LIM College – MBA Program
This paper was written for the purpose of researching and illustrating fast fashion strategies which include strategic integrated supply chain, manufacturing and sourcing methods. Fast fashion is explained as a system that involves more control over operations and customer “strategic behavior” by using the combined benefits of both the “quick response production capabilities” or “short production and distribution lead times”, which minimizes clearance items by finding more reasonable balances between supply and demand, and the “enhanced product design capabilities” or “highly fashionable product designs”, which plays homage to customer values.
This paper also analyzes methods used by fast fashion leader, the Spanish, Inditex owned Zara. A closer look at Zara’s supply chain, market responsiveness, flexibility, technology, pricing and costs strategies and methods are examined and compared to other fast fashion retailers that can appropriately be deemed as competition for Zara. Also, globalization and other operational strategies are discussed that all come together to show the remarkable success of the Spanish company.
Zara’s Fast Fashion
When thinking of the term fast fashion, one may think of the change in fashion trends and how quickly certain styles can be deemed as in, and the next second, those same styles are no longer looked at as having any resemblance of being fashionable. That would be the definition of a trend or fad in itself; “an intense but short-lived fashion; craze” (Dictionary.com 2012) . However, “the phrase ‘fast fashion’ refers to low-cost clothing collections that mimic current luxury fashion trends” (Joy, Sherry, Venkatesh, Wang, & Chan, 2012) . It is a system that enables young, trendy customers to quickly attain and keep up with the ever changing latest fashions and trends from the runway, celebrity styles and other trendy inspirations for reasonable prices. Fast fashion is a system that involves more control over customer “strategic behavior” by using the combined benefits of both the “quick response production capabilities” or “short production and distribution lead times”, which minimizes clearance items by finding more reasonable balances between supply and demand, and the “enhanced product design capabilities” or “highly fashionable product designs”, which plays homage to customer values, which in-turn persuades customers to purchase full priced items rather than shopping around or waiting for items to go on-sale (Cachon & Swinney, 2011, p. 778) . Globalization, Manufacturing and Sourcing Strategies for Fast Fashion Firms
According to Mihm (2010) , supply chain, market responsiveness, flexibility, technology, pricing and labor costs are all factors in globalization and manufacturing and sourcing strategies. For instance, firms that are mainly involved with outsourcing and other third parties have less control of their supply chain and hands control to those third parties. On the other hand, firms that predominantly sell their own brands and designs are generally more vertically integrated and have minimal involvement with third parties. These firms can have control over all aspects of their supply chain and are also capable of controlling their sourcing. Fast fashion firms are generally vertically integrated. Mihm (2010) also states that “fast fashion and market responsiveness seem to be inseparable” and stresses the importance of supplying correct quantities in order to support demand for each individual store. In terms of fast fashion, market responsiveness refers to the speed of responding to consumer demand and accurately distributing and supplying appropriate quantities and styles in each store at the right times (p. 56) . Firms can achieve this by research and development (R & D), technology, and forecasting. R & D normally is in charge of coming up with new products and innovations and an...