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.
| 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
| Rent Concentration
Types of Rents
| Trade policy
| Brand name
| Labor-intensive consumer products
| Capital- and technology-intensive products
- 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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