| | |ZARA Case Study | |Strategy | | | |Abhijan Sengupta | |PGDM ' IB | |Roll No: 43 | |3/24/2009 |
Question 1 a. Outline the key dominant features and the industry driving forces and industry structure for international fashion retail industry today and 4 decades back..
In the 1970's, the apparel industry spent more on capital investments than it had during the 1950's and 1960's combined.
Export oriented industrialization in South Asian economies like Malaysia, China.
In US, the apparel industry has trimmed one-third of its jobs since its peak in 1973.
Examples of technologies that were developed in the 1970's and 1980's are programmable sewing machines that allow operators to work more than one machine at a time, Computer Aided Design (CAD) that reduces lead time, and computer controlled cutting of material. Labor productivity increased by 26 percent between 1969 and 1979; this was slightly less than the 33-percent rate for all manufacturing.
Firms in the apparel industry are typically smaller and more disconnected than firms in the textiles industry.
The size of many apparel firms was often an obstacle to large capital investments. Small firms typically operate on a low profit margin, and the cost of new, technologically advanced equipment would be prohibitive to many of them
Use of computers in textile and apparel industry started
Design choices and visual possibilities can be infinite if the designer is given the time and freedom to be creative and to experiment using the computer.
According to National Knitwear Association of US, of 228 Apparel manufacturers: 65% use CAD to create colorways
60% use CAD to create printed fabric design
48% use CAD to create merchandising presentation
41% use CAD to create Knitwear designs
In US, both production and employment have continued to decline in the 1990's after the peak production in July 1987.
4 seasons in west - Spring Summer Fall/Autumn Winter
Industry structure = Five forces
Driving force of global apparel industry
• Mix of product
The apparel commodity chain is organized around 5 main segments: raw material supplies: including natural and synthetic fibers; the provision of components, such as yarn and fabric manufactured by textile companies; production networks made up of garment factories, including their domestic and overseas subcontractors; the trade channels established by export intermediaries; and the marketing networks at the retail levels. Each of these segments encompasses a variety of differences in terms of geographical locations, labour skills and conditions, technology and scale.
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