Case Study Summary of Zara and Oxford Industries Essay examples

1208 Words 5 Pages
Summary of Zara

Zara specializes in inexpensive fashions for women and men between the ages of 16 and 35. In keeping with the spirit of that demographic, Zara moves quickly. Like many apparel retailers, it has two seasons—fall/winter and spring/summer—but selections change frequently within those periods. Items spend no more than two weeks on the shelf before making way for new merchandise, and stores are replenished twice a week.

With annual growth of around 20 percent in both sales and number of stores, Zara was finding that strategy increasingly difficult to execute. Part of the Inditex group of fashion distributors, it currently has more than 1,100 stores in 68 countries. With so much volume flowing through the supply chain, the
…show more content…
The emphasis on fast turnaround motivates consumers to purchase items on the spot. Unlike in many clothing stores, where seasonal lines remain on the shelves for weeks or months, a particular style in a Zara store can disappear within a week. Zara speeds up its supply chain by strategically selecting and locating suppliers. A “proximity model” judges not only their geographic placement, but their ability to respond quickly to production orders. About half of the retailer’s production meets the proximity threshold, mostly coming from suppliers in Spain, Portugal and Morocco. From a geographic standpoint, nearly 65 percent of production is sourced in Europe. Zara also buys from suppliers in Asia, but because of the need for speed, their number is “considerably less” than the industry’s average.

The model has yielded additional benefits. Product now spends more time on the sales floor, and less in a back room or warehouse. With a reduction in misallocated inventory, there are fewer returns to the warehouse and transfers between stores. And, as Zara’s distribution network continues to grow, the retailer won’t need to expand its warehouse team as fast as the old process required.

Summary of Oxford Industries

Oxford Industries began in 1942 as a domestic manufacturer of basic, button-down shirts for mid-level retailers, particularly department stores. In recent

Related Documents