Madhani, P. M. (2012) in “Value creation throughintegration of supply chain management and marketing strategy” says, when bothSCM collaborative efforts as well as marketing collaborative efforts are high,full integration occurs between SCM and marketing with optimal result for thefirm. This is explained by the business model of Zara.Ian Malcolm Taplin, (2014) in research article “GlobalCommodity Chains and Fast Fashion: How the Apparel Industry Continues toRe-Invent Itself”, talks about how Western retailers have increasingly pushedsupply chain rationalization and improved channel integration to forcemanufacturers to be more responsive to cost, quality and speed of deliveryrequirements.
Shortened turn-around time for manufacturers now complements lowprice as the essential features for sub-contracting and it provides retailerswith opportunities to sell inexpensive, fashion-orientated goods. Innovationsassociated with fast fashion are discussed, particularly how some retailershave combined supply chain rationalization with fashionable product offeringsthat meet volatile consumer preferences. The two major retailers, Zara and H&M,illustrate how strategic differences within the fast fashion model reflectvariations in global commodity chain restructuring.Nebahat Tokatli (2007) in Global sourcing: insightsfrom the global clothing industry—the case of Zara, a fast fashion retailersays, as supplier firms in countries such as India, Morocco and Turkey havegained the competence to manufacture intricately worked high-quality garmentswith the required flexibility and at high speeds competencies even includingdesign capabilities as suppliers have learned how to ‘prepare collections’,Zara has turned to sourcing from these countries. It appears that instead ofZara changing the geography of jobs, the geography of competencies and jobs haschanged Zara, which is in contrast to what has been discussed in many articlesand literature.
(Johanson & Wiedersheim-Paul, 1975) in TheInternationalization of the Firm talk about how H&M has been described as atraditional/gradual internationalization retailer, which entered new marketswith successively greater psychic distance and gained knowledge with time andexperience. On the other hand, Zara has been characterized as a born-globalretailer, which emphasized psychic distance as irrelevant forinternationalization and that prior knowledge can be gained early on in life ofthe firm during expansion.During early stages of internationalization, Zara wasfollowing an ethnocentric orientation Alexander and Myers (2000) whereby thesubsidiary companies had to be a replication of the Spanish stores.
(Bonacheand Cervio, 1996). This approach encountered unexpected difficulties in somecountries due to the cultural differences. Thus, Zara decided to move towards ageocentric orientation, and adopted local solutions rather than merelyreplicating the home market.A significant characteristic of the Incremental InternationalizationModels assumes a commitment through incremental steps to gradually build experienceand gain knowledge about foreign markets (Johanson & Vahlne, 1977). H&Mfollowed this pattern in its slow expansion stage (entered 12 Europeancountries in 33 years), providing the retailers enough time to accumulateoverseas experience and identifying strategies that can be successful to applyto their international operations.In its later stage of Rapid Expansion (2000-present),H&M broke down this traditional model in its Middle East countries, whereit acquired market knowledge from its local partner through franchisingagreements 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 itsinternationalization process: Knowledge sharing (non-strong domestic market beforeinternationalization; higher risk-taking ability; early experience andknowledge gaining in life of the firm); competitive resource-based advantages(fully integration; standardization; long-term relationship and networks withintermediaries); and irrelevant psychic distance (Chetty & Campbell-Hunt)Pankaj Ghemawat (2006) in Zara: Fast Fashion talksabout the firms such as Zara involved into Cautious and Aggressive expansionstrategies during different periods with the latter being adopted by the experienceof Cautious expansion.
Carmen Lopez (2005) in INTERNATIONALISATION OF SPANISH FASHION BRAND ZARA says that GapInc. internationalization process has been slow and has focused on fewcountries. After operating in the home market for almost twenty years, Gapopened its first store in the UK in 1987 and Canada in 1989 respectively. Theyare both close markets given their cultural proximity and Canada is anadjoining country to the US. During the second phase of internationalizationGap expanded into France in 1993 and Japan in 1995 despite having geographicaland cultural distance. The experience acquired in earlier markets and theattractiveness of these two markets were the main driving forces.
Afteroperating in the German market for ten years, the unsatisfactory results insales led Gap to withdraw from German market in August 2004. Also in the literature review, it was found that themain supply chain solutions in the fashion industry are based on quickresponse, fast fashion and legible concepts. All these approaches, including ITapplications, manufacturing and sourcing activities as well as logisticsoperations, along with effective marketing policies achieve successful andefficient responses to consumer demand.