Zara Fast Fashion Case Study Solution
Even though H&M follows a strategy which differs significantly from Inditex’s approach it is the closest competitor from the financial point of view. H&M differs from Zara because it outsources all of the production, it is more price oriented and spends more money on advertising. But both companies are based in Europe, are fashion forward at lower price retailers, and have a strong international expansion strategy. Exhibit 6 indicates that the financial results of Inditex and H&M seem to …show more content…
The most vital factor of Zara’s unique business approach is an in-house production system. The company fully owns 20 factories. It only outsourced the production of high labor intensive processes but maintained in house some other capital intensive processes protecting as well the knowledge and know-how. By taking direct control of fabric supply, marking, cutting and final finishing Zara navigates its production throughout the entire value chain. The capital intensive vertical integration model into manufacturing combined with a highly labor intensive one has given Zara a competitive advantage.
Inditex, the parent company owns a subsidiary (Comditel), which