Zara, H&M, and the Gap: Brands Comparison

Subject: Case Studies
Pages: 1
Words: 301
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2 min
Study level: Master

Zara, H&M, and the Gap represent the three largest international fast-fashion brands. Their resources and capabilities are comparable, making them worthy competitors (Johnson et al., 2020).

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Zara, in relation to H&M, gains more attention from the audience, despite the fact that, according to various sources, the number of stores of companies compared in the countries is approximately the same. Zara’s strength lies in its emphasis on “manufacturing facilities and distribution networks,” which results in excellent profit margins and positive audience response (Aftab et al., 2018, p. 212). In turn, H&M offers all of its products at meager prices 0(Shaari & Hong, 2018). This includes formal and business wear to target a large group of customers with low purchasing power for the garment, making it a competitive advantage (Elizaga, 2016).

Considering the Gap, which “stands for high-quality clothing,” has not accommodated radical changes in retail (Brooks et al., 2018, p. 491). Currently, 230 stores have been closed, and the transition to online sales is an advantage (Garcia-Torres et al., 2017). Analyzing the IT systems of companies, everyone is investing in online shopping and delivery, realizing the importance of this option for people, especially after the pandemic.

What is more, the products of Zara’s competitors, H&M and Gap, are produced in developing countries, where wages are relatively low. This saves costs but “makes the company less flexible” because orders for overseas manufacturers need to be placed at least six months before the start of the season (Gasparri et al., 2019, p. 352). Zara, in turn, produces 60% of its own products, relying mainly on its design team and sewing equipment at its headquarters in Spain (Mozzhukhina, 2015). Due to this, the company can determine the number, design, and variety of clothing models produced and accelerate turnover, taking advantage of a sustainable competitive advantage.

Reference List

Aftab, M. A., Yuanjian, Q., Kabir, N., and Barua, Z. (2018) ‘Super responsive supply chain: The case of Spanish fast fashion retailer Inditex-Zara’, International Journal of Business and Management, 13(5), p. 212.

Brooks, A., Fletcher, K., Francis, R. A., Rigby, E. D., and Roberts, T. (2018). ‘Fashion, sustainability, and the anthropocene’, Utopian Studies, 28(3), pp. 482–504.

Elizaga, L.U. (2016) The contrast of fast fashion giants Zara, H&M and Uniqlo. [Unpublished master’s thesis]. Higher Technical School of Industrial Engineers and Telecommunications.

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Garcia-Torres, S., Rey-Garcia, M., and Albareda-Vivo, L. (2017) ‘Effective disclosure in the fast-fashion industry: from sustainability reporting to action’, Sustainability, 9(12), p. 2256.

Gasparri, S., Ikeler, P., and Fullin, G. (2019) ‘Trade union strategy in fashion retail in Italy and the USA: Converging divergence between institutions and mobilization? ’, European Journal of Industrial Relations, 25(4), pp. 345–361.

Johnson, G., Whittington, R., Scholes, K., Angwin, D. & Regner, P. (2020) Fundamentals of Strategy, 5th Edition. Harlow: Pearson.

Mozzhukhina, A. (2015) ‘How Zara uses supply chain management to execute business models’, HBS Digital Initiatives. Web.

Shaari, A., and Hong, T. T. (2018) ‘Evolution in fashion retail: Comparing fashion specialty store and department store in Malaysia’, International Journal of Academic Research in Business and Social Sciences, 8(9), pp. 1910–1918.