Production process through vertical integration

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Question

The Zara model is counterintuitive because they don't rely on advertising or setting a ton of sales in order to get customers in their store. They also don't rely on trying to set new trends and showcase those trends at fashion shows. Instead, they rely on word of mouth from customers. They interact with their customer's and ask them what they would like to see in their clothing line, or what other colors they would like along with tracking what clothes are being sold the best so that they are not overstock ing on merchandise that is not selling. By Zara doing this above made their firm a better performer than Gap and other competitors. Zara's model has contributed to its outperformance compared to Gap and other competitors in several ways, particularly through its distinctive approach to production and supply chain management. Here's how "rarely outsourcing" fits into that model:

Vertical Integration:

- Zara maintains control over much of its production process through vertical integration. This means it owns or closely collaborates with subsidiaries involved in the manufacturing process.

- By keeping production in-house or close to its headquarters, Zara can directly.

Reference no: EM133836571

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