Essay on Management and Zara

1511 Words Jan 3rd, 2008 7 Pages
Executive Summary: Zara is an apparel chain owned at operated by the Inditex of Spain. It was founded by Mr. Amancio Ortega Gaona; currently Spain's richest man. Zara specializes in fast fashion. At the end of fiscal year 2001 Zara was operating 1,284 stores world wide and had total revenue of €3,250 million. Inditex's headquarters and its major assets are located in the Galacia region of Spain. Inditex also operates five other chains: Massimo Dutti, Pull and Bear, Bershka, Stradivarius and Oysho. Zara owns both its production and retail units which give the upper management a better overall control. They have successfully integrated Information Technology into their business model. They also have great international growth selection …show more content…
They are very thorough in making sure that their designs are appealing to the customers. They employ creative teams to keep track of customers' tastes and communicate them with store managers. Some employees are sent overseas to observe fashion shows and fashion fairs in major cities like Paris, Milan and London. Zara goes to the extent of hiring people in each country where they own retail stores in order to keep track of new trends among potential customers and relay them to their key suppliers. Zara has developed and maintained a good company culture and experiences very low sales manager turnover.
Weaknesses:
Zara lacks a clear succession to its upper management. This can prove disastrous to its future if the new management team doesn't share the same vision and motivations as the current team. In a competitive market situation there is always a potential for Zara to make fashion mistakes. Growth based on current business model may be difficult for international expansion. Venturing into new markets may require lot of capital according to the current model. Communication with overseas representatives may prove difficult due to language and cultural barriers. Since most fashion sensitive products are manufactured internally in Spain, they may not reflect the current fashion trends from other parts of the world. Zara's plans of expansion may lead to complexities in aligning Inditex and Zara's strategies. Fast fashion doesn't permit Zara to utilize online

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