| H&M | Zara | Benetton |
Concept | Fashion and quality at the best price | Fashion and quality at the best price | Less high fashion but higher quality and durability |
Design | - The “design” stage is separated from the “volume buying” stage and “delivery dates” choices
- One single homogeneous department gathering:
100 designers in Stockholm + 50 pattern designers + 100 buyers + budget controllers
- They are the only one to involve famous designers in their designing process (Karl Lagerfield, Balmain…)
- Seasonless cycle: continual introduction of new products throughout the years
| - The design input flows from 3 separate functions:
Designers, market specialists and buyers
- The design stage is split into 3 product areas: Women’s, men’s and children’s garments. Each area has its own designers (around 300), market specialists and buyers
- Market specialists involve retail stores at the designing stage by asking about in-store clients’ reactions
- Seasonless cycle: continual introduction of new products throughout the years
+ specific production of batches
| - 300 designers involved in designing as well as in research and development processes. Standardized products (from 20 to 5-10% of customized clothes since 2000) in order to ease the design stage
- Classic seasonal cycle: Greater proportion of flash collections than H&M and Zara
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Manufacturing | - Supply lead time: 3 weeks to 6 months
- H&M does not own any factory. They work with 750 suppliers
- Production activities are divided between Asia and Europe with 21 production offices. Each production office has to coordinate with the others and with its own suppliers to produce at the right time
- Place the relationship with suppliers at the center of their strategy for minimizing risks
- Observe a balance between high volume orders for fashion basics and shorter lead times for trendier products
| - Supply lead time: 15 days
- Zara has the greatest vertical integration of all. It owns most of its manufacturing capability with a network of 20 Spanish factories dedicated to technologically complex or capital-intensive operations
- They buy 40% of its fabric from its wholly owned subsidiary
- Most Zara factories and their subcontractors work on a single shift system to retain some volume flexibility
| - Benetton owns a central in Italy for technologically complex or capital-intensive operations. The central co-ordinates production activities in a specialized way on a geographical basis. These production activities performed by a network of smaller contractors, telling them how much to produce and when to do so
- Contractors then subcontract some activities
- Benetton has a controlling share in its main suppliers of raw materials to ensure fast supply to its factories
- Benetton places decisions about colors late in the supply process to ensure more flexibility
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Distribution | - Stock management is taken care of internally but physical distribution is subcontracted transiting via its own terminal in Hamburg
- The products stock is centralized, with 1 central store then replenishes retails stores
| - Invested in highly automated warehouses close to their main production centers responsible for packing and shipping to retailers
| - Invested in highly automated warehouses close to their main production centers responsible for packing and shipping to retailers
- Use of RFID tags to track its garments
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Retail |
- Specificity: Wants to make the client feel at home.
| - Specificity: High turn-over for garments because of the batches
| - Average size : between 1500 and 3000 m2
- Observes a balance between small third-party-owned stores and bigger, Benetton owned stores
- Specificity: Uses those mega-stores to display the whole range of Benetton products and reinforce the Benetton shopping experience
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