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An Exploratory Study of the Mechanism of Sustainable Value Creation in the Luxury Fashion Industry

Author

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  • Yefei Yang

    (Logistics Management Department, Beijing Jiaotong University, Beijing 100044, China)

  • Han Han

    (Design Department, Politecnico di Milano, 20158 Milan, Italy)

  • Peter K. C. Lee

    (Logistics Management and Maritime Studies Department, The Hong Kong Polytechnic University, Hong Kong, China)

Abstract

In recent years, increasing numbers of luxury groups have adopted sustainable practices in their supply chains (sourcing, manufacturing, logistics, distribution, servicing, waste and recycling). However, the report from Greenpeace International organization (2014) indicates that some luxury brands/companies did not actively conduct sustainable practices to produce items, which is likely attributed to the cost and risks caused by such practices outweighing the benefits. This, to some extent, is due to the failure of developing collaborative practices. Specifically, some luxury brands may fail to develop collaborative practices to create value that are able to benefit multiple stakeholders. Thus, in our study, we explore the value creation mechanism to create sustainable value that benefits not only brands’ shareholders, but also other stakeholders, including producers, customers, other stakeholders in the society (e.g., marginalized people) and the environment. In addition, based on a case study from Stella McCartney and Kering and the literature on value creation, we develop a novel model for guiding sustainable value creation (i.e., value co-creation model), where the conceptual building blocks and specific practices are presented. Our contribution lies in extending the knowledge of the value co-creation model from co-creation with customers to co-creation with multiple stakeholders and elaborating systematically and empirically sustainable value co-creation mechanisms including the building blocks and specific practices. In addition, this study offers significant managerial insights for luxury brands/companies to effectively achieve sustainable value.

Suggested Citation

  • Yefei Yang & Han Han & Peter K. C. Lee, 2017. "An Exploratory Study of the Mechanism of Sustainable Value Creation in the Luxury Fashion Industry," Sustainability, MDPI, vol. 9(4), pages 1-16, March.
    • Handle: RePEc:gam:jsusta:v:9:y:2017:i:4:p:483-:d:93913
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    2. Maria Fernanda Ortiz Dominguez & Yasser Ahmad Bhatti, 2022. "From Waste to Luxury Fashion at Elvis & Kresse: A Business Model for Sustainable and Social Innovation in the Circular Economy," Sustainability, MDPI, vol. 14(19), pages 1-17, September.
    3. Thorey S Thorisdottir & Lara Johannsdottir, 2020. "Corporate Social Responsibility Influencing Sustainability within the Fashion Industry. A Systematic Review," Sustainability, MDPI, vol. 12(21), pages 1-64, November.
    4. Jennifer Kunz & Stephanie May & Holger J. Schmidt, 2020. "Sustainable luxury: current status and perspectives for future research," Business Research, Springer;German Academic Association for Business Research, vol. 13(2), pages 541-601, July.
    5. Bin Shen & Qingying Li & Ciwei Dong & Patsy Perry, 2017. "Sustainability Issues in Textile and Apparel Supply Chains," Sustainability, MDPI, vol. 9(9), pages 1-6, September.
    6. Esther Oluwadamilola Olufemi Rotimi & Cheree Topple & John Hopkins, 2021. "Towards A Conceptual Framework of Sustainable Practices of Post-consumer Textile Waste at Garment End of Lifecycle: A Systematic Literature Review Approach," Sustainability, MDPI, vol. 13(5), pages 1-18, March.
    7. Eduardo Méndez‐León & Tatiana Reyes‐Carrillo & René Díaz‐Pichardo, 2022. "Towards a holistic framework for sustainable value analysis in business models: A tool for sustainable development," Business Strategy and the Environment, Wiley Blackwell, vol. 31(1), pages 15-31, January.
    8. Sofia Garcia-Torres & Marta Rey-Garcia & Laura Albareda-Vivo, 2017. "Effective Disclosure in the Fast-Fashion Industry: from Sustainability Reporting to Action," Sustainability, MDPI, vol. 9(12), pages 1-27, December.
    9. Zoe Mellick & Alice Payne & Laurie Buys, 2021. "From Fibre to Fashion: Understanding the Value of Sustainability in Global Cotton Textile and Apparel Value Chains," Sustainability, MDPI, vol. 13(22), pages 1-21, November.
    10. Alessandro Brun & Hakan Karaosman & Teodosio Barresi, 2020. "Supply Chain Collaboration for Transparency," Sustainability, MDPI, vol. 12(11), pages 1-21, May.
    11. Giuseppe Vito & Cristina Simone & Francesca Iandolo & Pietro Vito, 2018. "Sustainability in the Italian Scientific Perspective: A Focus on the Economic and Managerial Points of View," RIVISTA DI STUDI SULLA SOSTENIBILITA', FrancoAngeli Editore, vol. 0(2), pages 9-26.
    12. Karaosman, Hakan & Perry, Patsy & Brun, Alessandro & Morales-Alonso, Gustavo, 2020. "Behind the runway: Extending sustainability in luxury fashion supply chains," Journal of Business Research, Elsevier, vol. 117(C), pages 652-663.
    13. Farhad Aliyev & Ralf Wagner & Stefan Seuring, 2019. "Common and Contradictory Motivations in Buying Intentions for Green and Luxury Automobiles," Sustainability, MDPI, vol. 11(12), pages 1-15, June.
    14. Cabral, Natália Gomes Cavalcante & Gohr, Cláudia Fabiana, 2023. "Sustainable value creation in sharing economy: Conceptual framework proposition and application in Brazilian offline communities," Technological Forecasting and Social Change, Elsevier, vol. 186(PA).
    15. Eve Fraser & Hamish van der Ven, 2022. "Increasing Transparency in Global Supply Chains: The Case of the Fast Fashion Industry," Sustainability, MDPI, vol. 14(18), pages 1-24, September.
    16. Magdalena Zioło & Iwona Bąk & Anna Spoz, 2023. "Theoretical framework of sustainable value creation by companies. What do we know so far?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(5), pages 2344-2361, September.
    17. Zofia Patora-Wysocka & Łukasz Sułkowski, 2019. "Sustainable Incremental Organizational Change—A Case of the Textile and Apparel Industry," Sustainability, MDPI, vol. 11(4), pages 1-27, February.
    18. Danilo Brozović & Anna D’Auria & Marco Tregua, 2020. "Value Creation and Sustainability: Lessons from Leading Sustainability Firms," Sustainability, MDPI, vol. 12(11), pages 1-19, May.

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