Summary: We investigate the role played by density inhomogeneities and dissipation on the final outcome of collapse of a self-gravitating sphere. By imposing a perturbative scheme on the thermodynamical variables and gravitational potentials we track the evolution of the collapse process starting off with an initially static perfect fluid sphere which is shear-free. The collapsing core dissipates energy in the form of a radial heat flux with the exterior spacetime being filled with a superposition of null energy and an anisotropic string distribution. The ensuing dynamical process slowly evolves into a shear-like regime with contributions from the heat flux and density fluctuations. We show that the anisotropy due to the presence of the strings drives the stellar fluid towards instability with this effect being enhanced by the density inhomogeneity. An interesting and novel consequence of this collapse is the earlier formation of the horizon.