Hbr Cases Csr Outsourcing in Tangers 2 P

The global apparel market is a buyer-driven market. Along with the globalization and technology development, consumers are easier to access to fashion. As a result, the customers are changing and the companies are evolving to deliver customers satisfaction. Zara, the most profitable brand of Spain clothing retail group Inditex, has leveraged its unique strategy to achieve success and will be expected to maintain a sustainable growth in the fashion industry.

Zara is a Spanish clothing and accessories retailer based in Arteixo, Galicia, and founded in 1975 by Amancio Orteg. It is the flagship chain store of the Inditex group, the world's largest apparel retailer. Zara describes its business as “The fast fashion” model which abandoned the traditional model of seasonal lines using instead adapting the creative ideas to customer demand on a going basis. Fashion clothes are like food, it turns bad quick. Zara’s business is about reducing response time. Zara needs about two week to develop a new product and gets it to stores. The company launches around 12,000 new designs each year. Zara’s success offers us some instructive lessons in how to create and sustain a break through strategy.

It is impossible to beat a cheap price. In today’s world, finding a sought after item at a dirt cheap price is one the main motivation American’s get in the car and battle the craziness in the mall. And as the basic American human beings that we are, it is never possible for us to be complacent with the amount of stuff we currently have. Eventually, we will come across a friend that has the next must have item that will cause us to run to our local mall and purchase a similar item at the lowest price possible. With all that said, it is no wonder why the industry of fast fashion has taken off over the past decade. Felipe Caro and Victor Martínez-de-Albéniz, researchers for UCLA’s school of supply chain coordination, define fast fashion as “a business model that combines four elements: (i) fashionable clothes mostly for consumers under 40; (ii) affordable prices in the mid-to-low range; (iii) quick response; and (iv) frequent assortment changes”. Retailers like H&M, Forever 21, Target, and Wal-Mart have been able to take this business model and make a fortune. But while all these quick trends and cheap prices are great for the consumer, its cost on the foreign worker and the environment does not go uncovered. In the book Overdressed by Elizabeth Cline, she presents many arguments supporting the claim that fast fashion is unethical based on

The clothing industry has become synonymous with sweatshops and overseas labour. The True Cost pushes for commercial change. Bringing an awareness to what “sweatshop” really

As I continued my research, I found an article written by Ralph Armbruster-Sandoval, a professor in the Latin American and Iberian Studies program at the University of California, Santa Barbara. The article, “Workers of the World Unite? The Contemporary Anti-Sweatshop Movement and the Struggle for Social Justice in the Americas,” examines and discusses the ascendancy of clothing corporations, such as Polo Ralph Lauren. This ascendancy allows them to surmount the human rights campaigns directed at their nefarious mistreatment of sweatshop workers in Central America. According to Armbruster-Sandoval, “Transnational Corporations (TNCs)...hold the upper hand because they can simply cut and run when they are confronted with labor-organizing campaigns...”

Sweatshops were first well known to the public eye when several major corporations’ exploitation of workers were revealed during the late twentieth century. Sweatshops generally are factories that provide workers with socially unacceptable working conditions, especially dealing with clothing items. With the expanding apparel industries around the world, more and more corporations are using sweatshop factories to their advantage. Numerous companies claim that they are not responsible for actions of those factories from which they purchase from because it is not part of their corporation. However, action needs to be taken by the government and individual corporations to improve the working conditions in sweatshop factories. Due to the harsh working environment, insufficient pay, and other factors that cause inhumane treatment of workers in sweatshops, the US government should improve working conditions for workers, have stricter regulations on sweatshops, and strive to improve the treatment of sweatshop workers across the globe.

Nike, Victoria’s Secret, GAP, Levis, Nordstrom, Calvin Klein. Other than their status as large fashion retailers, they all have one thing in common: the International Textile Garment and Leather Workers’ Federation condemns their use of overseas sweatshops. Goods manufactured in Sri Lanka, Indonesia, and many other Asian and African countries are often made in less-than-ideal conditions for low wages. While opponents of overseas labor champion stricter trading laws, this form of supply-and-demand economics remains a vital part of the global economy, as it enables prices to remain low in developed countries and employs many individuals in distant, poorer areas.

When people hear brand names such as Nike and Gap, most individuals will immediately associate the brands with fashionable and expensive designer products. It is no doubt that most people have worn an item with these particular brand names on them. However, many may not know that under the soft clothing and recognizable brands lies a very different story. Sweatshops date all the way back to the late eighteenth century. They did not have Gap or Nike, but they had huge textile industries. Back then, they attracted many of the poor to rapidly growing big cities, such as London, and soon became a common way for low-skilled workers to earn money. Although sweatshops mostly exist in places with third world living conditions, it affects people on an international level. Today, Cambodia’s textile industry plays a key role in the exporting and manufacturing of garments worldwide. However, exploitation by factory owners, and lack of sweatshop monitoring led to heinous living conditions for garment workers (Meyers). During the past couple of years, garment workers have started to speak out for themselves, protesting on the streets, but while the wages of the workers did improve, it came with a price.

As consumers, large consumption of cheap clothing triggers a pressure on manufacturers to keep mass producing products at a desperate, low price. However, this results to the continuing exertion of unhealthy and unjustful conditions of sweatshop labor. As previously stated, large corporations such as Forever 21, H&M and many others have sourced their factories to undeveloped countries, where employees receive barely enough pay to survive on from a day to day basis. The approach to an end or limitation of sweatshop suppliers will never reach a possibility if the limitless drive for inexpensive clothing keeps increasing. To consumers, low priced clothing may seem strikingly attractive, but the continuance purchase of cheap clothing signals a sign of approval to factory suppliers; declaring the permission to keep sweatshops alive in undeveloped countries. Generally, consumers don’t understand the substantial cost behind a cheap t-shirt before throwing it in the shopping cart, due to the coverup of labor and human rights practices from many apparel companies (Winkler). This then constitutes to the unawareness of poor labor conditions enforced by clothing retailers. Unintentionally, consumer consumption aids as fuel for the production of sweatshops in the garment industry. To enumerate, 98% of clothing today has been outsourced outside from domestic

Zara is an apparel company and the leader brand of the Spanish retail mogul, Inditex. zara was established in 1975 in Spain by Amancio Ortega who is currently the 3rd richest man in the world, the first store was opened as an outlet but by 1979 the establishment already had six stores at different locations in Spain and by 1985 the company branched out to Portugal new york city and Paris. Today Zara has over 1900 stores worldwide which are located in 22 different countries; these stores render employment to over 125,000 employees. Zara depends on information they gather from customer and organizational feedback from all their stores on a daily basis this information is then forwarded to the supply chain, which works in synergy with the stores to keep the level of storage in stores down to a minimum. Zara owns the production, supply chain and in-house production, which lead to greater speed in output (M.A.Cano)

In comparison to competitors, Zara’s business strategy, in regards to strategic partnerships and cost of production, provide for a strategic competitive advantage. Zara, unlike its competitors such as Gap, Benetton, and H&M, does not use Asian outsourcing. Eighty percent of Zara’s materials are manufactured in Europe, with 50% made in Zara controlled facilities in the Galicia region of Spain near headquarters. Most of Zara’s competitors have 100% outsourcing to cheap Asian countries. Though the cost of production in Spain is 17-20% more expensive than Asia, Zara does have a competitive advantage over its competitors in regards to operations. The local strategic partnerships that Zara maintains with manufacturers in Europe allow for a product throughput time of 3-4 weeks from conception to distribution. To make this happen, the company designs and cuts its fabric in-house and it acquires fabrics in only four colours to keep costs low. The proximity of these suppliers gives Zara great flexibility in adapting their product lines based on up to date market trends and consumer behaviour. It also decreases costs of holding inventory. Zara’s competitors, through outsourcing to Asian countries such as China, sacrifice the benefits of proximity for low labour and production costs.

Zara is a brand widely known across the globe for its unique fashionable cloths .It is a part of inditex which is known as one of the world’s largest distribution group in the world and the owner of the company is Spanish businessman named Amancio Ortega .This company was formed in 1963 as a fashion retailer for women clothes but the company became a success after the addition of a new brand named Zara in 1975 .Today Zara is amongst one of the largest international company producing the fashionable clothes. After the success of the inditex as a successful brand (ZARA) maker, inditex was able to expanded itself with more successful brands across the world in different countries at the end of the 1980.from 1976 to 1983 Zara turned out to be a successful retailing brand and introduced itself with nine new outlets to the biggest cities of the Spain with its first headquarter in Goa. Year 1984 turned out to be the witnesses of first logistics headquarter of Zara covering a large area of 10,000 square metres. New York

Fast fashion is merely more than a one hit wonder. The fast fashion industry has grown and has ultimately proven itself to be profitable industry in the clothing market. The retailer most distinguished for a fast fashion approach is Zara (Hayes & Jones, 2006). Zara is a child company of the parent company Inditex. Zara stores have established the stride for merchants around the globe in creating and shipping fashionable clothing (“Case 3-4. Continued Growth for Zara and Inditex”, 2013). Their marketing approach has helped them become extremely successful in terms of providing the customer with. International marketing strategies and its efficiency assists in the expansion of Zara. Cultural understanding is virtuously

Multinational Corporations have been subjected to various scandals relating to indirect violation of worker’s rights in China. Nonetheless, the extent to which corporations are responsible to ensure their operations and associations do not create nor reinforce human rights abuses is contentious. The objective of this research paper is to engage with the theoretical discourses pertaining to CSR, and to analyze the empirical impacts of CSR codes in Chinese factories. My research illustrates the minimal degree of effectiveness of CSR implementation in Reebok factories, due to state legislation and insufficient initiative by Reebok in relation to the cost associated with code implementation. I contrast the initial critical findings with a Swiss case study of the Chinese textile industry, which presents evidence of effective CSR implementation due to the threefold cooperation of brands, factory managers, and employers. I then bring forth Milton Friedman’s attack on the entire notion of CSR as an illegitimate imposition against businesses. I contend that successful CSR implementation requires trilateral engagement of multinational corporations, factory managers, employees complimented with an overarching, but limited state regulation.

Until now, every garment that is product in Zara’s factories around the world has to travel back to Spain in order to go through quality controls, and is then send to its distributors. But the continuous flows of goods from all the productions sites to Spain and from Spain to the markets of sell, as well as the relative communication flows necessary to such a business model will inevitably slow down as Zara will have to deal with a constantly growing number of customers. Thus, the highly centralized information system of Zara seems not to be easily applicable in Asia, in addition to being time and money consuming.