zara h&m benetton case study supplying fast fashion

Zara, H&M, Benetton Case Study – Supplying Fast Fashion

Related documents

Add this document to collection(s)

You can add this document to your study collection(s)

Add this document to saved

You can add this document to your saved list

Suggest us how to improve StudyLib

(For complaints, use another form )

Input it if you want to receive answer

H&M, Zara, Benetton Firms Supplying Fast Fashion

Introduction, design stage, manufacturing stage, distribution stage, retail strategy, trends utilized in supply chain management.

Fashion has become incredibly fast-paced. The ability to mass-produce numerous articles of clothing and make them available and affordable to the general populace has increased consumerist tendencies across the globe. Changing clothes every season has become the norm for upper and middle-class customers. As such, the most successful fashion retailers need to be capable of adjusting their selection of goods according to the ever-changing preferences of potential customers, as well as the newest developments in the industry. The ability to do so relies on the organization of their supply chain. The purpose of this paper is to analyze the Supply Chain Management (SCM) of three famous and successful fashion retail brands, H&M, Zara, and Benetton, identify the strengths and weaknesses of four distinct stages of their supply management, and determine which model is best suited for the industry overall.

The design stage of supply management involves determining which articles of clothing to produce and supply to retail stores. All three companies have several similarities and differences in their approach. Those involved in the process of design are market specialists, buyers, and the designers themselves. Market specialists make predictions about current and future trends, designers invent new clothes and apply new materials in the production process, and buyers help define the needs and requirements for specific brands by leaving feedback. However, the differences between the three companies lie in what the design stage is focused on.

For example, H&M tries to balance fashion, price, and quality (Slack, Brandon-Jones, Johnston, & Betts, 2015). Upon finding this point of balance, the company determines volumes and delivery dates. This means they adjust their stock based on estimated buyer interest and sales. Depending on the product, the volumes may be large or small.

Zara’s designs come not from individual branches of the company but through a combined effort. They have adopted a cyclical SCM strategy, where the design stage is the first and last part of the chain. Designers and market specialists work in the same workshops, enabling cooperation between branches, and the customers are offered the opportunity to take part in the process (Slack et al., 2015).

Benetton’s design process is aimed at standardization and grasping overall global trends. They pay less attention to region-specific needs and customs and focus on selling articles of clothes that are universal. Less catering to individual and region-specific preferences allows the company to reduce prices, standardize its shipments, and buy in large volumes (Slack et al., 2015).

The manufacturing stage is when the processes of creating articles of clothing to be later sold at the market occur. Each company has its own unique style of production, which ties in with its marketing philosophy and helps achieve its retailing goals. Benetton looks to benefit from cheap labor costs found in Africa, Asia, and Eastern Europe in order to produce cheaper clothes (Slack et al., 2015). As such, many of its manufacturing chains are located abroad, in countries such as China, India, Turkey, Romania, and Moldova. This style of manufacturing allows for greater and cheaper volumes of production but is more susceptible to the political and economic instability of those countries and potential accusations of unethical business practices.

H&M does not have any production plants of its own. Instead, it coordinates the efforts of over 750 suppliers globally (Slack et al., 2015). This system allows for greater flexibility when compared to establishing factories in a single location. In addition, the diversification of suppliers means that the production process would never totally cease because of any critical failures. However, this system relies heavily on efficient logistics and close relationships with individual manufacturers, which often causes delays in lead times and complications with determining the optimal time to make an order.

Zara’s manufacturing system is tailored to be able to quickly respond to the ever-changing demands of the customers and the shifts in the fashion industry. Its 22 factories, as well as the majority of its suppliers, are located in Spain (Slack et al., 2015), which helps create efficient and quick logistical and manufacturing processes. The system is geared towards producing a multitude of goods in small batches, in accordance with the company’s marketing strategy. However, this results in increased production costs as the company has no access to cheaper labor markets.

The distribution stage involves all the processes needed after the production of clothes to ensure products are delivered to the retail stores. The efficiency of distribution largely determines the time spent before the required clothes arrive from the warehouses and to the retail chains. Zara and Benetton implement similar strategies in that regard – each of their production facilities also has an automated distribution center, from which the products are shipped wherever they are needed (Slack et al., 2015). This system has certain advantages and disadvantages. While it helps supply the local markets quicker, it also increases the delivery time required for a specific article of clothing to be delivered to shops located far from the main production chain.

H&M, due to the nature of its production management, has a different approach to distribution. Instead of having numerous warehouses across the globe, it ships the products from large transportation hubs, where individual subcontractors deliver finished goods. Its call-off warehouse is located in Hamburg, where the company operates through a local terminal (Slack et al., 2015). This system relies on coordination and planning efficiency and is prone to accidents and order mix-ups.

All three companies use retail stores as their primary distribution sites. Their difference lies in ownership and restocking strategy. Zara and H&M take a relatively similar approach in that regard – they own the retail chain through which they distribute their goods. While H&M provides a relatively stable variety of goods at all times, in order to cater to the needs of different customers, Zara offers greater variety while keeping a smaller stock. Its collections change every two weeks (Slack et al., 2015), which not only attracts customers to visit the shops more often but also to buy the items quicker.

Benetton’s strategy is different due to the large volumes and standardization of their products. In order to achieve maximum exposure, the company works not only through their own retail chains but also with different third-party retailers. Its own shops are 2-3 times larger than those of Zara and H&M, in order to house greater volumes of products and display them to potential customers (Slack et al., 2015).

As it is possible to see, each company implements a different SCM strategy in order to achieve its goals. Zara utilizes a combination of lean and agile supply chain strategies, which are aimed at reducing waste and non-value-adding activities, while at the same time quickly responding to the ever-changing customer and market demands (Christopher, 2016). This strategy is defined by the accuracy of orders and variety of articles, but at increased costs.

H&M uses a postponement SCM strategy, which focuses on delaying orders for as long as possible, in order to make more accurate estimations of how much is needed (Christopher, 2016). It is the reason why H&M managers stress the importance of making an order “at the right time.” This approach offers a balance between accuracy, quality, and price, but presents significant logistical challenges.

Benetton uses a speculation SCM model. Instead of trying to cater to specific fluctuations and trends in the fashion market, it aims for the common denominator, in order to save money and reduce costs by producing and buying in bulk (Christopher, 2016). While this strategy has the potential to attract a larger number of customers, it also willingly misses the more privileged customers, looking for more fashionable and unique clothes.

Which SCM Strategy is Best?

It is not valid to make a straight comparison between the strategies mentioned above. All three companies have different goals and different positions in the market. Zara offers variety and uniqueness, Benetton offers quality and affordability, and H&M seeks a balance between the two. For their intended means and purposes, the companies use optimal SCM strategies that are currently available. For Benetton, it would be pointless to utilize lean management, as it would only increase the number of logistical operations required to restock their mega-shops. For Zara, it would be illogical to produce in bulk because their collection changes every two weeks. For H&M, it would not be prudent to overly rely on either method, as some of their products are more sensitive to fluctuations in the market and fashion than others. Thus, all three strategies can be considered equally valid and optimal for their intended purpose.

Christopher, M. (2016). Logistics and supply chain management (5th ed.). New York, NY: FT Publishing.

Slack, N., Brandon-Jones, A., Johnston, R., & Betts, A. (2015). Operations and process  management: Principles and practice for strategic impact (4th ed.). New York, NY: Pearson.

Cite this paper

• Chicago (N-B)
• Chicago (A-D)

StudyCorgi. (2021, June 27). H&M, Zara, Benetton Firms Supplying Fast Fashion. https://studycorgi.com/h-and-ampm-zara-benetton-firms-supplying-fast-fashion/

"H&M, Zara, Benetton Firms Supplying Fast Fashion." StudyCorgi , 27 June 2021, studycorgi.com/h-and-ampm-zara-benetton-firms-supplying-fast-fashion/.

StudyCorgi . (2021) 'H&M, Zara, Benetton Firms Supplying Fast Fashion'. 27 June.

1. StudyCorgi . "H&M, Zara, Benetton Firms Supplying Fast Fashion." June 27, 2021. https://studycorgi.com/h-and-ampm-zara-benetton-firms-supplying-fast-fashion/.

Bibliography

StudyCorgi . "H&M, Zara, Benetton Firms Supplying Fast Fashion." June 27, 2021. https://studycorgi.com/h-and-ampm-zara-benetton-firms-supplying-fast-fashion/.

StudyCorgi . 2021. "H&M, Zara, Benetton Firms Supplying Fast Fashion." June 27, 2021. https://studycorgi.com/h-and-ampm-zara-benetton-firms-supplying-fast-fashion/.

This paper, “H&M, Zara, Benetton Firms Supplying Fast Fashion”, was written and voluntary submitted to our free essay database by a straight-A student. Please ensure you properly reference the paper if you're using it to write your assignment.

Before publication, the StudyCorgi editorial team proofread and checked the paper to make sure it meets the highest standards in terms of grammar, punctuation, style, fact accuracy, copyright issues, and inclusive language. Last updated: June 27, 2021 .

If you are the author of this paper and no longer wish to have it published on StudyCorgi, request the removal . Please use the “ Donate your paper ” form to submit an essay.

Academia.edu no longer supports Internet Explorer.

To browse Academia.edu and the wider internet faster and more securely, please take a few seconds to  upgrade your browser .

Enter the email address you signed up with and we'll email you a reset link.

• We're Hiring!
• Help Center

Supplying Fast Fashion

2018, Supplying Fast Fashion

Related Papers

Zerzouri Omar

Pamela Danese

Dinh Nam Nguyen

The successful implementation of an integrated supply chain strategy enhances total control over the operations and thus enhances speed and flexibility. The objective of this study is twofold: first to identify the constituents that mold the fast fashion retailing business model, and second to discuss how global leader of fast fashion retailing Inditex-Zara's product offering is strongly supported by integration of various supply chain operations. The findings suggest that vertical integration through ownership of various operational stages including product design and development, production operation, logistics and distribution channel; appropriate sourcing strategy to meet product needs; application of process/product modularity practices in product design, material procurement and manufacturing to ensure manufacturing flexibility; flexible logistics capability; and all of these seamlessly integrated and coordinated by a centralized IT infrastructure can significantly raise overall supply chain flexibility and responsiveness. Inditex-Zara's super-responsive supply chain reduces 'bullwhip effect', order-to-delivery lead time to stores, ensures lean inventory and high level of responsiveness to adapt and deliver products to stores with latest fashion trends and customer feedbacks at a rapid speed. Thus Inditex-Zara is able to successfully counter the negative effects of short product life cycles, high product variety, demand uncertainty and thus able to closely match product supply to the stores with market demand. This contributes to lower inventory backlogs; avoid mark-down losses and/or inventory stock out.

European Researcher

Muhammed Kürşad Özlen

Abstract. The main purpose of retail business is to continuously maintain the responsiveness to the changing trends in consumer fashion tastes through quickly creating new designs that are suitable for all customers with an affordable price. Hence, the importance of Supply Chain (Management) has appeared. The objectives of this study are to analyze the impact of purchasing and supply chain management strategies in retail industry and identify the way of success of AZEL FRANCE Retailer Company of ZARA clothing in Bosnia and Herzegovina from supply chain perspective management by conducting a survey study. AZEL FRANCE is found to be successful in that it can control and streamline the highly consumable fashion items in their supply chains so that they can greatly decrease their lead time and thus increase be responsive enough for fast changes in fashion customer needs and desires by minimizing the industry risks. The retailer stores of AZEL FRANCE are also found to be confident about ...

Fashion Marketing

Hayley Deng

leigh sparks

The business transformation of Tesco in the last 25 or so years is one of the more remarkable stories in British retailing. From being essentially a comparatively small'pile it high, sell it cheap'downmarket retailer, the company has become one of Europe's leading retail businesses, with retail operations in countries as far-flung as Ireland, Poland, Malaysia and Japan.

Temperature Controlled Supply Chains 179 Chapter 12 Temperature Controlled Supply Chains D. Smith & L. Sparks Objectives (1) To define temperature controlled supply chains. (2) To understand the importance of temperature controlled supply chains for product safety and shelf life. (3) To describe the key principles and processes in temperature controlled supply chains. (4) To outline possible future developments and constraints in this field.

Saransh Goyal

RELATED PAPERS

Mohsin Nawaz

cherry chan

RUDRAJEET PAL

RELATED TOPICS

•   We're Hiring!
•   Help Center
• Find new research papers in:
• Health Sciences
• Earth Sciences
• Cognitive Science
• Mathematics
• Computer Science
• Academia ©2024

Product details

Teaching and learning

H&M and Zara Case Study – Comparing the Fast Fashion Giants

• Written by 440 Industries
• Case Study , H&M , Zara
• November 17, 2021

Introduction

Today, when we discuss fashion, we usually focus on clothes and other accessories. The days when people wore cloth for coverage are long gone. Fashion has taken clothing to a whole different level where it does more than cover our bare bodies. 

Everyone now desires to stand out in what they wear. This is because many of us know what we wear can help us reveal a lot about our personality. This could be our style or affluence. When making outfit choices, several brands come to mind. These could be brands like H&M vs Zara. 

These clothing brands are known for quality and style. Also, they are fast fashion brands , meaning a vast population is drawn to them for their quick offering of new trends, especially at cheaper rates. Therefore, let’s look at the H&M vs Zara case study in this article and compare these two fast fashion giants.

H&M Brand

• H&M vs Zara Case Study

Key Differences Between H&M vs Zara Brand

Among similar brands like Uniqlo and Zara, “ Hennes and Mauritz ” is the oldest. Sweden was the birthplace of this retail brand. This was as far back as 1947. Hence, it’s amazing how this brand has become such a recognizable giant in fashion. 

Besides Sweden, that’s native to them, this brand also operates in the United States. It was in 1974 that their public trade in Sweden began. Over the years, this brand has grown more prominent as it stretched out across the globe.

The H&M brand has established over 4000 stores in several countries globally; A number that’s way bigger than that of Zara.

This brand has gotten an edge over its competitors as they’ve been more productive in the US market. It’s just amazing how they got into this enormous market and gained so much success. In the US alone, they have up to 559 physical stores.

However, they haven’t stopped yet and are working towards expanding more throughout the globe. They aim to open more stores, about thousands of them, in the years to come.

Meanwhile, the brand made a broader shift to e-commerce sales from physical ones. This happened because they began receiving most of their purchases online. This also resulted in the brand closing down some physical stores.

Interestingly, aside from the H&M brand, the H&M group has seven other brands under them. They are COS, H&M Home Weekday, Monki, ARKET, & other stories and Afound.

H&M also collaborates with known figures, like Versace, in the products they offer their customers. This is one of the sales-boosting strategies that has helped boost their reputation.

The Zara brand is the latest compared to retail giants like H&M and Uniqlo. The year 1975 was when this brand started. The birthplace was Spain, and the founder, Amancio Ortega.

Zara is the largest brand under the Inditex group. It ranks number one in the apparel industry , particularly fast fashion. They deal in a wide range of products, including clothing, shoes, fragrances, and other accessories. 

The brand has also stretched out over the world in about 96 countries, where they have a total of about 2200 stores. Just in the US, the brand has established up to 99 stores. 

However, you’ll find most of their stores in their birth country, Spain, where it’s over 400.

The founder improved the brand’s design, production, and distribution process around the 1980s. This improvement led to a faster reaction to the new fashion that came up. 

In fact, their distribution is remarkable. They can start selling a product a month after they’ve designed it. Their product turnover is impressively quick! 

When they created their first store, they began making similar products as the more high-end fashion brands. As they did this, they offered them at low prices. Interestingly, they then influenced the term “fast fashion” due to this speedy feedback. 

Zara offers a lot more products to their customers. In fact, it’s much bigger than the number that other competitors like H&M offer. 

They can produce more than 10,000 pieces in a year, unlike the 2000-4000 pieces most other retail brands do. This is one of the brand’s exceptional strategies that have attracted customers with different tastes and styles, especially in the US.

H&M vs Zara Case Study 

Looking at the H&M vs Zara fast-fashion business, it’s been very lucrative for them. No matter what these companies focus on, they have one thing in common as a competitive advantage: the customers’ preferences.

As people want what’s trending and at the same time desire to have it quick, these companies have to employ a speedy process. Both H&M and Zara seem to offer low-end market apparels that are alike with high fashion standards. They make these very fast and at a low price. 

It’s common with fast fashion for trends not to stay for long. New designs keep coming up, and many people want to try out what’s new. Therefore, these fast fashion brands have to keep making these products available to meet the customers’ continuous demands. 

Zara, in particular, is at the top of the game when it comes to reducing the time between designing and production. In addition, both brands ensure that their supply chain effectively responds to demands quickly. When supply doesn’t come quick, it can badly affect sales. 

A common one is when the customers lose interest in the apparel they waited so long for because of the new trends that might have come up. Therefore, the cost of the goods, buying cycle, and, more importantly, market timing build up the fast-fashion concept of H&M vs Zara brand. 

Let’s compare these two brands with different marketing categories. This way, we can know what makes them different, especially in their strategies to boost sales.

Pricing System for H&M vs Zara

The H&M brand emphasizes offering their quality products cheaper as a means to keep customers trooping into their shops. They are known to offer huge discounts very often, unlike most of their competitors. 

On the other hand, Zara offers their products at a reasonable price as long as they match the quality. They don’t underprice to keep people trooping in. Similarly, they give discounts but not as much as the H&M brand. Instead, they focus more on the quality of what they offer. 

They create value around their product,s which stirs the feeling that what you’re buying is worth the price. 

Target Market for H&M vs Zara

These two fashion giants create their target market based on psychographics and demographics. Focusing on an individual’s lifestyle, interests, and social status falls under the psychographic segment. However, considering their customers’ gender, age, income, class, etc., is a demographic way of segmenting their market. 

H&M’s brand targets primarily women, particularly those aged between 20-34 years. 

These are the younger, working females that still have so much love for what’s trending. On the other hand, Zara still targets the younger population but expands more demographically. 

They offer clothing and accessories for both genders, particularly about 18-40 years of age. However, this is just their target market, and this brand offers both articles of clothing for younger kids.

Promotion for H&M vs Zara

H&M is always making regular promotions for their products. Their advertising is quite versatile. They reveal a lot about their products through various means including, TV commercials, prints, billboards, banners, social media, and many more. The brand puts a lot of emphasis on promotion. 

A common thing about the Zara brand is that they don’t fancy advertising. You’ll see no banners, no billboards, and no form of promotion. They consider investing in building more stores far more important than advertising their goods. 

However, the company employs the system they call evangelism. So, instead of taking their brand to their consumers as advertisements, they bring their consumers into their brand. They nurture their customers as brand influencers, allowing them to boost operations and, more importantly, do the storytelling.

Product Distribution for H&M vs Zara

Zara gets goods on its shelves much faster than H&M. The brand doesn’t have any factory of its own. Instead, they buy from other distributors. About 60% of H&M products come from places like Cambodia or Bangladesh, which are cheaper. 

However, these places are far from them, so leading times are always longer. This makes this brand have several orders from customers pending. This situation creates problems for the brand, especially in sales. 

This also makes them have more unsold goods in stock, unlike Zara. These goods’ value is more than $4 billion. This could also be why the H&M company focuses more on giving discounts as one of their pricing strategies. Interestingly, the gross profit made by both brands is almost the same, despite H&M making cheaper purchases. So, in essence, they lose the advantage that comes with buying from cheaper places. 

Also, the distribution system has made them famous in the fast-fashion world as they can control the number of goods they produce and the supply. Therefore, they don’t have issues with numerous unsold goods in stock. It takes about a day to distribute to their stores in Europe due to their robust distribution network. Moreover, it will take about 40 hours to deliver to the US branches.  

Both brands, H&M vs Zara, have grown successfully over the years more than other fast fashion brands. The progress of the Zara brand explains why price isn’t everything. Unlike H&M, they tend to focus more on the value they can place on their products. H&M has still suffered many losses despite its underpricing strategies. 

However, in fast fashion, the constant change in trends keeps the demand alive, but what’s more important is that these fast fashion brands make these products available.

Was This Article Helpful?

You're never to cool to learn new things, here are sources for further research.

Please note: 440 Industries is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.

Fashion Marketing

Retail marketing, fashion entrepreneurship, fashion finance.

MORE ARTICLES FROM OUR BLOG

Diesel Case Study: Fashion Industry’s Sustainable Revolution

Explore the Diesel Case Study: fashion industry’s sustainable shift through cleaner engines, innovative campaigns, and Smart Rebels focus.

The OTB Group Case Study: Core Values and Growth Strategies

Discover The OTB Group Case Study, highlighting core values, growth strategies, sustainability efforts, and digital innovation in the fashion world.

Jil Sander Case Study: Fashion Legacy & Adaptations

Explore the Jill Sander Case Study, delving into her minimalist fashion legacy and how creative directors Lucie and Luke Meier adapt to market changes.

Marni Case Study: Bold Fashion and Diverse Collaborations

Explore the Marni Case Study, highlighting bold fashion, diverse collaborations, and innovative digital expansion in this captivating analysis.

440 Industries Disclaimer, Credits and acknowledgements. Privacy Policy

Copyright © 440 industries 2024.

Benetton’s, H&M’s, and Zara’s Design and Retail Essay

Introduction, manufacturing and suppliers, distribution, retail outlets, recommendations.

It is quite clear that fashion trends change very often due to changed conditions in the universal market since tastes are so dynamic. As such, companies and partners in the supply chain must remain vigilant to avoid losing customers to competitors. Moving to different geographical areas in search of cheap labor does not matter anymore and might not be useful to fashion companies since fast fashion competes on both price and time. Product and technology life cycles have decreased with time which makes it hard to predict demand (Zhelyazkov, n.d.).

This complicates issues regarding raw materials as companies have to plan long in advance. Things become more complicated since customer behavior is very dynamic as customers get rid of their clothes in short durations to match with latest trends (Zhelyazkov, n.d.). In this situation, Supply Chain Management comes in handy to assist companies keep pace with fast fashion since supply chain management deals with different players in the supply chain. Such players include suppliers, those who supply such suppliers, and customers. This essay compares and contrasts three different companies in the fashion industry namely Benetton, H&M and Zara on aspects of design, manufacturing, distribution, and retail.

Luciano Benetton started Benetton company close to fifty years ago aided by his sister. The firm grew through controversial advertisements and has its presence in over 120 countries. Benetton produces over 110 million garments each year and has over 5,000 retail stores which produce close to two billion euros (Slack, Chambers, Johnston, & Betts, 2008). H&M came into being in 1947 and sells clothes and cosmetics through it retail stores estimated at over one thousand distributed across 21 countries (Slack, Chambers, Johnston, & Betts, 2008). Amancio Ortega Gaona started Zara in 1975 by accident as it was initially set up as an outlet for cancelled orders. Zara brand has over 1,300 stores spread in 39 countries and became the world’s fastest growing volume garment leader (Slack, Chambers, Johnston, & Betts, 2008).

The three companies create own designs and are reluctant to outsource. Benetton and Zara engage in in-house designing while H&M engages popular designers occasionally with an aim of attracting more customers for associating with famous designers (Slack, Chambers, Johnston, & Betts, 2008). However, such guest designers at H&M create designs in H&M production stores. In-house designing arises from the fact that in fashion industry, designing defines a company and contributes to success or lack of it in a market. In addition, in such a dynamic market, design must take least time possible (Slack, Chambers, Johnston, & Betts, 2008).

In this regard, speed is of essence in the supply chain and especially in design stage. The three companies make sure that designs reach required points on time and in right quality. This leads to another important aspect which clearly manifests in the three companies: flexibility. Flexibility refers to being fast and responsive which is critical in fashion industry. Flexibility also applies to the cost of producing a design where each company works towards allocating enough resources to the design process. All in all, the companies must also take care not to overfund the design process (Zhelyazkov, n.d.).

All suppliers associated with Benetton are distinct from the ownership of Benetton. Regarding manufacturing, Benetton does not make any cloth or spin yarn. Benetton is only involved in some steps in the garment-making process which allows it to interact with suppliers (Slack, Chambers, Johnston, & Betts, 2008). Benetton has production units in Italy and various other places in the world but outsources most of manufacturing work. H&M does not claim ownership to any of the supplying or manufacturing stages and this makes H&M stand out from the three companies. Zara came into being as an exclusive manufacturing company and have since owned most of the supply chain and manufacturing stages (Slack, Chambers, Johnston, & Betts, 2008).

Each of the three companies has its own warehouse facilities. Zara has heavily invested in warehouses with an aim of increasing manufacturing velocity. Such warehouses do not serve as storage facilities but units for sorting and re arranging products into right quantity for delivery to retail outlets. As such, goods do not take long in the warehouses and if a company is not able to handle this part, outsourcing becomes necessary so that goods move around the world in time. The three companies have invested in this part through outsourcing (Slack, Chambers, Johnston, & Betts, 2008).

Benetton owns few of the outlets while the rest are under franchise. H&M and Zara own most of the retail outlets and only partner in regions where such partnership is a legal prerequisite for doing business. Benetton is in a position to expand without investing much of its capital to retail outlets while H&M and Zara must necessarily invest in capital to acquire more retail outlets (Slack, Chambers, Johnston, & Betts, 2008).

Since design forms the foundation of the three companies, they should invest a lot in this stage of the supply chain management. To attract more customers, Benetton and Zara should also invite guest designers to increase the popularity of the two companies since H&M has already done it and has succeeded in attracting customers by exploiting the reputation of such designers. However, this does not imply outsourcing of the design stage as outsourcing a core capability is risky and if handled by unworthy players, can bring down an enterprise (Mandeep, 2008).

Regarding suppliers and manufacturing, it is prudent to own parts of the manufacturing process and get involved in supplying process. This gives a company a chance to influence manufacturing velocity and get in touch with suppliers (Zhenxiang & Lijie, 2011). As indicated, this should only be partial and complete involvement in manufacturing and supplying process should belong to other players so that the three companies minimize expenditure that would go towards setting up of expensive manufacturing units. In addition, lack of deep involvement in manufacturing and supplying process gives a company an advantage in focusing on core capability (Mandeep, 2008).

On the same line, the three companies should outsource distribution stage of supply chain management but where necessary and convenient, they should invest in warehouses which should serve as an extension of the factories but not as storage units. The companies should make sure that goods getting into warehouses do not overstay but are repackaged and distributed to retail stores in the shortest time possible (Mandeep, 2008).

As concerns retail, franchise is better than investing capital in retail outlets. This allows companies to invest capital in core business and at the same time expand easily. In this case, the three companies would invest more in design and partner in retail outlets. Lastly, none of the companies seem to have invested in Information technology yet this would contribute to competitive advantage (Bhagwat, 2011).

Bhagwat, S. (2011). Zara: IT for Fast Fashion Case Analysis . Web.

Mandeep, S. (2008). Analysis of clothing supply chain: Integration & Marriage of Lean & Agile . Web.

Slack, N., Chambers, S., Johnston, B., & Betts, A. (2008). Operations and Process Management: Principles and Practice for Strategic Impact (2nd ed.). New York: Prentice Hall.

Zhelyazkov, G. (n.d.). Agile Supply Chain: Zara’s Case Study Analysis . Web.

Zhenxiang, W., & Lijie, Z. (2011). Case Study of Online Retailing Fast Fashion Industry. International Journal of e-Education, e-Business, e-Management and e-Learning, I (3), 195-200.

• Astonishing Success of Zara in the Fast Fashion Industry
• Marketing Communication at Benetton and Yeo Valley Companies
• Benetton's Eccentricity in Advertisement Campaign
• Boeing Company's Functional Strategy and Control
• Sweet Milk Company's Objectives and Business Plan
• The TJX Companies Inc.'s Pricing Strategies
• The TJX Companies Inc.'s Promotional Strategies
• The TJX Companies Inc.'s Distribution Strategy
• Chicago (A-D)
• Chicago (N-B)

IvyPanda. (2020, August 22). Benetton's, H&M's, and Zara's Design and Retail. https://ivypanda.com/essays/benettons-hampms-and-zaras-design-and-retail/

"Benetton's, H&M's, and Zara's Design and Retail." IvyPanda , 22 Aug. 2020, ivypanda.com/essays/benettons-hampms-and-zaras-design-and-retail/.

IvyPanda . (2020) 'Benetton's, H&M's, and Zara's Design and Retail'. 22 August.

IvyPanda . 2020. "Benetton's, H&M's, and Zara's Design and Retail." August 22, 2020. https://ivypanda.com/essays/benettons-hampms-and-zaras-design-and-retail/.

1. IvyPanda . "Benetton's, H&M's, and Zara's Design and Retail." August 22, 2020. https://ivypanda.com/essays/benettons-hampms-and-zaras-design-and-retail/.

Bibliography

IvyPanda . "Benetton's, H&M's, and Zara's Design and Retail." August 22, 2020. https://ivypanda.com/essays/benettons-hampms-and-zaras-design-and-retail/.

» Study the supply chain practices of Zara, H&M and Benetton. » Understand the importance of supply chain in the apparel industry. » Analyze the strengths and weaknesses of different types of supply chains, and the linkage between strategy and the choice of supply chain type. » Evaluate how the three companies, through efficient supply chain management, were able to hasten the product delivery process.

Supply Chain, Zara, H&M, Benetton, Design, Production, Distribution, Dual Supply Chain, Central warehouse, Distribution center, Store management, Franchise operations, Fashion industry, Emerging trends, Replenishment, Third party suppliers, Restocking

Zara - Next Page>>

Case Studies Links:- Case Studies , Short Case Studies , Simplified Case Studies . Other Case Studies:- Multimedia Case Studies , Cases in Other Languages . Business Reports Link:- Business Reports . Books:- Text Books , Work Books , Case Study Volumes .

• American History (1,320)
• Biographies (722)
• Book Reports (1,617)
• Business (9,201)
• English (4,172)
• History Other (1,404)
• Miscellaneous (3,117)
• Music and Movies (518)
• Philosophy (589)
• Psychology (1,286)
• Religion (554)
• Science (1,608)
• Social Issues (2,797)
• Technology (1,269)
• Browse Essays
• / Technology
• / Zara, H&m, Benetton: Supplying...

Zara, H&m, Benetton: Supplying Fast Fashion

Essay by people   •  September 12, 2011  •  Case Study  •  1,153 Words (5 Pages)  •  4,580 Views

Essay Preview: Zara, H&m, Benetton: Supplying Fast Fashion

RESEARCH CASE STUDY FROM BIRMINGHAM CITY UNIVERSITY, MARKETING OPERATIONS

ZARA, H&M, BENETTON CASE STUDY: Supplying fast fashion

High-street Design Labels

Notable here is that all three companies do the majority of their own design. In fact, Benetton and Zara do virtually all of their own design in-house, while H&M is using 'guest designers', but mainly to exploit the reputation of these designers.

It is worth noting that for all the stages in the supply chain, it is design that these companies are the most reluctant to outsource. This is because that in an industry concerned with fashion, an aesthetic value, the design stage is the operation that contributes the most to the market image of the company. Of the main process objectives for the design part of the supply chain, speed is very important, as is quality (in terms of fitness for purpose). Similarly, where distinctive seasons are still used (more so at Benetton, less so at Zara) dependability, that is having designs finished in time for the clothes to be put through the supply chain and reach the stores in time for the season, is also relatively important.

Flexibility is also an issue. It is important to draw the distinction between flexibility and agility. The concept of agility (being flexible, fast and responsive) may be a better way of thinking about fast fashion. The issue of cost is also important here. It is not about the cost of the finished garment (this is important but part of quality as 'fit for purpose') but the cost of producing the designs. While this cannot be allowed to get out of control, each company seem to understand the importance of not under resourcing the design process.

Suppliers and manufacturing

Benetton does not own any of its suppliers. It does not make cloth or spin yarn. However, because it does manufacture some stages of the garment-making process, it will have an interest in relationships with suppliers. As regards the manufacturing stage, Benetton has plants both in Italy and around the world, but relies significantly on a large number of 'contractors' who perform most of the manufacturing. The interesting point here is that these contractors are often owned and managed by ex-Benetton employees. H&M does not own any part of the supply and manufacturing stages of the supply chain. This is quite a deliberate policy. Of the three companies, they are the only one to keep totally clear of these activities. Several suggestions for this approach could be :

* It means they do not require the capital to invest in expensive manufacturing plant.

* They are specialists in designing and selling rather than manufacturing, so it is best to stick to what you know best.

* There are plenty of companies around the world who can make garments; increasingly these are in relatively cheap labour cost economies. Managing these factors is a specialized task.

* Generally, there is more margin in service activities than in manufacturing activities.

Zara started out as exclusively a manufacturing organization. Mainly though, it is because Zara believes that they acquire distinct capabilities by owning so much of these stages (and other stages) of the chain.

Distribution

Very few companies of this type still perform all their own distribution. All three have warehouse facilities. In particular, Zara has put significant