For its Zara brand, Inditex manufactures the majority of the garments it sells and undertakes all of its own distribution from manufacturing plants to its directly managed retail outlets. Benetton outsources most of its production, and most of its retail outlets are owned and operated by franchisees. Which is the superior system

Benetton

Explanation:

The superior system is whichever one that results in the lowest costs but highest returns.

Inditex manufactures and distributes on its own which means that it is incurring quite an expense to do so because it would have to invest in both manufacturing equipment and distribution channels. When demand is down, those investments will not be paid off but will still be incurring cost.

Benetton on the other hand operates in such a way that it only incurs cost when it needs to produce something. It outsources this production and so only has to pay for the actual production which reduces cost. In using franchises to distribute, they also save on distribution costs as the franchisee incurs the cost but still has to pay Benetton a certain amount for using its brand and products.

lives by a moral and ethical code

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