Zara Case Essay

613 Words Sep 14th, 2015 3 Pages
DEPARTMENT OF ACCOUNTANCY
UNIVERSITY OF ILLINOIS
MEMORANDUM
TO: Mario Schijven
FROM: Yue Ma
DATE: September 28th, 2015
SUBJECT: Zara’s Value Chain (Zara Case)

Zara’s value chain differs from the other traditional models a lot. The design and creation rely extensively on copying fashion trends observed at the fashion shoes and at competitors’ points of sale, which based on buyers and designers alike.

Value Chain Zara’s value chain is supported by each primary and secondary activity in which it has a substantial value –creating activity. The primary activities are based on Zara’s purchase supplies and inbound, operations, distribution and outbound, sales and marketing, and profit
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In addition, the infrastructure that Zara has to build to support its operations is a point of competency for the company. First, the managers need to know more about the market and customer demand. As a fashion company, the customer demand should mainly focus on customer’s tastes and most population fashion style. Second, the ability of managers to coordinate activities worldwide is also necessary.
The main idea of Zara is to make sure no other company can produce new fashion design to stores as quickly as it.

Core Competence A core competency is the main strengths or strategic advantages of a business. Theoretically, a core competency should allow Zara to expand into new end markets as well as provide a significant benefit to customers, such as newest fashion style. It should also be hard for competitors to replicate. So the core competency of Zara includes product development, market imagination, human resource and manufacturing expertise (e.g. dyeing process). Compare to other traditional retailers, which all are focusing on distributing and retailing goods, Zara pay more attention to owing an in-house production. With this advantage, Zara can be flexible in the variety and amount of the new style productions. Zara’s competency has provided the chain with a competitive advantage over traditional retailers in the

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