Can a clothing retailer famous for local, in-season production take advantage of lower wage costs abroad without hindering its competitive advantage?
Can a clothing retailer famous for local, in-season production take advantage of lower wage costs abroad without hindering its competitive advantage?
THE JEROME CHAZEN CASE SERIES In 1975, Amancio Ortega Gaona, a former clerk at a ladies' apparel retailer, opened his first Zara clothing store in La Coruia, Spain. The company remained based in Spain's Galicia region even as it became an international chain, with more than 300 stores worldwide. The company's growth - and its ability to offer high-concept fashion at mainstream prices - is widely credited to its unique location and vertically integrated model of flexible production. But Zara is now considering shifting more of its garment manufacturing offshore, particularly to China. Will the move hurt Zara's image - and its competitive advantage? In this case, students learn about the sourcing dilemmas and margin pressures faced by an international retailer.
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