Advantages and Disadvantages of Vertical Integration vs. Outsourcing in Fashion Industry

Introduction to
Business Processes.

Table of Contents
INTRODUCTION...........................................................................................................................4
Compare and discuss the advantages and disadvantages of vertical integration vs. outsourcing
in fashion industry..................................................................................................................4
Reflection ..............................................................................................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Vertical integration is a Strategy where organisation are using it as part of control process
for the purpose of dealing with cost and improvement of cost efficiencies. Outsourcing is
associated with establishment of supply chain controls for the purpose of distribution and dealing
with different aspects of supply chain process of organisations. CSR activities are part of
business that has to be evaluated to analyse its impact on the overall business functioning in the
changing external macro environment. Present report is divided into two parts the first part is
based on the discussion of the advantages and disadvantage of vertical integration and the
outsourcing components as part of fashion industry. The second part is based on reflection report
that is to analyse the corporate social responsibility aspect of the business and the way they are
affecting the functioning of organizations.
Compare and discuss the advantages and disadvantages of vertical integration vs. outsourcing in
fashion industry
Vertical integration: It is a strategy that is based on an approach where organisation
is controlling its suppliers, retail locations, distributors and supply chain. It benefits the
organisation by allowing them to work towards reduction of cost, controlling of processes
and further improvement of efficiencies (Bárcena-Ruiz and Garzón, 2018). In fashion
industry integration is adopted where by a parent company is controlling all the different
phases of production. It is the process of design inception that is taking place through raw
materials, production and post processing compliance. Textile & apparel organisation are
moving towards vertical integration for the purpose of building of their compliance from
supply chain to end.
Vertical integration Outsourcing
Vertical integration is a strategic structure
where an organisation owns supply chain for
their products. Supply chain is incorporating
the steps that start from the raw materials to
turning it into final product. In fashion industry
there are benefits in terms of offering lower
Outsourcing is a business practise which is
done by hiring external organisation for the
purpose of performing in house operations of a
organisation by the staff.