Analysis of Value Chain and Sources of Differentiation in International Fashion Markets

Purposes: The aim of this paper is to address three issues. Firstly, this paper aims to make the strategic analysis of the value chain of the Galician textile-clothing sector. Next, we attempt to analyse the sources of competitive advantage on which companies will build the strategy, as well as defining the main sources of differentiation. Lastly, the international projection of different companies that belong to the Galician medium-sized and big companies’ strategic group will be analysed. Design/methodology: To respond to the objectives put forward, the fieldwork was divided into two clearly different stages. Firstly, 40 in-depth interviews with executives were carried out followed up by a questionnaire. Findings: Results indicate that the differentiation focused on specific segments must be the foundation on which companies compete in international markets. Among the variables that contribute most to the creation of that differentiation are the brand and the design. The latter is a strategic variable of the value chain that should not be subcontracted. Galician companies need to have better control of the operations in the value chain, especially the finishes and control of end quality. Originality/value: This paper advances in the strategic analysis of the value chain of the textile-clothing sector and the contribution of branding and other intangible assets in building the strategy in the international fashion markets. Keywords: Value Chain, Differentiation, Brand, Competitive Strategy, Fashion