For this assignment, we will review the vertical integration strategy and the scope of modern fashion firms. Vertical integration is a strategic structure where a company owns and controls the supply chain for its product. The supply chain incorporates all the steps from raw material to manufacturing and selling the product. There are numerous benefits of vertical integration. The primary benefits are being more in control of the supply chain, being able to offer lower prices and having increased market control. Companies practice the vertical integration strategy depending on what type of company it is: backward integration and forward integration. The next section discusses the details of outsourcing in the fashion industry.
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BENEFITS OF OUTSOURCING IN THE FASHION INDUSTRY

There are many benefits of outsourcing in the fashion industry. Outsourcing is the practice of having certain job functions performed outside the company instead of having an internal department that develops them. In the fashion industry, it is a common practice, and we can differentiate it into four main themes. With the vertical integration strategy, the integrated issues include design and innovation, the speed of the market, production, and quality control. Great brands acquire personalized designs and are aware of global trends. Another benefit of vertical integration is reduced inventory and working capital by outsourcing. It becomes possible to reduce purchase quantities and achieve a rapid adaptation to changes in the pattern of consumer behavior.
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ZARA’S BUSINESS OPERATIONS AND STRATEGY

Inditex (Zara) is the world’s largest clothing manufacturer. In this section, we will review Zara’s stake in outsourcing in the fashion industry. Zara works with the theme of market speed, as Inditex adds to its collection of stores at an astounding rate of 500 stores yearly. Zara considers customer needs and demand levels to make decisions of growth and sustenance. They owe their success partly to the vertical integration strategy. Other factors that contribute to Zara’s success include supply chain management, comparative advantage and competition, strategy, and philosophy. Zara’s mission is to contribute to the sustainable development of society and that of the environment with which we interact. The benefits of vertical integration help them to control issues of corporate social responsibility since they are in control of the supply chain.
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