Zara And Benetton : Chain Management And Marketing

Zara is a high-end street store offering the latest tastes in fashion for women, men, and children alike. Amancio Ortego, Zara’s founder, has made the store grow with rapid success in both its home country, Spain, and internationally. One of the distinct reasons why Zara is such a unique company compared to its competitors is its foundation of the quick response system. Today, Zara’s cycle time is six weeks, in which it responds to its customers’ demand very quickly, unlike most stores that take half a year. Overall, Zara is distinct from most apparel stores in its ability to travel globally and from its international strategy.

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

Zara and Benetton: Comparison of two business models. 2010. [e-book] p. 10. Available through: Google Scholar [Accessed: 25 Nov 2013].

Zara International is considered a high end clothing store that is affordable. Due to its quality in fashion, low prices and immediate availability, popular stores such as Gap and H&M fail to keep up with Zara’s success. Zara’s well known tactic of fast fashion has separated them from their competition. The ‘fast fashion’ objective is to distribute top trends of fashion within the runway to customers by selling them in local stores. Zara has been able to achieve the fast fashion perspective by hiring approximately 200 people that will assist in getting these trends out in stores within a matter of weeks.

Zara’s strategy is to offer cutting edge fashion at affordable prices by following fashion and identifying which styles are “hot”, and quickly getting the latest styles into stores. They can move from identifying a trend to having clothes ready for sale within 30 days (whereas most retailers take 4-12 months). This is made possible by controlling almost the whole garment supply chain from design to retail.

The basic strategy for fighting competition is to attract buyers at lower prices, more unique designs, high-quality design, efficient customer service and solid image brand. Thus bargaining power of buyer for apparel industry is high as the products falls under the basic needs in human lives. There is no much difference in terms of products offered by the apparel company, so if buyer is unhappy with the product or service they can easily switch to another brand. Thus, Zara are trying to strengthen its position in the market by using their unique strategy by giving priority to buyer to meet their special needs.

The core concept of Zara 's business model is they sell "medium quality fashion clothing at affordable prices", and vertical integration and quick-response is key to Zara 's business model.  Through the entire process of Zara 's business system: designing, sourcing and manufacturing, distribution and retailing, they presented four fundamental success factors: short cycle time, small batches per product, extensive variety of product every season and heavy investment in information and communication technology.  These four elements are involved in every aspect of the business.

Zara is unique in its marketing model as Zara has a policy of zero advertisement. Plus, its concept of fast-fashion enables Zara to produce new collections every few weeks. This stimulates customers to visit Zara approximately seventeen times during a year, opposed to the three times other, similar companies expect their customers to visit, as Zara’s products change regularly. Customers only have a short period of time to buy a specific item. The fact that Zara produces all its clothes itself, instead of buying clothes from other retailers, also makes

Zara is known for its ability to respond quickly to the demands of the market. The market segment that Zara is target is not very price sensitive, and therefore it does not compete on price but rather on fashion trends. The company has positioned itself so that it has the ability to design and have a finished good within four to five weeks for an entirely new design and two weeks for restocking/modifying and existing products. To put this concept into perspective, Zara’s competitors take about six months to do the same task. Given Zara’s quick response time, they have the luxury of following fashion rather than gambling on it. The short cycle time reduced working capital intensity and facilitated continuous manufacture of new merchandise, allow for Zara to commit to the bulk of its product line for a season much later than its key competitors.

Fast fashion is merely more than a one hit wonder. The fast fashion industry has grown and has ultimately proven itself to be profitable industry in the clothing market. The retailer most distinguished for a fast fashion approach is Zara (Hayes & Jones, 2006). Zara is a child company of the parent company Inditex. Zara stores have established the stride for merchants around the globe in creating and shipping fashionable clothing (“Case 3-4. Continued Growth for Zara and Inditex”, 2013). Their marketing approach has helped them become extremely successful in terms of providing the customer with. International marketing strategies and its efficiency assists in the expansion of Zara. Cultural understanding is virtuously

Zara, one of the world’s largest apparel retailers, was founded in 1975 in La Coruna， Spain. With its successful rollout in the Spanish market, it began to expand its stores around the world, and became one of the most profitable brands in the appalling market. Zara was famous for its ability to quickly respond to the market demands, which provides a useful lesson in terms of competitive advantage with its competitors. But confronting to the fast-paced and constantly changing market, if a company wants to consistently increase market share in order to survive in the competitive market, it is irrefutable that it needs to achieve sustainable competitive advantage, since the achievement of sustainable competitive advantage can be expected to lead to higher performance.

Although the global economic crisis has weakened consumer confidence there is a remarkable consumption phenomenon in fashion market. Fast fashion is a new word used in fashion scene to say that designs move from runaway speedily so as to take the latest fashion at Fashion Week in both the spring and the fall of every year. These trends are designed and produced fast and cheaply to enable the mainstream consumer to take benefit of contemporary clothing styles with a lower price. This concept of quick manufacturing at economical price is applied in large retail companies such as Zara, H&M, and Topshop. The

The aim of this report is refer to operation management concepts and theories about Zara. This report broadens the fashion industry horizons, mainly subject of an investigation the "Fast Fashion". Definition Fast Fashion explained as a stream having more fashion cycles of chronic fashion cycle followed by high fashion houses. The function on which is based the Fast Fashion is faster and repetitive consumerism clothes so anytime customers to feel that they are in vogue. This model, which is known as Quick Response finds response by large companies like Zara, referred to in more detail in the working. The background of today's society is clearly consumer. Made ambitious efforts by corporations around the world, in order to meet the

Fashion is the imitation of a given example and satisfies the demand for social adaptation. . . . The more an article becomes subject to rapid changes of fashion, the greater the demand for cheap products of its kind. — Georg Simmel, “Fashion” (1904) Inditex (Industria de Diseño Textil) of Spain, the owner of Zara and five other apparel retailing chains, continued a trajectory of rapid, profitable growth by posting net income of € 340 million on € revenues of € 3,250 million in its fiscal year 2001 (ending January 31, 2002). Inditex had had a heavily € oversubscribed Initial Public Offering in May 2001. Over the next 12 months, its stock price

At the heart of Zara 's success is a vertically integrated business model spanning design, just-in-time production, marketing and sales. The key to this model is the ability to adapt the offer to customers desires in the shortest time possible. For Zara , time is the main factor to be considered, above and beyond production cost. The group believed that vertical integration gave it more flexibility than its rivals to respond to fickle fashion trends. With the European markets becoming saturated, Zara had been looking at stretching its product line and furthering its global expansion.