American Apparel: Vertically Integrated in Downtown L.A.
American Apparel: Vertically Integrated in Downtown L.A.
1. The textile/clothing sector is vertically de‐integrated: design, textile manufacture, clothing manufacture, distribution are undertaken by specialist firms. Why? In this case, clothing firms like American Apparel have vertically integrated, in order to get time to market, increase resources availability, and cost efficiency. However, many textile/clothing sector is vertically de‐integrated which means that their design, textile manufacture, clothing manufacture, distribution are undertaken by specialist firms. (De-verticalization) is the process of separating functions and services from a once-integrated business model. Companies such as Levi Strauss & Co., who emphasize the need to build global brands, frequently through acquisitions of related consumer products lines, while many of their production facilities are being closed or sold to specialist firms. For company whose controlling power is stronger, vertically integrated is more benefit for them. For example, they can have their own sources to be more competitive in the industry. The Company can directly face consumers and can control the services quality and deal with consumer’s complain immediately. However, the above is all for the companies whose controlling power are stronger, like Zara, American Apparel. Still, textile/clothing sector is vertically de‐integrated. (De-verticalization) and outsourcing permit efficient sharing of resources and thus enable the realization of economies of scale and learning-by-doing effects in particular tasks which provide the companies who chose (de-verticalization) significant reductions in the costs of market creation, expansion differentiation. It’s risky to count on several suppliers, but owning whole supplier chain has much more risk. Many companies think that they don’t want to have their own factories because of the low profit and high pollution risk. The factories have to burden the up-grade cost. And
1. The textile/clothing sector is vertically de‐integrated: design, textile manufacture, clothing manufacture, distribution are undertaken by specialist firms. Why? In this case, clothing firms like American Apparel have vertically integrated, in order to get time to market, increase resources availability, and cost efficiency. However, many textile/clothing sector is vertically de‐integrated which means that their design, textile manufacture, clothing manufacture, distribution are undertaken by specialist firms. (De-verticalization) is the process of separating functions and services from a once-integrated business model. Companies such as Levi Strauss & Co., who emphasize the need to build global brands, frequently through acquisitions of related consumer products lines, while many of their production facilities are being closed or sold to specialist firms. For company whose controlling power is stronger, vertically integrated is more benefit for them. For example, they can have their own sources to be more competitive in the industry. The Company can directly face consumers and can control the services quality and deal with consumer’s complain immediately. However, the above is all for the companies whose controlling power are stronger, like Zara, American Apparel. Still, textile/clothing sector is vertically de‐integrated. (De-verticalization) and outsourcing permit efficient sharing of resources and thus enable the realization of economies of scale and learning-by-doing effects in particular tasks which provide the companies who chose (de-verticalization) significant reductions in the costs of market creation, expansion differentiation. It’s risky to count on several suppliers, but owning whole supplier chain has much more risk. Many companies think that they don’t want to have their own factories because of the low profit and high pollution risk. The factories have to burden the up-grade cost. And