Zara's Case Study

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1. What is Zara’s value Proposition? How does it differ from its Competitors? “Zara has pioneered leading-edge fashion clothes for budget minded young adults through a tightly integrated vertical structure that cuts delivery time between a garment’s design and retail delivery to under three weeks (against the industry norm of three to six months)” (Grant, 2010, p.212) According to Clayton Christensen in order to process you Value Proposition you must look at the following (Harvard Business Review) Zara’s value proposition is that it offers its customers cutting edge fashion at very affordable prices. It actively seeks out what styles are “hot” in the fashion world. After Zara has identified the latest trend it can have the…show more content…
4. Marketing & Sales: Zara broad offering meets its customer’s demands quickly. This is due to management’s almost instantaneous response to changes in customers’ needs (Ghemawat et al, 2006). Zara’s prices consider the cost of exporting and market conditions of the store’s location (D’Andrea et al, 2003) instead of the traditional application a cost plus margin. Zaras inventory turnover is higher than their direct competition (at 10.67% versus H&M at 6.84%) (D’Andrea et al, 2003). Constantly changing stock encourages sales and increase the average visits to stores per customer (Kotler et al, 2009). 5. Service: Traditional supply chains take a supplier centric/push view with a focus on what a business is trying to sell rather than a focus on customer’s demands (Kotler et al, 2009). Zara’s supply chain adopts a vertical structure which is mainly demand driven with cycle times being kept to a minimum which allows information to be acted upon quickly (Grant, 2011). Zara’s Supporting Activities (4) 1. Infrastructure Zara IT supports the interaction between the different departments throughout the entire company. 2. Human Resource Management (HRM) Zara focus on HRM is evident in their hiring of newly graduated designers with fresh ideas and energy from the local areas. 3. Technology Highly
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