MGCR 331 Chapter Notes - Chapter 3: Contract Manufacturer, Fast Fashion, Inditex
24 Nov 2013
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Chapter 3 fast fashion from savvy systems. Inditex corporation = parent of zara, based on la coruna. Zara unique because: few sales, low advertising, vertically intergrated (in-house production. Tripled from 1996-2000; sales went from 2. 43b to 18. 3b in 2008. Why zara? expanding very fast one store per day. High fashion at an affordable price twice-weekly delivery, keeps inventory/styles up to date and changing. Inventory is death in fashion industry need to predict what will be in style months in advance. Gap guessed wrong couldn"t attract younger customers; alienated older customers. Contract manufacturing cheaper produce in developing countries: cons: lacking safety, environmental prudence and uses child labor. Need to consider ethical practices of suppliers and partners as well. The fair factories clearinghouse tech: sweatshop labour makes it hard for honest firms to compete with the lower prices of firms that use this option. Zara has used technology to dominate the retail fashion industry as measured by sales, profitability, and growth.
