Fashion retail has always been a highly competitive and fast-changing business where many chains have risen dramatically and then fallen just as quickly. Today, as many firms are struggling to compete while simultaneously managing their costs and delivering adequate returns, others are thriving in the face of shifting circumstances.
In the past decade, a relatively new phenomenon called fast fashion has commanded the attention of the consumers, managers and investors. Fast fashion retail pioneers like Zara and H&M, with their super-responsive supply chains and efficient decision-making processes, are able to produce and distribute affordable high-end fashion at breakneck speeds. They relentlessly offer customers the cheap-chic products they want, where they want, avoiding any unnecessary faux pas. As a result, they enjoy higher profit margins than their competitors—an average of 16-plus percent versus a modest 7 percent for typical apparel or specialty-apparel retailers. And in European countries, where the concept began, this business represents anywhere from 5 to 18 percent of the total apparel market.
An in-depth analysis of a set of fashion retailers has revealed some of the critical ingredients of success, distinguishing such factors from incidental ones.
In essence, we found that what sets fast fashion companies apart from all other competitors is that they conceive strategy and its implementation as an iterative rather than a linear process. They intuitively yet consistently move through a loop, placing less emphasis on hierarchy and more on feedback, dialogue, group processes, understanding organisational complexity and dynamics, and limiting uncertainty. By moving through the iterative cycle of translating understanding into action, they are able to fashion superior strategies and performance.
Inhaltsverzeichnis (Table of Contents)
- Executive Summary
- 1. Introduction
- 2. Conspicuous consumption and the need for agility
- 3. The agility loop: a systemic approach to strategy
- Making sense of a situation
- Making choices
- Making things happen
- Making revisions
- 4. Company overviews: business models and growth strategies
- Inditex (Industria de Diseño Textil, S.A.)
- H&M (Hennes & Mauritz A.B.)
- Benetton Group S.p.A.
- The Gap Inc.
- 5. Comparing Financial Performance
- Total revenue
- EBITDA
- Market capitalisation
- 6. The drivers of agility
- Retail lead time
- Directly managed retail operations
- Cross functional design teams
- Coexisting supply chains
- Extra capacity
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This work explores the concept of strategic agility and its impact on superior performance within the fashion retail industry. It aims to examine how leading fashion retailers achieve this agility through specific strategies and operational models.
- The importance of strategic agility in the fashion retail industry
- The role of the agility loop in achieving strategic agility
- Comparison of business models and growth strategies of leading fashion retailers
- The key drivers of agility in fashion retail
- Analysis of financial performance indicators to assess the impact of agility
Zusammenfassung der Kapitel (Chapter Summaries)
The study begins with an introduction to the fashion retail industry and the growing need for strategic agility to compete effectively in a dynamic environment. Chapter 2 explores the concept of conspicuous consumption and its relevance to the fashion retail industry. Chapter 3 introduces the agility loop, a systemic approach to strategy that encompasses four key phases: making sense of a situation, making choices, making things happen, and making revisions.
Chapter 4 delves into the business models and growth strategies of four leading fashion retailers: Inditex, H&M, Benetton Group, and The Gap Inc., providing insights into their respective approaches to achieving agility. Chapter 5 compares the financial performance of these companies based on key metrics such as total revenue, EBITDA, and market capitalisation. Finally, Chapter 6 analyzes the drivers of agility, examining factors such as retail lead time, directly managed retail operations, cross-functional design teams, coexisting supply chains, and extra capacity.
Schlüsselwörter (Keywords)
The primary themes and concepts explored in this work include strategic agility, fashion retail, business models, growth strategies, agility loop, retail lead time, directly managed retail operations, cross-functional design teams, coexisting supply chains, extra capacity, and financial performance.
- Arbeit zitieren
- Stefano Turconi (Autor:in), 2007, Achieving strategic agility. On the fast track to superior performance in fashion retail, München, GRIN Verlag, https://www.grin.com/document/144067
