So why as a brand, is Zara important?
Speaking of competitive advantage, two problems constantly haunt image based brands such as Abercrombie & Fitch: counterfeit and copy-cat brands.
In the early 90s when A&F seriously took off after being acquired by L Brands (formerly known as "The Limited"), copy-cat brands Aeropostale and American Eagle Outfitters launched an effort to cater to the same theme but at lower price points. These copy-cat brands eroded the profit margins and market share of A&F, and subsequently huge lawsuits were filed by A&F. To their dismay, A&F lost, despite substantial similarities in design, materials, store layout, and so on forth. Legal Audio Opinions and Courtroom Video - LexisNexis Courtroom Cast
Counterfeits are always a concern to lifestyle brands that have a specific look towards them. This applies whether it is simple polo shirts and jackets in the case of A&F or luxury handbags. It does not take much reasoning to convince someone to buy a counterfeit that can be up to 90% cheaper with only a small portion of people being able to tell the counterfeit aspect of it.
Hence, it comes to no surprise that A&F is thinking of moving into the fast fashion market. Abercrombie Plans to Remake Hollister Stores
TLDR; no outsourcing times. To manufacture a garment, one needs the design, the textiles and accessories, as well as the labor.
Zara has created the ultimate Trinity of fashion. Their designers, textile manufacturers (under parent company Inditex), and laborers (again under Inditex, in the same building as textile) are all combined at one location. Between the designer's office and the factory is only a 20 minute car ride, from Arteixo to A Coruna in Spain.
This strategy, made with the help of Toyota, is now called "Just-In-Time", and is one implementation of a vertically integrated supply chain strategy. So far, no other company has been able to match this speed, because it requires a tremendous amount of infrastructural investment, backed by solid management to be able to pull off. This is a competitive advantage that is at its best, one that is hard to imitate.