Supply Chain Management : Zara 's Strategy

Supply-chain management consists of developing a strategy to organize, control, and motivate the resources involved in the flow of services and materials within the supply chain. A supply chain strategy, an essential aspect of supply chain management, seeks to design a firm’s supply chain to meet the competitive priorities of the firm’s operations strategy.

The aim of this case study is to analyze how ZARA has achieved its success through various business strategies. In particular, we will focus on supply chain management the relation between suppliers and retailers which helped to increase the efficiency of the company and also made customers satisfy. In particular, we will analyze various analytical tools and techniques implemented by ZARA to achieve success. And

Therefore it has become crucial to have an agile and responsive supply chain set up for both these companies. The main objective of the strategy is to reduce the lead times related to the process of getting new designs with good quality and right price into the retail stores in order to have the ability of responding to new market conditions and fashion trends. To achieve these objectives, Zara and Benetton have set up some supply chain strategies that resemble each other in many ways; they both focus on delivery, flexibility, efficiency and responsiveness to the production requirements of the company. Moreover, Zara controls every step of the value chain, closing information loop quickly, leveraging ownership of own asset, even trades off cost benefits to increase responsiveness of total system. In production stage, Zara has smaller batch productions compared with Benetton, this leads to a faster inventory turnover and quick response for Zara which is also equivalent of manufacturing's JIT to the retail sector. On the other hand, Benetton has based its supply network on two models of Industrialized Model and Commercial Model, sometimes referred as a dual supply chain. These models use two ways of planning. One is sequential approach aimed at minimizing costs and

The Spanish retail chain Zara has unique supply chain management practices that enable it to gain a competitive advantage over other fashion retailers in the industry. Zara’s rapid response time enables the firm to quickly respond to changing fashions while deliberately under producing products. This strategy, which is supported by competencies in logistic management, design and information systems, allows the company to maintain less inventory and higher profit margins and is a key factor to Zara’s success. The firm should continue to add value by seeking new opportunities to expand in the retail market and maintain their sustainable growth.

Distribution by an organization can be a huge competitive advantage to the organization. Most organizations focus on their clients far and wide. As a result of the increasing costs, organizations are attempting to grow in different markets with the goal that they have a higher turnover and consequently a higher advantage. (Bhasin, 2015)

The supply chain from raw material to consumer it's from design and production to distribution and retailing. Zara has unique and rabid supply chain today. Design and production are internal process and are done in company. At Zara's headquarters, there are creative teams of three hundred professionals doing a design process. They responsible for design the designs which will satisfy customer needs and keep pace with fashion. Zara can take a product from concept through design, manufacturing, and store-shelf placement in as

Other companies have tried pushing their products and setting trends through advertising, but this often resulted in “fashion misses”, while Zara, through its responsive supply chain strategy, is able to produce and deliver styles that capitalize on what the customers are looking for. Thus, Zara is able to accurately match supply to demand.

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

Initially, the efficient supply chain of the business is a good method to enhance its competitive position. Supply chain refers to those associated operations and activities for converting inputs to outputs. Such activities contain issues of operations, marketing and supply (Han, 2008). High level of combination within the chain is the best method to get competitive benefit. Zara Company achieved matchless success in having powerful supply chain. This company owns numerous branches all around the world. In this essay, we will discuss supply chain of Zara, Zara’s Fast Fashion distribution system, and role of vertical and horizontal analysis in making competitive advantage for business.

Collaboration of chief tasks, strategic use of organizational resources and core competencies contribute to Zara’s competitive advantage. Zara follows vertically integrated supply chain so it exercises control over suppliers. Demand is easily met and manufacturing is easily achieved. It uses Vertical Marketing System (VMS). It has Zara successfully integrate design, production, distribution, and retailing and which has turned it into the world’s fastest-growing fashion retailer. Its design team is having skilled and talented and experienced staff and the designers are regularly updated by stores and sales staff which keep record of moving stock. Its in-house team of production department is also hardworking and producing clothes quickly as it is manufacturing clothes in small batch. The market survey said that people visit Zara often when compared to Zara’s competitors. Its employees wait for one week for selling its stock and meanwhile if stock is not sold then they just take it out from store and then design team try to make better design for customer satisfaction and the design which is not sold their production will be stopped and in this manner it will face only little cost but will be able to attract customers. So its vertical integration system is helping it to gain advantage. Its customers are well aware that its stock will be changing after every week so they visit quite often to this store as they know if they don’t visit regularly then they can miss good stuff and good designer clothes. In the market survey it has been revealed that in Spain top branded fashion store is visited by customers 3 times a year and whereas Zara is visited by its customers 17 times a year so it is clear that Zara is taking advantage of vertical integration (Christopher,

Zara is a fashion company founded by Amancio Ortega in Spain in 1975. It is part of Inditex holding company, a large fashion retail chain that operates five other clothing brands. Since its inception, Zara has been financially very successful as it contributes the most to Inditex’s overall revenue. Also, Zara’s fast growth is represented by its massive global presence; it has stores all over the world from Americas to Middle East to Europe, its principal market. In my analysis, Zara’s competitive advantage lies in its ability to mass produce a large range of highly demanded latest designer clothes faster than its other competitors in the industry. By virtue of being first in the

Vertical integration, a distinctive feature of Zara’s business model, has allowed the company to successfully develop a strong merchandising strategy. This strategy has led Zara to create a climate of scarcity and opportunity as well as a fast-fashion system. However, Zara’s strategy creates some weaknesses. Their vertical integration has more advantages than drawbacks but it is important to recognize its limitations. Vertical integration often leads to the inability to acquire economies of scale, which means Zara cannot gain the advantages of producing large quantities of goods for a discounted rate. Higher costs are then incurred for the Inditex

Zara is a clothing and accessories retailer selling stylish apparel at affordable prices, and it is also the most profitable brand of the Spanish clothing retail group Inditex SA. Ortega planned for this new Zara outlet, located near his factory in La Coruna in northern Spain, to sell this overstock merchandise himself. Since then, Zara has expanded into 500 stores in 68 countries as of January 2007 and has become a leader in customized fashion retailing. This assignment presents core competencies to help Zara achieve competitive advantages in fashion industry. Besides, we also offer five competitive objectives about quality, speed, flexibility, dependability and cost to evaluate

One global retailer is expanding at a dizzying pace. It's on track for what appears to be world domination of its industry. Having built its own state-of-the art distribution network, the company is leaving the competition in the dust in terms of sales and profits, not to mention speed of inventory management and turnover. Wal-Mart you might think? Dell possibly? Although these two retail giants definitely fit the description, we're talking here about Zara, the flagship specialty chain of Spain-based clothing conglomerate, Inditex.

With annual growth of around 20 percent in both sales and number of stores, Zara was finding that strategy increasingly difficult to execute. Part of the Inditex group of fashion distributors, it currently has more than 1,100 stores in 68 countries. With so much volume flowing through the supply chain, the