Zara Business Case

Zara, a Spanish-based chain owned by Inditex, is a retailer who has taken a new approach in the industry. By owning its in-house production, Zara is able to be flexible in the variety, amount, and frequency of the new styles they produce. With their unique strategy, Zara has the competitive advantage to be sustainable. In order to maintain that advantage and growth they must confront certain challenges that face traditional retailers in the apparel industry such as Hennes and Mauritz (H&M) and The Gap, who differ from Zara because they outsource all of their production, spend more money on advertising, and is price-oriented.

To cite this document: S.G. Hayes, Nicola Jones, (2006),"Fast fashion: a financial snapshot", Journal of Fashion Marketing and Management, Vol. 10 Iss: 3 pp. 282 - 300 Permanent link to this document: http://dx.doi.org/10.1108/13612020610679277 Downloaded on: 07-08-2012 References: This document contains references to 40 other documents To copy this document: permissions@emeraldinsight.com This document has been downloaded 10511 times since 2006. *

There are also many different customer attitudes and preferences to take into account as well. For example, Germans are more interested in price than French people, tastes are based upon the variety of clothing and the quality exhibited. This meaning German were concerned with what other options the market offered in terms of a getting a good price (like a substitute). The French and Italian were more affected by the fashion in the market place then other ethnicities like the German or British. The Japanese teenager market was noted for one of the trendiest in the world while the overall Japanese community was perceptively noted as formal. However, the U.S teenager market research found them to be less fashionable and trendy.

In this example can be seen how information and communication technologies (ICTs) influence on knowledge management processes within organizations and its influence on innovation and co-learning. The use of ICTs is increasing because nowadays the business environment is becoming more dynamic and complex and new strategic resources are needed for taking competitive advantages. (María Teresa GARCÍA-ÁLVAREZ, p.994)

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 provided a useful lesson in terms of competitive advantage with its rivals. 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.

Zara’s has vast range of missions in order to be greatest retail company in fashion world. Throughout Zara’s business model, they intend to help to the sustainable development of the world. (Source: Zara website) Zara’s mission statement indicates that:

Zara is a retailing chain of Inditexthat specializes in high-fashion at reasonable prices. In the last 12 months, Inditex’s stock price has increased by 50% despite bearish market conditions. The 50% increase is due to the investor expectations of Inditex’s growth. Inditex’s growth can be contributed to the decisions it has made in creating a vertically integrated centralized process. The centralization of its vertically integrated operations in Europe provided it with its competitive advantage; however, I believe it will also make it fail if it decides to grow substantially into other markets. Financial Analysis compare to competitors In comparing Inditex financial performance against its competitors, it is apparent that Inditex is

Baker (2008) said “A process that can permit an institution to focus its resources on the best chances with the goals of enhancing volume of sales and realizing a sustainable competitive edge is explained as Marketing strategy.” The effective operation of marketing strategies can help enterprises pinpoint the direction of sale and make a sale planning revolving around market strategies which play an important role in any companies. Fashion enterprises are no exception.

Teri Agins, a senior writer at the Wall Street Journal, has publications in the Journal and wrote in 1999 The End of Fashion. Agins’ book gives a true overview of the fashion industry from the origin of Haute Couture to prêt-à-porter to mass-market consumption. Her focus is on marketing and uses Armani, Ralph Lauren, Donna Karen, Marshall Fields and Gap to demonstrate “(from) class to mass, (from) elitism to democratization; (from) art to commodity.” This is perfectly showed in a paragraph from Agins

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

The concept of "fast fashion" fast fashion or refers to a phenomenon of mass production and consumption that increases at the same rate at which trends are undergoing modifications. In the consumer model clothing collections that mimic current trends at low cost are purchased, so brands that offer these types of benefits not only change your articles often, they are forced to manufacture their products in countries developing paying workers very low wages and even sacrificing security conditions in which they operate.

Zara is a retailing chain of Inditexthat specializes in high-fashion at reasonable prices. In the last 12 months, Inditex’s stock price has increased by 50% despite bearish market conditions. The 50% increase is due to the investor expectations of Inditex’s growth. Inditex’s growth can be contributed to the decisions it has made in creating a vertically integrated centralized process. The centralization of its vertically integrated operations in Europe provided it with its competitive advantage; however, I believe it will also make it fail if it decides to grow substantially into other markets. Financial Analysis compare to competitors In comparing Inditex financial performance against its competitors, it is apparent that Inditex is

In differentiation strategies, the emphasis is on creating value through sustainable uniqueness. This can be achieved through product innovations, superior quality, or superior service, which is then sustained and leveraged through creative advertising; brand-building and strong supply chain relationships. Another requirement for a successful differentiation strategy is that customers must be willing to pay more for the uniqueness of a product or service than the firm paid to create it. A differentiation strategy will lead to higher firm performance only if buyers value the attributes that make a product or service unique enough to pay a higher price for it or if they choose to buy from that firm preferentially. If

This expansion demonstrates how the luxury industry is now run by massive corporations whose focus is only on growth, visibility, brand awareness, advertising, and most importantly, PROFITS! With growth and expansion, has come a decrease in quality and rarity. The luxury garments produced are mostly not handmade but are even outsourced to large factories in places such as China and Turkey. Also, to meet quarterly turnover projections, “designers churn(ed) out increasingly trendy collections of clothes, handbags, and shoes.” (Thomas, Pg. 246) With hundreds of new stores around the globe the surplus of designer labeled merchandise is immense hence, the proliferation of outlet malls.

Social and cultural changes are major determinants of emerging fashions. However, they are themselves affected by the other drivers of change that include globalization of world markets and accessibility of more sophisticated communications technologies. The latter has provided people with faster and wider access to more ideas and influences from other cultures and societies, driving demand for wider choice in fashion products.