Mango: Outsourcing of Non-core Activities to Keep up with Fashion

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Distribution was a completely in-house activity at Mango. The company had been developing its logistics system right from 1984. Several technologies were added from time to time to update the system. According to Planellas, Mango's greatest success "is rooted not only in those factors that you can see with the naked eye but also in what goes on behind the scenes; for example, such important factors as its logistics system. After 2000, Mango concentrated on developing a logistics system to aid its aggressive expansion into international markets. Mango came out with a concept of logistics based on speed, information, and technology...

The stores of Mango were either owned or franchised. All the Mango stores were located in prime shopping areas or city centers. Some of the prominent retail locations across the world where Mango stores were located included Regent Street and Oxford Street in London, Kärnestrasse in Vienna, Rue Rennes or Rue Rivoli in Paris. The stores were large enough to meet the interior design, image, and product display criteria set by Mango. They also had huge display windows. The wholly owned outlets occupied an area of 407 sq. meters on an average. Each store was conceptualized by a team of 100 people that included interior designers, architects, engineers, project managers, managers, and employees...

Analysts attributed Mango's rapid global expansion to its franchise system. Mango started using franchisees right from the time it expanded to Portugal in 1992, with the opening of a store in Coibra. The store was a franchise store, and was opened after a local businessman requested for it. This was followed by two stores in France - both franchise stores - at Toulouse and Lyon. Wholly-owned shops demanded huge investments, and according to Mango, involved high risk too. So it decided to expand through franchisees, especially in the developing markets...

Mango went on to become one of the top brands in Spain. In 2012, it was the second most popular brand in the country, according to Interbrand. "Mango continues to create value through a strong brand personality, supported by celebrities such as Scarlett Johansson and Kate Moss.... Mango has focused on greater internationalization over the past two years, with a special concentration on countries like Russia and China. Mango intends for China to be one of its main markets in the next five years.... Mango is also increasing its presence in the U.S., thanks to an agreement with J C Penney" reported Interbrand...

Exhibit I: About Fast Fashion
Exhibit II: Mango - Revenue and Other Details
Exhibit III: Mango - Own Stores
Exhibit IV: Mango - Franchises

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