Zara Case Study : Zara Case

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Zara Case Study
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Zara Case Study
Executive Summary This case study (Ghemawat, Nueno, & Dailey, 2003) of the Spanish retail apparel company Zara, one of the six retail brands owned by Spanish company Inditex, focused on a number of issues confronting the retailer. These issues arose mainly from the consideration that Zara defied many of the dynamics of the retail apparel market. Zara, unlike its competitors, owned most of its production as well as its own stores. Zara’s production took place largely in Spain, a relatively expensive production locale. As Zara’s growth slows, and as the brand continues to expand into other countries, Zara needs to be able to find some means of returning to a growth basis. After a presentation of the background and discussion of the issues, two recommendations were issued. First, Zara ought to utilize its existing IT infrastructure, coupled with more advanced forecasting programs as necessary, to become more aggressive about pulling non-performing clothing and replace it with high-performing clothing. Second, Zara ought to extend its strategy of scarcity as a source of demand creation by utilizing social media sites such as Twitter, Facebook, and Instagram to post information about incoming fashion. Cumulatively, these two relatively simple actions could improve Zara’s profit and sales substantially.
Background
Zara is an apparel retailing chain owned by the Spanish company Inditex. As of the time

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