The Fast Fashion Business Model
1. What are the key characteristics associated with the fashion markets that support this model?
The fashion industry is synonymous with rapid changes and for a company to have success in the fashion industry the organization needs to be fast and flexible. The nature of the industry is discussed in terms of its volatility, complexity and dynamism. Companies like Zara, the retailer H&M and GAP have to keep up with the every changing trends in the fashion industry. One day skinny jeans will be all the rage and the next day they will be out of style. The fashion industry changes with the popular styles of its day, and it changes day by day, month by month.
The Fashion industry manufactures cloths that have …show more content…
When a customer purchases an item the data is directly imputed into the company’s mainframe and schedules each of the stores replenishment cycles depending on demand. This keeps the supply chain lean, and nothing moves unless it has to. This is all made possible with an effective IT department utilizing the latest methods to keep Zara and H&M the leading fashion outlets in the world.
4. What are the integration requirements between partners in this strategy?
An early and constant communication between customer and supplier can ensure a better management of the supply chain, and a more agile supply chain. Another rule is if a customer treats his suppliers well, inform them, being involved with their process is likely that less issues raise and usually is a guarantee for a longtime partnership. These facts are well known by Zara and used in its daily operations. Zara’s designers gather data on sales and inventory from each of its stores on a daily basis and use this to inform their view of the situation.
This in turn brings great flexibility to Zara and H&M, allowing them to cope with the sudden changes in customer demand. Zara, in comparison to its larger competitors like Old Navy, only has 20 strong supplier partnerships compared to Zara’s much larger competitor with 65 suppliers
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Berry, Hannah. “The Fashion Industry: Free to Be an Individual.” The Norton Field Guide to
For the past several decades, globalization has been a hot topic and it also anticipates every aspect of the world to connect each other. Likewise, globalization also allows consumers to have more access to catch up with updated fashion. The advantages of globalization bring a new philosophy called fast fashion, which holds quick response time and enhanced design in fashion apparel industry. In this paper, I will deliver By exploring all the aspects of each system, I will conclude the reason why fast fashion becomes the mainstream of the fashion apparel industry, and use one particular brand, Zara, as an example to discover the impact on consumer behavior in detail. Finally I will make some comments on the future of fast fashion and what luxury brands will react to this circumstance……..
The fashion industry comprises of two things, firstly retail and secondly services. The company does not need any introduction with production equipment. The company will provide a finished product for retail through its own website and provide a large volume of orders service, as well as contract face to face to discuss customer’s needs, pricing etc.
The overall aim of the report is to show how Zara while trading in a highly competitive market has produced a supply chain model, which is unique. This uniqueness has led to the overall success of Zara and helped to make the organization a worldwide success.
Problem Statement: In 2003, Zara's CIO must decide whether to upgrade the retailer's IT infrastructure and capabilities. At the time of the case, the company relies on an out-of-date operating system for its store terminals and has no full-time network in place across stores. Despite these limitations, however, Zara's parent company, Inditex, has built an extraordinarily well-performing value chain that is by far the most responsive in the industry. Therefore the major problem to the company is to decide whether it has to upgrade the present system and by doing so, risking the reliability they have with the current system or to continue with the present DOS based system which will not be compatible for future changes or improvements.
Based on the business strategy and tactics, Zara has been trying to optimize its business operation largely in three cyclical processes ordering, fulfillment, and design and manufacturing. Much of the process are standardized and simplified under the excellent control and employee's intuitive decision making latitude. In short, the principle of Zara's business operation is optimization of all business process and get rids of all redundancies and unnecessary things. More extended or peripherals of the principles can be summarized as follow;
The fashion industry is still exceptionally fast growing and fast changing, which dictates news ideas and trends at an astounding rate. Product perception as ‘fashionable’ loses it value very soon. One day’s desired luxury item can become unwanted by the next. To update new trends, changes and fashion designs successful communication is essential (Moore, 2012: 9). To maintain good face-to-face relationship with the customer communication throughout all channels is highly important (Carr, 2013:5)
In order to have both an effective and efficient supply chain, managers should be focused on trying to achieve not only a cost effective supply chain, but a flexible one. In today’s economy, because the market is so volatile, trendy, and competitive, flexibility is the key to success. In order to respond to customers’ ever-increasing requirement demands, market leaders have positioned themselves well by continually investing in new key performance indicators, additional technology, improved supply chain networks, and streamlining efforts (Source One INC, 2013). This helps to maximize flexibility and overall responsiveness. With increased flexibility, leaders recognize that supply chains must be adjusted to meet different customer needs. In my research I will analyze Gate Gourmet’s use of information technology and the importance of supply chain integration.
Fast Fashion may be the most significant disruptive in the retail industry today. Troublesome novelties, or product or services, that alter an prevailing market by presenting minimalism, suitability, convenience and affordability, have the most positive influence on a company. Because fashion is ever changing and technology is always evolving the amount of production time it takes for something to be manufactured
Fashion is an outlet people use to express themselves. People anxiously wait to see what the next trends are as seasons pass by. We buy anything that doesn’t break a bank, people buy a $10 shirt just because it’s cheap and they might not even wear it, but it’s all right, since it wasn’t expensive. As harmless and normal as that scenario sounds, the fashion industry has created the harmful concept that is “fast fashion”, in which stores sell an abundance of extremely cheap trendy clothing and “where deliveries are small and often, with stock delivered twice a week, for instant-access fashion.” (Cochrane)
... unordinary supply chain, which gives them a highly competitive advantage. They also successfully introduced a new, unique business model into the apparel manufacturing and retail industry. Zara chose to handle design, production and distribution in-house and concentrate the whole production close to their headquarters in Spain. By the entire process, Zara can react much faster than its competitors do to both the ephemeral trends in the world of fashion and the capricious tastes of its customers. They have achieved their success by thinking out of the box. Their success is directly related to their ability to understand their customer’s most innate needs and desires and tie these to successful innovation strategies, which ultimately lead to these new and unique approaches to their business.
Zara uses its latest advanced and integrated information system to be able to link, monitor and follow up its entire supply chain with ease. By being able to link the whole process starting from design, production, distribution and finally to retailing.
The business model that sets Zara apart from other clothing retailers is how rapidly the company changes stocks and releases new product lineups. The company averages 12-16 collections annually which equates to more than one lineup a month. Due to stock being limited and the rapid production Zara brings forth, their items are viewed as exclusive promoting further business. Their customers are happy knowing that their specific article of clothing is more “rare” due to only having an average of a two-week window to purchase the clothing. The company specifically targets current trends and has them in the store within 30 days. This maintains the brand’s uniqueness and relativity in fashion.