Zara Case Analysis

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In today’s highly globalized society, the importance of production velocity is seen on a daily basis. From the massive appeal of fast food to the increasing popularity of fast fashion, the modern consumer is becoming more and more impatient. With this new development, industries as a whole have had to accommodate their consumers by drastically reducing the time between design, production, and sale. One of the leading and most successful companies that has been able to achieve this goal is Zara. Based in Spain, Zara is the main chain store for Inditex, the world’s biggest international fashion retailer, accounting for two-thirds of Inditex’s total sales (about $14.8 billion annually). Its first store opened in the northwest coastal town of …show more content…
This is only because of the general public’s lack of understanding of the shift in production, as opposed to the erroneous idea that quality can only come from core countries. Although it might be an antiquated view of the production process, many still hold it to be true through the logic that high-quality goods require a flexible production process that the mass producing periphery and semi-periphery are not designed for. Zara prides itself on having the majority of its production close to its headquarters in Spain - 55% in Spain, Portugal and Morocco. This proximity greatly contributes to the company’s quick reaction time to its consumer’s fashion wants and needs that in turn brings them great financial benefits in the long run. It also shows that the company as a whole does not buy into the correlation between quality and the core, but instead emphasizes proximity by viewing Morocco, a developing country, as a valued source of production. The only clothing that is made in Asia is that which is highly predictable in the global market and thus does not need a quick reaction time - mainly items like basic t-shirts, which don 't require seasonal …show more content…
First, a company needs to have far reach internationally, mostly through a large number of strategically located stores in global cities. Secondly, there needs to be a strong and extremely effective connection between consumer demand and “the upstream operations of design, procurement, production and distribution,” which places great importance in the operation of not only effective mediums of communication, but also increasingly responsive ones that far surpass the rest of the industry. This constant communication takes place between a variety of individuals: store employees relaying what is selling out at a rapid speed, trend setters popularizing specific items through social media, trend-spotters communicating what is raising in notoriety within pop-culture, designers translating trends into specific items, production teams coordinating manufacturing, distributers seeking efficient ways to the stores, etc. Thirdly, there needs to be “short development cycles, rapid prototyping, small batched and variety,” so that the consumer can continuously obtain clothing items in real time as these evolve over seasons and trends. This allows Zara to operate with a relatively low working capital and at the same time sell-out its small clothing batches in a short amount of time.

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