Case Analysis Of Zara

1060 Words 5 Pages
Zara is one of the most fascinating fashion retailers which have many stores all over the world. The main goal of Zara is to offer the modern fashion in medium quantity at the best prices. Zara became an exciting case study for the rival fashion brands and retailers around the world. The present essay will display the supply chain of Zara from the raw material until being offered to the hands of the consumer, the advantages of Zara's fast distribution system, the comparison between horizontal and vertical integration and how these practices enables Zara to acquire competitive advantages.
Zara executed a powerful supply chain including five steps in order to be able to furnish the best fashion at reasonable prices. The first step is design
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Zara is only manufacturing a few editions of each item which facilitate the adaptation of the fast changing trends; also the customers feel special that the item is unique if not everybody wears it. In this way the items have a small risk of becoming not widely favored. This kind of fast fashion strategy which is adopted by Zara enables the company from having high margins and price reductions. Zara's strategy aims to prioritize quality in lieu of maximizing the output. The biggest point of weakness in Zara's supply chain represents in Zara's owning of all the channels of supply chain which results in a difficulty in expanding to far locations, as it will be a very expensive process to distribute such products. The disadvantage in Zara's fast fashion lies in Zara's focus on the limitation of original products which misleads the client. Those people who know about this replication or who have insufficient information about fashion will not suffer, but other people who interest in buying original brands will be cheated by these fashion trends. Another negative defect of fast fashion is that it depends on the concept of inexpensiveness and actually it is not true (Maria Hansson, …show more content…
Zara is generally using the vertical integration in order enable them from gaining a competitive advantage. The vertical integration of design, low inventory rule, in-time manufacturing, advanced information technology and quick response policy allow a quick response to customer's varying demands. By holding a comparison between Zara and H&M and GAP, we can find that Zara's business model has a high degree of vertical integration whereas H&M and GAP has a partial vertical integration. The vertical integration of Zara allows the firm to have a quicker turnaround than its rival, because Zara controls its whole production chain while H&M and GAP outsource their production. The two main elements in the business model of Zara are the store as a source of information and the time factor. Zara has a competitive advantage for the freshness of their products and its fast distribution and production strategy which allows them introduce the latest fashions within a period from two to four weeks. Moreover, with Zara's ability to distribute and produce new trends of fashion in a short period, they can change over 75% of the offered merchandise every three or four weeks. This helps in increasing the numbers of customer visits (Fan, Ying, Lopez, Carmen; 2009) (Pirone,

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