Zara: It for Fashion

Zara’s value chain differs from the other traditional models a lot. The design and creation rely extensively on copying fashion trends observed at the fashion shoes and at competitors’ points of sale, which based on buyers and designers alike.

Let us first consider Zara 's main competitive advantage before analyzing how current and potential future strategies will affect this competitive advantage. Zara currently employs a "design-on-demand" retail model allowing the company to bring the latest fashion trends from

Zara takes a no bells and whistle approach to the technology used outside of the manufacturing (ex. use of technology in the fabric cutting) side of their business. They have been very successful with their reactive supply chain process and do not have to rely of tends and forecasting because of their Corporate Mandate to produce low quality (10 wears) high fashion garments. I believe this is a very unique approach to business and would not be applicable or appropriate anywhere. This business practices would not function well in an environment where customers want a reliable products that last nor would it not work for companies who’s stagey to purchase large quantities

Zara, one of the world’s largest apparel retailers, was founded in 1975 in La Coruna， Spain. With its successful rollout in the Spanish market, it began to expand its stores around the world, and became one of the most profitable brands in the appalling market. Zara was famous for its ability to quickly respond to the market demands, which provides a useful lesson in terms of competitive advantage with its competitors. But confronting to the fast-paced and constantly changing market, if a company wants to consistently increase market share in order to survive in the competitive market, it is irrefutable that it needs to achieve sustainable competitive advantage, since the achievement of sustainable competitive advantage can be expected to lead to higher performance.

Zara's short lead-time gives a higher chance for a more accurate predicting the next fashion. This makes them able to meet the customers demand and offer a higher level of fashionable clothes in their

Quick response of Zara leads it to be successful in the fashion clothing industry. Zara adopts international strategy for its operation. With vertical integration, it benefits Zara in cost aspect, however, it involves some risks. Due to our anaylysis on Zara’s operations, some of the recommendations are made to facilitate its further improvements.

Zara International was a retail shop originated in La Coruna, Spain in 1975. It was clothing and accessories shop and imitated the latest fashion trends and sold them at a lower cost. It became Zara International after entering Portugal in 1988 and then the United States and France in the 1990s. The distributor for this brand is Inditex and is considered the most successful retail chain in the world. Zara has a business strategy that is very different from the retailers nowadays. If a customer orders a product Zara’s distribution centers can have the items in the store within 24 to 48 hours of receiving the order, depending upon the country. The business plan that Zara’s executives made was very innovative and played a great part in the

Zara, one of the world’s largest apparel retailers, was founded in 1975 in La Coruna， Spain. With its successful rollout in the Spanish market, it began to expand its stores around the world, and became one of the most profitable brands in the appalling market. Zara was famous for its ability to quickly respond to the market demands, which provided a useful lesson in terms of competitive advantage with its rivals. But confronting to the fast-paced and constantly changing market, if a company wants to consistently increase market share in order to survive in the competitive market, it is irrefutable that it needs to achieve sustainable competitive advantage, since the achievement of sustainable competitive advantage can be expected to lead to higher performance.

In comparison to competitors, Zara’s business strategy, in regards to strategic partnerships and cost of production, provide for a strategic competitive advantage. Zara, unlike its competitors such as Gap, Benetton, and H&M, does not use Asian outsourcing. Eighty percent of Zara’s materials are manufactured in Europe, with 50% made in Zara controlled facilities in the Galicia region of Spain near headquarters. Most of Zara’s competitors have 100% outsourcing to cheap Asian countries. Though the cost of production in Spain is 17-20% more expensive than Asia, Zara does have a competitive advantage over its competitors in regards to operations. The local strategic partnerships that Zara maintains with manufacturers in Europe allow for a product throughput time of 3-4 weeks from conception to distribution. To make this happen, the company designs and cuts its fabric in-house and it acquires fabrics in only four colours to keep costs low. The proximity of these suppliers gives Zara great flexibility in adapting their product lines based on up to date market trends and consumer behaviour. It also decreases costs of holding inventory. Zara’s competitors, through outsourcing to Asian countries such as China, sacrifice the benefits of proximity for low labour and production costs.

Zara is a clothing and accessories retailer selling stylish apparel at affordable prices, and it is also the most profitable brand of the Spanish clothing retail group Inditex SA. Ortega planned for this new Zara outlet, located near his factory in La Coruna in northern Spain, to sell this overstock merchandise himself. Since then, Zara has expanded into 500 stores in 68 countries as of January 2007 and has become a leader in customized fashion retailing. This assignment presents core competencies to help Zara achieve competitive advantages in fashion industry. Besides, we also offer five competitive objectives about quality, speed, flexibility, dependability and cost to evaluate

The business idea of Zara is to link customer demand to manufacturing, and to link manufacturing to distribution. And based on this general idea, Zara has several essential elements for its business model. First, speed and decision making, which means that in the external level, Zara need to respond very quickly to demands of target customers, and always keep in style. While for the inside, Zara treasure intelligence and judgment of common employees who enjoy a great deal of autonomy. Second, its marketing, merchandising and advertising strategy. Zara does not spend on virtually advertising, while it spends heavily on stores, and no selling online because of

The basic strategy for fighting competition is to attract buyers at lower prices, more unique designs, high-quality design, efficient customer service and solid image brand. Thus bargaining power of buyer for apparel industry is high as the products falls under the basic needs in human lives. There is no much difference in terms of products offered by the apparel company, so if buyer is unhappy with the product or service they can easily switch to another brand. Thus, Zara are trying to strengthen its position in the market by using their unique strategy by giving priority to buyer to meet their special needs.

In my point of view, the most famous way of ZARA strategies in doing their business has a huge linkage with lean which is the fast fashion. ZARA implement just in time strategy to keep their stock low, which decreases the waste of overproducing and inventory. They will only produce the product in the small batch to see whether it going to sell well or not and if the product is well sell they will produce them again but if it not they will have low failure-cost. By resulting of having just the stock they need, ZARA can make a new product more often, and when customer come in they will see a more new fresh product which will make customer come to their store more often. Also, they need not to do discount much or have their product unsold or to be the deadstock much lead them to gain a better margin. Also with one of Zara most famous key of their business “fast fashion”, which according to what Mr. Ortega the owner of Zara said in the book “Secret of Zara”, he said that when there are a new design ZARA want them to be able to launch in just for 2 week to make that item latest fashion product in that time. So, making a small amount of product will help them to make the new design product faster. ZARA is using vertical integration by implement in-house design, production, distribution and retailing instead of being like their competitor that

Zara, the world largest clothing retailer brand that is part of the Inditex multinational clothing company which was created by Amancio Ortega and Rosalia Mera (Inditex, brands). They are based in the northwest of Spain. Currently, Zara has a total of 2,000 stores in major cities around 88 different countries (Inditex). They are acclaimed as a fast fashion company in the industry with more than two hundred professional designers within the creative teams. Zara’s products are diversification strategy, include men’s and women’s apparels and accessories that keep up with the current fashion trend (Inditex).

From an analytical prospective, explain how information systems relate to the way Zara runs its business. What types of systems are the most essential for this company in its current environment?