| Relatively concentrated intermediaries| Relatively fragmented intermediaries| Key Cross-Border Links| Retailers, branded marketers and branded manufacturers| Producers| Rent Concentration| Downstream| Upstream|

Types of Rents| Relational| Technology|
 | Trade policy| Organizational|
 | Brand name|  |
Typical Industries| Labor-intensive consumer products| Capital- and technology-intensive products|

* Production
- These large cross-border flows of apparel reflected cheaper labor and inputs—partly because of cascading labor efficiencies-in developing countries - Despite extensive investments in substituting capital for labor, apparel production remained highly labor-intensive so that even relatively large "manufacturers" in developed countries outsourced labor-intensive production steps (e.g., sewing) to lower-cost labor sources nearby.

* Cross Border Intermediation
- Trading companies had...
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