Madhani, P. M. (2012) in “Value creation through
integration of supply chain management and marketing strategy” says, when both
SCM collaborative efforts as well as marketing collaborative efforts are high,
full integration occurs between SCM and marketing with optimal result for the
firm. This is explained by the business model of Zara.

Ian Malcolm Taplin, (2014) in research article “Global
Commodity Chains and Fast Fashion: How the Apparel Industry Continues to
Re-Invent Itself”, talks about how Western retailers have increasingly pushed
supply chain rationalization and improved channel integration to force
manufacturers to be more responsive to cost, quality and speed of delivery
requirements. Shortened turn-around time for manufacturers now complements low
price as the essential features for sub-contracting and it provides retailers
with opportunities to sell inexpensive, fashion-orientated goods. Innovations
associated with fast fashion are discussed, particularly how some retailers
have combined supply chain rationalization with fashionable product offerings
that meet volatile consumer preferences. The two major retailers, Zara and H&M,
illustrate how strategic differences within the fast fashion model reflect
variations in global commodity chain restructuring.

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Nebahat Tokatli (2007) in Global sourcing: insights
from the global clothing industry—the case of Zara, a fast fashion retailer
says, as supplier firms in countries such as India, Morocco and Turkey have
gained the competence to manufacture intricately worked high-quality garments
with the required flexibility and at high speeds competencies even including
design capabilities as suppliers have learned how to ‘prepare collections’,
Zara has turned to sourcing from these countries. It appears that instead of
Zara changing the geography of jobs, the geography of competencies and jobs has
changed Zara, which is in contrast to what has been discussed in many articles
and literature.

(Johanson & Wiedersheim-Paul, 1975) in The
Internationalization of the Firm talk about how H&M has been described as a
traditional/gradual internationalization retailer, which entered new markets
with successively greater psychic distance and gained knowledge with time and
experience. On the other hand, Zara has been characterized as a born-global
retailer, which emphasized psychic distance as irrelevant for
internationalization and that prior knowledge can be gained early on in life of
the firm during expansion.

During early stages of internationalization, Zara was
following an ethnocentric orientation Alexander and Myers (2000) whereby the
subsidiary companies had to be a replication of the Spanish stores. (Bonache
and Cervio, 1996). This approach encountered unexpected difficulties in some
countries due to the cultural differences. Thus, Zara decided to move towards a
geocentric orientation, and adopted local solutions rather than merely
replicating the home market.

A significant characteristic of the Incremental Internationalization
Models assumes a commitment through incremental steps to gradually build experience
and gain knowledge about foreign markets (Johanson & Vahlne, 1977). H&M
followed this pattern in its slow expansion stage (entered 12 European
countries in 33 years), providing the retailers enough time to accumulate
overseas experience and identifying strategies that can be successful to apply
to their international operations.

In its later stage of Rapid Expansion (2000-present),
H&M broke down this traditional model in its Middle East countries, where
it acquired market knowledge from its local partner through franchising
agreements due to problems regarding real estate, risk involved etc.

On the basis of Rapid Internationalization Models,
Zara was described as maintaining three basic characteristics in terms of its
internationalization process: Knowledge sharing (non-strong domestic market before
internationalization; higher risk-taking ability; early experience and
knowledge gaining in life of the firm); competitive resource-based advantages
(fully integration; standardization; long-term relationship and networks with
intermediaries); and irrelevant psychic distance (Chetty & Campbell-Hunt)

Pankaj Ghemawat (2006) in Zara: Fast Fashion talks
about the firms such as Zara involved into Cautious and Aggressive expansion
strategies during different periods with the latter being adopted by the experience
of Cautious expansion.

Inc. internationalization process has been slow and has focused on few
countries. After operating in the home market for almost twenty years, Gap
opened its first store in the UK in 1987 and Canada in 1989 respectively. They
are both close markets given their cultural proximity and Canada is an
adjoining country to the US. During the second phase of internationalization
Gap expanded into France in 1993 and Japan in 1995 despite having geographical
and cultural distance. The experience acquired in earlier markets and the
attractiveness of these two markets were the main driving forces. After
operating in the German market for ten years, the unsatisfactory results in
sales led Gap to withdraw from German market in August 2004.

Also in the literature review, it was found that the
main supply chain solutions in the fashion industry are based on quick
response, fast fashion and legible concepts. All these approaches, including IT
applications, manufacturing and sourcing activities as well as logistics
operations, along with effective marketing policies achieve successful and
efficient responses to consumer demand.


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