Business Management & Strategic Management
Added on - 21 Apr 2020
Running head:BUSINESS MANAGEMENT AND STRATEGIC MANAGEMENTBusiness Management and strategic management: American ApparelName of the StudentName of the UniversityAuthor’s note
1BUSINESS MANAGEMENT AND STRATEGIC MANAGEMENTWhat role does vertical integration play in American Apparel's strategy in terms of bothtangible and intangible factors?Founded in 1898 American Apparel has come a long way in the garment industry, thecompany has expanded and grown with the dynamic of the business environment and has gainedgoodwill from all the stakeholders. The company is based out of los angles and verticalintegration has been a significant part of its operational strategy1.Vertical integration is the process of by which a business organization increase andimprove its operations. It involves dividing the same production path into various steps. Theprocess of supply chain is owned by the company at various levels. For example: when thecompany produces both the end product as well as the required raw material. The supply chaininvolves four stages: commodities, manufacturing, distribution and retail. This process helps thecompany reduce the cost of production and manufacture as well as increase the efficiency of theresources by implementing multiple usages2.The company has also established itself as a successful multinational company and ownsmore than 270 retail stores in 20 countries all around the world. One of the most unique featuresof American apparel is that it is a company in the fashion industry that has implemented bothforward and backward vertical integration a central part. The decision of the management playsan important role in the operation as well as earning the revenue for the company. Theorganization does most of the work in the line of production starting from cutting of the fabric1Fulton, Katelyn, and Seung-Eun Lee. "Assessing sustainable initiatives of apparel retailers on theinternet."Journal of Fashion Marketing and Management: An International Journal17.3 (2013): 353-366.2Rangrang, B. A. I., and T. A. N. Shiyu. "R&D Mode, Vertical Integration and Innovation Performance ofIndigenous Brand in the Introduction Period."Journal of Management4 (2016): 007.