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H & M Business Model Essay

1992 Words8 Pages

operational needs of its enterprise.” (Sikulu, Chong, Braun & Sikula, 2010: 3) insourcing refers to production done inside the company structure, maintaining full control over the production plants, either internationally produced or in the home country. According to Gereffi (2005) international retailers are the driving force behind globalization in the apparel industry. Therefore a comparison is made between two of the largest globally active retail groups, namely H&M group and Inditex. H&M does not own any production facilities and therefore operates, using a fully vertically disintegrated supply chain. Meaning they outsource the production of all their clothing produced. Where on the other hand Inditex is known for its vertically integrated supply chain, focusing on in-house production controlling every step of the supply chain. They only outsource the production of simple clothing ordered in large batches like sweaters. (Göransson Jönsson & Persson, 2007) by comparing the two opposite business models of Inditex and the H&M group, both active in the clothing industry, a first indication and measurement of the …show more content…

o Measuring: Costs of goods sold, salaries, overall expenses as a ratio to sales.
- To what extent does quality differ between the vertical disintegration strategy of the H&M group and the vertical integration strategy of Inditex? o Measuring: Aesthetics, Intangible Elements, Conformance, Features, Reliability, Durability
- To what extent does agility differ between the vertical disintegration strategy of the H&M group and the vertical integration strategy of Inditex and which benefits are gained? o Measuring: The lead-time for new products.
- To what extent does the asset utilization differ between the vertical integration strategy of the H&M group and the vertical disintegration strategy of

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