Executive Summary
The fashion strategy of Zara is described as a fashion imitator where in it caters to the wants of the customers and creates them for the attention of the target market. This is not usual as the traditional fashion industry compliments with the seasonal trend and what is in or out with regard to the influence of the fashion shows. Zara presents considerably more products than the same companies. The company designs a new product and finishes goods in its stores in just four to five weeks. The system of the business goes like if the design does not create sales in a week, it is pulled out from shops and further orders are void too and a new design is pushed. It makes the company to be tagged as a fast fashion because of its system. The main point in the case of Zara is how it affects the customers and how it maintains the value for the customers since it does not pursue a product until the growth stage.
What is the real Business of Zara?
Zara is a chain store under the Inditex group which is owned by Amancio Ortega and basically located in Spain. It is in line with other brands such as Oysho, Stradivarius and other. As being described by other fashion experts, Zara is the most ground-breaking and overwhelming retailer in the world and accounts for the success of Spain. Its real business is manufacturing the most fashion-sensitive products and designs clothes according to the customer choice. Zara Stores has 7 product lines which are the: men’s clothing and women’s clothing. As of last year, each of the product lines comprise of 5 sub-sections. And the sub-sections are Lower Garment, Upper Garment, Shoes, Cosmetics and Complements.
As completely as possible sketch the supply chain for Zara from raw materials to consumer purchases
The supply chain for Zara consists of manufacturing own products up to the process of reaching its market. The success of Zara stars from its extensive researches up to its distribution. Zara can be viewed as a vertically incorporated retailer where in designs, produces and distributes its own products. Compared to other apparel retailers with the same nature in the market, Zara handles almost all the steps in the supply chain. Almost half of its total products are made in Spain and the rest are in Europe, Asia and its other branches in the world. The competitors of Zara contract out the production to Asia though but Zara creates the most fashionable items in its own factories in Spain. The clothes with a longer shelf life are outsourced to Asia and Turkey as they prevail to be the low-cost suppliers.
The process of production in Zara is in small batches. The products are directed to the stores twice a week which helps the warehouse to have more spaces for other production. It lessens the tendency for instability in the last demand in order to get amplified as they were transported. Basically, Zara is able to manufacture products in a month or more for newer designs. It allows half a month for the refilling of on-display products unlike the usual mode of the industry which has six months of holding period for a certain product design.
Does Zara incur disadvantages from its fast-fashion distribution system? Are these disadvantages offset by the advantages?
The fast fashion distribution system of the company lessens the working capital intensity and assisted the unremitting manufacture of new products. Zara incurs a disadvantage through this system but it just equalizes the supply chain of the business. A disadvantage is seen on the fast fashion distribution system because it does not allow customers or the market to strengthen the purchasing power for the product. If the product is available only up to five weeks, it fails to attract the potential customers who happen to be in the stage of discovering the product. Zara apparently caters to the introductory stage of the product design only.
However, its short term cycle is indeed offset by the advantages for the fact that they manufacture products according to the taste of the customers and have done extensive researches before launching a new item. It equalizes the production of small quantities and displaying only for a short term. It is a good strategy though because the fashion industry is not into those used products and each day, customers seek for a new flavour.
How does Zara add value for the customer through major logistics functions?
Zara maintains the preferences of customers as one of their strategic way of penetrating the market. They consider the variations that occur within a region such as the French, they are more into the quality of a product and thus, Zara makes their product to be high-end in order to meet the expectations of customers. Differences among the customers are valued by the company and measure the perspectives of each culture. As such, Zara becomes flexible for the designs that they make and comprehend with the taste of the customers. Consumer behaviour is first researched by the company before manufacturing a certain item and hence fits the target market. Thus, Zara adds value for the customer through the consideration of their preferences and meeting their expectations for the brand.
What are the critical factors of success of Zara? Among these factors what do you think is relevant for the buyer to value in her job?
The success of Zara is seen to be subtle at the first years of its international market. Upon its success in Spain, it started the market internationally and thus dominates the respective branches in different locations all over the world. It is viewed that a more receptive market occurred in other locations and continuously leave brand identification for a different distribution area. Factors of the success of Zara are seen to be through its short term cycle and integrated vertical supply chain.
Being a fast fashion company, it prevails as the most significant factor for the customers to value the business. Introducing new brands for the customers are very important in for the people who are into fashion. It maintains the market to be in the in-crowd and thus it appeals to the senses of the customers who love buying fashionable items and unique designs that Zara manufactures.
Conclusion
Creating sales in a specific short period of time is quite difficult as it gives the customers a short period for discovering the essence of the product. However, being a fast fashion company makes the success of the business as it gives the market new ideas and trends for clothes unlike similar companies. It penetrates the market more and affects the buying behavior of the customers as how they attract the customers to visit the stores more often to check out for new products. Thus, retailing strategy of the business is effective because it encourages the market to patronize the brand.
Reference
Ghemawat, P. & Nueno, JL. (2006). “Zara: Fast Fashion”, Harvard Business School.