Zara Supply Chain

Partnering and strategic alliances involves working together for the mutual benefit of not only each other, but for the organization (Goetsch & Davis, 2016, p. 64). There are many benefits to partnering. Partnering continually improves processes and products as well as relationships between the organization and its suppliers (Goetsch & Davis, 2016, p. 65). It also improves overall satisfaction of the customers (Goetsch & Davis, 2016, p. 65). Partnering is not limited to those who the organization deals with outside the company. Internal partnering is just as important (Goetsch & Davis, 2016, p. 68). Partnering and forming strategic alliances both within the company an outside the company creates a competitive advantage over other organizations and more opportunities by opening up new markets and increasing the skills and capabilities of the employees within the organization (Goetsch & Davis, 2016, p. 65).

* Joint ventures: the corporation and outsourced entity’s taking responsibility for distribution; corporate investment in the supply chain expected

Today the globalized fashion industry is characterized by wide spread supply chains where the design of a product can be made in one country, manufactured in another and then sold in a third. Fast fashion is a concept used by some of the companies operating in this industry, Benetton and Zara are two of the biggest players utilizing the strategy, although in various ways.

Zara only added two store maximum per year. In 1990, Zara opened its first store in Paris, which is the capital of style and the initial spot for later growth in Europe (Cervinho & Bonache 1996). After that Zara open some store in Mexico for South America representatives and trailed by Greece and Malta in 1992 and 1993. The only exclusion for this stage is the initial opening for USA store which is far away from the Spain. This is happened since Zara wanted to create brand awareness and getting global reputation in fashion industry (Martinez 1997; Cervinho & Bonache

Based on SDC database, MDT’s press release and annual report, MDT has made 8 acquisitions, 1 joint venture and 7 strategic alliances in the last 5 years. As Greve, Rowley and Shipilov (2014) suggests, I will use three different perspectives of network advantages as a basis of further analysis. First degree perspective (Greve, Rowley and Shipilov, 2014) focus on the individual relationship which brings two types of advantages namely compatibility and complementarity.

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

Finding the right strategy for our company will be the start of our supply chain strategy. The main three are the Keiretsu network, virtual company, vertical integration. All three have their advantages and disadvantages. An example of a Keiretsu network would be our company working closely with a supplier, such as a motor manufacturer but not necessarily owing their company. A virtual company is network of independent companies—suppliers, customers, competitors, linked by information technology to share skills, costs, and access to one another 's markets. Such organizations are usually formed on the basis of a cooperative agreement with little or no hierarchy or vertical integration. This flexible structure

The Network model is very useful to create innovativeness, by matching different organizations with complementary skills, by outsourcing the manufacture to overseas-based firms, technical services, and even marketing and distribution. The entire supply chain can benefit from the network model of internationalization, creating competitive advantage for the firm. Even in this particular case, SMEs have to face the big challenge of dealing with bigger organization with greater managerial and coordination skills, plus the resources to invest, although the strengths of this approach to SMEs lies on the importance of the personal factors.

International Marketing- ‘Zara: the Spanish retailer goes to the top of world fashion’ Case Study

Zara is one of the Inditex’s largest international fashion brands. The company first opened in La Coruna in 1975, still lives by the simple idea of Amancio Ortega to link customer demand to manufacturing, and link manufacturing to distribution. Castellano and Ortega shared the same beliefs that quick response to customers, use of computers, and disintegrated decision-making were important to build the business. It has built distribution and information system which allows to keep latest design in stores in just one or two weeks. Its supply chain has made it so successful and popular among its customers (Zhang, 2008).

First, “Retail companies have become involved in supply chain management in order to control product quality, inventory levels, timing, and expenses.” (About money). For this reason, Zara’s strategy ensured that its supply chain capabilities supported its ability to satisfy the targeted customers. In addition, Zara collects information on customer needs, integrates data with design, manufacturing and distribution functions. With this in mind, Zara concentrated its product to short lead time, lower quantities, more styles and use an effective distribution system. Similarly, Limited Brands, shifted to a high end product line that required a strategy to bring product to market and customer satisfaction. Furthermore, Limited Brands management approved the project of building a global

I believe that it is important to realize that a strategic alliance or partnership is solely depended on trust and faith in the relationship between all involved in simultaneous stages should not change or use those stages for their own advantage without consideration of the organization involved. Some of the advantages would be:

In the future, Zara’s marketing trends is to broaden their target customers who are educated, young, and fashion lover or price-sensitive. According to United Nations (2011), total population in the world has been growing rapidly from 1950 to 2010

Zara is an international retailer that is continuously growing in popularity due to the store’s trend-sensitive and affordable styles. Inditex, Zara’s distribution group, is one of Spain’s greatest successes in that they have dominated the global market. Their unique business model and marketing tactics have a lot to do with this company’s worldwide success. This retailer exhibits a creative and eco-friendly business plan that integrates design, just-in-time production, marketing and sales. With a vertically integrated supply chain system, Zara controls product design, development, manufacturing, selling and distribution to retailers, product service and advertising.

When these conditions are not present, the risks of strategic inflexibility and organizational problems suggest that it may be better contract out manufacturing components to independent suppliers. Since issues of strategic flexibility