Business Model Of Zara

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Zara, the Spanish clothing and accessories retailer, is well known for being both fast and flexible. Zara gives a perfect example of how European companies can be competitive on a global scale, in an industry that is extremely vulnerable to LCC competition such as apparel.
While other companies outsource manufacturing to offshore suppliers in order to benefit from low labour costs in developing countries, Zara’s business model focuses mainly on vertical integration and in-house production. It achieved success by sourcing half of its production in nearby countries and by designing around 80% of its products in the same season they are sold. By looking at how Zara operates, other companies can learn how to be more flexible, fast and responsive and how to transform logistics into a competitive advantage.
Zara is one of the brands owned by Inditex, one of the world's largest fashion retailers with more than 6,460 stores across the world (Inditex, 2015). The group owns in addition to Zara – its most important brand –7 other brands: Pull & Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Lefties and Urterque
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Moreover, Zara has never reported a fall in sales on an annual basis since its listing in 2001. Therefore, in this part we will look at how Zara managed to have such spectacular growth rates, analysing the underpinning drivers behind this phenomenon.
Zara organizes its supply chain in such a way that it adapts very fast to changing fashion trends. The fashion industry is typically characterized by very short product life cycles. Therefore being fast, adaptive and responsive to change is of core importance in this type of industry. Moreover, with increasing competition from LCC manufacturers (e.g. Primark), the fashion business is becoming increasingly competitive. Hence being efficient in operation is another critical success factor in this

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