New Retail Shop in Plovdiv- Zara

Amancio Ortega and his company Zara have developed a fast fashion model that has revolutionized the fashion industry. From their origins in Spain, these companies have become a growing international presence that tailors fashion not to preset seasons and the whims of star designers, but to the changing demands of customers. However the growth in Zara sales will slow down eventually, this slowdown will likely be due to the increasing adoption of its business model by

Zara is one of the retail sale format of Inditex group and well-known an international fashion clothing brand which is very famous for its apparel and accessories. Zara is a place where we can buy all the latest fashionable clothes in the world as they launches 10,000 designs every year. Zara is one of the Spain famous fashion clothing brand which is located in 70 countries in the world. Zara company is started earlier in 1975 by Amancio Ortega, a famous business person who planned to enlarge his small factory by opening a big store. In 1988 the Zara Company started to enter in to the international market to expand their business globally. Zara opened first international store in Portugal. Portugal store got a big success and then Zara decided to open a store in USA. By the next year they opened another store in Paris. These all made a tremendous growth to Zara and it became as an iconic representation of Spanish fashion. Zara began to enlarge their business quickly in 1990s. Around the world there are 1763 stores in 2013. In this assignment we are going to discuss about Zara’s strategy structure, infrastructure and process development, work scheduling and its reward products.

The business idea of Zara is to link customer demand to manufacturing, and to link manufacturing to distribution. And based on this general idea, Zara has several essential elements for its business model. First, speed and decision making, which means that in the external level, Zara need to respond very quickly to demands of target customers, and always keep in style. While for the inside, Zara treasure intelligence and judgment of common employees who enjoy a great deal of autonomy. Second, its marketing, merchandising and advertising strategy. Zara does not spend on virtually advertising, while it spends heavily on stores, and no selling online because of

No business in this type of industry has total control over the market price and there are no barriers to entry and exit. Because of its monopolistically competitive playing grounds, Zara’s conduct is to increase its market power by producing demand for its heterogeneous products. Through differentiation and cost leadership, Zara attempts to increase market demand by offering new items weekly while keeping a low inventory, thus making its products unique and attractive to consumers. Because of its backward vertical integration model, Zara creates a strong synergy throughout its production process. Zara has sustained a competitive advantage globally by expanding into new markets and becoming more efficient. In a monopolistically competitive industry, Zara is expected to make profits in the short run but will break even in the long run because demand will decrease as average total costs increase. This means in the long run, a monopolistically competitive firm, such as Zara, will make zero economic profit (AmosWEB, 2001).

Zarawas able to catch a trend while it was hot thus customers were willing to pay a higher premium for the product increasing their gross margin. In addition, Zara did not have to commit to its suppliers several months in advance of a season on the style and amount needed unlike its competitors. Zara was able to create in smaller batches, thus decreasing risk by limiting the amount of inventory on hand. The downside of owning and controlling production is that it often leads to higher costs of labor compared to labor in developing countries (south-east Asia). To lessen the costs, Zaradecided to outsource the main commodities of apparel such as the undyed fabric, buttons and zippers. Because these were basic ingredients to any apparel it did not affect the final product and cut down cost. Also, 85%-90% of their styles were standard across stores and countries which benefited from economies of scale. Lastly by playing both role of manufacturer and retailer Zara is able to get profits on both sides. The short-lead times provide flexibility to Zara; however, Zara needs to provide the consumer with the latest trends in order to increase profitability. Therefore, Zara invests heavily in their product development teams compared to their competitors. Extensive continual market research was performed on current trends from fashion shows, universities and key trend

Zara 's combination of cutting-edge fashions and culture lends itself well to a European-style, fashion-conscious consumer. While this type of consumer can be found in New York, this is not representative of the entire US market. Retailers in small towns and urban sprawls rely more on a shopping mall atmosphere. Adapting that strategy would undermine Zara 's image. It is therefore recommended that Zara target only major metropolitan areas which would likely have higher concentrations of fashion-minded individuals.

In comparison to competitors, Zara’s business strategy, in regards to strategic partnerships and cost of production, provide for a strategic competitive advantage. Zara, unlike its competitors such as Gap, Benetton, and H&M, does not use Asian outsourcing. Eighty percent of Zara’s materials are manufactured in Europe, with 50% made in Zara controlled facilities in the Galicia region of Spain near headquarters. Most of Zara’s competitors have 100% outsourcing to cheap Asian countries. Though the cost of production in Spain is 17-20% more expensive than Asia, Zara does have a competitive advantage over its competitors in regards to operations. The local strategic partnerships that Zara maintains with manufacturers in Europe allow for a product throughput time of 3-4 weeks from conception to distribution. To make this happen, the company designs and cuts its fabric in-house and it acquires fabrics in only four colours to keep costs low. The proximity of these suppliers gives Zara great flexibility in adapting their product lines based on up to date market trends and consumer behaviour. It also decreases costs of holding inventory. Zara’s competitors, through outsourcing to Asian countries such as China, sacrifice the benefits of proximity for low labour and production costs.

Before going any further the project team should come up with a detailed explanation and planning of all the processes related to the implementation of the project. There should be exact dates for the completion of each step, combined with a list the responsible people. Schedule for the deliveries and supplies should be created and a person should be appointed to look after the proper execution. The specialists responsible for the planning should report to the project manager two weeks before the beginning of the construction work.

Zara is a modern day fashion business that takes an unconventional approach in their business model. Zara is one of the largest international fashion companies which belongs to the distribution group called inditex. They sell well made relatively cheap pieces of clothing that is always cut according to the latest fashion designed. Their customers are the heart of their designs, productions, distribution and sales. Just like all fashion companies, their primary goal is to be the number one fashion retailer. To obtain that success, their new business model challenges the industry and pushes them ahead of their competitors. Zara unique approach to fast fashion pays off as many other brands are trying to follow their success. What sets Zara apart from other modern businesses is that, their business model is to react to fashion trends as quickly as possible. Zara adapt quickly to current trends and fashion that the public demand. Their goal is create fresh new trendy design almost every one to two weeks that will be ready to be produced and shipped. Their primary goal in creating these new sketches is not only to identify trends but to evolve and never repeat their designs. Zara’s company’s strategy involves stocking their inventory very little and updating their collection often. This benefits them because it makes the shopper feel like they have to buy the item, or else it would be sold out later on. Zara’s risk taking strategy has proven to work because according to

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

Zara brand is an attractive case study for many fashion brands around the world for understanding Zara’s business model and their wining factors. One of the Zara’s strategies that make difference between Zara and other competitors is policy of zero advertising. The company tries to invest their capital in opening new branches. As result of this policy Zara is known as fashion imitator trade group and low price fashion products. The range of Zara’s products is wide such as: men\women’s clothing, Zara kids, and shoes, lower and upper garment in various sizes. Designing of Zara’s products are made 50% in Spain, 24% in African and Asian and 26% in the rest of

The retail giant Zara have proven that utilizing all resources and different management techniques branded the store as a fashion empire. However, Zara has been named one of the most profitable retailers in the world. Zara has expanded and is operating stores all over the world which makes the retailer global. The philosophy behind the retail giant is immersing new fashion fast. Furthermore, Zara focus is producing high-end quality clothes through creativity. The retail giant uses a rapid response system to trending clothes which increase Zara profits and market demands. The retailer implemented several business models to reflect the current state of the business. For example, capabilities, utilize short lead times, reduce inventory risk, decrease quantities that are produced and increase choices and styles, value drivers and concept. Following this business model allowed Zara to be branded as supplying the consumer with what they want and fast. Nevertheless, the retailer offers moderate pricing, customer loyalty, and a turnaround time of the latest trends of 24 to 48 hours. These goals formulated the fundamental concept of monitoring production, maintaining designs and tracking the distribution processes. The entire process has enabled Zara to exploit and execute all competitors. Also, the strategy behind Zara planning is maintaining total control over production and keeping manufacturing and all designing in-house. Within this case study, five question will be answered

Instituto de Empresa, Maria de Molina 12, 5°, Madrid 28006, Spain E-mails: angel.diaz@ie.edu; luis.solis@ie.edu Abstract Zara is a Spanish fashion manufacturer and retailer that has known swift success. Spaniards have become used to visiting Zara frequently, as there is always a new product. Zara launches 100 different collections every year, with over 11000 models, none lasting more than five weeks in production and with an average lead-time (design to store delivery) of four weeks. Inditex, the group to which the brand Zara belongs owns five brands with over 1000 stores in more than 30 countries. Although its global sales are still one sixth those of Gap, its

The objective of the goal of this thesis is to get| real life exposure and gives attention to the appropriate marketing strategy in any sort of market situation. After studying some international trade journal noticed that the competition on the on this sector is increasing day by day as new businesses are approaching in the market. Since a result recent day's ZARA is faced with a huge competition. To get preserving its previous position |in the market preparing this thesis has to give attention to the appropriate marketing strategy for ZARA.

Especially the textile industry is in constant flux, hardly driven by consumer demands. Therefore, the fundamental concept of the company is to maintain design, manufacturing and distribution processes which enable Zara to respond quickly to shifts in consumer demands. While other competitors outsource all production to Asia, Zara designs and produces in-house. By doing so, the company has tight control over the whole production process (the vertical integrated