Compare and discuss the advantages and disadvantages of vertical integration vs. outsourcing in fashion industry
You have to give real-world examples, i.e. compare the practices of Zara and two of its competitors. You should accurately deploy key concepts or frameworks in your comparative study. For example, discuss transaction cost theory in the vertical integration decision. The evaluation should also be done on all key (internal and external) stages of the fashion value chain. You are recommended to draw and compare the full value chain of Zara and its competitors.
(Use the theory/theories to help in the explanation of why Zara choose a more vertically integrated approach and its advantages as well as challenges. Similarly, explain why Zara’s competitors adopt a less vertically integrated approach (or outsourcing more activities).
Students can adopt the Outsourcing decision structure as in the PPT.
Students should know how to draw a rather comprehensive supply networks for Zara & its competitors, and compare the differences.)
