Case Study Zara Analysis Mis Essay

3175 Words Mar 20th, 2012 13 Pages
Team “AnonyMIS”: Julia Winter, Maximilian Philipp Schmidt, Julius Liebrecht,
Djaky Agbadou, Nathalie Garro

In-Class Case Study:

1 Introduction: Background Information

1.1 Company overview

The firm Zara is a Spanish clothing and accessories retailer based in Galicia, northern Spain. In 1975, founder Amancio Ortega opened the first store in La Coruna, Spain.
Zara is the flagship chain store of the Inditex group (Industria de Diseno Textil), encompassing many self-designed different fashion styles from daily clothing to formal suits, evening dresses and business wear. Their stores feature low-costs lookalike products of popular high-end clothing fashion. The Spanish corporation Inditex is the world`s largest fashion
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Also, customers decide to buy the clothes right away and at full price, because most of the products are not available any more if they wait a few weeks. This also leads to more frequent visits, because there is a new collection twice a month. Finally, there is a low impact of failed product introduction on Zara’s profit margin, because the profit lost is kept relatively low.
A very important part of the retailing IT systems is the staff scheduling software, which sets up flexible schedules based on each store’s forecasted sales volume.
All the stores’ windows displays, merchandise layout and in-store soundtrack are directed from the headquarter.
All in all, a combination of vertical integration and technology-orchestrated supplier coordination, just-in-time manufacturing, and logistics allows it to go from design to shelf in days instead of months.

3 Strategic Analysis

3.1 Business Sector

Zara is operating in the clothing industry. They offer clothing in the low-cost district for men, women and kids. Moreover, Zara is also selling some accessories and shoes. The fashion market is highly competitive as there are a lot of competitors like H&M, C&A but also Gucci and Ralph Lauren in the premium segment for example. In the low-cost area, the competitive pressure is even stronger than in the rest of the clothing industry. In addition, the market is extremely saturated which means that it is almost impossible to enter the market as a new

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