3. Vertical Integration
• Backward and Forward Integration
• Reduced Transactional Costs
• Zara = Fast Fashion (Competitive Advantage)
• Zara vs. H&M vs. Gap
4. Zara: Exception To The Rule
Vertical integration is in extinction in the
consumer economy but Zara is a spectacular
exception to the rule (Richard Hyman).
Self-reinforcing Strategy (Two weeks shelf life)
Cultural Phenomenon of Instant Fashion.
10. Value Adding/Destroying Activities
of Corporate Parents
Case study on the parenting styles of the following diversified companies:
oVirgin Group
oBerkshire Hathaway
oZara Inc.
oTesco
The Parenting Matrix
Goold et al, 1994
11. Elements of Corporate Strategy
Johnson, Whittington and Scholes,
Parenting styles may
impact how wide the
corporate scope is,
while the scope in
itself may reflect
limitations of the
parenting styles.
Portfolio matrices is
used to identify
attractive areas to
diversify into as scope
increases. This helps
to highlight
underperforming units
and thus may lead to
scope reduction
By emphasising the lack of
fit between subunits and
parent, portfolio matrix
may lead to change in
parenting style thereby
impacting upon the
decisions made.