Examine a global supply chain of clothing industries emphasizing relations of power among main actors - Essay Example

The first one was the Multi-Fibre Arrangement (MFA) a regulatory framework that created preferential tariffs and quotas on the apparel industry on the commodities that imported by the developed nations such as U.S., EU states and Canada (Gereffi, & Frederick, 2010). However, in the period 1995-2005, the MFA quotas and tariffs were replaced by the World Trade Organisation’ (WTO) agreement on clothing and textile (Brambilla, Khandelwal, & Schott, 2010). The second crisis was the financial crisis of 2008, which hit the apparel industry resulting in the unemployment, increased social unrests and factory shutdowns due to decreased demand in the developed economies.

Zara is one of the giant global retailers in the fast fashion industry incepted in 1975. The company is an entity of the Spanish group Inditex. By 1990, Zara had expanded globally into a number of states including New York, U.S., Paris, France and Oporto in Portugal. Currently, the company operates over 1830 outlets in 82 nations globally, located in Africa, America, Europe and Asia (Inditex, 2011). Zara considers itself as fast fashion retail chain rather than a high fashion brand, which has enabled it to expand and achieve high growth levels.

Zara unlike other brands in the apparel industry uses a vertical integration model that encompasses just-in-time, design, sales and marketing (The Economist, 2001). For this reason, the company can respond to consumers demands in a prompt way, and this has been the key driving force for the accelerated growth of the company in the industry. Labour Intensive-This is because it requires a large number of labour forces to produce its goods or services. The degree of labour intensity is measured in proportion to the amount of capital required to produce goods or services; the higher the proportion of labour costs required, the more labour intensive the business (Bartley, 2005).

The clothing